Equibles

10-Q

Seneca Foods Corp (SENEB)

10-Q 2020-08-05 For: 2020-06-27
View Original
Added on April 04, 2026

Table of Contents

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 June 27, 2020

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

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, every Interactive Data File required to be submitted 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 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:

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 ☐

Title of Each Class Trading Symbol Name of Exchange on<br> <br>Which Registered
Common Stock Class A, $.25 Par SENEA NASDAQ Global Market
Common Stock Class B, $.25 Par SENEB NASDAQ Global Market

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 July 31, 2020
Common Stock Class A, $.25 Par 7,368,593
Common Stock Class B, $.25 Par 1,733,902

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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-June 27, 2020, June 29, 2019 and March 31, 2020 1
Condensed Consolidated Statements of Net Earnings-Three Months Ended June 27, 2020 and June 29, 2019 2
Condensed Consolidated Statements of Comprehensive Income-Three Months Ended June 27, 2020 and June 29, 2019 2
Condensed Consolidated Statements of Cash Flows-Three Months Ended June 27, 2020 and June 29, 2019 3
Condensed Consolidated Statements of Stockholders' Equity-Three Months Ended June 27, 2020 and June 29, 2019 4
Notes to Condensed Consolidated Financial Statements 5
Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3 Quantitative and Qualitative Disclosures about Market Risk 20
Item 4 Controls and Procedures 21
PART II OTHER INFORMATION
Item 1 Legal Proceedings 22
Item 1A Risk Factors 22
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3 Defaults Upon Senior Securities 22
Item 4 Mine Safety Disclosures 22
Item 5 Other Information 22
Item 6 Exhibits 22
SIGNATURES 23

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SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Per Share Data)

Unaudited
June 29,<br> <br>2019 March 31,<br> <br>2020
ASSETS
Current Assets:
Cash and Cash Equivalents 11,607 $ 16,901 $ 10,702
Accounts Receivable, Net 62,860 74,000 109,802
Contracts Receivable 6,059 5,157 7,610
Current Assets Held For Sale 11,989 - -
Current Assets Held For Sale-Discontinued Operations 182 98 182
Inventories 423,844 493,498 411,631
Refundable Income Taxes - 441 4,350
Other Current Assets 7,363 3,577 7,323
Total Current Assets 523,904 593,672 551,600
Property, Plant and Equipment, Net 239,524 206,188 228,489
Right-of-Use Assets Operating, Net 57,349 83,742 60,663
Right-of-Use Assets Financing, Net 32,222 34,294 33,617
Deferred Income Taxes, Net 9,185 3,722 7,872
Noncurrent Assets Held For Sale-Discontinued Operations 1,026 1,143 1,026
Other Assets 19,751 2,547 26,042
Total Assets 882,961 $ 925,308 $ 909,309
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable 99,615 $ 77,571 $ 71,194
Deferred Revenue 3,594 1,936 7,758
Accrued Vacation 12,147 11,843 11,876
Accrued Payroll 8,796 6,002 11,864
Other Accrued Expenses 17,182 17,550 17,808
Income Taxes Payable 8,463 - -
Current Liabilities Held For Sale-Discontinued Operations - 3,653 880
Current Portion of Operating Lease Obligations 21,311 26,641 21,550
Current Portion of Financing Lease Obligations 6,232 6,573 6,224
Current Portion of Long-Term Debt 500 88 500
Total Current Liabilities 177,840 151,857 149,654
Long-Term Debt, Less Current Portion 144,467 246,645 217,081
Operating Lease Obligations, Less Current Portion 38,634 60,979 42,760
Financing Lease Obligations, Less Current Portion 22,613 29,907 24,366
Pension Liabilities 79,321 18,005 75,742
Other Long-Term Liabilities 5,000 4,077 5,342
Total Liabilities 467,875 511,470 514,945
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock 681 707 681
Common Stock, .25 Par Value Per Share 3,041 3,039 3,041
Additional Paid-in Capital 98,412 98,285 98,384
Treasury Stock, at Cost (88,319 ) (78,484 ) (88,319 )
Accumulated Other Comprehensive Loss (79,220 ) (18,285 ) (79,220 )
Retained Earnings 480,491 408,576 459,797
Total Stockholders' Equity 415,086 413,838 394,364
Total Liabilities and Stockholders’ Equity 882,961 $ 925,308 $ 909,309

All values are in US Dollars.

