Financial Analysis

"16. Acquisition On March 2, 2026 (the acquisition date), the Company executed an Asset Purchase Agreement and associated Intellectual Property Assignment Agreement with B&G Foods, Inc. (the Seller) to purchase the Sellers Green Giant U.S. frozen business (the acquisition). The Company acquired Green Giant U.S. frozen inventory; fixed assets located at a frozen vegetable manufacturing facility in Yuma, Arizona; and the Green Giant trade name and associated intellectual property. The Company assumed the existing leases for both the Yuma, Arizona facility and a warehouse facility in San Luis, Arizona. In addition, employees working at the Yuma, Arizona facility became employees of the Company as of the acquisition date. The preliminary purchase price was approximately $61.5 million, of which $63.2 million was paid to the Seller on the acquisition date using available cash on hand. The remaining $1.7 million represents contingent consideration due to the Company from the Seller as of March 31, 2026, and has been recorded as a receivable on the Companys Consolidated Balance Sheet. The Company expects to finalize the purchase price during the first half of fiscal year 2027. Additionally, a portion of the purchase price was used to settle a pre-existing net liability of $1.4 million. The amount was comprised of a $4.0 million net liability representing deferred revenue and deferred costs for which the associated performance obligation had not yet been performed by the Company f …

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Fiscal Year: 2026 2025 2024 Canned vegetables $ 1,366,632 $ 1,314,315 $ 1,204,823 Frozen vegetables 151,183 124,714 120,795 Fruit products 93,456 92,378 87,435 Snack products 15,020 14,995 13,400 Other 33,384 32,485 32,150 Total $ 1,659,675 $ 1,578,887 $ 1,458,603

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12. Fair Value of Financial Instruments Cash and cash equivalents, restricted cash, accounts receivable, refundable income taxes, accounts payable, income taxes payable, and accrued expenses are reflected in the Consolidated Balance Sheets at carrying value, which approximates fair value due to the short-term maturity of these instruments. Utilizing the fair value hierarchy, the Company determines fair value of money market funds using Level 1 inputs of quoted prices in active markets. Fair value of commercial paper is determined by using Level 2 inputs of quoted prices for similar assets in active markets. The carrying value and estimated fair values of the Company's long-term debt and finance obligation are summarized as follows (in thousands): As of: March 31, 2026 March 31, 2025 Carrying value $ 271,477 $ 369,878 Estimated fair value $ 271,406 $ 364,276 The estimated fair value for long-term debt and finance obligation (classified as Level 2 in the fair value hierarchy) is determined by the quoted market prices for similar debt (comparable to the Companys financial strength) or current rates offered to the Company for debt with the same maturities. Since quoted prices for identical instruments in active markets are not available (Level 1), the Company makes use of observable market-based inputs to calculate fair value, which is Level 2. …

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8. Income Taxes The Company files a consolidated federal and various state income tax returns. The provision for income taxes is as follows (in thousands): Fiscal Year: 2026 2025 2024 Current: Federal $ 22,075 $ 9,236 $ 20,850 State 4,225 1,833 4,364 Total 26,300 11,069 25,214 Deferred: Federal $ 5,712 $ 1,257 $ (5,010 ) State 2,409 933 (523 ) Total 8,121 2,190 (5,533 ) Total income taxes $ 34,421 $ 13,259 $ 19,681 A reconciliation of the U.S. federal statutory rate to the effective rate for fiscal year 2026 is presented in accordance with ASU 2023-09 below (dollars in thousands): Fiscal Year: 2026 U.S. federal statutory rate $ 31,310 21.0 % State income taxes (net of federal tax benefit) (1) 5,388 3.6 % Effect of cross border tax laws (304 ) -0.2 % Tax credits (416 ) -0.3 % Non-taxable or non-deductible items (1,222 ) -0.8 % Changes in unrecognized tax benefits (438 ) -0.3 % Other reconciling items 103 0.1 % Total $ 34,421 23.1 % (1) State and local taxes in California, Illinois, and Pennsylvania comprise the majority of this category. A reconciliation of the U.S. federal statutory rate to the effective rate for fiscal years 2025 and 2024 is as follows (prior to the adoption of ASU 2023-09): Fiscal Year: 2025 2024 U.S. federal statutory rate 21.0 % 21.0 % State income taxes (net of federal tax benefit) 3.9 % 3.6 % Federal credits -0.8 % -0.6 % State rate changes 0.0 % -0.2 % State credit expiration 0.9 % 0.0 % State return to accrual 1.4 % 0.5 % Change in valuation allowance …

