For the fiscal year ended March 31, 2015
|
Commission File Number 0‑01989
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New York
(State or other jurisdiction of
incorporation or organization)
3736 South Main Street, Marion, New York
(Address of principal executive offices)
Registrant's telephone number, including area code
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16‑0733425
(I.R.S. Employer Identification No.)
14505
(Zip Code)
(315) 926-8100
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Title of Each Class
|
Name of Each Exchange on
Which Registered
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Common Stock Class A, $.25 Par
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NASDAQ Global Market
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Common Stock Class B, $.25 Par
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NASDAQ Global Market
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(1)
|
Portions of the Annual Report to shareholders for fiscal year ended March 31, 2015 (the "2015 Annual Report") applicable to Part I, Item 1, Part II, Items 5‑9A and Part IV, Item 15 of Form 10‑K.
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(2)
|
Portion of the Proxy Statement to be issued in connection with the Registrant's annual meeting of stockholders (the "Proxy Statement") applicable to Part III, Items 10-14 of Form 10-K.
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TABLE OF CONTENTS
|
||
FORM 10-K ANNUAL REPORT FISCAL YEAR 2015
|
||
SENECA FOODS CORPORATION
|
||
PART I.
|
Pages
|
|
Item 1.
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Business
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1-4
|
Item 1A.
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Risk Factors
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4-9
|
Item 1B.
|
Unresolved Staff Comments
|
9
|
Item 2.
|
Properties
|
9-10
|
Item 3.
|
Legal Proceedings
|
10
|
Item 4.
|
Mine Safety Disclosures
|
10
|
PART II.
|
||
Item 5.
|
Market for Registrant's Common Stock, Related Security Holder Matters
|
11
|
and Issuer Purchases of Equity Securities
|
||
Item 6.
|
Selected Financial Data
|
11
|
Item 7.
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Management's Discussion and Analysis of Financial Condition and
|
11
|
Results of Operations
|
||
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
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11
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Item 8.
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Financial Statements and Supplementary Data
|
11-12
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and
|
12
|
Financial Disclosure
|
||
Item 9A.
|
Controls and Procedures
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12-14
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Item 9B.
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Other Information
|
14
|
PART III.
|
||
Item 10.
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Directors, Executive Officers and Corporate Governance
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15
|
Item 11.
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Executive Compensation
|
15
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Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and
|
15
|
Related Stockholder Matters
|
||
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
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15
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Item 14.
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Principal Accountant Fees and Services
|
15
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PART IV.
|
||
Item 15.
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Exhibits and Financial Statements Schedules
|
16-19
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SIGNATURES
|
20
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Forward-Looking Statements
|
Certain of the statements contained in this annual report on Form 10-K are forward-looking statements made within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (Exchange Act). Forward-looking statements involve numerous risks and uncertainties. Forward-looking statements are not in the present or past tense and, in some cases, can be identified by the use of the words "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "seeks," "should," "likely," "targets," "may", "can" and other expressions that indicate future trends and events. A forward-looking statement speaks only as of the date on which such statement is made and reflects management's analysis only as of the date thereof. The Company undertakes no obligation to update any forward-looking statement. The following factors, among others discussed herein and in the Company's filings under the Exchange Act, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: costs and availability of raw materials, competition, cost controls, sales levels, governmental regulation, consumer preferences, industry trends, weather conditions, crop yields, natural disasters, recalls, litigation, reliance on third-parties, wage rates, and other factors. See also the factors described in "Part I, Item 1A. Risk Factors" and elsewhere in this report, and those described in the Company's filings under the Exchange Act.
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PART I
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Item 1
|
Business
|
History and Development of Seneca Foods Corporation
|
SENECA FOODS CORPORATION (the "Company") is North America's 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 and its products are sold under private label as well as national and regional brands that the Company owns or licenses, including Seneca®, Libby's®, Green Valley®, Aunt Nellie's®, READ®, and Seneca Farms®. The Company packs Green Giant, Le Sueur and other brands of canned vegetables as well as select Green Giant frozen vegetables for General Mills Operations, LLC ("GMOL") under our long-term Alliance Agreement that was amended and restated during the second quarter of fiscal year 2010.
|
As of March 31, 2015, the Company's facilities consisted of 22 packaging plants strategically located throughout the United States, three can manufacturing plants, two seed packaging operations, a farming operation and a logistical support network. The Company also maintains warehouses which are generally located adjacent to its packaging plants. The Company is a New York corporation and its headquarters is located at 3736 South Main Street, Marion, New York and its telephone number is (315) 926-8100.
