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Seneca Foods Reports Sales and Earnings for the Quarter and Six Months Ended September 28, 2024

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Seneca Foods reported financial results for Q2 and first half of fiscal 2025. Net sales reached $730.2 million for the six months ended September 28, 2024, up from $706.1 million in the same period last year, primarily due to higher sales volumes. However, gross margin decreased to 11.7% from 16.1% year-over-year. Q2 net sales were $425.5 million, up from $407.5 million, with gross margin declining to 10.1% from 14.3%. Core business case volumes increased 9.9% in the first six months, excluding co-pack business. The company noted increased unit costs due to inventory reductions and unfavorable growing weather, though working capital trends and operating cash flow improved.

Seneca Foods ha riportato i risultati finanziari per il secondo trimestre e il primo semestre dell'anno fiscale 2025. Le vendite nette hanno raggiunto 730,2 milioni di dollari nei sei mesi conclusisi il 28 settembre 2024, in aumento rispetto ai 706,1 milioni di dollari nello stesso periodo dell'anno scorso, principalmente grazie a un aumento dei volumi di vendita. Tuttavia, il margine lordo è diminuito all' 11,7% rispetto al 16,1% dell'anno precedente. Le vendite nette del secondo trimestre sono state di 425,5 milioni di dollari, un incremento rispetto ai 407,5 milioni di dollari, con un margine lordo in calo al 10,1% rispetto al 14,3%. I volumi delle vendite del core business sono aumentati del 9,9% nei primi sei mesi, escludendo le attività di co-pack. L'azienda ha notato un aumento dei costi per unità a causa delle riduzioni dell'inventario e delle condizioni meteorologiche sfavorevoli per la crescita, anche se le tendenze del capitale circolante e il flusso di cassa operativo sono migliorati.

Seneca Foods presentó los resultados financieros para el segundo trimestre y la primera mitad del año fiscal 2025. Las ventas netas alcanzaron 730,2 millones de dólares durante los seis meses que terminaron el 28 de septiembre de 2024, en comparación con los 706,1 millones de dólares en el mismo período del año pasado, principalmente debido al aumento de los volúmenes de ventas. Sin embargo, el margen bruto disminuyó al 11,7% desde el 16,1% interanual. Las ventas netas del segundo trimestre fueron de 425,5 millones de dólares, un aumento desde los 407,5 millones de dólares, con un margen bruto que cayó al 10,1% desde el 14,3%. Los volúmenes del negocio principal aumentaron un 9,9% en los primeros seis meses, excluyendo el negocio de co-pack. La empresa señaló un aumento en los costos por unidad debido a reducciones en el inventario y condiciones climáticas desfavorables para el crecimiento, aunque las tendencias del capital de trabajo y el flujo de caja operativo mejoraron.

세네카 푸드는 2025 회계연도 2분기 및 상반기 재무 결과를 발표했습니다. 2024년 9월 28일 종료된 6개월 동안 순매출은 7억 3020만 달러에 도달했으며, 이는 작년 같은 기간의 7억 610만 달러에서 증가한 수치로, 주로 판매량 증가에 기인합니다. 그러나 총 마진은 작년 대비 16.1%에서 11.7%로 감소했습니다. 2분기 순매출은 4억 2550만 달러로, 이는 4억 750만 달러에서 증가했으며, 총 마진은 14.3%에서 10.1%로 감소했습니다. 코어 비즈니스 케이스 볼륨은 코팩 비즈니스를 제외하고 상반기 동안 9.9% 증가했습니다. 회사는 재고 감소와 불리한 성장 날씨로 인해 단위당 비용이 증가했다고 언급했지만, 운전 자본 추세와 운영 현금 흐름은 개선되었습니다.

Seneca Foods a publié les résultats financiers du 2ème trimestre et de la première moitié de l'exercice fiscal 2025. Les ventes nettes ont atteint 730,2 millions de dollars pour les six mois se terminant le 28 septembre 2024, en hausse par rapport à 706,1 millions de dollars pour la même période l'année dernière, principalement en raison d'une hausse des volumes de vente. Cependant, la marge brute a diminué à 11,7% contre 16,1% d'une année sur l'autre. Les ventes nettes du 2ème trimestre se sont élevées à 425,5 millions de dollars, un accroissement par rapport à 407,5 millions de dollars, avec une marge brute en baisse à 10,1% contre 14,3%. Les volumes du cœur d'activité ont augmenté de 9,9% au cours des six premiers mois, en excluant l'activité de co-pack. L'entreprise a noté une augmentation des coûts unitaires en raison de réductions d'inventaire et de conditions météorologiques défavorables pour la culture, bien que les tendances en matière de fonds de roulement et de flux de trésorerie opérationnel se soient améliorées.

