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Seneca Foods Overstates Net Income Two Consecutive Years

Canned food firm restates financials one month after significantly overstating profitability.

August 10, 2023

Seneca Foods Corporation (SENEA), a packaged fruits and vegetables company, restated two years of financials after admitting its LIFO inventory charge was flawed.

In an amendment a month after releasing its annual report, Seneca corrected the value of its inventory using the LIFO method, which increased COGS by $31.6 million and $6.3 million in FY 2023 and 2022, respectively.

Net earnings were overstated by $23.9 million and $4.8 million in FY 2023 and 2022, respectively, due to the error.

Seneca reassured investors the error did not impact results under the first-in, first out (FIFO) method of inventory accounting and that the corrections were non-cash.

Investors seeking a silver lining are likely to take comfort knowing Seneca awards executive bonuses based on Adjusted Earnings, which uses FIFO inventory accounting due to “large non-cash LIFO charges” in FY23 and 22.

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