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The Company was founded in 1949 and during its 66 years of operation, the Company has made over 50 strategic acquisitions including the purchase of the long-term license for the Libby's brand in 1983, the purchase of General Mills' Green Giant packaging assets and entry into the Alliance Agreement with GMOL in 1995 and the acquisition of Chiquita Processed Foods in 2003. The Company believes that these acquisitions have enhanced the Company's leadership position in the private label and foodservice canned vegetable markets in the United States and significantly increased its international sales. In August 2006, the Company acquired Signature Fruit Company, LLC, a leading producer of canned fruits located in Modesto, California. This acquisition allowed the Company to broaden its product offerings to become a leading producer and distributor of canned fruit and to achieve cost advantages through the realization of distribution and other synergies with the Company's canned vegetable business. In 2013, the Company completed its acquisition of 100% of the membership interest in Independent Foods, LLC. The business is based in Sunnyside, Washington, is a packer of canned pears, apples and cherries in the United States. The rationale for the acquisition was twofold: (1) the business is a complementary fit with the Company's existing business and (2) it provides an extension of the Company's product offerings. In April 2014, the Company purchased a 50% equity interest in Truitt Bros. Inc.
|
Available Information
|
The Company's Internet address is www.senecafoods.com. The Company's annual report on Form 10-K, the Company's quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available on the Company's web site, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. All such filings on the Company's web site are available free of charge. Information on our website is not part of the Annual Report on Form 10-K.
|
In addition, the Company's website includes items related to corporate governance matters, including charters of various committees of the Board of Directors and the Company's Code of Business Conduct and Ethics. The Company intends to disclose on its website any amendment to or waiver of any provision of the Code of Business Conduct and Ethics that would otherwise be required to be disclosed under the rules of the SEC and NASDAQ.
|
Financial Information about Industry Segments
|
The Company manages its business on the basis of two reportable segments – the primary segment is the packaging and sale of fruits and vegetables and the secondary segment is the packaging and sale of chip products. These two segments constitute the food operation. The food operation constitutes 98% of total sales, of which approximately 69% is canned vegetable packaging, 19% is canned fruit packaging, 11% is frozen fruit and vegetable packaging and 1% is fruit chip packaging. The non-food operation, which is primarily related to the sale of cans and ends and outside revenue generated from our trucking and aircraft operations, represents 2% of the Company's total sales.
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Narrative Description of Business
|
Principal Products and Markets
|
Food Packaging
|
The principal products include canned fruits and vegetables, frozen vegetables and other food products. The products are sold nationwide by major grocery outlets, including supermarkets, mass merchandisers, limited assortment stores, club stores and dollar stores. Additionally, products are sold to food service distributors, industrial markets, other food packagers, export customers in 90 countries and federal, state and local governments for school and other feeding programs. Food packaging operations are primarily supported by plant locations in New York, California, Wisconsin, Washington, Idaho, Illinois, and Minnesota. See Note 14 of Item 8, Financial Statements and Supplementary Data, for additional information about the Company's segments.
|
The following table summarizes net sales by major product category for the years ended March 31, 2015, 2014, and 2013:
|
Classes of similar products/services:
|
2015
|
2014
|
2013
|
|||||||||
(In thousands)
|
||||||||||||
Net Sales:
|
||||||||||||
GMOL *
|
$
|
161,993
|
$
|
177,881
|
$
|
165,684
|
||||||
Canned vegetables
|
754,556
|
753,318
|
746,892
|
|||||||||
Frozen *
|
94,648
|
107,109
|
84,935
|
|||||||||
Fruit
|
234,918
|
264,549
|
245,596
|
|||||||||
Snack
|
11,667
|
11,496
|
11,357
|
|||||||||
Other
|
28,568
|
25,855
|
21,833
|
|||||||||
Total
|
$
|
1,286,350
|
$
|
1,340,208
|
$
|
1,276,297
|
||||||
* GMOL includes frozen vegetable sales exclusively for GMOL.