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

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SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF NET EARNINGS

(Unaudited)

(In Thousands, Except Per Share Data)

Three Months Ended
June 27,<br> <br>2020 June 29,<br> <br>2019
Net Sales $ 288,165 $ 264,925
Costs and Expenses:
Cost of Product Sold 239,603 245,751
Selling, General and Administrative 18,145 16,258
Plant Restructuring Charge 263 4,806
Other Operating Income (145 ) (4,827 )
Total Costs and Expenses 257,866 261,988
Operating Income 30,299 2,937
Loss From Equity Investment 676 -
Other Loss (Income) 931 (1,803 )
Interest Expense, Net 1,651 3,352
Earnings Before Income Taxes 27,041 1,388
Income Taxes 6,335 285
Net Earnings $ 20,706 $ 1,103
Basic Earnings per Common Share $ 2.26 $ 0.12
Diluted Earnings per Common Share: $ 2.24 $ 0.12

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)

Three Months Ended
June 27, 2020 June 29, 2019
Comprehensive income:
Net earnings $ 20,706 $ 1,103
Total $ 20,706 $ 1,103

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

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SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In Thousands)

Three Months Ended
June 27, 2020 June 29, 2019
Cash Flows from Operating Activities:
Net Earnings From Operations $ 20,706 $ 1,103
Adjustments to Reconcile Net Earnings to Net Cash Used In Operations:
Depreciation & Amortization 7,881 7,382
Gain on the Sale of Assets (315 ) (4,663 )
Provision for Restructuring and Impairment 263 4,806
Loss From Equity Investment 676 -
Deferred Income Tax Benefit (1,313 ) (1,305 )
Changes in Operating Assets and Liabilities:
Accounts Receivable 48,493 4,965
Inventories (12,213 ) 8,186
Other Current Assets (94 ) (502 )
Income Taxes 12,813 1,453
Accounts Payable, Accrued Expenses and Other 23,424 7,382
Net Cash Provided By Operations 100,321 28,807
Cash Flows from Investing Activities:
Additions to Property, Plant and Equipment (19,230 ) (9,776 )
Proceeds from the Sale of Assets 914 6,398
Net Cash Used In Investing Activities (18,316 ) (3,378 )
Cash Flows from Financing Activities:
Long-Term Borrowing 91,896 93,600
Payments on Long-Term Debt (164,510 ) (109,236 )
Other Assets (6,950 ) -
Payments on Financing Leases (1,536 ) (1,616 )
Purchase of Treasury Stock - (2,744 )
Dividends - (12 )
Net Cash Used In Financing Activities (81,100 ) (20,008 )
Net Increase in Cash and Cash Equivalents 905 5,421
Cash and Cash Equivalents, Beginning of the Period 10,702 11,480
Cash and Cash Equivalents, End of the Period $ 11,607 $ 16,901
Supplemental Disclosures of Cash Flow Information:
Noncash Transactions:
Property, Plant and Equipment Purchased Under Lease Obligations $ 2,375 $ 4,775

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

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SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(Unaudited)

(In Thousands)

Accumulated
Additional Other
Preferred Common Paid-In Treasury Comprehensive Retained
Stock Stock Capital Stock Loss Earnings
First Quarter FY 2021: **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Balance March 31, 2020 $ 681 $ 3,041 $ 98,384 $ (88,319 ) $ (79,220 ) $ 459,797
Net earnings - - - - - 20,706
Cash dividends declared on preferred stock - - - - - (12 )
Equity incentive program - - 28 - - -
Balance June 27, 2020 $ 681 $ 3,041 $ 98,412 $ (88,319 ) $ (79,220 ) $ 480,491
First Quarter FY 2020: **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Balance March 31, 2019 $ 707 $ 3,039 $ 98,260 $ (75,740 ) $ (18,285 ) $ 409,504
Net earnings - - - - - 1,103
Cash dividends declared on preferred stock - - - - - (12 )
Equity incentive program - - 25 - - -
Purchase treasury stock - - - (2,744 ) - -
Operating lease impairment adjustment upon the adoption of ASU 2016-02 "Leases" (net of tax) - - - - - (2,019 )
Balance June 29, 2019 $ 707 $ 3,039 $ 98,285 $ (78,484 ) $ (18,285 ) $ 408,576
Preferred Stock Common Stock
--- --- --- --- --- --- ---
6% 10%
Cumulative Par Cumulative Par 2003 Series
Value .25 Value .025 Participating Participating Class A Class B
Callable at Par Convertible Convertible Par Convertible Par Common Stock Common Stock
Voting Voting Value .025 Value .025 Par Value .25 Par Value .25
Shares authorized and designated:
June 27, 2020
Shares outstanding:
June 27, 2020

All values are in US Dollars.

