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What changed in Seneca Foods Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Seneca Foods Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+78 added−76 removedSource: 10-K (2023-06-13) vs 10-K (2022-06-10)

Top changes in Seneca Foods Corp's 2023 10-K

78 paragraphs added · 76 removed · 50 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese seasonal fluctuations are illustrated in the following table, which presents certain unaudited quarterly financial information for the periods indicated (in thousands): First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year 2022: Net sales $ 235,042 $ 372,256 $ 445,593 $ 332,389 Gross margin 33,623 42,728 44,985 26,596 Net earnings 14,136 11,654 18,664 6,553 Revolver outstanding (at quarter end) 1,000 51,679 33,711 20,508 Fiscal Year 2021: Net sales $ 288,165 $ 390,294 $ 484,392 $ 304,793 Gross margin 48,562 48,943 77,704 56,976 Net earnings 20,706 18,105 72,460 14,829 Revolver outstanding (at quarter end) 34,406 62,611 - 1,000 Backlog In the food packaging business, an end of year sales order backlog is not considered meaningful.
Biggest changeThese seasonal fluctuations are illustrated in the following table, which presents certain unaudited quarterly financial information for the periods indicated (in thousands): First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year 2023: Net sales $ 265,193 $ 439,842 $ 473,254 $ 331,063 Gross margin 22,843 41,779 53,789 17,485 Net earnings 5,103 16,131 21,054 (9,150 ) Fiscal Year 2022: Net sales $ 235,042 $ 372,256 $ 445,593 $ 332,389 Gross margin 33,623 42,728 44,985 26,596 Net earnings 14,136 11,654 18,664 6,553 Competition Competition in the packaged food industry is substantial with brand recognition and promotion, quality, service, and pricing being the major determinants in the Company’s relative market position.
A total of $0.1 million was paid as a royalty fee for the fiscal year ended March 31, 2022. 3 Table of Contents The Company also sells canned vegetables, frozen vegetables, jarred fruit, and other food products under several other brands for which the Company has obtained registered trademarks, including, Aunt Nellie’s®, CherryMan®, Green Valley®, READ®, Seneca®, and other regional brands.
A total of $0.1 million was paid as a royalty fee for the fiscal year ended March 31, 2023. The Company also sells canned vegetables, frozen vegetables, jarred fruit, and other food products under several other brands for which the Company has obtained registered trademarks, including, Aunt Nellie’s®, CherryMan®, Green Valley®, READ®, Seneca®, and other regional brands.
Item 1. Business History and Development of Seneca Foods Corporation Seneca Foods Corporation (“Seneca” or the “Company”) was founded in 1949 and has evolved through internal growth and strategic acquisitions into a leading provider of packaged fruits and vegetables, with 26 facilities located throughout the United States.
Item 1. Business Overview Seneca Foods Corporation (“Seneca” or the “Company”) was founded in 1949 and has evolved through internal growth and strategic acquisitions into a leading provider of packaged fruits and vegetables, with 26 main facilities located throughout the United States.
The Company does not expect any material capital expenditures to comply with environmental regulations in the near future. There has been a broad range of proposed and promulgated state, national and international regulations aimed at reducing the effects of climate change.
The Company does not expect any capital expenditures out of the ordinary course of business in order to comply with environmental regulations in the near future. There has been a broad range of proposed and promulgated state, national and international regulations aimed at reducing the effects of climate change.
Competitive pressures also may limit our ability to quickly raise prices in response to rising costs. To the extent we are unable to avoid or offset any present or future cost increases our operating results could be materially adversely affected.
Competitive pressures also may limit the Company’s ability to quickly raise prices in response to rising costs. To the extent the Company is unable to avoid or offset any present or future cost increases its operating results could be materially adversely affected.
We attempt to manage cost inflation risks by locking in prices through short-term supply contracts, advance grower purchase agreements, and by implementing cost saving measures. We also attempt to offset rising input costs by raising sales prices to our customers. However, increases in the prices we charge our customers may lag behind rising input costs.
The Company attempts to manage cost inflation risks by locking in prices through short-term supply contracts, advance grower purchase agreements, and by implementing cost saving measures. The Company also attempts to offset rising input costs by raising sales prices to its customers. However, increases in the prices the Company charges its customers may lag behind rising input costs.
Refer to the information set forth under the heading “ Segment Information ” in Note 14 of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data”, for additional discussion about the Company’s segments.
Non-food packaging sales represented 2% of the Company's fiscal year 2023 net sales. Refer to the information set forth under the heading “ Segment Information ” in Note 14 of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data”, for additional discussion about the Company’s segments.
("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 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 Company is required to pay an annual royalty to Corlib Brands, now known as Libby's Brand Holding, Ltd., who 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).