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14. Legal Proceedings, Other Contingencies, and Commitments 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, workers compensation along with other employee claims, tort and other general liability claims, for which it carries insurance, as well as patent infringement and related litigation. 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. 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 impact on its financial position, results of operations, or cash flows. The Company has posted a surety bond and a surety-backed letter of credit which serve as collateral for its workers compensation policy. The primary purpose of these instruments is to indemnify the beneficiary should the Company be unable to fulfill its obligations for claims asserted under the workers compensation policy. Both the surety bond and the surety-backed letter of credit are automatically renewed annually, unless the issuer gives cancellation notice in advance. As of March 31, 2026, the amount of the surety bond a …

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6. Debt Note Payable and Finance Obligation During fiscal year 2024, the Company entered into an unsecured note payable with an individual lender for an interim financing arrangement associated with deposits paid to vendors for the installation of a new can manufacturing line located at one of the Companys plant facilities. The note payable had a variable interest rate based upon the Secured Overnight Financing Rate ( SOFR ) plus 1.80% with interest payable monthly. During fiscal year 2025, subsequent to the final installation of the can manufacturing line in September 2024, the Company took title and recorded an addition to property, plant and equipment of $21.3 million and a corresponding reduction of the vendor deposits which were recorded within other assets on the Consolidated Balance Sheet. After taking title to the equipment, the Company and the lender entered into a financing agreement for the can manufacturing line which commenced in September 2024 and is recorded as a finance obligation on the accompanying Consolidated Balance Sheets. In connection with this transaction, the note payable was cancelled. The finance obligation has a maturity date of September 14, 2031 and a monthly payment of $0.3 million which is comprised of principal and interest at a fixed rate of 5.56%. Future minimum payments under the finance obligation are as follows (in thousands): Fiscal years ending March 31: 2027 $ 3,684 2028 3,684 2029 3,684 2030 3,684 2031 3,684 Thereafter 1,840 Total mi …

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Recently Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09) related to income tax disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. The Company adopted this guidance for the fiscal year ended March 31, 2026, on a prospective basis by providing the additional disclosures as required. Refer to Note 8, Income Taxes, for additional information. Recently Issued Accounting Pronouncements In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (ASU 2025-11), which is intended to update the guidance in Topic 270 by improving the navigability of the required interim disclosures, clarifying when that guidance is applicable, and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company plans to adopt this pronouncement for its fiscal year beginnin …

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10. Retirement Plans The Company has a noncontributory defined benefit pension plan (the Plan) covering most employees who meet certain age-entry requirements and work a stated minimum number of hours per year. The Plan was amended to freeze accruals to new hires and rehires effective January 1, 2020. The Plan was adequately funded as of March 31, 2026 and 2025, respectively, and no contributions were required to meet legal funding requirements. The following tables provide a reconciliation of the changes in the Plans benefit obligation and fair value of plan assets over the two-year period ended March 31, 2026 and a statement of the funded status as of March 31, 2026 and 2025 (in thousands): Fiscal Year: 2026 2025 Change in benefit obligation Benefit obligation at beginning of year $ 217,388 $ 236,507 Service cost (excluding expenses) 3,997 4,905 Interest cost 11,105 11,967 Actuarial gain (6,645 ) (14,616 ) Benefit payments (10,926 ) (21,375 ) Benefit obligation at end of year $ 214,919 $ 217,388 Change in plan assets Fair value of plan assets at beginning of year $ 293,121 $ 288,949 Actual return on plan assets 42,019 26,901 Benefit payments and expenses (12,079 ) (22,729 ) Fair value of plan assets at end of year $ 323,061 $ 293,121 Funded status $ 108,142 $ 75,733 The Plans funded status increased by $32.4 million during fiscal year 2026 reflecting the actual fair value of plan assets and the projected benefit obligation as of March 31, 2026. This funded status increase w …

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15. Related Party Transactions During fiscal year 2026, approximately 2% of vegetables supplied to the Company were grown by a Director of Seneca Foods Corporation. The Companys grower purchases from the Director were $2.8 million, $2.8 million, and $3.0 million in fiscal years 2026, 2025 and 2024, respectively, pursuant to a raw vegetable grower contract. The Chairman of the Audit Committee reviewed the relationship and determined that the contract was negotiated at arm's length and on no more favorable terms than to other growers in the marketplace. The Company incurred expenses for charitable contributions to the Seneca Foods Foundation (the Foundation) in the amount of $0.5 million and $1.0 million in fiscal years 2025 and 2024, respectively. There were no charitable contributions made by the Company to the Foundation in fiscal year 2026. The Foundation is a nonprofit entity that supports charitable activities by making grants to unrelated organizations or institutions and is managed by current employees of the Company. The three current trustees of the Foundation are either current members of the Company's Board of Directors or an immediate family member of a Company Director. The Company maintains a liability for retirement arrangements to a beneficiary that has a family relationship with one of the Companys current Directors. As of March 31, 2026 and 2025, the liability for these benefits totaled $0.8 million and $1.0 million, respectively. Payments are made monthly ov …

