SENEA 10-K & 10-Q changes, risk factors and insider trading

Our operations are affected by the growing cycles of the vegetables we package. When the vegetables are ready to be picked, we must harvest and package them quickly or lose the opportunity to package the impacted vegetables for an entire year. Most of our vegetables are grown by farmers under contract with us. Consequently, we must pay the contract grower for the vegetables even if we cannot or do not harvest or package them. Most of our production occurs during the second quarter (July through September) of our fiscal year, which corresponds with the quarter that the growing season ends for mostmajority of the produce packagedis byharvested us.and subsequently packaged.

A majority of our sales occur during the second and third quarters of each fiscal year due to seasonal consumption patterns for our products. Accordingly, inventory levels and accounts receivable levels are generally highest during the second and third quarters. Net sales generated during our second and third fiscal quarters have a significant impact on our results of operations. Because of these seasonal fluctuations, the results of any particular quarter, particularly in the first half of our fiscal year, will not necessarily be indicative of results for the full year or for future years.

We set our planting schedules without knowing the effect of the weather on the crops or on the entire industry’s production. Weather conditions during the course of each vegetable crop’s growing season will affect the volume and growing time of that crop. As most of our vegetables are produced in more than one part of the United States, this somewhat reduces the risk that our entire crop will be subject to disastrous weather. The upper Midwest is the primary growing region for the principal vegetables which we pack, namely peas, green beans and sweet corn, and it is also a substantial source of our competitors’ vegetable production. A sizeable portion of our vegetable production areas are located in well-draining soils and are also serviced withby 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.

The food products industry and our financial performance are sensitive to changes in overall economic conditions that impact consumer spending, including but not limited to inflation, economic volatility resulting from a pandemic, and global conflicts. 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-19challenging pandemiceconomic landscape experienced over the past several years may cause consumers to be more sensitive to price changes. 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.

Pandemics or disease outbreaks may disrupt our business, including among other things, our supply chain, our manufacturing operationsoperations, and customer and consumer demand for our products, andwhich could have a material adverse impact on our business.

The sale of food products for human consumption involves the risk of illness or injury to consumers. Such injuries may result from mislabeling, tampering by unauthorized third parties or product contamination or spoilage, including the presence of foreign objects, undeclared allergens, substances, chemicals, other agents or residues introduced during the growing, manufacturing, storage, handling or transportation phases of production. Under certain circumstances, we may be required to recall products, leading to a material adverse effect on our business, financial condition, results of operations or liquidity. Even if a situation does not necessitate a recall, product liability claims might be asserted against us. We have from time to time been involved in product liability lawsuits, none of which have been material to our business. While we are subject to governmental inspection and regulations and believe our facilities comply in all material respects with all applicable laws and regulations, if the consumption of any of our products causes, or is alleged to have caused, a health-related illness in the future,illness, we may become subject to claims or lawsuits relating to such matters. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused injury, illness or death could adversely affect our reputation with existing and potential customers and our corporate and brand image. Moreover, claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. We maintain product liability insurance in an amount we believe to be adequate. However, we cannot assure you that we will not incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage. A product liability judgment against us or a product recall or the damage to our reputation resulting therefrom could have a material adverse effect on our business, financial condition, results of operations or liquidity.

We maintain a company-sponsored noncontributory defined benefit pension plan. A deterioration in the value of plan assets resulting from poor market performance, a general financial downturn or otherwise could cause an increase in the amount of contributions we are required to make to these plans. For example, our defined benefit pension plan may from time to time move from an overfunded to underfunded status driven by decreases in plan asset values that may result from changes in long-term interest rates and disruptions in U.S. or global financial markets. For a more detailed description of the pension plan, refer to the information set forth under the heading “Retirement Plans” in Note 910 of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data.” An obligation to make additional, unanticipated contributions to our defined benefit plans could reduce the cash available for working capital and other corporate uses and may have a material adverse effect on our business, financial condition, results of operations andor liquidity.

At the end of March 2025,2026, we had roughly 2,8852,995 employees of which approximately 2,8002,900 were full timefull-time and approximately 8595 seasonal employees worked in food packaging. During the peak summer harvest period, we employed an additional approximately 4,0104,015 seasonal employees to help package fruitfruits and vegetables. If there is a shortage of seasonal labor, or if there is an increase to minimum wage rates, this could have a negative impact on our cost of operations. Many of our packaging operations are located in rural communities that may not have sufficient labor pools, requiring us to hire employees from other regions. An inability to hire and train sufficient employees during the critical harvest period could materially and adversely affect our business, financial condition and results of operations.