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. 3 Table of Contents The Company is required to pay an annual royalty to Corlib Brands, now known as Libby's Brand Holding, Ltd., who 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).
The Company believes that it is a major producer of canned vegetables, frozen vegetables, and jarred fruit but some producers of these products have sales which exceed the Company's sales.
The Company believes that it is a major producer of canned vegetables, frozen vegetables, and jarred fruit but some producers of these products have sales which exceed the Company's sales. The Company is aware of at least 13 competitors in the U.S. packaged fruit and vegetable industry, many of which are privately held companies.
This is due, in part, because the Company’s fruit and vegetable sales exhibit seasonal increases in the third fiscal quarter due to increased retail demand during the holiday season.
As the seasonal pack progresses, these components of working capital both increase until the pack is complete. The Company’s revenues typically are highest in the second and third fiscal quarters. This is due, in part, because the Company’s fruit and vegetable sales exhibit seasonal increases in the third fiscal quarter due to increased retail demand during the holiday season.
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. 2 Table of Contents Financial Information about Industry Segments The Company has historically managed its business on the basis of three reportable food packaging segments: (1) fruits and vegetables, (2) prepared food products and (3) snack products.
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.
Raw materials and other input costs, such as labor, fuel, utilities and transportation, are subject to fluctuations in price attributable to a number of factors. Fluctuations in commodity prices can lead to retail price volatility and can influence consumer and trade buying patterns.
The Company purchases other raw materials, including steel, ingredients and packaging materials from commodity processors, steel producers and packaging suppliers. Raw materials and other input costs, such as labor, fuel, utilities and transportation, are subject to fluctuations in price attributable to a number of factors.
The other category comprises non-food packaging sales which relate to the sale of cans, ends, seed, and outside revenue from the Company's trucking and aircraft operations. During fiscal year 2021, the Company sold its prepared foods business, leaving just two reportable segments along with the other category.
Financial Information about Industry Segments The Company has historically managed its business on the basis of three reportable food packaging segments: (1) fruits and vegetables, (2) prepared food products and (3) snack products. The other category comprises non-food packaging sales which relate to the sale of cans, ends, seed, and outside revenue from the Company's trucking and aircraft operations.
The facilities are comprised of plants for packaging, can manufacuting, seed production, 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 incorporated in New York with its headquarters located at 3736 South Main Street, Marion, New York and its telephone number is (315) 926-8100.
The facilities are comprised of plants for packaging, can manufacturing, seed production, a farming operation and a logistical support network. Food packaging operations are primarily supported by plant locations in New York, Michigan, Oregon, Wisconsin, Washington, Idaho, Illinois, and Minnesota. The Company also maintains warehouses which are generally located adjacent to its packaging plants.
The Company’s 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, restaurants chains, 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 also sells its products to foodservice distributors, restaurants chains, industrial markets, other food processors, export customers in approximately 60 countries and federal, state and local governments for school and other food programs. Additionally, the Company packs canned and frozen vegetables under contract packing agreements.
The Company’s food operation constituted 98% of total net sales in fiscal year 2022. Canned vegetables represented 84%, frozen vegetables represented 9%, fruit products represented 6%, and chip products represented 1% of the total food packaging net sales. Non-food packaging sales represented 2% of the Company's fiscal year 2022 net sales.
During fiscal year 2021, the Company sold its prepared foods business, leaving just two reportable segments along with the other category. The Company’s food operation constituted 98% of total net sales in fiscal year 2023. Canned vegetables represented 83%, frozen vegetables represented 8%, fruit products represented 6%, and chip products represented 1% of the total food packaging net sales.
The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly. We experienced material net cost increases for raw materials and other input costs during fiscal year 2022.
Fluctuations in commodity prices can lead to retail price volatility and can influence consumer and trade buying patterns. The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly.
The following table summarizes net sales by major product category for fiscal years 2022 and 2021 (in thousands): Fiscal Year 2022 2021 Canned vegetables $ 1,135,983 $ 1,172,635 Frozen vegetables 123,895 102,197 Fruit products 84,708 88,431 Snack products 12,332 10,999 Prepared foods - 71,866 Other 28,362 21,516 $ 1,385,280 $ 1,467,644 Source and Availability of Raw Materials We purchase raw materials, including raw produce, steel, ingredients and packaging materials from growers, commodity processors, steel producers and packaging suppliers.
The following table summarizes net sales by major product category for fiscal years 2023 and 2022 (in thousands): Fiscal Year: 2023 2022 Canned vegetables $ 1,253,257 $ 1,135,983 Frozen vegetables 121,211 123,895 Fruit products 91,495 84,708 Snack products 12,661 12,332 Other 30,728 28,362 $ 1,509,352 $ 1,385,280 Source and Availability of Raw Materials The Company’s high-quality products are primarily sourced from approximately 1,400 American farms.