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

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

1. Unaudited Condensed Consolidated Financial Statements

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of Seneca Foods Corporation (the “Company”) as of June 27, 2020 and results of its operations and its cash flows for the interim periods presented. All significant intercompany transactions and accounts have been eliminated in consolidation. The March 31, 2020 balance sheet was derived from the audited consolidated financial statements.

The results of operations for the three **** month period ended June 27, 2020 are not necessarily indicative of the results to be expected for the full year.

For the three months ended June 27, 2020 and June 29, 2019 the Company sold certain finished goods inventory for cash on a bill and hold basis.  The terms of the bill and hold agreement(s) provide that title to the specified inventory is transferred to the customer(s) prior to shipment and the Company has the right to payment (prior to physical delivery) which results in recorded revenue as determined under the revenue recognition standard.

The accounting policies followed by the Company are set forth in Note 1 to the Company's Consolidated Financial Statements in the Company’s 2020 Annual Report on Form 10-K.

Other footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company's 2020 Annual Report on Form 10-K.

All references to years are fiscal years ended or ending March 31 unless otherwise indicated. Certain percentage tables may not foot due to rounding.

Reclassifications—Certain previously reported amounts have been reclassified to conform to the current period classification. In addition, the Company has adjusted its prior quarter cash flow statement to properly reflect lease payments made on operating leases under ASC 842.  This adjustment reduced net cash provided by operations and reduced net cash used in financing activities.

2. Discontinued Operations

On July 13, 2018, the Company executed a nonbinding letter of intent with a perspective buyer of the Modesto facility. On October 9, 2018, the Company closed on the sale of the facility to this outside buyer with net proceeds of $63,326,000. During the second quarter of fiscal 2019, the Company ceased use of the Modesto facility. Based on its magnitude of revenue to the Company (approximately 15%) and because the Company was exiting the production of peaches, this sale represented a significant strategic shift that has a material effect on the Company’s operations and financial results. Accordingly, the Company has applied discontinued operations treatment for this sale as required by Accounting Standards Codification 210-05—Discontinued Operations. The business we exited is part of the Fruit and Vegetable segment.

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

The following table presents information related to the major classes of assets and liabilities of Modesto that are classified as Held For Sale-Discontinued Operations in the Company's Consolidated Balance Sheets (in thousands):

June 27 June 29 March 31
2020 2019 2020
Other Current Assets 182 98 182
Current Assets Held For Sale-Discontinued Operations $ 182 $ 98 182
Other Assets $ 1,026 $ 1,143 1,026
Noncurrent Assets Held For Sale-Discontinued Operations $ 1,026 $ 1,143 1,026
Accounts Payable and Accrued Expenses $ - $ 3,653 880
Current Liabilities Held For Sale-Discontinued Operations $ - $ 3,653 880
3. Assets Held For Sale
--- ---

As of June 27, 2020, the Company has certain non-operating units in the Midwest that met the criteria to be classified as held for sale, which requires the Company to present the related assets and liabilities as separate line items in our Condensed Consolidated Balance Sheet. The Company is required to record the assets held for sale at the lower of carrying value or fair value less costs to sell. The following table presents information related to the major classes of assets and liabilities that were held for sale in our Condensed Consolidated Balance sheets (in thousands):

Property, Plant and Equipment (net) $ 11,989
Current Assets Held For Sale $ 11,989
4. Revenue Recognition
--- ---

In the following table, revenue is disaggregated by product category groups (in millions):

Three Months Ended
June 27,<br> <br>2020 June 29,<br> <br>2019
Canned Vegetables $ 221.0 $ 187.2
Frozen 17.9 18.2
Fruit Products 18.8 22.7
Chip Products 2.4 2.9
Prepared Foods 24.2 29.8
Other 3.9 4.1
$ 288.2 $ 264.9

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

5. Inventories

First-In, First-Out (“FIFO”) based inventory costs exceeded LIFO based inventory costs by $142,126,000 as of the end of the first quarter of fiscal 2021 as compared to $164,517,000 as of the end of the first quarter of fiscal 2020. The change in the LIFO Reserve for the three months ended June 27, 2020 was a decrease of $2,141,000 as compared to an increase of $3,176,000 for the three months ended June 29, 2019. This reflects the projected impact of an overall cost decrease expected in fiscal 2021 versus fiscal 2020. The following table shows inventory by category and the related LIFO balance (in thousands):

June 27, 2020 June 29, 2019 March 31, 2020
Finished products $ 330,071 $ 405,372 $ 351,251
In process 29,875 33,568 31,173
Raw materials and supplies 206,024 219,075 173,474
565,970 658,015 555,898
Less excess of FIFO cost over LIFO cost 142,126 164,517 144,267
Total inventories $ 423,844 $ 493,498 $ 411,631
6. Leases
--- ---