Climate change serves as a risk multiplier increasing both the frequency and severity of natural disasters that may affect our business operations. Moreover, there has been a broad range of proposed and promulgated state, national and international regulationregulations aimed at reducing the effects of climate change. Such regulationregulations could result in additional costs in the form of taxes, consultant costs, the restriction of output, investments of capital to maintain compliance with laws and regulations, or required acquisition or trading of emission allowances. Disclosure requirements imposed by different regulators may not always be uniform, which may result in increased complexity, increased compliance costs, and other compliance-related risks. Climate change regulation continues to evolve, and it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation.

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. These actions have been taken despite the scientific evidence and general consensus of United States and international government agencies that BPA is safe and does not pose a risk to human health. The legislative actions combined with growing public perception about food safety may require us to change some of the materials used as linings in our packaging materials. Failure to do so could result in a loss of sales as well as loss in value of the inventory utilizing certain materials. In collaboration with other can makers as well as enamel suppliers, we have aggressively worked to find alternative materials for can linings not manufactured using BPA. We have fully transitioned to BPA Non-Intent (“BPANI”) for all food contact surfaces of our canned product volume. Even though BPANI has been fully approved by the Food and Drug Administration (“FDA”), there could be future legislative or regulatory actions that claim BPANI also poses a risk to human health. 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.

Our product introductions and improvements of existing products, along with other marketplace initiatives, are designed to capitalize on new and evolving customer or consumer trends and preferences. Shifts in consumer trends and preferences may result from several factors, including dietary trends, attention to nutritional aspects and concerns (perceived or substantiated) about the health effects of and the sourcing of certain ingredients. For example, the FDA has issued a statement on sodium which referred to an Institute of Medicine statement that too much sodium is a major contributor to high blood pressure. Some of our products contain a moderate amount of sodium per recommended serving, which is based on and aligns with consumer preferences for taste. In addition, there is the potential for increased government regulation of certain color additives which may include additional labeling requirements. Specific products within our portfolio could be impacted resulting in the need to modify our ingredient composition or develop alternative color additives. Such modifications and suitable alternatives may prove challenging to identify and integrate while still being agreeable with consumer preferences. To remain competitive, we must anticipate and react to these trends and preferences. While we devote significant resources to meeting this goal, we may not be successful in developing new products or appropriate alternative ingredients that are acceptable by customers or consumers and meet the requirements of government regulatory agencies.

Unfavorable economic conditions, including the impact of recessions in the United States and throughout the world, may negatively affect our business and financial results. TheseAlthough historically the Company's business has benefited in times of economic downturn, certain conditions could negatively impact (i) consumer demand for our products, (ii) the mix of our products’ sales, (iii) our ability to collect accounts receivable on a timely basis, (iv) the ability of suppliers to provide the materials required in our operations and (v) our ability to obtain financing or to otherwise access the capital markets. The strength of the U.S. dollar versus other world currencies could result in increased competition from imported products and decreased sales to our international customers. A prolonged recession could result in decreased revenue, margins and earnings. Additionally, the economic situation could have an impact on our lenders or customers, causing them to fail to meet their obligations to us. Certain of our raw materials, namely steel, are subject to import tariffs and other restrictions, and the United States government may periodically impose new or revise existing duties, quotas, tariffs or other restrictions to which we are subject. The global economic environment continues to face widespread uncertainties and while we have not been impacted directly by ongoing foreign conflicts, we are monitoring the effects on the broader economy, including on the availability and price of commodities used in or for the production of our products. The occurrence of any of these risks could materially and adversely affect our business, financial condition and results of operations.

As of March 31, 2025,2026, we had a $1.0 million outstanding balance on our revolving credit facility (“Revolver”). During our second and third fiscal quarters, our operations generally require more cash than is available from operations. In these circumstances, it is necessary to borrow under our Revolver. Our ability to obtain financing in the future through credit facilities will be affected by several factors, including our creditworthiness, our ability to operate in a profitable manner and general market and credit conditions. Significant changes in our business or cash outflows from operations could create a need for additional working capital. An inability to obtain additional working capital on terms reasonably acceptable to us or to access the Revolver would materially and adversely affect our operations. Additionally, if we need to use a portion of our cash flows to pay principal and interest on our debt, it will reduce the amount of moneycapital we have for operations, working capital, capital expenditures, expansions, acquisitions or general corporate or other business activities. The Company also has a Receivables Purchase Program that can be used to manage short-term liquidity and provide working capital flexibility in a cost-effective manner, as needed.

