Seneca Foods Corporation (SENEB) 2012 Q2 法說會逐字稿

(audio in progress) quarter of the fiscal year 2012, but before we do let me first cover a few standard legal disclaimers.

（音頻播放中）這是 2012 財年的一個季度，但在此之前，我首先要介紹一些標準的法律免責聲明。

Information shared during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because such comments are subject to risks and uncertainties, our actual results may vary materially from those expressed or implied by such forward-looking statements.

本次電話會議中分享的資訊可能包含《1995 年私人證券訴訟改革法案》所定義範圍內的前瞻性陳述。由於此類評論受風險和不確定性的影響，我們的實際結果可能與此類前瞻性陳述所表達或暗示的結果有重大差異。

Investors are cautioned not to place undue reliance on such statements, which speak only as of the date the statements are made. Except for ongoing obligations to disclose material information as is required by the federal securities laws, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this call or to reflect the occurrence of unanticipated events.

敬請投資者切勿過度依賴此類聲明，因為這些聲明僅代表聲明發布當日的觀點。除聯邦證券法規定的持續揭露重大資訊的義務外，本公司不承擔任何義務公開發布對任何前瞻性聲明的任何修訂，以反映本次電話會議召開日後的事件或情況，或反映意外事件的發生。

Some of the comments that we will make refer to non-GAAP measures. The Company does not intend this information to be used in isolation or as a substitute for other measures that are prepared in accordance with GAAP. I refer you to our second-quarter press release which contains reconciliation of GAAP to non-GAAP measures and to the Investor Information section of our website which is located at www.senecafoods.com.

我們將發表的一些評論涉及非公認會計準則 (GAAP) 指標。本公司不打算將這些資訊單獨使用或取代其他依照公認會計準則 (GAAP) 編製的指標。請參考我們第二季的新聞稿，其中包含 GAAP 與非 GAAP 指標的對賬，以及我們網站 www.senecafoods.com 的「投資者資訊」部分。

Unless otherwise mentioned, references to current year and 2012 or to prior year and 2011 refer to the fiscal years that end on March 31, 2012 and 2011, respectively. Now let me turn the call over to Kraig Kayser to talk about our business.

除非另有說明，本年度及2012年以及上年度及2011年分別指截至2012年3月31日及2011年3月31日的財年。現在，我將把電話轉給Kraig Kayser，請他談談我們的業務。

Thank you, Roland. Seneca reported second-quarter profit of $2.9 million, or $0.24 per diluted share, versus a profit of $2.8 million, or $0.23 per diluted share, in last year's second quarter. Sales for the quarter were $283.6 million, up from last year's $275.4 million due to improved selling prices over prior year.

謝謝你，羅蘭。 Seneca 公佈第二季度利潤為 290 萬美元，即每股 0.24 美元，而去年同期利潤為 280 萬美元，即每股 0.23 美元。本季銷售額為 2.836 億美元，高於去年的 2.754 億美元，這得益於銷售價格較上年有所提升。

For the six months ended October 1 Seneca reported a net loss of $5.1 million, or $0.42 per share, versus a profit of $8.1 million, or $0.66 per share, in the same period prior year. Sales were $542.7 million, up from $495.4 million in the prior year.

截至10月1日的六個月，Seneca 淨虧損510萬美元，合每股虧損0.42美元，去年同期獲利810萬美元，合每股虧損0.66美元。銷售額為5.427億美元，高於去年的4.954億美元。

One of the key drivers in reported earnings for the quarter and the six months was the LIFO charge. During the quarter the Company recorded a pretax $12.8 million LIFO charge versus a credit of $645,000 during the prior-year quarter or a $13.4 million swing. While in the sixth-month period the Company recorded a LIFO charge of $19.3 million versus a credit of $4.8 million in the first six months of last fiscal year or a $24.1 million swing.

本季和上半年報告獲利的關鍵驅動因素之一是後進先出法費用。本季度，公司記錄了1,280萬美元的稅前後進先出法費用，而去年同期的貸項為64.5萬美元，即1,340萬美元的波動。而在第六個月，公司記錄了1,930萬美元的後進先出法費用，而上財年上半年的貸項為480萬美元，即2,410萬美元的波動。

The large impact on earnings is a result of the Company being on the LIFO, reflects the fact that costs are up significantly this year as a result of higher produce, steel, and fuel costs. Roland will review the non-GAAP earnings on a FIFO basis as well as more detail on the earnings statement and balance sheet later in the call.