The Company determines if an arrangement is a lease at inception of the agreement. Operating leases are included in right-of-use operating assets, and current and noncurrent operating lease obligations in the Company’s Condensed Consolidated Balance Sheets. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. If the lease does not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The right-of-use operating lease assets also include in its calculation any prepaid lease payments made and excludes any lease incentives received from the arrangement. The Company’s lease terms may include options to extend or terminate the lease, and the impact of these options are included in the lease liability and lease asset calculations when the exercise of the option is at the Company’s sole discretion and it is reasonably certain that the Company will exercise that option. The Company will not separate lease and nonlease components for its leases when it is impractical to separate the two, such as leases with variable payment arrangements. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

The Company has operating leases for land, machinery and equipment. The Company also has finance leases for machinery and equipment. The commencement date used for the calculation of the lease obligation is the latter of the commencement date of the new standard ( April 1, 2019) or the lease start date. Certain of the leases have options to extend the life of the lease, which are included in the liability calculation when the option is at the sole discretion of the Company and it is reasonably certain that the Company will exercise the option. In addition, the Company has certain leases that have variable payments based solely on output or usage of the leased asset. These variable operating lease assets are excluded from the Company’s balance sheet presentation and expensed as incurred. Leases with an initial term of 12 months or less are not material.

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

Upon adoption of ASU 2016-02, the Company determined its right-of-use assets related to the operating leases for its plant equipment in Sunnyside, Washington were partially impaired and therefore were reduced with a corresponding charge to retained earnings of $2,019,000 (which is net of tax). The estimated lives of these assets were shortened due to the planned closure of the facility after the year’s pack.

Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense were as follows:

Three Months Ended
June 27, 2020 June 29, 2019
(In thousands) (In thousands)
Lease cost: **** **** **** ****
Amortization of right of use asset $ 1,186 $ 1,067
Interest on lease liabilities 294 368
Finance lease cost 1,480 1,435
Operating lease cost 6,407 7,900
Total lease cost $ 7,887 $ 9,335
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases $ 294 $ 368
Operating cash flows from operating leases 7,278 8,961
Financing cash flows from finance leases 1,536 1,616
$ 9,108 $ 10,945
Right-of-use assets obtained in exchange for new finance lease liabilities $ 35 $ 237
Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,340 $ 4,538
Weighted-average lease term (years):
Financing leases 5.1 5.7
Operating leases 3.7 4.1
Weighted-average discount rate (percentage):
Financing leases 4.1 4.2
Operating leases 4.4 4.6

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

Estimated undiscounted future lease payments under non-cancelable operating leases and financial leases, along with a reconciliation of undiscounted cash flows to operating and financing lease liabilities, respectively, as of *June 27, 2020 (*in thousands) were as follows:

Years ending March 31: Operating Financing
Balance of 2021 $ 17,076 $ 5,442
2022 19,469 7,255
2023 13,675 7,255
2024 6,819 5,728
2025 3,262 2,374
2026-2032 4,598 4,005
Total minimum payment required $ 64,899 $ 32,059
Less interest 4,954 3,214
Present value of minimum lease payments 59,945 28,845
Amount due within one year 21,311 6,232
Long-term lease obligations $ 38,634 $ 22,613
7. Revolving Credit Facility
--- ---

The Company entered into a five-year revolving credit facility (“Revolver”) on July 5, 2016. Maximum borrowings under the Revolver total $300,000,000 from April through July and $400,000,000 from August through March. The Revolver balance as of June 27, 2020 was $34,406,000 and is included in Long-Term Debt in the accompanying Condensed Consolidated Balance Sheets since the Revolver matures on July 5, 2021. The Company utilizes its Revolver for general corporate purposes, including seasonal working capital needs, to pay debt principal and interest obligations, and to fund capital expenditures and acquisitions. Seasonal working capital needs are affected by the growing cycles of the vegetables and fruits the Company processes. The majority of vegetable and fruit inventories are produced during the months of June through November and are then sold over the following year. Payment terms for vegetable and fruit produce are generally three months but can vary from a few days to seven months. Accordingly, the Company’s need to draw on the Revolver may fluctuate significantly throughout the year.

The decrease in average amount of Revolver borrowings during the first three months of fiscal 2021 compared to the first three months of fiscal 2020 was attributable to the high sales in March through June 2020 due to pantry loading as a result of COVID-19.

General terms of the Revolver include payment of interest at LIBOR plus a defined spread.