Seneca Foods Corporation is a leading provider of packaged fruits and vegetables, with facilities located throughout the United States. Our product offerings include canned, frozen and jarred produce, and snack chips that are sold under private label as well as national and regional brands that the Company owns or licenses, including Seneca®, Libby’s®, Green Giant®, Aunt Nellie’s®, Cherryman®, Green Giant®, Green Valley®, Libby’s®, READ®, and READSeneca®. Our products are sold nationwide by major grocery outlets, including supermarkets, mass merchandisers, limited assortment stores, club stores and dollar stores. We also sell products to foodservice distributors, restaurant chains, industrial markets, other food processors, export customers in approximately 55 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.

We purchase raw materials, including raw produce, steel, ingredients and packaging materials from growers, commodity processors, steel producers and packaging suppliers. Raw materials and other input costs, such as labor, fuel, fertilizer, utilities and transportation, are subject to fluctuations in price attributable to a number of factors. Certain of ourthe raw materials, namely steel, are subject to import tariffs and other restrictions, and the United States government may periodically impose new or revise existing duties, quotas, tariffs or other restrictions to which wethe areCompany may be subject. 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 impact of which could increase our cost of products sold and reduce our profitability.

We experienced material cost increases to various production inputs during the last several years due to a number of factors, including but not limited to, supply chain disruptions, steel supply and pricing, raw material shortages, laborinflationary shortages,pressure, and labor shortages. Additionally, foreign conflicts have disrupted the conflictglobal betweeneconomic Russiaenvironment andduring Ukraine.these years. While wethe haveCompany has no direct exposure to thisthese foreign conflict,conflicts, itsome of which are ongoing, they have had a negative impact on the global economy which has increased certain of our input costs. While some of the factors mentioned above have started to ease and stabilize, our costs remain elevated as compared to historical levels.

Three Months Ended DecemberJune 27, 20252026 and DecemberJune 28, 20242025

Net sales totaled $1,265.8$405.2 million for the ninethree months ended DecemberJune 27, 20252026 as compared with $1,233.0$297.5 million for the ninethree months ended DecemberJune 28, 2024.2025. The overall net sales increase of $32.8$107.7 million, or 2.7%,36.2%, was driven by higher sales volumes contributing an increase of $96.8 million, along with higher selling prices and the impact of product mix which contributed an increase of $10.9 million as compared to the prior year nine-month interim period was driven by higher sales volume contributing an increase of $16.5 million and a $16.3 million increase from the impact of higher selling prices and product mix.quarter.

Net sales of canned vegetables and frozen vegetables increased by a combined $29.4$105.5 million over the prior year.year quarter. The categories experienced an increase in sales volume equating to $18.5$96.0 million, along with $9.5 million from higher selling prices and a $10.9 million increase from the impact of pricing and product mix. Net sales in the fruit products category decreasedincreased by $1.2$0.9 million mainly driven by loweran increase in sales volume. TheNet sales of the snack products category remainedwere relativelyflat consistentcompared withto athe netprior salesyear increase of $0.3 million.quarter. Lastly, net sales attributable to the other category increased $4.2$1.3 million as compared to the prior year quarter for seed, cans and ends, and outside revenue from aircraft operations, which are ancillary to the Company’s main operations.

The following table presents components of operating and non-operating (income) expense as a percentage of net sales (percentages shown as absolute values):

Three Months Ended DecemberJune 27, 20252026 and DecemberJune 28, 20242025

Gross Margin: Gross margin for the three months ended DecemberJune 27, 20252026 was 16.4%11.8% as compared to 9.8%14.1% for the three months ended DecemberJune 28, 2024.2025. Gross margin wasdecreased higherwhen forcomparing the currentyear-over-year quarter,quarterly partiallyperiods drivenmainly bybecause the prior year quarter benefited from a larger LIFO credit thatthereby decreasedreducing the cost of products sold on a GAAP basis year-over-year.for Inthat addition,period. finishedThe goodsCompany’s soldLIFO bycredit for the Companythree duringmonths theended currentJune quarter27, largely2026 consistedwas of$3.0 products produced during the current year seasonal pack, which have a lower cost on a FIFO per unit basismillion as compared to finished$11.8 goodsmillion for the three months ended June 28, 2025. Excluding the LIFO credit, the gross margin was steady year-over-year as the percentage increase in cost of products sold duringwas thegenerally prior year quarter. These factors, alongconsistent with the net salespercentage increase further discussed in thenet section above, resulted in a higher gross margin for the current quarter.sales. Refer to the separate business trends section above and the material cash requirements section below for additional discussion of the factors impacting the respective seasonal pack.

