Item 1
Business
General Development of Business
SENECA FOODS CORPORATION (herein referred to as the "Company") was organized in 1949 and incorporated under the laws of the State of New York. On December 20, 1993 the Company acquired certain assets of ERLY Juice, Inc. and WorldMark, Inc. This included manufacturing facilities located in Eau Claire, Michigan. Most of the products are sold under the TreeSweet(r) brand. In an unrelated transaction Seneca acquired the Wapato, Washington juice ingredients business of Sanofi Bio-Industries, Inc. on November 30, 1993. The Company's textile division was sold during August 1993.
Financial Information About Industry Segments
The Company's business activities are conducted in food and non-food segments. The food segment is food processing. The non-food segment is an air charter service.
Narrative Description of Business
Principal Products and Markets
Food Processing
The principal products of this segment include grape products, apple products, and vegetables. The products are canned, bottled, and frozen and are sold to retail and institutional markets. The Company has divided the United States into four major marketing sections: Eastern, Southern, Northwestern, and Southwestern. Plant locations in New York, North Carolina, and Washington provide ready access to the domestic sources of grapes and apples necessary to support marketing efforts in their respective sections of the country. There is also a newly acquired bottling plant in Michigan. Vegetable operations are primarily supported by plant locations in New York, Wisconsin, and Minnesota. In addition, the Company operates a mushroom canning facility in Pennsylvania.
The following summarizes net sales by major category for the three years ended July 31, 1994, 1993, and 1992.
Other
Seneca Flight Operations provides air charter service primarily to industries in upstate New York.
Source and Availability of Raw Material
Food Processing
The Company's food processing plants are located in major vegetable, grape, and apple producing states. Fruits and vegetables are primarily obtained through contracts with growers. Apple concentrate is purchased domestically and abroad to supplement raw fruit purchased under contract. The Company's sources of supply are considered equal or superior to its competition for all of its food products.
Seasonal Business
Food Processing
While individual fruits and vegetables have seasonal cycles of peak production and sales, the different cycles are usually offsetting to some extent. The supply of commodities, current pricing, and expected new crop quantity and quality affect the timing of the Company's sales and earnings. An Off Season Allowance is established during the year to minimize the effect of seasonal production on earnings. This is zero at fiscal year end.
Backlog
Food Processing
In the food processing business the end of year sales order backlog is not considered meaningful. Traditionally, larger customers provide tentative bookings for their expected purchases for the upcoming season. These bookings are further developed as data on the expected size of the related national harvests becomes available. In general these bookings serve as a yardstick, rather than as a firm commitment, since actual harvest results can vary notably from early estimates. In actual practice, the Company has substantially all of its expected seasonal production identified to potential sales outlets before the seasonal production is completed.
Competition and Customers
Food Processing
Competition in the food business is substantial with imaginative brand registration, quality service, and pricing being the major determinants in the Company's relative market position. Except for the Seneca apple and grape products and Libby's vegetable products data mentioned below, no reliable statistics are available to establish the exact market position of the Company's own food products. During the past year approximately 43% of the Company's processed foods were packed for retail customers under the Company branded labels of Libby's(r), TreeSweet(r), and Seneca(r). About 18% of the processed foods were packed for institutional food distributors and the remaining 39% of processed foods were retail packed under the private label of customers. The customers represent a full cross section of the retail, institutional, distributor, and industrial markets and the Company does not consider itself dependent on any single sales source. The principal branded products are Seneca Frozen Apple Juice Concentrate, rated the number one seller nationally, Seneca Frozen Natural Grape Juice Concentrate, Seneca applesauce, and Libby's canned vegetable products which rate among the top five national brands.
Environmental Protection
Environmental protection is an area that has been worked on most diligently at each food processing facility. In all locations the Company has cooperated with federal, state, and local environmental protection authorities in developing and maintaining suitable antipollution facilities. In general, pollution control facilities are equal to or somewhat superior to those of our competitors and are within environmental protection standards. The Company does not expect any material capital expenditures to comply with environmental regulations in the near future.
Employment
Food processing - Full time 1,409 - Seasonal 1,567 2,976 - Other 115 _____ 3,091
Foreign Operations
Export sales for the Company are a relatively small portion (less than 3%) of the food processing sales.
Item 2
Item 2
Properties
The Company has ten food processing, packaging, and warehousing facilities located in New York State that provide approximately 1,067,000 square feet of food packaging, freezing and freezer storage, and warehouse storage space. These facilities process and package fruit and vegetable products. The Company is a lessee under a number of operating and capital leases for equipment and real property used for processing and warehousing.
Five other processing, packaging, and warehousing facilities are located in the states of North Carolina (208,000 square feet), Pennsylvania (39,000 square feet) and in Washington (263,000 square feet). Processing operations in North Carolina are primarily devoted to apple juice products; in Washington, grape juice, apple juice and sauce; and in Pennsylvania, mushroom canning and warehousing.
One facility in Minnesota, one facility in Michigan, and four facilities in Wisconsin provide approximately 1,795,000 square feet of food packaging, freezing and freezer storage, and warehouse storage space. These facilities process and package various vegetable and fruit products. The facilities are owned by the Company.
The Company owns three food distribution facilities in Massachusetts and New York totaling approximately 400,000 square feet which are leased out to another company through 1995-97.
Substantially all of the properties are well maintained and equipped with modern machinery. All locations, although highly utilized, have the ability to expand as sales requirements justify. Because of the seasonal production cycles the exact extent of utilization is difficult to measure. In certain circumstances the theoretical full efficiency levels are being reached; however, expansion of the number of production days or hours could increase the output by up to 20% for a season.