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

The following table documents the quantitative data for Revolver borrowings during the first quarter of fiscal 2021 and fiscal 2020:

First Quarter
2021 2020
(In thousands)
Reported end of period:
Outstanding borrowings $ 34,406 $ 136,014
Weighted average interest rate 1.75 % 4.00 %
Reported during the period:
Maximum amount of borrowings $ 107,967 $ 151,107
Average outstanding borrowings $ 57,281 $ 134,135
Weighted average interest rate 2.03 % 3.96 %
8. Stockholders’ Equity
--- ---

There were no repurchases of stock during the three-month period ended June 27, 2020. As of June 27, 2020, there are 3,042,092 shares or $88,319,000 of repurchased stock. These shares are not considered outstanding.

9. Retirement Plans

The net periodic benefit cost for the Company’s pension plan consisted of:

Three Months Ended
June 27, 2020 June 29, 2019
Service Cost Including Administration $ 2,574 $ 2,288
Interest Cost 2,251 2,296
Expected Return on Plan Assets (3,567 ) (3,958 )
Amortization of Prior Service Cost 23 30
Amortization of Net Loss 2,224 -
Net Periodic Benefit Cost $ 3,505 $ 656

There was no contribution to the pension plan in the three month periods ended June 27, 2020 or June 29, 2019.

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

10. Plant Restructuring

The following table summarizes the rollforward of restructuring charges and related asset impairment charges recorded and the accruals established:

Restructuring Payable
Severance Other Costs Total
(In thousands)
Balance March 31, 2020 $ 202 $ - $ 202
First quarter charge 219 44 263
Cash payments/write offs (203 ) (44 ) (247 )
Balance June 27, 2020 $ 218 $ - $ 218
Severance Other Costs Total
--- --- --- --- --- --- --- --- --- ---
(In thousands)
Balance March 31, 2019 $ 225 $ 1 $ 226
First quarter charge 586 4,220 4,806
Cash payments/write offs (170 ) (4,220 ) (4,390 )
Balance June 29, 2019 $ 641 $ 1 $ 642

During the quarter ended June 27, 2020, the Company recorded a restructuring charge of $263,000 related to the closing of plants in the Northwest, of which $219,000 was related to severance and $44,000 was for lease impairments.

During the quarter ended June 29, 2019, the Company recorded a restructuring charge of $4,806,000 related to the closing of plants in the Midwest and Northwest of which $2,245,000 was for accelerated amortization of right of use operating lease assets, $1,975,000 was mostly related to equipment moves and $586,000 was related to severance.

11. Other Operating Income and Expense

During the three months ended June 27, 2020 the Company recorded a gain on the sale of unused fixed assets of $534,000. The Company also recorded a loss of $389,000 on the disposal of equipment from a sold Northwest plant. During the three months ended June 29, 2019 the Company recorded a gain on the partial sale of a plant in the Midwest of $4,075,000. The Company also recorded a gain of on the sale of unused fixed assets of $752,000. These items are included in other operating income in the Unaudited Condensed Consolidated Statements of Net Earnings.

12. Recently Issued Accounting Standards

In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. ASU 2018-14 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The amendments in this ASU should be applied on a retrospective basis to all periods presented. We are currently evaluating the effect that ASU 2018-14 will have on our condensed consolidated financial statements and related disclosures.

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

In December 2019, the FASB issued ASU No. 2019-12 to simplify the accounting for income taxes by removing certain exceptions to the general principles and simplify areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enacted tax laws or rate changes. The new standard will be effective for the Company in the first quarter fiscal year 2022. We are currently evaluating the effect that the new standard will have on the Company’s financial position, results of operations and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which was subsequently amended in November 2018 through ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses." ASU No. 2016-13 will require entities to estimate lifetime expected credit losses for trade and other receivables along with other financial instruments which will result in earlier recognition of credit losses. Further, the new credit loss model will affect how entities in all industries estimate their allowance for losses for receivables that are current with respect to their payment terms. In November 2019, the FASB issued ASU No. 2019-10, which, among other things, deferred the application of the new guidance on credit losses for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. This guidance will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., a modified-retrospective approach). Under the above-mentioned deferral, the Company expects to adopt ASU No. 2016-03, and the related ASU No. 2018-19 amendments, beginning as of April 1, 2023 and is in the process of assessing the impact, if any, that this new guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.

There were no other recently issued accounting pronouncements that impacted the Company’s condensed consolidated financial statements. In addition, the Company did not adopt any other new accounting pronouncements during the quarter ended June 27, 2020.