Selling, General, and Administrative: Selling, general and administrative expense for the three months ended DecemberJune 27, 20252026 increased $1.0$1.7 million from the three months ended DecemberJune 28, 2024.2025. Selling, general, and administrative expense as a percentage of net sales for the three months ended DecemberJune 27, 2025,2026, was 4.6%5.0% as compared with 4.5%6.3% for the prior year quarter. The percentagedecrease remained relatively flat on a comparative basis as net sales increased andin selling, general, and administrative expense increasedas mostlya percentage of net sales was mainly driven by routinethe workforceincrease relatedin costs.net sales and the fixed nature of certain expenses.

Other Non-Operating Income: Other non-operating income totaled $2.8$3.0 million and $1.5$1.9 million for the three months ended DecemberJune 27, 20252026 and DecemberJune 28, 2024,2025, respectively, and is comprised of the non-service related pension amounts that are actuarially determined.

Interest Expense, net: Interest expense as a percentage of net sales was 0.8% for the three months ended DecemberJune 27, 2025,2026, as compared to 1.6%1.8% for the three months ended DecemberJune 28, 2024.2025. Interest expense decreased from $7.8$5.4 million in the prior year quarter to $4.1$3.1 million in the current quarter primarily driven by lower average borrowings outstanding under the Company’s revolving credit facility andfacility, a lower weighted average interest rate for the revolving credit facility as compared to the prior year quarter.quarter, and the current quarter did not have any interest incurred for Term Loan A-1.

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 during the preceding fiscal years 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 wereshowed favorableimprovement as compared to the preceding fiscal years.

The Company’s current fiscal year 2026 seasonal pack benefited from improved crop yields and less challenging growing conditions in certain regions, which contributed to an overall larger pack size as compared to the prior year. The Company’s plant locations ran more steadily during the harvesting and production process without as many weather-related interruptions experienced in fiscal year 2025. These factors have resulted in an overall lower-cost seasonal pack on a per unit basis for the current nine-month period. 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 nine-month interim period.2026.

A strong cash position leading into fiscal year 2027, coupled with continued positive cash flows provided by operating activities, allowed the Company to minimize use of its revolving credit facility during the three months ended June 27, 2026. Additionally, the Company utilized cash on hand to fund the $50.0 million voluntary pre-payment on Amended Term Loan A-2 as discussed in Note 6. The Company believes that its operations along with existing liquidity sources will satisfy its cash requirements for at least the next twelve months. The Company has borrowed funds and continues to believe that it has the ability to do so at reasonable interest rates; however additional borrowings would result in increased interest expense. The Company does not have any off-balance sheet financing arrangements.

Net Cash Provided by Operating Activities: For the ninethree months ended DecemberJune 27, 2025,2026, cash provided by operating activities was $114.2$109.1 million, which consisted of $7.0$82.4 million from changes in operating assets and liabilities, coupled with net earnings of $89.4$19.5 million and partially offset by non-cash charges of $17.8$7.2 million. The non-cash charges were mainly comprised of $33.4$10.6 million of depreciation and amortization, a $6.6 million impact for deferred taxes,amortization and $3.0$1.3 million of non-cash lease expense, partially offset by a $22.1$3.0 million LIFO credit.credit and a $1.9 million increase in pension benefit. The change in operating assets and liabilities was largelymainly impacted by workinginventories capitalbeing needsa use of cash as the nine-monthearly period covered the primary monthsstages of the Company’s seasonal pack.pack Cashcommenced utilized for inventories and accounts payable activity wereduring the main drivers.quarter.