Domestic and Export Sales The following table sets forth domestic and export sales (In thousands, except percentages): Fiscal Year 2022 2021 Net sales: United States $ 1,285,540 $ 1,372,679 Export 99,740 94,965 Total net sales $ 1,385,280 $ 1,467,644 As a percentage of net sales: United States 92.8 % 93.5 % Export 7.2 % 6.5 % Total 100.0 % 100.0 % 5 Table of Contents
Domestic and International Sales The following table sets forth domestic and international sales (In thousands, except percentages): Fiscal Year 2023 2022 Net sales: Domestic $ 1,408,710 $ 1,285,540 International 100,642 99,740 Total net sales $ 1,509,352 $ 1,385,280 As a percentage of net sales: Domestic 93.3 % 92.8 % International 6.7 % 7.2 % Total 100.0 % 100.0 % 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.
For peas, the peak inventory time is mid-summer and for corn and green beans, the Company's highest volume vegetables, the peak inventory is in mid-autumn. The Company’s revenues typically are highest in the second and third fiscal quarters.
For peas, the peak inventory time is mid-summer and for corn and green beans, the Company's highest volume vegetables, the peak inventory is in mid-autumn. The seasonal nature of the Company’s production cycle results in inventory and accounts payable reaching their lowest point late in the fourth quarter/early in the first quarter prior to the new seasonal pack commencing.
The Company is aware of at least 13 competitors in the U.S. packaged fruit and vegetable industry, many of which are privately held companies. 4 Table of Contents Environmental Protection Environmental protection is an area that has been worked on diligently at each food packaging facility.
Under various statutes, these agencies prescribe and establish, among other things, the requirements and standards for quality, safety and representation of the Company’s products to the consumer in labeling and advertising. 4 Table of Contents Environmental protection is an area that has been worked on diligently at each food packaging facility.
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Its high quality products are primarily sourced from approximately 1,400 American farms. 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®.
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The Company is incorporated in New York with its headquarters located at 350 WillowBrook Office Park Fairport, New York and its telephone number is (585) 495-4100. The Company’s business strategies are designed to grow its market share and enhance sales and margins.
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Additionally, the Company packs canned and frozen vegetables under contract packing agreements. The Company pursues acquisitions when they are strategic and financially additive and meet its overall business needs. In 73 years of operation, the Company has made over 50 strategic acquisitions, investments and alliances that have expanded its leadership in the packaged fruit and vegetable industry.
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These strategies include: 1) expand the Company’s leadership in the packaged fruit and vegetable industry; 2) provide low-cost, high-quality vegetable products to consumers through the elimination of costs from the Company’s supply chain and investment in state-of-the-art production and logistical technology; 3) focus on growth opportunities to capitalize on higher expected returns; and 4) pursue strategic acquisitions that leverage the Company’s core competencies.
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The table below includes some of the acquisitions and divestitures that have been completed in recent years: Date Significant Event March 2021 Acquisition of a processing facility in Berlin, Wisconsin for $7.1 million to aid the Company’s frozen business by expanding freezing capability and adding frozen celery production to the core fruit and vegetable business.
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Available Information The Company’s Internet address is www.senecafoods.com .
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December 2020 Divestiture of the prepared foods business, resulting in a gain of $34.8 million. The nature of the prepared foods business was not central to Seneca’s primary business and the sale allowed for the continued focus and investment in the Company’s core fruit and vegetable business.
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Principal products and markets The Company’s principal product offerings include canned, frozen and bottled produce, and snack chips.
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November 2020 Executed an agreement with a co-pack customer to process canned vegetables on a contractual basis, and as part of that arrangment, acquired a plant in Cambria, Wisconsin.
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The Company manufactures and sells the following: ● private label products to retailers, such as supermarkets, mass merchandisers, and specialty retailers, for resale under the retailers’ own or controlled labels; ● private label and branded products to the foodservice industry, including foodservice distributors and national restaurant operators; ● branded products under national and regional brands that the Company owns or licenses, including Seneca®, Libby’s®, Aunt Nellie’s®, Cherryman®, Green Valley® and READ®; ● branded products under co-pack agreements to other major branded companies for their distribution; and ● products to the Company’s industrial customer base for repackaging in portion control packages and for use as ingredients by other food manufacturers. 2 Table of Contents The Company’s fruits and vegetables are sold nationwide by major grocery outlets, including supermarkets, mass merchandisers, limited assortment stores, club stores and dollar stores.
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As an additional part of the arragement, Seneca acquired two already closed facilities and the equipment therein which was relocated and utilized by existing Seneca facilities in order to improve efficiencies or expand production capacities. Any equipment that was unable to be utilized was disposed of in fiscal year 2021.