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SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) June 27, 2020

13. Earnings per Common Share

Earnings per share for the quarters ended June 27, 2020 and June 29, 2019 are as follows:

Q U A R T E R
(Thousands, except per share amounts) Fiscal 2021 Fiscal 2020
Basic
Net Earnings $ 20,706 $ 1,103
Deduct preferred stock dividends paid 6 6
Undistributed earnings 20,700 1,097
Earnings attributable to participating preferred 81 4
Earnings attributable to common shareholders $ 20,619 $ 1,093
Weighted average common shares outstanding 9,118 9,477
Basic earnings per common share $ 2.26 $ 0.12
Diluted
Earnings from attributable to common shareholders $ 20,619 $ 1,093
Add dividends on convertible preferred stock 5 5
Earnings attributable to common stock on a diluted basis $ 20,624 $ 1,098
Weighted average common shares outstanding-basic 9,118 9,477
Additional shares issued related to the equity compensation plan 3 2
Additional shares to be issued under full conversion of preferred stock 67 67
Total shares for diluted 9,188 9,546
Diluted earnings per common share $ 2.24 $ 0.12
14. Fair Value of Financial Instruments
--- ---

As required by Accounting Standards Codification ("ASC") 825, “Financial Instruments,” the Company estimates the fair values of financial instruments on a quarterly basis. The estimated fair value for long-term debt (classified as Level 2 in the fair value hierarchy) is determined by the quoted market prices for similar debt (comparable to the Company’s financial strength) or current rates offered to the Company for debt with the same maturities. Long-term debt, including current portion had a carrying amount of $144,967,000 and an estimated fair value of $145,261,000 as of June 27, 2020. As of March 31, 2020, the carrying amount was $217,581,000 and the estimated fair value was $217,559,000. The fair values of all the other financial instruments approximate their carrying value due to their short-term nature.

15. Income Taxes

The effective tax rate for continuing operations was 23.4% and 20.5% for the three month periods ended June 27, 2020 and June 29, 2019, respectively. The change in tax rate resulting from federal credits and incentives is a 4.8 percentage point increase.  This change is the majority of the 2.9 percentage point increase in the effective tax rate.  The dollar amount of these credits and incentives did not change significantly from 2020 to 2021.  The projected pre-tax income increased significantly from 2020 to 2021 which resulted in the federal credits and incentives having a smaller impact on the tax rate in 2021.  This increase was partially offset by a 1.3 percentage point decrease resulting from interest received from the federal refund for the NOL carryback claim filed as a result of the CARES Act.

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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OPERATIONS

June 27, 2020

. 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® and READ®. 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 canned vegetables as well as frozen vegetables under contract packing agreements. In addition, 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:

The first fiscal quarter 2021 results include net sales of $288,165,000, which represents an 8.8% increase, or $23,240,000, from the first quarter of fiscal 2020.  The net increase in sales is due to higher selling prices/sales mix of $25,446,000 partially offset by volume decreases of $2,206,000. The increase in sales is primarily from a $33,785,000 increase in Canned Vegetable sales, partially offset by a $5,590,000 decrease in Prepared Food sales, a $3,906,000 decrease in other Canned Fruit sales, a $544,000 decrease in Snack sales, a $240,000 decrease in Frozen sales, and a $265,000 decrease in Other sales.

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

Three Months Ended
June 27, 2020 June 29, 2019
Canned Vegetables $ 221.0 $ 187.2
Frozen 17.9 18.2
Fruit Products 18.8 22.7
Chip Products 2.4 2.9
Prepared Foods 24.2 29.8
Other 3.9 4.1
$ 288.2 $ 264.9

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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OPERATIONS

June 27, 2020

Operating Income:

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

Three Months Ended
June 27, 2020 June 29, 2019
Gross Margin 16.9 % 7.2 %
Selling 2.8 % 2.8 %
Administrative 3.5 % 3.3 %
Plant Restructuring 0.1 % 1.8 %
Other Operating Income -0.1 % -1.8 %
Operating Income 10.5 % 1.1 %
Interest Expense, Net 0.6 % 1.3 %

For the three month period ended June 27, 2020, the gross margin increased from the prior year quarter from 7.2% to 16.9% due primarily to higher prices in the first quarter of 2021. The Company’s LIFO credit for the first quarter ended June 27, 2020 was $2,141,000 as compared to a charge of $3,176,000 for the first quarter ended June 29, 2019. This reflects the impact on the quarter of lower cost increases expected to be incurred in fiscal 2021, compared with to fiscal 2020. On an after-tax basis, LIFO increased net earnings by $1,606,000 for the quarter ended June 27, 2020 and LIFO decreased net earnings by $2,382,000 for the quarter ended June 29, 2019, based on the historical statutory federal income tax rates.

For the three month period ended June 27, 2020, selling costs as a percentage of sales remained the same at 2.8% compared to the same period in the prior year.