For the ninethree months ended DecemberJune 28, 2024,2025, cash provided by operating activities was $243.6$53.7 million, which consisted of $142.8$38.9 million from changes in operating assets and liabilities, coupled with net earnings of $40.6$14.9 million and partially offset by non-cash charges of $60.2$0.1 million. The non-cash charges were mainly comprised of $33.6$11.1 million of depreciation and amortization,amortization $4.0and $0.9 million of non-cash lease expense, andlargely offset by a $23.0$11.8 million LIFO charge.credit. The change in operating assets and liabilities was mainly impacted by workinginventories capitalbeing needsa use of cash as the early stages of the Company’s seasonal pack commenced during the nine-month period which covered the primary seasonal pack months.quarter.

Net Cash Used in Investing Activities: Net cash used in investing activities was $26.5$15.5 million for the ninethree months ended DecemberJune 27, 2025,2026, andwhich consistedwas oflargely driven by cash used for capital expenditures of $27.0$17.2 million,million. partiallyPartially offsetoffsetting bythat proceedsamount was $1.7 million received upon settlement of the contingent consideration resulting from the salebusiness ofacquisition assetsin totalingfiscal $0.5year million.2026.

Net cash used in investing activities was $28.9$11.2 million for the ninethree months ended DecemberJune 27,28, 2024,2025, and consisted of cash used for capital expenditures of $26.7$11.3 millionmillion, andpartially $2.7offset million paid as deposits to vendors for a can manufacturing line. Partially offsetting those amounts, the Company receivedby proceeds from the sale of assets totaling $0.5$0.1 million.

Net Cash Used in Financing Activities: Net cash used in financing activities was $104.7$56.6 million for the ninethree months ended DecemberJune 27, 2025,2026, driven primarily by payments of $94.0$54.4 million on its term loans and finance obligation. This included fulla payment of $81.0$50.0 million pre-payment for theAmended Term Loan A-1 upon maturityA-2 during the current nine-month interim period.quarter. The Company also used cash of $7.6$1.4 million to purchase treasury stock and made payments of $3.0$0.8 million on finance leases. The Company utilized its revolving credit facility, although borrowings and repayments both equated to $97.3$0.6 million during the nine-monththree month period, thereby resulting in no change to the ending balance as compared to the beginning of the fiscal year.

Net cash used in financing activities was $213.7$80.8 million for the ninethree months ended DecemberJune 28, 2024,2025, driven primarily by a net paydown on the Company’s revolving credit facilitypayments of $195.0 million. The Company also made payments totaling $14.9$85.4 million on its term loans and finance obligationobligation. This included full payment of $81.0 million for the Term Loan A-1 upon maturity during the priorcurrent nine-monthquarter. interim period. Partially offsetting the outflows was a $12.4 million increase in note payable borrowings associated with the Company’s can manufacturing line which was converted to a finance obligation during the nine-month period. Additionally, theThe Company also used cash of $10.8$3.8 million to purchase treasury stock and made payments of $3.8$1.0 million on finance leases. Partially offsetting the cash outflows, the Company had net borrowings of $9.4 million on its revolving credit facility.

Impact of Seasonality on Financial Position and Results of Operations:

The Company’s production cycle begins with planting in the spring followed by harvesting and packaging during the second and third fiscal quarters with sales spanning over the following twelve months. Minimal food packaging occurs in the Company'sThe last fiscal quarter ending March 31, which31 is the optimal time for maintenance, repairs and equipment changes in itsthe Company’s seasonal packaging plants. The supply of commodities, current pricing, and expected new crop quantity and quality affect the timing and amount of the Company’s sales and earnings. When the seasonal harvesting periods of the Company's major vegetables are newly completed, inventories for these packaged vegetables are at their highest levels. For peas, the peak inventory time is mid-summer and for sweet 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 typically reaching their lowest point in mid-to-latethe firstfourth quarter prior to the new seasonal pack commencing. As the seasonal pack progresses, these components of working capital both increase until the pack is complete.

The Company’s fruit and vegetable sales exhibit seasonal increases in the third fiscal quarter due to increased retail demand during the holiday season. In addition, the Company sells cannedcertain andfinished frozen vegetablesgoods to a co-pack customercustomers on a bill and hold basis during the pack cycle, which typically occurs in the second and third quarters. Given the seasonal nature of the Company’s sales, the accounts receivable balance typically reaches its highest point at the end of the second fiscal quarter.

Non-GAAP Financial Measures:

A description of the Company's critical accounting estimates is contained in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025.2026. There were no material changes to the Company's critical accounting policies or estimates during the ninethree months ended DecemberJune 27, 2025.2026.