獲利受到巨大影響，是因為公司採用後進先出法，反映出今年農產品、鋼材和燃料成本上漲導致成本大幅上漲。 Roland 將在電話會議稍後討論採用先進先出法的非 GAAP 盈利，並更詳細地介紹損益表和資產負債表。

While the net earnings do not show it as a result of LIFO charges, our performance is improving. The prior quarter, the Company's first quarter of fiscal 2012 was the bottom of the commodity cycle that we have been battling for the past year. Our business is now on the upswing as a result of the inventory correction that has taken place.

雖然淨利潤並未反映出後進先出法的影響，但我們的業績正在改善。上一季度，也就是公司2012財年第一季度，正處於大宗商品週期的底部，而我們在過去一年中一直在努力應對這一周期。由於庫存調整，我們的業務目前正處於上升階段。

In the two years prior inventories of canned and frozen products have been building on our balance sheet, and presumably in the industry, as a result of strong growing seasons in both fruit and vegetable sides of our business. A combination of pack plan reductions, strong sales in advance of price increases, and less than favorable growing conditions have all combined to turn the markets around to more favorable selling conditions.

在過去兩年中，由於我們業務中水果和蔬菜的生長旺季強勁，罐裝和冷凍產品的庫存在我們的資產負債表上不斷增加，想必整個行業也是如此。包裝計劃的減少、價格上漲前的強勁銷售以及不太有利的生長條件，所有這些因素共同作用，使市場銷售狀況轉為有利。

One indication of the changing conditions is the reduced promotional activity by the Company in the quarter versus the prior year. Trade spending was down by almost a third for the quarter to $14.6 million from $20.9 million in the prior year.

情況變化的一個跡像是，公司本季的促銷活動較上年同期減少。本季貿易支出從上年的2,090萬美元下降近三分之一，至1,460萬美元。

As we pack our product in a very short window during the summer and fall, we use price to manage the inventories to allow us to move through the pack and yet remain a 52-week supplier to our customers. Trade spending is one way we manage this.

由於夏季和秋季的包裝時間非常短，我們利用價格來管理庫存，以便我們能夠完成包裝，同時仍能為客戶提供52週的供貨。貿易支出是我們管理庫存的一種方式。

Not surprisingly, with reduced trade spending the improvement in sales for the quarter was due to higher selling prices partially offset by lower volumes. Sales for the quarter were up $24.6 million due to the higher prices, offset by a $16.4 million reduction in volumes for a net increase of $8.2 million. The lower volumes were also a reflection of the fact that our customers bought in heavily ahead of the pricing advances that were kicking in during the second quarter.

毫不奇怪，由於貿易支出減少，本季銷售額的成長是由於銷售價格上漲，但銷量下降部分抵消了這一因素。由於價格上漲，本季銷售額成長了2,460萬美元，但銷量減少1,640萬美元，從而淨增加820萬美元。銷售下降也反映出我們的客戶在第二季價格上漲開始之前大量購入。

In fact, for the six-month period the sales increase of $47.3 million over the prior year was almost evenly split between higher prices and higher volumes. Reduced volumes over prior year will likely continue for the next several quarters as Seneca adjusts from being in an inventory oversupply situation to a more balanced and even short situation in some commodities.

事實上，上半年銷售額較上年同期成長4,730萬美元，幾乎平均歸功於價格上漲和銷售增加。隨著Seneca從庫存過剩狀態轉向更加平衡甚至部分商品短缺的狀態，銷售年減的趨勢在未來幾季可能還會持續。

For example, the Company's pea pack was one of the shortest in memory as a result of wet weather in the early part of the growing season followed by exceptionally hot weather. This combination is very bad for growing peas, and as a result, we are managing through this inventory very carefully.

例如，由於生長季初期陰雨連綿，隨後經歷了異常炎熱的天氣，該公司的豌豆庫存量是有史以來最短的。這種組合對豌豆的生長非常不利，因此，我們正在非常謹慎地管理庫存。

Also in the last quarterly call I was concerned about the size of the fruit crop as the industry association projections were calling for another large crop. However, hail and other weather-related issues shortened up the crop to a more normal size, while at the same time demand has improved somewhat as important competition has softened to allow us to return the fruit business to profitability in the second quarter for the first time in a year-and-a-half.

在上次季度電話會議上，我也對水果產量感到擔憂，因為產業協會預測今年將再次豐收。然而，冰雹和其他天氣因素導致產量下降，恢復到更正常的水平。同時，隨著重要競爭的減弱，需求回升，使我們的水果業務在第二季度實現了一年半以來的首次盈利。

As I have discussed in the past, the fruit business has been plagued with declining demand and oversupply. Over the past 12 months the Peach Growers Association has conducted tree pull programs to offset some of the oversupply, while at the same time promoting export programs. The combination of these efforts has made a meaningful impact on the oversupply situation which should lead to more stable conditions.