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The Company continues to experience material cost inflation for many of its raw materials and other input costs attributable to a number of factors, including but not limited to, supply chain disruptions (including raw material shortages), labor shortages, and the war in Ukraine.
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The idle facilities were acquired with no plans of operation, one of which was sold during fiscal year 2022 and the remaining facility is expected be sold in fiscal year 2023.
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While the Company has no direct exposure to Russia and Ukraine, it has experienced increased costs for transportation, energy, and raw materials due in part to the negative impact of the Russia-Ukraine conflict on the global economy.
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October 2019 The Company ceased production at its fruit processing plant in Sunnyside, Washington but continued to store, case and label products at this facility until late in fiscal year 2020. In February 2020, the Company invested approximately $10 million and contributed the Sunnyside facility to acquire a 49% stake in CraftAg, LLC, a newly formed company which processed hemp.
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Government Regulation The Company is subject to extensive regulations in the United States by federal, state and local government authorities.
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During fiscal yer 2022, the Company's investment was deemed to be other-than-temporarily impaired and the carrying value of the investment was written down to $0. Available Information The Company’s Internet address is www.senecafoods.com .
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In the United States, the federal agencies governing the manufacture, marketing and distribution of our products include, among others, the Federal Trade Commission (“FTC”), the United States Food & Drug Administration (“FDA”), the United States Department of Agriculture (“USDA”), the United States Environmental Protection Agency (“EPA”) and the Occupational Safety and Health Administration (“OSHA”).
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Principal products and markets The Company’s principal products include canned vegetables, frozen vegetables, jarred fruit, 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.
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Human Capital Employment As of March 31, 2023, Seneca Foods employed 2,809 full-time employees and averaged approximately an additional 3,600 seasonal employees during the Company’s peak summer harvest season. 100% of our employees are located in the United States, distributed across the Company’s facilities.
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Additionally, products are sold to food service distributors, restaurant chains, 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, Michigan, Oregon, Wisconsin, Washington, Idaho, Illinois, and Minnesota.
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Culture At Seneca Foods, we work hard every day to feed the world safe and nutritious products, while adhering to our fundamental beliefs (which can be found on our website). These beliefs include acting with integrity in all matters, treating employees with respect, and maintaining the highest standards for protecting our workers.
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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.
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We also believe in promoting from within, which has resulted in many long-tenured employees in leadership positions throughout the Company. Employee Health and Safety The health and safety of our employees is a top priority at Seneca Foods. The Company complies with all national and local laws of the jurisdictions in which we operate regarding worker health and safety.
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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.
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In addition, we work to continuously improve our safety record with worker safety training and Seneca’s HERO (Health Environment Risk Observation) program, in which employees proactively identify and mitigate potential safety risks. At Seneca Foods, we believe that safety is everyone’s responsibility, and the HERO program reflects that commitment, with close to 100% employee participation.
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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. During fiscal year 2021, the Company and Libby’s Brand Holding, Ltd. renegotiated again to remove fruit from the license agreement.
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The Company also conducts annual safety audits at all processing locations to ensure compliance with Seneca and OSHA safety standards. External risk management services are also consulted as part of this process.
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Traditionally, larger customers provide tentative bookings for their expected purchases for the upcoming season. These bookings are further developed as data on the expected size of the related national harvests becomes available. In general, these bookings serve as a yardstick rather than as a firm commitment, since actual harvest results can vary notably from early estimates.
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The Company’s management recognizes plants that achieve at least one million work hours or 1,000 days worked without a lost time injury to employees with the President’s “Bronze Eagle” award, which is prominently displayed at many of our processing facilities.
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In actual practice, the Company has substantially all of its expected seasonal production identified to potential sales outlets before the seasonal production is completed. Competition Competition in the packaged food industry is substantial with brand recognition and promotion, quality, service, and pricing being the major determinants in the Company’s relative market position.
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Employee Training and Development Seneca Foods believes in developing internal talent and providing employees with an opportunity for education and advancement. In support of this endeavor, we have developed two key programs . SAVES (Seneca Adding Value Employee System) focuses on employee empowerment, education, and application of lean manufacturing principles.
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Environmental Litigation and Contingencies In the ordinary course of its business, the Company is made a party to certain legal proceedings seeking monetary damages, including proceedings involving product liability claims, worker’s compensation and other employee claims, tort and other general liability claims, for which it carries insurance as well as patent infringement and related litigation.
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The Company’s dedicated SAVES instructors and project leaders educate employees and empower them to make process improvements at all of our processing facilities. GROWS (Get Rid of Waste Systemically) supports our leadership development efforts through continuous improvement project leadership. Diversity, Equity and Inclusion Seneca Foods believes that everyone should feel respected and welcome in our workplace.
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The Company is in a highly regulated industry and is also periodically involved in government actions for regulatory violations and other matters surrounding the manufacturing of its products, including, but not limited to, environmental, employee, and product safety issues.