|
Source and Availability of Raw Materials
|
The Company's food packaging plants are located in major vegetable producing states and in two fruit producing states. Fruits and vegetables are primarily obtained through supply contracts with independent growers.
|
Intellectual Property
|
The Company's most significant brand name, Libby's®, is held pursuant to a trademark license granted to the Company in March 1982 and renewable by the Company every 10 years for an aggregate period expiring in March 2081. The original licensor was Libby, McNeill & Libby, Inc., then an indirect subsidiary of Nestlé, S. A. ("Nestlé") and the license was granted in connection with the Company's purchase of certain of the licensor's canned vegetable operations in the United States. Corlib Brands Management, LTD acquired the license from Nestlé during 2006. The license is limited to vegetables which are shelf-stable, frozen, and thermally packaged, and includes the Company's major vegetable varieties – corn, peas and green beans – as well as certain other thermally packaged vegetable varieties and sauerkraut.
|
The Company is required to pay an annual royalty and Corlib Brands now known as Libby's Brand Holding, Ltd., which may terminate the license for non-payment of royalty, use of the trademark in sales outside the licensed territory, failure to achieve a minimum level of sales under the licensed trademark during any calendar year or a material breach or default by the Company under the agreement (which is not cured within the specified cure period). With the purchase of Signature Fruit Company, LLC, which also uses the Libby's® brand name, the Company re-negotiated the license agreement and created a new, combined agreement based on Libby's® revenue dollars for fruits, vegetables, and dry beans. A total of $379,000 was paid as a royalty fee for the year ended March 31, 2015.
|
The Company also sells canned fruits and vegetables, frozen vegetables and other food products under several other brands for which the Company has obtained registered trademarks, including, Aunt Nellie's®, Green Valley®, Stokely®, Read®, Seneca Farms®, and Seneca® and other regional brands.
|
Seasonal Business
|
While individual fruits and vegetables have seasonal cycles of peak production and sales, the different cycles are somewhat offsetting. Minimal food packaging occurs in the Company's last fiscal quarter ending March 31, which is the optimal time for maintenance, repairs and equipment changes in its packaging plants. The supply of commodities, current pricing, and expected new crop quantity and quality affect the timing and amount of the Company's sales and earnings. When the seasonal harvesting periods of the Company's major fruits and vegetables are newly completed, inventories for these packaged fruits and vegetables are at their highest levels. For peas, the peak inventory time is mid-summer and for corn, the Company's highest volume vegetable, the peak inventory is in mid-autumn. For peaches, the Company's highest volume fruit, the peak inventory time is early-autumn. For pears, the peak inventory is late-summer.
|
These seasonal fluctuations are illustrated in the following table, which presents certain unaudited quarterly financial information for the periods indicated:
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Year ended March 31, 2015:
|
||||||||||||||||
Net sales
|
$
|
240,043
|
$
|
312,161
|
$
|
456,207
|
$
|
277,939
|
||||||||
Gross margin
|
16,996
|
16,804
|
26,084
|
23,273
|
||||||||||||
Net (loss) earnings
|
(107
|
)
|
(578
|
)
|
7,819
|
2,765
|
||||||||||
Inventories (at quarter end)
|
467,290
|
731,527
|
547,149
|
472,412
|
||||||||||||
Revolver outstanding (at quarter end)
|
180,050
|
302,220
|
255,000
|
233,000
|
||||||||||||
Year ended March 31, 2014:
|
||||||||||||||||
Net sales
|
$
|
232,127
|
$
|
336,628
|
$
|
477,694
|
$
|
293,759
|
||||||||
Gross margin
|
19,680
|
22,379
|
31,178
|
17,726
|
||||||||||||
Net earnings (loss)
|
1,347
|
6,603
|
6,846
|
(1,017
|
)
|
|||||||||||
Inventories (at quarter end)
|
484,694
|
758,654
|
550,723
|
451,250