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2. Revenue Recognition The Company applies the provisions of Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers, and recognizes revenue under the core principle to depict the transfer of products to customers in an amount reflecting the consideration the Company expects to receive. The Company conducts its business almost entirely in food packaging, which comprised approximately 98% of the Company's fiscal year 2026 net sales. Nature of Products The Companys product offerings include the following: Canned and frozen vegetables which are sold under private label, and national and regional brands that the Company owns or licenses, as well as under contract packing agreements; Fruit products comprised of jarred and packaged products; Snack products comprised of packaged fruit chips; Other non-food operations which are ancillary to the Companys main product offerings, such as the sale of cans and ends, seed, and outside revenue from the Companys aircraft operations. Disaggregation of Revenue In the following table, revenue is disaggregated by product category groups (in thousands): Fiscal Year: 2026 2025 2024 Canned vegetables $ 1,366,632 $ 1,314,315 $ 1,204,823 Frozen vegetables 151,183 124,714 120,795 Fruit products 93,456 92,378 87,435 Snack products 15,020 14,995 13,400 Other 33,384 32,485 32,150 Total $ 1,659,675 $ 1,578,887 $ 1,458,603 When Performance Obligations Are Satisfied A performance obligation is a promise in a contract to transfe …

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13. Segment Information The Company conducts its business almost entirely in food packaging with two reportable segments: Vegetable and Fruit/Snack. The reportable segments reflect how the Company's Chief Executive Officer, who is the Chief Operating Decision Maker (CODM), allocates resources and evaluates performance, and how the Company's internal management financial reporting is structured. The Company's CODM evaluates the performance of these reportable segments with a focus on earnings (loss) before income taxes as the measure of segment profit or loss. The Other category consists of the Company's non-food operations including revenue derived from the sale of cans, ends, seed, outside revenue from the Company's aircraft operations, and certain corporate items. These ancillary activities do not qualify as an operating segment and are not eligible for aggregation with one of the identified operating segments; therefore they are combined and presented within the Other category. Earnings (loss) before income taxes is utilized by the CODM to assess the profitability of the business. The CODM uses this information in making key operational decisions, including but not limited to, approval of annual budgets, expanding into new markets or product categories, pursuing business acquisitions or divestures, and initiating major capital expenditures. Analysis of current and historical trends of segment performance, including consideration of known favorable or unfavorable factors th …

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"1. Summary of Significant Accounting Policies Nature of Operations Seneca Foods Corporation (the Company) currently has 27 facilities in nine states in support of its main operations. The Company markets private label and branded packaged foods to retailers and institutional food distributors. Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States (""GAAP"") requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of net sales and expenses during the reporting period. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates. Cash, Cash Equivalents and Restricted Cash The Company considers all highly l …

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11. Stockholders Equity Preferred Stock The Company has authorized three classes of preferred stock: Class A Preferred Stock, 6% Voting Cumulative Preferred Stock, and Preferred Stock Without Par Value. Class A Preferred Stock There are 8,200,000 shares of Class A Preferred Stock which have been authorized with a par value of $0.025. The Class A Preferred Stock is designated in series by the Board of Directors, and as of March 31, 2026, there are three designated series. 10% Voting Cumulative Convertible Preferred Stock - Series A There are 1,000,000 shares of 10% Series A Preferred Stock that have been designated by the Board of Directors, with 407,240 shares outstanding as of March 31, 2026. The shares have a par value of $0.025 and a stated value of $0.25 and are convertible into one share of Class A Common Stock and one share of Class B Common Stock for every 20 shares of Series A Preferred Stock. During fiscal years 2026 and 2025, the Company paid dividends of $10,181, equating to $0.025 per share, on the Series A Preferred Stock. 10% Voting Cumulative Convertible Preferred Stock - Series B There are 400,000 shares of 10% Series B Preferred Stock that have been designated by the Board of Directors, with 400,000 shares outstanding as of March 31, 2026. The shares have a par value of $0.025 and a stated value of $0.25 and are convertible into one share of Class A Common Stock and one share of Class B Common Stock for every 30 shares of Series B Preferred Stock. During fisc …

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17. Subsequent Event In May 2026, the Company utilized a portion of its available cash on hand to make a voluntary pre-payment of $50.0 million to reduce the outstanding principal balance of its Term Loan A-2. No pre-payment penalty was incurred.

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