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The Company is committed to providing equal opportunity in all aspects of employment, and to applying fair labor practices while respecting the national and local laws of the countries and communities where we have operations. The Company does not engage in or tolerate discrimination, intimidation, harassment, or any other unlawful conduct.
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While it is not feasible to predict or determine the ultimate outcome of these matters, the Company does not believe that an adverse decision in any of these legal proceedings would have a material adverse impact on its financial position, results of operations, or cash flows.
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We believe that a diverse and inclusive workforce provides the Company with the benefits of different viewpoints and perspectives, as well as a talented and innovative employee base.
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Employment As of the end of December 2021, the Company had approximately 3,000 employees of which 2,800 are full time, 100 seasonal employees work in food packaging, and 100 full time employees work in other activities. The number of employees increases by approximately 4,000 due to an increase in seasonal employees during our peak pack season.
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The Company has seven collective bargaining agreements with three unions covering approximately 787 of its full-time employees. The terms of these agreements result in wages and benefits which are substantially the same for comparable positions for the Company’s non-union employees.
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There is one agreement that will expire in calendar 2023, three agreements that will expire in calendar 2024, one agreement that will expire in calendar 2025, one agreement that will expire in calendar 2026, and one agreement that will expire in calendar 2027.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

20 edited+8 added−3 removed95 unchanged
Biggest changeIf prices of these commodities increase beyond what we can pass along to our customers, our operating income will decrease. 6 Table of Contents Risks Associated With Our Operations Pandemics or disease outbreaks, such as the COVID-19 pandemic, may disrupt our business, including among other things, our supply chain, our manufacturing operations and customer and consumer demand for our products, and could have a material adverse impact on our business.
Biggest changePandemics or disease outbreaks may disrupt our business, including among other things, our supply chain, our manufacturing operations and customer and consumer demand for our products, and could have a material adverse impact on our business. The spread of pandemics or disease outbreaks may negatively affect our operations.
We have pledged our accounts receivable, inventory, equipment, capital stock, or other ownership interests that we own in our subsidiaries to secure certain debt. If a default occurred and was not cured, secured lenders could foreclose on this collateral.
We have pledged our accounts receivable, inventory, equipment, certain facilities, capital stock, or other ownership interests that we own in our subsidiaries to secure certain debt. If a default occurred and was not cured, secured lenders could foreclose on this collateral.
There has been continued state legislative activity to ban certain enamals used to line cans; such as Bisphenol-A ("BPA"). These legislative decisions are predominantly driven by consumer perception that BPA may be harmful.
There has been continued state legislative activity to ban certain enamels used to line cans; such as Bisphenol-A ("BPA"). These legislative decisions are predominantly driven by consumer perception that BPA may be harmful.
The top ten customers represented approximately 53%, and 50% of net sales for fiscal years 2022 and 2021, respectively. If we lose a significant customer or if sales to a significant customer materially decrease, our business, financial condition and results of operations may be materially and adversely affected.
The top ten customers represented approximately 55%, and 53% of net sales for fiscal years 2023 and 2022, respectively. If we lose a significant customer or if sales to a significant customer materially decrease, our business, financial condition and results of operations may be materially and adversely affected.
If a significant percentage of our workforce or the workforce of our third party business partners is unable to work, including because of illness or travel or government restrictions in connection with the COVID-19 pandemic or any future pandemic or disease outbreak, our operations may be negatively impacted.
If a significant percentage of our workforce or the workforce of our third-party business partners is unable to work, including because of illness or travel or government restrictions in connection with a pandemic or disease outbreak, our operations may be negatively impacted.
The occurrence of any of these risks could materially and adversely affect our business, financial condition and results of operations. Our ability to manage our working capital and our Revolver is critical to our success. As of March 31, 2022, we had a $20.5 million outstanding balance on our revolving credit facility (“Revolver”).
The occurrence of any of these risks could materially and adversely affect our business, financial condition and results of operations. Our ability to manage our working capital and our Revolver is critical to our success. As of March 31, 2023, we had a $180.6 million outstanding balance on our revolving credit facility (“Revolver”).
Should LIFO be repealed, the $41.4 million of postponed taxes, plus any future benefit realized prior to the date of repeal, would likely have to be repaid over some period of time.
Should LIFO be repealed, the $66.1 million of postponed taxes, plus any future benefit realized prior to the date of repeal, would likely have to be repaid over some period of time.
In the event the Internal Revenue Service (“IRS”) were to determine that this subsidiary does not qualify as an insurance company, we could be required to make accelerated income tax payments to the IRS that we otherwise would have deferred until future periods.