|
||||||||||||
Revolver outstanding (at quarter end)
|
151,026
|
282,000
|
226,000
|
175,000
|
The following table sets forth domestic and export sales:
|
Fiscal Year
|
||||||||||||||
2015
|
2014
|
2013
|
||||||||||||
(In thousands, except percentages)
|
||||||||||||||
Net Sales:
|
||||||||||||||
United States
|
$
|
1,170,522
|
|
$
|
1,217,238
|
|
$
|
1,150,831
|
||||||
Export
|
115,828
|
122,970
|
125,466
|
|||||||||||
Total Net Sales
|
$
|
1,286,350
|
|
$
|
1,340,208
|
|
$
|
1,276,297
|
||||||
As a Percentage of Net Sales:
|
||||||||||||||
United States
|
91.0
|
% |
|
90.8
|
% |
|
90.2
|
%
|
||||||
Export
|
9.0
|
% |
|
9.2
|
% |
|
9.8
|
%
|
||||||
Total
|
100.0
|
% |
|
100.0
|
% |
|
100.0
|
%
|
|
|
·a classified board of directors;
|
|
|
|
·a requirement that special meetings of shareholders be called only by our directors or holders of 25% of the voting power of all shares outstanding and entitled to vote at the meeting;
|
|
|
|
·our board of directors has the power to classify and reclassify any of our unissued shares of capital stock into shares of capital stock with such preferences, rights, powers and restrictions as the board of directors may determine;
|
|
|
|
·the affirmative vote of two thirds of the shares present and entitled to vote is required to amend our bylaws or remove a director; and
|
|
|
|
·under the New York Business Corporation Law, in addition to certain restrictions which may apply to "business combinations" involving us and an "interested shareholder", a plan for our merger or consolidation must be approved by two-thirds of the votes of all outstanding shares entitled to vote thereon. See "Our existing shareholders, if acting together, may be able to exert control over matters requiring shareholder approval."
|
Item 1B
|
Unresolved Staff Comments
|
The Company does not have any unresolved comments from the SEC staff regarding its periodic or current reports under the Exchange Act.
|
Item 2
|
Properties
|
The following table details the Company's manufacturing plants and warehouses:
|
Manufacturing Plants and Warehouses
|
||||
Square
|
||||
Footage
|
Acres
|
|||
('000)
|
||||
Food Group
|
||||
Modesto, California
|
2,213
|
114
|
||
Buhl, Idaho
|
616
|
144
|
||
Payette, Idaho
|
382
|
43
|
||
Princeville, Illinois
|
271
|
308
|
||
Arlington, Minnesota
|
264
|
536
|
||
Blue Earth, Minnesota
|
286
|
346
|
||
Bricelyn, Minnesota
|
57
|
7
|
||
Glencoe, Minnesota
|
646
|
786
|
||
LeSueur, Minnesota
|
23
|
2
|
||
Montgomery, Minnesota
|
559
|
1,010
|
||
Rochester, Minnesota
|
1,078
|
840
|
||
Geneva, New York
|
769
|
602
|
||
Leicester, New York
|
198
|
91
|
||
Marion, New York
|
348
|
181
|
||
Lebanon, Pennsylvania
|
138
|
16
|
||
Dayton, Washington
|
253
|
41
|
||
Sunnyside, Washington
|
570
|
50
|
||
Yakima, Washington
|
122
|
8
|
||
Baraboo, Wisconsin
|
584
|
11
|
||
Cambria, Wisconsin
|
412
|
406
|
||
Clyman, Wisconsin
|
435
|
724
|
||
Cumberland, Wisconsin
|
375
|
304
|
||
Gillett, Wisconsin
|
320
|
105
|
||
Janesville, Wisconsin
|
1,201
|
302
|
||
Mayville, Wisconsin
|
297
|
367
|
||
Oakfield, Wisconsin
|
227
|
2,228
|
||
Ripon, Wisconsin
|
589
|
75
|
||
Non-Food Group
|
||||
Penn Yan, New York
|
27
|
4
|
||
Total
|
13,260
|
9,651
|
These facilities primarily package various fruit and vegetable products. Most of the facilities are owned by the Company. The Company is a lessee under a number of operating leases for equipment and real property used for packaging and warehousing.
|
The Company believes that these facilities are suitable and adequate for the purposes for which they are currently intended. 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.
|
Certain of the Company's facilities are mortgaged to financial institutions to secure long-term debt. See Notes 3, 4 and 5 of Item 8, Financial Statements and Supplementary Data, for additional information about the Company's long-term debt and lease commitments.
|
Item 3
|
Legal Proceedings
|
See Note 14, "Legal Proceedings and Other Contingencies" to the Consolidated Financial Statements included in Item 8, Financial Statements and Supplemental Data.