For the three month period ended June 27, 2020, administrative expense as a percentage of sales increased from 3.3% to 3.5% primarily due to higher employment costs.

During the three months ended June 27, 2020 the Company recorded a gain on the sale of unused fixed assets of $534,000. The Company also recorded a loss of $389,000 on the disposal of equipment from a sold Northwest plant. During the three months ended June 29, 2019 the Company recorded a gain on the partial sale of a plant in the Midwest of $4,075,000. The Company also recorded a gain of on the sale of unused fixed assets of $752,000. These items are included in other operating income in the Unaudited Condensed Consolidated Statements of Net Earnings.

Interest expense for the first quarter ended June 27, 2020, as a percentage of sales, decreased to 0.6% from 1.3% in first quarter ended June 29, 2019. During fiscal 2021, overall borrowings were lower than the previous year along with higher sales for the current period.

Income Taxes:

The effective tax rate for continuing operations was 23.4% and 20.5% for the three month periods ended June 27, 2020 and June 29, 2019, respectively. The change in tax rate resulting from federal credits and incentives is a 4.8 percentage point increase.  This change is the majority of the 2.9 percentage point increase in the effective tax rate.  The dollar amount of these credits and incentives did not change significantly from 2020 to 2021.  The projected pre-tax income increased significantly from 2020 to 2021 which resulted in the federal credits and incentives having a smaller impact on the tax rate in 2021.  This increase was partially offset by a 1.3 percentage point decrease resulting from interest received from the federal refund for the NOL carryback claim filed as a result of the CARES Act.

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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OPERATIONS

June 27, 2020

Earnings per Share:

Basic earnings per share were $2.26 and $0.12 for the three months ended June 27, 2020 and June 29, 2019, respectively. Diluted earnings per share were $2.24 and $0.12 for the three months ended June 27, 2020 and June 29, 2019, respectively. For details of the calculation of these amounts, refer to footnote 13 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:

June 27, June 29, March 31, March 31,
2020 2019 2020 2019
Working Capital:
Balance $ 346,064 $ 441,815 $ 401,946 $ 490,871
Change in Quarter (55,882 ) (49,056 )
Current Portion of Long-Term Debt 500 88 6,763 7,468
Long-Term Debt, Less Current Portion 144,467 246,645 217,081 265,900
Operating Lease Obligations, Less Current Portion 38,634 60,979 42,760 -
Financing Lease Obligations, Less Current Portion 22,613 29,907 24,366 -
Capital Lease Obligations, Less Current Portion - - - 31,286
Total Stockholders' Equity Per Equivalent Common Share (see Note below) 45.01 43.39 42.77 43.27
Stockholders' Equity Per Common Share 45.45 43.80 43.17 43.67
Current Ratio 2.95 3.91 3.69 5.37

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 9 of the Notes to Consolidated Financial Statements of the Company’s 2020 Annual Report on Form 10-K for conversion details.

As shown in the Condensed Consolidated Statements of Cash Flows, net cash provided by operating activities was $100,321,000 in the first three months of fiscal 2021, compared to $28,807,000 in the first three months of fiscal 2020. The $71,514,000 increase in cash provided is a $43,528,000 increase in cash provided for in accounts receivable in the first three months of fiscal 2021 as compared to the first three months of fiscal 2020, a $19,603,000 increase in cash provided by net earnings, a $11,360,000 increase in cash provided by income taxes, a $17,394,000 increase in cash provided by accounts payable, accrued expenses and other liabilities and a $408,000 increase in cash provided by other current assets, partially offset by a $20,399,000 decrease in inventories.

As compared to June 29, 2019, inventory decreased $69,654,000 to $423,844,000 at June 27, 2020. The components of the inventory decrease (excluding LIFO) reflect a $75,301,000 decrease in finished goods, a $3,693,000 decrease in work in process and a $13,051,000 decrease in raw materials and supplies. The finished goods decrease primarily reflects higher sales due to COVID-19 pantry loading and lower inventory quantities attributable to the lower calendar year 2019 pack versus the calendar year 2018 pack. 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 $142,126,000 as of the end of the first quarter of 2021 as compared to $164,517,000 as of the end of the first quarter of 2020.

Cash used in investing activities was $18,316,000 in the first three months of fiscal 2021 compared to cash used in investing activities of $3,378,000 in the first three months of fiscal 2020. Additions to property, plant and equipment were $19,230,000 in the first three months of fiscal 2021 as compared to $9,776,000 in first three months of fiscal 2011. Proceeds from the sale of assets were $914,000 for the first three months of fiscal 2021 as compared to $6,398,000 in first three months of fiscal 2020.