In the event the Internal Revenue Service (“IRS”) were to determine that this subsidiary does not qualify as an insurance company, we could be required to make accelerated income tax payments to the IRS that we otherwise would have deferred until future periods. Item 1B. Unresolved Staff Comments None
As of March 31, 2022, we had a LIFO reserve of $164.5 million which, at the U.S. corporate tax rate, represents approximately $41.4 million of income taxes, payment of which is delayed to future dates based upon changes in inventory costs. From time-to-time, discussions regarding changes in U.S. tax laws have included the potential of LIFO being repealed.
As of March 31, 2023, we had a LIFO reserve of $264.5 million which, at the U.S. corporate tax rate, represents approximately $66.1 million of income taxes, payment of which is delayed to future dates based upon changes in inventory costs. From time-to-time, discussions regarding changes in U.S. tax laws have included the potential of LIFO being repealed.
Some of our workforce dwell in company provided housing and therefore outbreaks such as COVID-19 would need to be managed, to the extent possible, to meet health care protocols.
Some of our workforce dwell in company provided housing and therefore any outbreaks would need to be managed, to the extent possible, to meet health care protocols.
We typically have experienced lower margins during times of industry oversupply. In the past, the fruit and vegetable packaging industry has been characterized by excess capacity, with resulting pressure on our prices and profit margins. We have closed packaging plants in past years in response to the downward pressure on prices.
In the past, the fruit and vegetable packaging industry has been characterized by excess capacity, with resulting pressure on our prices and profit margins. We have closed packaging plants in past years in response to the downward pressure on prices.
As of March 31, 2022, holders of Class B common stock and voting preferred stock held 89.1% of the combined voting power of all shares of capital stock then outstanding and entitled to vote.
As of March 31, 2023, holders of Class B common stock and voting preferred stock held 90.2% of the combined voting power of all shares of capital stock then outstanding and entitled to vote.
At the end of December 2021, we had approximately 3,000 employees of which 2,800 full time, 100 seasonal employees worked in food packaging, and 100 employees worked in other activities. During the peak summer harvest period, we hire up to approximately 4,000 seasonal employees to help package fruit and vegetables.
At the end of December 2022, we had roughly 3,000 employees of which approximately 2,800 were full time, 100 seasonal employees worked in food packaging, and 100 employees worked in other activities. During the peak summer harvest period, we averaged approximately 3,600 additional seasonal employees to help package fruit and vegetables.
In addition, market prices can be affected by the planting and inventory levels and individual pricing decisions of our competitors. Generally, market prices in the fruit and vegetable packaging industry adjust more quickly to variations in product availability than an individual packager can adjust its cost structure; thus, in an oversupply situation, a packager’s margins likely will weaken.
Generally, market prices in the fruit and vegetable packaging industry adjust more quickly to variations in product availability than an individual packager can adjust its cost structure; thus, in an oversupply situation, a packager’s margins likely will weaken. We typically have experienced lower margins during times of industry oversupply.
The upper Midwest is the primary growing region for the principal vegetables which we pack, namely peas, green beans and corn, and it is also a substantial source of our competitors’ vegetable production. The adverse effects of weather-related reduced production may be partially mitigated by higher selling prices for the vegetables which are produced.
The upper Midwest is the primary growing region for the principal vegetables which we pack, namely peas, green beans and corn, and it is also a substantial source of our competitors’ vegetable production.
As of March 31, 2022, our current executive officers and directors beneficially owned 10.4% of our outstanding shares of Class A common stock, 49.7% of our outstanding shares of Class B common stock and 14.0% of our voting preferred stock, or 31.8% of the combined voting power of our outstanding shares of capital stock.
As of March 31, 2023, our current executive officers and directors beneficially owned 11.4% of our outstanding shares of Class A common stock, 50.07% of our outstanding shares of Class B common stock and 23.1% of our voting preferred stock, or 37.2% of the combined voting power of our outstanding shares of capital stock.
In the fruit and vegetable packaging industry, product availability and market prices tend to have an inverse relationship: market prices tend to decrease as more product is available and to increase if less product is available. Product availability is a direct result of plantings, growing conditions, crop yields and inventory levels, all of which vary from year to year.
Our net sales are a function of product availability and market pricing. In the fruit and vegetable packaging industry, product availability and market prices tend to have an inverse relationship: market prices tend to decrease as more product is available and to increase if less product is available.
Moreover, fruit and vegetable production outside the United States, particularly in Europe, Asia and South America, is increasing at a time when worldwide demand for certain products is being impacted by the global economic slowdown. These factors may have a significant effect on supply and competition and create downward pressure on prices.
Product availability is a direct result of plantings, growing conditions, crop yields and inventory levels, all of which vary from year to year. Moreover, fruit and vegetable production outside the United States, particularly in Europe, Asia and South America, is increasing at a time when worldwide demand for certain products is being impacted by the global economic slowdown.