|
See also Item 1, Business -- Environmental Regulation, for information regarding environmental legal proceedings.
|
Item 4
|
Mine Safety Disclosures
|
Not Applicable.
|
PART II
|
Item 5
|
Market for Registrant's Common Stock, Related Security Holder Matters and Issuer Purchases of Equity Securities
|
Each class of preferred stock receives preference as to dividend payment and declaration over any common stock. In addition, refer to the information in the 2015 Annual Report, "Shareholder Information and Quarterly Results", which is incorporated by reference.
|
Securities Authorized for Issuance Under Equity Compensation Plans
|
On August 10, 2007, the 2007 Equity Incentive Plan (the "2007 Equity Plan") was approved by shareholders at the Company's annual meeting. The 2007 Equity Plan has a 10-year term and authorized the issuance of up to 100,000 shares of either Class A Common Stock and Class B Common Stock or a combination of the two classes of stock. A total of 3,366 were awarded in fiscal year 2015 under the terms of the 2007 Equity Plan. As of March 31, 2015, there were 68,593 shares available for distribution as part of future awards under the 2007 Equity Plan. No additional shares have been awarded under the 2007 Equity Plan through the date of this Form 10-K.
|
Common Stock Performance Graph
|
Refer to the information in the 2015 Annual Report, "Shareholder Information and Quarterly Results", which is incorporated by reference.
|
Issuer Purchases of Equity Securities
|
Maximum Number (or
|
||||||||||||||||||||||||
Approximate Dollar
|
||||||||||||||||||||||||
Total Number of Shares
|
Average Price Paid per
|
Total Number of Shares
|
Value) of Shares that
|
|||||||||||||||||||||
Purchased (1)
|
Share
|
Purchased as Part of
|
May Yet Be Purchased
|
|||||||||||||||||||||
Class A
|
Class B
|
Class A
|
Class B
|
Publicly Announced
|
Under the Plans or
|
|||||||||||||||||||
Period
|
Common
|
Common
|
Common
|
Common
|
Plans or Programs
|
Programs
|
||||||||||||||||||
1/01/15 - 1/31/15
|
-
|
45,380
|
$
|
-
|
$
|
32.46
|
-
|
|||||||||||||||||
2/01/15 - 2/28/15
|
-
|
2,301
|
$
|
-
|
$
|
32.23
|
-
|
|||||||||||||||||
3/01/15 - 3/31/15
|
874,400
|
34
|
$
|
26.03
|
$
|
33.97
|
817,400
|
|||||||||||||||||
Total
|
874,400
|
47,715
|
$
|
26.03
|
$
|
32.45
|
817,400
|
1,267,414
|
||||||||||||||||
(1) All purchases were made in open market transactions by the Trustees of the Seneca Foods Corporation Employees' Savings Plan,
|
||||||||||||||||||||||||
Trustees of Dundee Insurance, Inc and the Seneca Foods, L.L.C. 401(k) Retirement Savings Plan to provide employee matching
|
||||||||||||||||||||||||
contributions under the Plans.
|
Item 6
|
Selected Financial Data
|
Refer to the information in the 2015 Annual Report, "Five Year Selected Financial Data", which is incorporated by reference.
|
Item 7
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
Refer to the information in the 2015 Annual Report, "Management's Discussion and Analysis of Financial Condition and Results of Operations", which is incorporated by reference.
|
Item 7A
|
Quantitative and Qualitative Disclosures about Market Risk
|
Refer to the information in the 2015 Annual Report, "Quantitative and Qualitative Disclosures about Market Risk", which is incorporated by reference.
|
Item 8
|
Financial Statements and Supplementary Data
|
Refer to the information in the 2015 Annual Report, "Consolidated Financial Statements and Notes thereto including Report of Independent Registered Public Accounting Firm," which is incorporated by reference.
|
Item 9
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
None.
|
Item 9A
|
Controls and Procedures
|
Evaluation of Disclosure Controls and Procedures
|
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2015. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2015, the Company's disclosure controls and procedures: (1) were designed to ensure that material information relating to the Company is made known to our Chief Executive Officer and Chief Financial Officer by others within those entities, particularly during the period in which this report was being prepared, so as to allow timely decisions regarding required disclosure and (2) were effective, in that they provide reasonable assurance that information required to be disclosed by the Company in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.
|
Management's Annual Report on Internal Control Over Financial Reporting
|
Our management is responsible for establishing and maintaining adequate internal control over the Company's financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
|
Our management assessed the effectiveness of the Company's internal control over financial reporting as of March 31, 2015. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on our assessment, management believes that, as of March 31, 2015, our internal control over financial reporting is effective based on those criteria.
