Company: SENEA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001437749-25-033352
Chunk: 29

Company: Seneca Foods Corp
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 29
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 strategic acquisitions to leverage existing capabilities and further build upon its existing business. Liquidity requirements are funded primarily through cash generated from operations and external sources of financing, including the revolving credit facility. The Company may also utilize its Receivables Purchase Program to manage short-term liquidity and provide working capital flexibility, as needed.

During the preceding fiscal years, working capital needs trended higher than previously experienced by the Company in part because of larger annual pack sizes needed to replenish the Company’s post-pandemic inventory levels to meet customer demand, and because of supply chain challenges and inflationary pressure in the steel industry which impacted can manufacturing operations. To successfully navigate the uncertainty driven by inflation and import tariffs, and a desire to diversify its steel supply, the Company employed a strategic approach during those fiscal years and increased steel coil purchases to better position itself for subsequent years. The higher cost of steel coil raw materials translated into an elevated container cost and ultimately resulted in an increased cost per unit for the associated finished good product. Working capital was likewise unfavorably impacted as the Company experienced material cost increases implemented by suppliers affecting various other production inputs aside from steel. These economic conditions contributed to higher cash outflows and an increased cost per unit for the associated finished good product.

During fiscal year 2025, the Company experienced an easing of working capital needs. However, adverse weather conditions during the planting and harvesting seasons had a notable impact, especially in the upper Midwest where the Company has its primary growing region. Challenging growing conditions and reduced crop yields resulted in a seasonal pack smaller than originally planned. This in turn resulted in a higher-cost seasonal pack on a per unit basis for fiscal year 2025; although, the overall cash requirements were favorable as compared to the preceding fiscal years.

During the initial six months of fiscal year 2026, the Company has completed much of its current seasonal pack for major vegetables, namely peas, sweet corn and green beans. The pack size for 2026 is shaping up to be larger than last year and has benefited from improved crop yields and less challenging growing conditions in certain regions. The Company’s plant locations have run steadily during the harvesting and production process without the periodic interruptions experienced last year. These factors have contributed to an overall lower-cost seasonal pack on a per unit basis thus far. Higher cash requirements were encountered by the Company because of the increased pack size although a strong cash position leading into fiscal year 2026 allowed the Company to minimize use of its revolving credit facility as compared to the prior year six-month interim period.

The Company