Seneca Foods hat die finanziellen Ergebnisse für das 2. Quartal sowie die erste Hälfte des Geschäftsjahres 2025 veröffentlicht. Der Nettoumsatz erreichte 730,2 Millionen Dollar für die sechs Monate bis zum 28. September 2024, im Vergleich zu 706,1 Millionen Dollar im gleichen Zeitraum des Vorjahres, hauptsächlich aufgrund höherer Verkaufsvolumina. Der Bruttomargen sank jedoch auf 11,7% von 16,1% im Vorjahresvergleich. Der Nettoumsatz im 2. Quartal betrug 425,5 Millionen Dollar, ein Anstieg von 407,5 Millionen Dollar, während der Bruttomargen auf 10,1% von 14,3% fiel. Die Kernbereichsumsätze erhöhten sich im ersten Halbjahr um 9,9%, ohne Co-Pack-Geschäfte zu berücksichtigen. Das Unternehmen stellte fest, dass die Kosten pro Einheit aufgrund von Bestandsreduktionen und ungünstigen Wachstumsbedingungen gestiegen sind, obwohl die Trends des Betriebskapitals und der operative Cashflow sich verbessert haben.

Positive
  • Net sales increased by $24.1 million (3.4%) year-over-year for the six-month period
  • Core business case volumes up 9.9% in first six months
  • Improved working capital trends and operating cash flow compared to prior year
Negative
  • Gross margin declined from 16.1% to 11.7% for six-month period
  • Q2 gross margin decreased from 14.3% to 10.1%
  • Increased unit costs due to smaller planned pack and unfavorable weather conditions
  • Negative impact on co-pack business due to timing of purchases

Insights

The financial performance shows mixed signals. While $730.2M in six-month revenue represents a 3.4% increase, driven by higher sales volumes, profitability has significantly deteriorated. The gross margin compression from 16.1% to 11.7% is concerning, indicating substantial cost pressures. The Q2 results mirror this trend with margins declining from 14.3% to 10.1%.

The core business shows strength with a 9.9% volume growth excluding co-pack operations. However, operational challenges including weather impacts and inventory management are driving up unit costs. The silver lining is improved working capital management and operating cash flow, suggesting better operational efficiency despite margin pressures.

FAIRPORT, N.Y., Nov. 06, 2024 (GLOBE NEWSWIRE) --  Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced financial results for the second quarter and six months ended September 28, 2024.

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

  • Net sales for the six months ended September 28, 2024 totaled $730.2 million compared to $706.1 million for the six months ended September 30, 2023. The year-over-year increase of $24.1 million was due primarily to higher sales volumes.
  • Gross margin as a percentage of net sales is 11.7% for the six months ended September 28, 2024, as compared to 16.1% for the six months ended September 30, 2023.

“Second quarter results reflect continued positive volume momentum in our core business, as case volumes were up 9.9% in the first six months year-over-year when excluding co-pack business, which has been negatively impacted by the timing of purchases compared to last year,” stated Paul Palmby, President and Chief Executive Officer of Seneca Foods. “Inventory reductions associated with a smaller planned pack and unfavorable growing weather in the Midwest are leading to increased unit costs in F25, but total cash outlays are significantly down. As a result, working capital trends and operating cash flow are favorable compared to the prior year.”

Executive Summary (vs. year-ago, second quarter results):

  • Net sales for the second quarter of fiscal 2025 totaled $425.5 million compared to $407.5 million for the second quarter of fiscal 2024. The year-over-year increase of $18.0 million was due to higher sales volumes, coupled with product mix and increased selling prices.
  • Gross margin as a percentage of net sales is 10.1% for the three months ended September 28, 2024, as compared to 14.3% for the three months ended September 30, 2023.

About Seneca Foods Corporation

Seneca Foods is one of North America’s leading providers of packaged fruits and vegetables, with facilities located throughout the United States. Its high quality products are primarily sourced from more than 1,200 American farms and are distributed to approximately 55 countries. Seneca holds a large share of the market for retail private label, food service, restaurant chains, international, contracting packaging, industrial, chips and cherry products.  Products are also sold under the highly regarded brands of Libby’s®, Green Giant®, Aunt Nellie’s®, Green Valley®, CherryMan®, READ®, and Seneca labels, including Seneca snack chips.  Seneca’s common stock is traded on the Nasdaq Global Select 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 Measures   

Adjusted net earnings is calculated on a FIFO basis and excludes the impact from the application of LIFO. The Company believes this non-GAAP financial measure provides for a better comparison of year over year 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 earnings before income taxes to adjusted net earnings (in thousands).

         
 Three Months Ended Six Months Ended 
 September 28, September 30, September 28, September 30, 
  2024  2023  2024  2023 
Earnings before income taxes, as reported$17,068 $32,577 $33,569 $62,838 
LIFO charge 14,977  9,316  12,059  7,616 
Adjusted earnings before income taxes 32,045  41,893  45,628  70,454 
Income taxes 7,434  10,118  10,559  16,844 
Adjusted net earnings$24,611 $31,775 $35,069 $53,610 
         

Set forth below is a reconciliation of reported net earnings to EBITDA and FIFO EBITDA (earnings before interest, income taxes, depreciation, amortization and non-cash charges 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 (in thousands).