The Company's independent registered public accountant has issued its report on the effectiveness of the Company's internal control over financial reporting. The report appears on the next page.
|
Report of Independent Registered Public Accounting Firm
|
Board of Directors and Stockholders
|
Seneca Foods Corporation
|
Marion, New York
|
We have audited Seneca Foods Corporation's internal control over financial reporting as of March 31, 2015, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Item 9A, Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
|
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
|
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
|
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
|
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2015, based on the COSO criteria.
|
We have also audited, in accordance with the standards of the Public Company Accounting Standards Board (United States), the consolidated balance sheets of Seneca Foods Corporation as of March 31, 2015 and 2014, and the related consolidated statements of net earnings, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended March 31, 2015 and our report dated June 9, 2015 expressed an unqualified opinion thereon.
|
/s/ BDO USA, LLP
|
Milwaukee, Wisconsin
|
June 9, 2015
|
Changes in Internal Control over Financial Reporting
|
There was no change in our internal control over financial reporting (as defined in rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2015 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
|
Item 9B
|
Other Information
|
None.
|
PART III
|
Item 10
|
Directors, Executive Officers and Corporate Governance
|
The information regarding directors is incorporated herein by reference from the section entitled "Proposal One: Election of Directors" in the Company's definitive Proxy Statement ("Proxy Statement") to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, for the Company's Annual Meeting of Stockholders to be held on July 31, 2015. The Proxy Statement will be filed within 120 days after the end of the Company's fiscal year ended March 31, 2015.
|
The information regarding executive officers is incorporated herein by reference from the section entitled "Executive Officers" in the Proxy Statement.
|
The information regarding compliance with Section 16(a) of the Exchange Act is incorporated herein by reference from the section entitled "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement.
|
Information regarding the Company's code of business conduct and ethics found in the subsection captioned "Available Information" in Item 1 of Part I hereof is also incorporated herein by reference into this Item 10.
|
The information regarding the Company's audit committee, its members and the audit committee financial experts is incorporated herein by reference from the subsection entitled "Audit Committee" in the section entitled "Board Governance" in the Proxy Statement.
|
Item 11
|
Executive Compensation
|
The information included under the following captions in the Proxy Statement is incorporated herein by reference: "Compensation Discussion and Analysis," "Summary Compensation Table," "Grants of Plan-Based Awards in Fiscal Year 2015," "Outstanding Equity Awards at 2015 Fiscal Year-End," "Stock Vested in Fiscal Year 2015," "Pension Benefits," "Compensation of Directors" and "Compensation Committee Interlocks." The information included under the heading "Compensation Committee Report" in the Proxy Statement is incorporated herein by reference; however, this information shall not be deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.
|
Item 12
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Information regarding security ownership of certain beneficial owners and management is incorporated herein by reference from the sections entitled "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management and Directors" in the Proxy Statement.
|
Item 13
|
Certain Relationships and Related Transactions, and Director Independence
|
The information regarding transactions with related parties and director independence is incorporated herein by reference from the sections entitled "Independent Directors" and "Certain Transactions and Relationships" in the Proxy Statement.
|
Item 14
|
Principal Accountant Fees and Services
|
The information regarding principal accountant fees and services is incorporated herein by reference from the section entitled "Principal Accountant Fees and Services" in the Proxy Statement.