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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OPERATIONS

June 27, 2020

Cash used in financing activities was $81,100,000 in the first three months of fiscal 2021, which included borrowings of $91,896,000 and the repayment of $164,510,000 of long-term debt, principally consisting of borrowings and repayments on the revolving credit facility (“Revolver”). Other than borrowings under the Revolver, there was no new long-term debt during the first three months of fiscal 2020. The Company did not repurchase treasury stock in the first three months of fiscal 2021 but repurchased $2,744,000 of treasury stock during the first quarter of fiscal year 2020.

The Company entered into a five-year revolving credit facility on July 5, 2016. Available borrowings on the Revolver total $300,000,000 from April through July and $400,000,000 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 June 27, 2020, the interest rate was approximately 1.75% on a balance of $34,406,000. 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.

The Company’s credit facilities contain standard representations and warranties, events of default, and certain affirmative and negative covenants, including various financial covenants. At June 27, 2020, the Company was in compliance with all such financial covenants.

New Accounting Standards

Refer to footnote 12 of the Notes to Condensed Consolidated Financial Statements.

Seasonality

The Company's revenues are typically higher in the second and third fiscal quarters. The Company’s sales exhibit seasonality with the third fiscal quarter generating the highest retail sales due to holidays that occur during that quarter. See the Critical Accounting Policies section below for further details.

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.

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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OPERATIONS

June 27, 2020

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;
● potential impact of COVID-19 related issues at our facilities;
● 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.

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.

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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OPERATIONS

June 27, 2020

Critical Accounting Policies

For the three months ended June 27, 2020 and June 29, 2019 the Company sold certain finished goods inventory for cash on a bill and hold basis. The terms of the bill and hold agreement(s) provide that title to the specified inventory is transferred to the customer(s) prior to shipment and the Company has the right to payment (prior to physical delivery) which results in recorded revenue as determined under the revenue recognition standard.

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 is 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.

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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. To manage interest rate risk, the Company uses both fixed and variable interest rate debt plus fixed interest rate lease obligations. There have been no material changes to the Company’s exposure to market risk since March 31, 2020.

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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 June 27, 2020, 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.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Refer to footnote 15 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, 2020 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) of
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
4/01/2020 –
4/30/2020 - - $ - $ - -
5/01/2020 –
5/31/2020 - - $ - $ - -
6/01/2020 –
6/30/2020 - - $ - $ - -
Total - - $ - $ - - 516,287
Item 3. Defaults Upon Senior Securities
--- ---

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits
10.1 Amended and Restated Loan and Guaranty Agreement as of May 28, 2020 by and among Seneca Foods Corporation, Seneca Foods, LLC, Seneca Snack Company, Green Valley Foods, LLC and certain other subsidiaries of Seneca Foods Corporation and Farm Credit East, ACA (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 1, 2020).
--- ---
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.INS Inline XBRL Instance Document (filed herewith).
--- ---
101.1.SCH Inline XBRL Taxonomy Extension Calculation Schema Document (filed herewith).
101.2.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
101.3.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
101.4.LAB Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
101.5.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
104 Cover page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)

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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<br> <br>(Company)
/s/Kraig H. Kayser
August 5, 2020
Kraig H. Kayser<br> <br>President and<br> <br>Chief Executive Officer
/s/Timothy J. Benjamin
August 5, 2020
Timothy J. Benjamin<br> Chief Financial Officer

23

ex_195393.htm

EXHIBIT 31.1

CERTIFICATION

I, Kraig H. Kayser, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Seneca Foods Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
--- ---
(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
--- ---
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
--- ---
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
--- ---
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
--- ---
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
--- ---
By: /s/Kraig H. Kayser
--- --- ---
Dated: August 5, 2020
Kraig H. Kayser<br> President and Chief Executive<br> Officer

ex_195394.htm

EXHIBIT 31.2

CERTIFICATION

I, Timothy J. Benjamin, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Seneca Foods Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
--- ---
(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
--- ---
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
--- ---
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
--- ---
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
--- ---
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
--- ---
By: /s/Timothy J. Benjamin
--- --- ---
Dated: August 5, 2020
Timothy J. Benjamin<br>     Chief Financial Officer

ex_195395.htm

EXHIBIT 32

CERTIFICATION PURSUANT TO

  1. U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Seneca Foods Corporation (the "Registrant") on Form 10-Q for the period ended June 27, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Kraig H. Kayser, Chief Executive Officer and Timothy J. Benjamin, Chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/Kraig H. Kayser
Kraig H. Kayser<br> Chief Executive Officer
August 5, 2020
/s/ Timothy J. Benjamin
Timothy J. Benjamin<br> Chief Financial Officer
August 5, 2020

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