 Three Months Ended Six Months Ended
 September 28, September 30, September 28, September 30,
  2024   2023   2024   2023 
Net earnings$13,303  $24,779  $25,964  $47,890 
Income taxes 3,765   7,798   7,605   14,948 
Interest expense, net of interest income 9,013   7,185   19,358   13,758 
Depreciation and amortization 12,516   12,822   24,962   25,425 
Interest amortization (116)  (114)  (231)  (214)
EBITDA 38,481   52,470   77,658   101,807 
LIFO charge 14,977   9,316   12,059   7,616 
FIFO EBITDA$53,458  $61,786  $89,717  $109,423 
        

Forward-Looking Information

This release contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments, and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the words "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "seeks," "should," "likely," "targets," "may," "can” and variations thereof and similar expressions. Forward-looking statements are subject to known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed. We believe important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following:

  • the effects of rising costs and availability of raw fruit and vegetables, steel, ingredients, packaging, other raw materials, distribution and labor;
  • crude oil prices and their impact on distribution, packaging and energy costs;
  • an overall labor shortage, ability to retain a sufficient seasonal workforce, lack of skilled labor, labor inflation or increased turnover impacting our ability to recruit and retain employees;
  • climate and weather affecting growing conditions and crop yields;
  • our ability to successfully implement sales price increases and cost saving measures to offset cost increases;
  • the loss of significant customers or a substantial reduction in orders from these customers;
  • effectiveness of our marketing and trade promotion programs;
  • competition, changes in consumer preferences, demand for our products and local economic and market conditions;
  • the impact of a pandemic on our business, suppliers, customers, consumers and employees;
  • unanticipated expenses, including, without limitation, litigation or legal settlement expenses;
  • product liability claims;
  • the anticipated needs for, and the availability of, cash;
  • the availability of financing;
  • leverage and the ability to service and reduce debt;
  • foreign currency exchange and interest rate fluctuations;
  • the risks associated with the expansion of our business;
  • the ability to successfully integrate acquisitions into our operations;
  • our ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption;
  • other factors that affect the food industry generally, including:
    • recalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that consumers could lose confidence in the safety and quality of certain food products;
    • competitors’ pricing practices and promotional spending levels;
    • fluctuations in the level of our customers’ inventories and credit and other business risks related to our customers operating in a challenging economic and competitive environment; and
    • the risks associated with third-party suppliers, including the risk that any failure by one or more of our third-party suppliers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain finished goods products or injure our reputation; and
  • changes in, or the failure or inability to comply with, U.S., foreign and local governmental regulations, including health, environmental, and safety regulations.

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:
Michael Wolcott, Chief Financial Officer
585-495-4100

Seneca Foods Corporation  
Unaudited Selected Financial Data  
For the Periods Ended September 28, 2024 and September 30, 2023  
(In thousands of dollars, except share data)  
          
          
 Three Months Ended Six Months Ended  
 September 28, September 30, September 28, September 30,  
  2024   2023   2024   2023   
          
Net sales$425,465  $407,475  $730,192  $706,139   
          
Operating income (note 1) 24,679   38,424   50,122   73,921   
Other non-operating income (1,402)  (1,338)  (2,805)  (2,675)  
Interest expense, net 9,013   7,185   19,358   13,758   
Earnings before income taxes$17,068  $32,577  $33,569  $62,838   
          
Income taxes 3,765   7,798   7,605   14,948   
          
Net earnings$13,303  $24,779  $25,964  $47,890   
          
Basic earnings per common share$1.92  $3.32  $3.74  $6.36   
Diluted earnings per common share$1.90  $3.29  $3.70  $6.30   
          


Note 1:The effect of the LIFO inventory valuation method on the second quarter pre-tax results decreased operating income by $15.0 million and $9.3 million for the three months ended September 28, 2024 and September 30, 2023, respectively. The effect of the LIFO inventory valuation method on YTD six month pre-tax results decreased operating income by $12.1 million and $7.6 million for the six months ended September 28, 2024 and September 30, 2023, respectively.   
     
Note 2:The Company used the “two-class” method for basic earnings per share by dividing the earning attributable to common shareholders by the weighted average of common shares outstanding during the period.   
    

 


FAQ

What was Seneca Foods (SENEA) revenue for Q2 2025?

Seneca Foods reported net sales of $425.5 million for Q2 fiscal 2025, an increase from $407.5 million in Q2 fiscal 2024.

How much did Seneca Foods (SENEA) gross margin decline in Q2 2025?

Seneca Foods' gross margin declined to 10.1% in Q2 fiscal 2025 from 14.3% in the same quarter of fiscal 2024.

What was Seneca Foods (SENEA) case volume growth in first half 2025?

Seneca Foods reported a 9.9% increase in core business case volumes for the first six months of fiscal 2025, excluding co-pack business.

Seneca Foods Corp

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Packaged Foods
Canned, Fruits, Veg, Preserves, Jams & Jellies
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