|
PART IV
|
Item 15
|
Exhibits and Financial Statement Schedule
|
A.Exhibits, Financial Statements, and Supplemental Schedule
|
1.Financial Statements ‑ the following consolidated financial statements of the Registrant, included in the 2015 Annual Report, are incorporated by reference in Item 8:
|
Consolidated Statements of Net Earnings – Years ended March 31, 2015, 2014 and 2013
|
Consolidated Statements of Comprehensive Income (Loss) – Years ended March 31, 2015, 2014 and 2013
|
Consolidated Balance Sheets ‑ March 31, 2015 and 2014
|
Consolidated Statements of Cash Flows – Years ended March 31, 2015, 2014 and 2013
|
Consolidated Statements of Stockholders' Equity – Years ended March 31, 2015, 2014 and 2013
|
Notes to Consolidated Financial Statements – Years ended March 31, 2015, 2014 and 2013
|
Reports of Independent Registered Public Accounting Firm
|
Pages
|
2.Supplemental Schedule:
|
Report of Independent Registered Public Accounting Firm on Schedule 18
|
Schedule II—Valuation and Qualifying Accounts 19
|
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:
|
Exhibit Number Description
|
3.1 The Company's Restated Certificate of Incorporation, (incorporated by reference to the Company's Current Report on Form 8-K dated August 11, 2010).
|
3.2 The Company's Bylaws (incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q/A filed August 18, 1995 for the quarter ended July 1, 1995)
|
3.3 Amendment to the Company's Bylaws (incorporated by reference to Exhibit 3 to the Company's Current Report on Form 8-K dated November 6, 2007)
|
10.1**Second Amended and Restated Alliance Agreement (incorporated by reference to Exhibit 10 to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 5, 2009)
|
10.2**First Amendment to the Second Amended and Restated Alliance Agreement by and among Seneca Foods Corporation and General Mills Operations, LLC dated June 11, 2010 (incorporated by reference to Exhibit 10 to the Company's Form 10-Q for the quarter ended July 3, 2010)
|
10.3 Second Amended and Restated Loan and Security Agreement dated as of July 20, 2011 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 26, 2011).
|
10.4 First Amendment to the Second Amended and Restated Loan and Security Agreement dated as of August 1, 2011 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended March 31, 2013).
|
10.5 Second Amendment to the Second Amended and Restated Loan and Security Agreement dated as of December 20, 2012 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (incorporated by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended March 31, 2013).
|
10.6 Third Amendment to the Second Amended and Restated Loan and Security Agreement dated as of March 5, 2013 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended March 31, 2013).
|
10.7 Fourth Amendment to the Second Amended and Restated Loan and Security Agreement dated as of December 16, 2013 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended March 31, 2014).
|
10.8 Fifth Amendment to the Second Amended and Restated Loan and Security Agreement dated as of April 1, 2014 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended March 31, 2014).
|
10.9 Sixth Amendment to the Second Amended and Restated Loan and Security Agreement dated as of June 17, 2014 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC for the quarter ended June 28, 2014).
|
10.10 Seventh Amendment to the Second Amended and Restated Loan and Security Agreement dated as of November 6, 2014 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, certain other subsidiaries of Seneca Foods Corporation, the financial institutions party thereto as lenders, Bank of America, N.A., as agent and issuing bank, RBS Citizens, N.A., as syndication agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated with RBS Citizens, N.A., as joint lead arrangers (filed herewith).
|
10.11 Indemnification Agreement between the Company and the directors of the Company (incorporated by reference to Exhibit 10 to the Company's Annual report on Form 10-K for the fiscal year ended March 31, 2002)
|
10.12* Seneca Foods Corporation Executive Profit Sharing Bonus Plan (incorporated by reference to Exhibit 99.1to the Company's Registration Statement on Form S-8 (No. 333-166846))
|
10.13* Seneca Foods Corporation Manager Profit Sharing Bonus Plan (incorporated by reference to Exhibit 99.2 to the Company's Registration Statement on Form S-8 (No. 333-166846))
|
13 The material contained in the 2015 Annual Report to Shareholders under the following headings: "Five Year Selected Financial Data", "Management's Discussion and Analysis of Financial Condition and Results of Operations", Consolidated Financial Statements and Notes thereto including Independent Auditors' Report, "Quantitative and Qualitative Disclosures about Market Risk", and "Shareholder Information and Quarterly Results" (filed herewith)
|
21 List of Subsidiaries (filed herewith)
|
23 Consent of BDO USA, LLP (filed herewith)
|
24 Powers of Attorney (filed herewith)
|
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 as Chief Financial Officer 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 Annual Report on Form 10-K for the year ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i)consolidated balance sheets, (ii) consolidated statements of net earnings, (iii) consolidated statements of comprehensive income, (iv) consolidated statements of cash flows, (v) consolidated statement of stockholders' equity and (vi) the notes to the consolidated financial statements
|
* Indicates management or compensatory agreement
**Certain provisions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect of such omitted portions
|
|
Report of Independent Registered Public Accounting Firm
|
Board of Directors and Stockholders
|
Seneca Foods Corporation
|
Marion, New York
|
The audits referred to in our report dated June 9, 2015 relating to the consolidated financial statements of Seneca Foods Corporation, which is incorporated in Item 8 of Form 10-K by reference to the Annual Report to Shareholders for the year ended March 31, 2015, also included the audit of the financial statement schedule listed in the accompanying index. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.