If canned vegetable, frozen vegetable, or jarred fruit categories decline, less shelf space will be devoted to these categories in the supermarkets. Fresh and perishable businesses are improving their delivery systems around the world and the availability of fresh produce is impacting the consumers purchasing patterns relating to packaged fruit and vegetables.
Fresh and perishable businesses are improving their delivery systems around the world and the availability of fresh produce is impacting the consumers purchasing patterns relating to packaged fruit and vegetables. Our financial performance and growth are related to conditions in the United States’ fruit and vegetable packaging industry which is a mature industry.
Other factors not presently known to us or that we presently believe are not material could also affect our business operations or financial results. The Company refers to itself as “we”, “our” or “us” in this section. Fruit and Vegetable Industry Risks Excess capacity in the fruit and vegetable industry has a downward impact on selling price.
Other factors not presently known to us or that we presently believe are not material could also affect our business operations or financial results.
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Our financial performance and growth are related to conditions in the United States’ fruit and vegetable packaging industry which is a mature industry with a modest growth rate during the last 10 years. Our net sales are a function of product availability and market pricing.
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The Company refers to itself as “we”, “our” or “us” in this section. 5 Table of Contents Fruit and Vegetable Industry Risks Excess capacity in the fruit and vegetable industry has a downward impact on selling price. If canned vegetable, frozen vegetable, or jarred fruit categories decline, less shelf space will be devoted to these categories in the supermarkets.
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The spread of pandemics or disease outbreaks, such as COVID-19, may negatively affect our operations.
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These factors may have a significant effect on supply and competition and create downward pressure on prices. In addition, market prices can be affected by the planting and inventory levels and individual pricing decisions of our competitors.
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Additionally, historically low interest rates coupled with poor market performance would have the effect of decreasing the funded status of these plans which would result in greater required contributions.
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A sizeable portion of our vegetable production areas are serviced with irrigation systems to help minimize (i) wet conditions for planting and (ii) dry conditions during the growing season. Any adverse effects of weather-related reduced production may be partially mitigated by higher selling prices for the vegetables which are produced.
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If prices of these commodities increase beyond what we can pass along to our customers, our operating income will decrease. 6 Table of Contents Risks Associated With Our Operations Changes in economic conditions that impact consumer spending could harm our business.
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The food products industry and our financial performance are sensitive to changes in overall economic conditions that impact consumer spending, including not limited to, inflation, economic volatility resulting from a pandemic and the war in Ukraine.
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Future economic conditions affecting consumer income such as employment levels, business conditions, interest rates, inflation and tax rates could reduce consumer spending or cause consumers to shift their spending to other products. Historic increases in inflation following the COVID-19 pandemic may cause consumers to be more sensitive to price changes.
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A general reduction in the level of consumer spending or shifts in consumer spending to other products could have a material adverse effect on our growth, sales, and profitability.
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Future changes or additional health and safety laws and regulations in connection with our products, packaging or processes may also impose upon us new requirements, costs, and changes to production. Such requirements, changes, liabilities, and costs could materially and adversely affect our business, financial condition and results of operations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table details the Company’s manufacturing plants and warehouses: Square Footage Acres (000) Food Group Nampa, Idaho 243 16 Payette, Idaho 392 43 Princeville, Illinois 288 518 Hart, Michigan 351 78 Traverse City, Michigan 58 43 Blue Earth, Minnesota 286 429 Glencoe, Minnesota 674 798 LeSueur, Minnesota 82 7 Montgomery, Minnesota 561 1,652 Rochester, Minnesota 835 620 Geneva, New York 769 594 Leicester, New York 200 91 Dayton, Oregon 82 19 Dayton, Washington 250 28 Yakima, Washington 122 8 Baraboo, Wisconsin 625 13 Berlin, Wisconsin 89 125 Cambria East, Wisconsin 399 401 Cambria West, Wisconsin 212 321 Clyman, Wisconsin 438 724 Cumberland, Wisconsin 400 307 Gillett, Wisconsin 324 105 Janesville, Wisconsin 1,234 341 Mayville, Wisconsin 239 353 Oakfield, Wisconsin 229 2,135 Ripon, Wisconsin 634 87 Non-Food Group (1) Marion, New York 6 - Penn Yan, New York 27 4 Total 10,049 9,860 (1) The table does not include facilities in Albany, Oregon and Beverly, Washington that were idle and classified as an asset held for sale on our consolidated balance sheet as of March 31, 2022.