See Note 6 of Item 8, Financial Statements and Supplementary Data, for additional information about the Company's lease commitments. Item 3
Item 3
Legal Proceedings
The Company is not involved in any material legal proceedings.
Item 4
Item 4
Submission of Matters to a Vote of Equity Security Holders
Additional information will be filed separately with the Commission, pursuant to Regulation 14A, in the Proxy Statement.
PART II
Item 5
Item 5
Market for the Registrant's Common Stock and Related Security Holder Matters
Each class of preferred stock receives preference as to dividend payment and declaration over any common stock.
In addition, refer to the 1994 Annual Report, page 16, "Shareholder Information".
Item 6
Item 6
Selected Financial Data
Refer to the 1994 Annual Report page 3, "Five Year Selected Financial Data".
Item 7
Item 7
Management's Discussion and Analysis of Financial Condition and Results of Operations
Refer to the 1994 Annual Report page 4, "Management's Discussion and Analysis of Financial Condition and Results of Operations".
Item 8
Item 8
Financial Statements and Supplementary Data
Refer to the 1994 Annual Report pages 5 through 14, "Consolidated Financial Statements and Notes thereto including Independent Auditors' Report".
Item 9
Item 9
Changes in and Disagreements on Accounting and Financial Disclosure
None.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Seneca Foods Corporation Rochester, New York
We have audited the consolidated financial statements of Seneca Foods Corporation and subsidiaries as of July 31, 1994 and 1993, and for each of the three years in the period ended July 31, 1994, and have issued our report thereon dated September 24, 1994; which report includes an explanatory paragraph as to a change in accounting for income taxes; such consolidated financial statements and report are included in your 1994 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedules of Seneca Foods Corporation and subsidiaries, listed in Item 14(A)(2). These consolidated financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.
/S/Deloitte & Touche LLP
Rochester, New York September 24, 1994
PART III
Item 10
Item 10
Directors and Executive Officers of the Registrant
Item 11
Item 11
Executive Compensation
Item 12
Item 12
Security Ownership of Certain Beneficial Owners and Management
Item 13
Item 13
Certain Relationships and Related Transactions
Information required by Items 10 through 13 will be filed separately with the Commission, pursuant to Regulation 14A, in a definitive proxy statement involving the election of directors.
PART IV
Item 14
Item 14
Exhibits, Financial Statement Schedules, and Reports on Form 8-K
A. Exhibits and Financial Statement Schedules
1. Financial Statement Schedules - the following consolidated financial statements of the Registrant, included in the Annual Report for the year ended July 31, 1994, are incorporated by reference in Item 8:
Consolidated Statements of Net Earnings - July 31, 1994, 1993, and 1992
Consolidated Balance Sheets - July 31, 1994 and 1993
Consolidated Statements of Cash Flows - July 31, 1994, 1993, and
Consolidated Statements of Stockholders' Equity - July 31, 1994, 1993, and 1992
Notes to Consolidated Financial Statements - July 31, 1994, 1993, and 1992
Independent Auditors' Report
2. Supplemental Schedules:
Schedule I - Marketable Securities - Other Investments Schedule V - Property, Plant, and Equipment Schedule VI - Accumulated Depreciation and Amortization of Property, Plant, and Equipment Schedule VIII - Valuation and Qualifying Accounts Schedule X - Supplementary Income Statement Information
Other schedules have not been filed because the conditions requiring the filing do not exist or the required information is included in the consolidated financial statements, including the notes thereto.
3. Exhibits:
No. 3 -Articles of Incorporation and By-Laws - Incorporated by reference to the Company's 10-Q filed October, 1992.
No. 4 -Articles defining the rights of security holders - Incorporated by reference to the Company's 10-Q filed October, 1992. The Company will furnish, upon request to the SEC, a copy of any instrument defining the rights of any holder of Long-Term Debt.
No. 11 -Computation of Earnings per Share
No. 13 -1994 Annual Report to Shareholders, incorporated by reference and filed herewith.
No. 22 -List of Subsidiaries
B. Reports on Form 8-K
None filed during this period.
(a) reclassifications (b) acquisitions
(a)Accounts written off, net of recoveries.
Schedule X
SUPPLEMENTARY INCOME STATEMENT INFORMATION (In thousands)
Charged to costs and expenses
Years ended July 31, 1994 1993 1992
Maintenance and repairs $ 17,172 $ 10,791 $ 11,349
The amounts for taxes, other than payroll and income taxes, and advertising are omitted because they are less than 1% of Net Sales.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SENECA FOODS CORPORATION
By/s/ Jeffrey L. Van Riper October 21, 1994 Jeffrey L. Van Riper Controller and Secretary (Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
Signature Title Date
/s/Arthur S. Wolcott Chairman and Director October 21, 1994 Arthur S. Wolcott
/s/Kraig H. Kayser President, Chief Executive October 21, 1994 Kraig H. Kayser Officer, and Director
/s/Devra A. Bevona Treasurer October 21, 1994 Devra A. Bevona
/s/Jeffrey L. Van Riper Controller and Secretary October 21, 1994 Jeffrey L. Van Riper (Principal Accounting Officer)
Continued
/s/Robert T. Brady Director October 21, 1994 Robert T. Brady
/s/David L. Call Director October 21, 1994 David L. Call
/s/Edward O. Gaylord Director October 21, 1994 Edward O. Gaylord
/s/G. Brymer Humphreys Director October 21, 1994 G. Brymer Humphreys
/s/Susan W. Stuart Director October 21, 1994 Susan W. Stuart