|
In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
|
/s/ BDO USA, LLP
|
Milwaukee, Wisconsin
|
June 9, 2015
|
Schedule II
|
||||||||||||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS
|
||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||
Balance at
|
Charged/
|
Charged to
|
Deductions
|
Balance
|
||||||||||||||||||||||
beginning
|
(credited)
|
other
|
from
|
at end
|
||||||||||||||||||||||
of period
|
to income
|
accounts
|
reserve
|
of period
|
||||||||||||||||||||||
Year-ended March 31, 2015:
|
||||||||||||||||||||||||||
Allowance for doubtful accounts
|
$
|
160
|
$
|
45
|
$
|
¾
|
$
|
(60
|
)
|
(a)
|
$
|
145
|
||||||||||||||
Income tax valuation allowance
|
$
|
390
|
$
|
1,397
|
$
|
¾
|
$
|
¾
|
$
|
1,787
|
||||||||||||||||
Year-ended March 31, 2014:
|
||||||||||||||||||||||||||
Allowance for doubtful accounts
|
$
|
201
|
$
|
23
|
$ |
$
|
(64
|
)
|
(a)
|
$
|
160
|
|||||||||||||||
Income tax valuation allowance
|
$
|
758
|
$
|
(368
|
)
|
$
|
¾
|
$
|
¾
|
$
|
390
|
|||||||||||||||
Year-ended March 31, 2013:
|
||||||||||||||||||||||||||
Allowance for doubtful accounts
|
$
|
206
|
$
|
(55
|
)
|
$
|
44
|
(b)
|
$
|
6
|
(a)
|
$
|
201
|
|||||||||||||
Income tax valuation allowance
|
$
|
906
|
$
|
(148
|
)
|
$
|
¾
|
$
|
¾
|
$
|
758
|
|||||||||||||||
(a) Accounts written off, net of recoveries.
|
||||||||||||||||||||||||||
(b) Acquired via the Sunnyside acquisition.
|
SENECA FOODS CORPORATION
/s/Timothy J. Benjamin
Timothy J. Benjamin
Senior Vice President, Chief Financial Officer and Treasurer
|
June 9, 2015
|
Signature
|
Title
|
Date
|
||
/s/Arthur S. Wolcott
Arthur S. Wolcott
|
Chairman and Director
|
June 9, 2015
|
||
/s/Kraig H. Kayser
Kraig H. Kayser
|
President, Chief Executive Officer, Director
|
June 9, 2015
|
||
/s/Timothy J. Benjamin
Timothy J. Benjamin
|
Senior Vice President, Chief Financial Officer and Treasurer
|
June 9, 2015
|
||
/s/Jeffrey L. Van Riper
Jeffrey L. Van Riper
|
Vice President, Controller, and Secretary (Principal Accounting Officer)
|
June 9, 2015
|
||
*
|
Director
|
June 9, 2015
|
||
Arthur H. Baer
|
||||
*
|
Director
|
June 9, 2015
|
||
Peter R. Call
|
||||
* |
Director
|
June 9, 2015
|
||
John P. Gaylord
|
|
|
||
Director
|
June 9, 2015
|
|||
Susan A. Henry
|
||||
*
|
Director
|
June 9, 2015
|
||
Samuel T. Hubbard, Jr.
|
||||
*
|
Director
|
June 9, 2015
|
||
Thomas Paulson
|
||||
*
|
Director
|
June 9, 2015
|
||
Susan W. Stuart
/s/Kraig H. Kayser
*By Kraig H. Kayser,
Attorney-in-fact
|