Biggest changeProperties The following table details the Company’s manufacturing plants and warehouses: (000s) Square Food Group Footage Acres Nampa, Idaho 243 16 Payette, Idaho 392 43 Princeville, Illinois 288 568 Hart, Michigan 365 83 Traverse City, Michigan 58 43 Blue Earth, Minnesota 286 429 Glencoe, Minnesota 674 913 LeSueur, Minnesota 82 497 Montgomery, Minnesota 564 1,172 Rochester, Minnesota 835 620 Geneva, New York 769 593 Leicester, New York 204 91 Dayton, Oregon 82 19 Dayton, Washington 250 29 Yakima, Washington 122 8 Baraboo, Wisconsin 625 13 Berlin, Wisconsin 89 125 Cambria East, Wisconsin 399 401 Cambria West, Wisconsin 212 321 Clyman, Wisconsin 438 724 Cumberland, Wisconsin 400 307 Gillett, Wisconsin 324 105 Janesville, Wisconsin 1,234 342 Mayville, Wisconsin 239 354 Oakfield, Wisconsin 229 2,135 Ripon, Wisconsin 634 87 Non-Food Group (1) Fairport, New York 12 Penn Yan, New York 27 4 Total 10,076 10,042 (1) The table does not include facilities in Albany, Oregon and Beverly, Washington that were idle and classified as an asset held for sale on our consolidated balance sheet as of March 31, 2023.
The table also does not include a non-operational facilty in Mendota, Illinois. 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.
The table also does not include a non-operational facility in Mendota, Illinois. 12 Table of Contents 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.
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Because of the seasonal production cycles, the exact extent of utilization is difficult to measure.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information set forth under the heading “ Legal Proceedings and Other Contingencies ” in Note 15 of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference.
Biggest changeItem 3. Legal Proceedings The information set forth under the heading “ Legal Proceedings and Other Contingencies ” in Note 15 of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference. Item 4. Mine Safety Disclosures Not Applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Number of Average Price Shares Purchased Paid per Share Maximum Number Total Number of Shares (or Approximate Dollar Value) of Class A Class B Class A Class B Purchased as Part of Publicly Shares that May Yet Be Purchased Period Common Common Common Common Announced Plans or Programs Under the Plans or Programs 01/01/2022 – 01/31/2022 66,688 - $ 47.22 - 66,688 02/01/2022 – 02/28/2022 52,071 - $ 48.10 - 52,071 03/01/2022 – 03/31/2022 (1) 91,948 - $ 51.21 - 80,070 Total 210,707 - $ 49.18 - 198,829 782,281 (1) Includes 11,878 shares that were purchased in open market transactions by the trustees under the Seneca Foods Corporation Employees' Savings Plan to provide employee matching contributions under the plan.
Biggest changeTotal Number of Average Price Shares Purchased Paid per Share Maximum Number Total Number of Shares (or Approximate Dollar Value) of Class A Class B Class A Class B Purchased as Part of Publicly Shares that May Yet Be Purchased Period Common Common Common Common Announced Plans or Programs Under the Plans or Programs 01/01/2023 – 01/31/2023 - - 02/01/2023 – 02/28/2023 - - 03/01/2023– 03/31/2023 - - Total - - - - 550,661 Item 6.
Under the authorization, the Company may purchase shares of Common Stock from time to time in the open market or in privately negotiated transactions in compliance with the applicable rules and regulations of the Securities and Exchange Commission.
Under the repurchase program, the Company may purchase shares of Common Stock from time to time in the open market or in privately negotiated transactions in compliance with the applicable rules and regulations of the Securities and Exchange Commission.
Issuer Purchases of Equity Securities On June 11, 2021, the Board authorized a stock repurchase program for the repurchase of up to 1,500,000 shares of the Company's Class A and/or Class B Common Stock, including the shares of convertible participating preferred stock of the Company, (collectively, the “Common Stock”).
Issuer Purchases of Equity Securities On August 10, 2022, the Board approved an amendment to the Company’s stock repurchase program which increased the maximum number of shares to be repurchased under the program up to 2,000,000 shares of the Company's Class A and/or Class B Common Stock, including the shares of convertible participating preferred stock of the Company, (collectively, the “Common Stock”).
Item 5. Market for Registrant ’ s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities The information set forth under the heading “ Stockholders ’ Equity ” in Note 11 of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference.
Item 5. Market for Registrant ’ s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities Refer to the information in the 2023 Annual Report, attached as Exhibit 13 to this Annual Report on Form 10-K, under the section “Shareholder Information”, which is incorporated by reference.
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Common Stock Performance Graph As a smaller reporting company, we are not required to provide disclosure pursuant to this Item.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItem 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations Refer to the information in the 2022 Annual Report, attached as Exhibit 13 to this Annual Report on Form 10-K, under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which is incorporated by reference.
Biggest changeItem 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations Refer to the information in the 2023 Annual Report, attached as Exhibit 13 to this Annual Report on Form 10-K, under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which is incorporated by reference.

Other SENEB 10-K year-over-year comparisons