正如我過去所討論的，水果產業一直受到需求下降和供應過剩的困擾。在過去12個月裡，桃農協會開展了拔樹計劃，以抵消部分供應過剩，同時推廣出口項目。這些措施對供應過剩狀況產生了顯著影響，有望使市場更加穩定。

A recent signing of free trade agreements with Korea, Panama, and Colombia were positive events for the future of our fruit and vegetable business. For example, canned peaches were subject to a 45% import duty in Korea and the FTA allows these to scale down to zero over the next five years.

我們最近與韓國、巴拿馬和哥倫比亞簽署了自由貿易協定，這對我們蔬果業務的未來發展至關重要。例如，罐裝桃子先前在韓國的進口關稅為45%，而根據自由貿易協定，未來五年內，進口關稅將降至零。

We are also seeing encouraging signs for our export business overall going forward. Were it not for the short pack this summer in corn, particularly in Minnesota, we were anticipating a 10% growth in our case sales in international. A combination of the weak dollar and increasing costs in countries like Thailand, who we compete with for export corn business, has led to significantly more interest in our products than in previous years.

我們也看到了未來出口業務整體上令人鼓舞的跡象。如果不是今年夏天玉米供應不足，尤其是在明尼蘇達州，我們預計國際市場箱裝玉米銷量將成長10%。美元疲軟，加上泰國等國（我們在玉米出口業務上與它們競爭）的成本上漲，導致市場對我們產品的興趣比往年顯著增加。

Our domestic business is also showing signs of strength. Despite planned reductions in our sales to General Mills, our retail and food service business has seen growth in the first six months of the year. And even in the second quarter where prices had advanced significantly, we saw a case growth in our private-label retail and food service businesses.

我們的國內業務也顯示出強勁的跡象。儘管我們計劃減少對通用磨坊的銷售額，但我們的零售和餐飲服務業務在今年上半年仍實現了成長。即使在價格大幅上漲的第二季度，我們的自有品牌零售和餐飲服務業務也實現了成長。

Bottom line is that consumers continue to find our products good value, even at the higher prices, and sales volumes have been holding up. I will turn it over to Roland now to give you more perspective on the quarter and six months in detail.

最重要的是，即使價格上漲，消費者仍然覺得我們的產品物有所值，銷售也一直保持穩定。現在，我將把時間交給羅蘭，她將為您詳細介紹本季和上半年的情況。

Thank you, Craig. As Craig mentioned, second-quarter fiscal 2012 sales were $283.6 million versus $275.5 million a year ago. This $8.1 million or 3% increase was attributable to a $24.5 million increase in sales price and mix, which was due both to increased selling prices and decreased promotional activity.

謝謝，Craig。正如Craig所說，2012財年第二季的銷售額為2.836億美元，去年同期為2.755億美元。銷售額成長810萬美元（3%），主要是因為銷售價格和產品組合上漲了2,450萬美元，這不僅是因為銷售價格上漲，也是因為促銷活動減少。

Sales volume was down $16.4 million versus prior-year, due primarily to reduced sales volumes to General Mills caused by a smaller pea pack this year than last. Second-quarter fiscal 2012 USDA sales were $3.1 million less than a year ago. For the six months of our fiscal 2012 sales were $542.7 million versus $495.4 million during the same period last year.

銷售額較上年同期下降1,640萬美元，主要原因是今年豌豆包裝尺寸小於去年，導致通用磨坊的銷售額下降。 2012財年第二季度，美國農業部（USDA）銷售額較上年同期減少310萬美元。 2012財年上半年，銷售額為5.427億美元，去年同期為4.954億美元。

The $47.3 million or 9.5% increase is due to a $23.9 million increase in improved selling prices and sales mix and a $23.4 million increase in sales volume. We experienced increased sales volume in all areas but General Mills, where volume was down due to the shorter pea pack volume and reduced impact purchases of beans and corn.

4,730萬美元（9.5%）的成長得益於銷售價格和銷售組合的改善，銷售額成長了2,390萬美元，銷售額也成長了2,340萬美元。除通用磨坊外，所有地區的銷售額均有所成長。通用磨坊的豌豆包裝庫存減少，以及大豆和玉米等重要採購的減少，導致其銷售額下降。

Frozen sales volume increased by $11.6 million versus prior year due in part to the Lebanon frozen business that we acquired in August 2010 midway through our second quarter of fiscal 2011. Year-to-date USDA sales increased by $4.4 million or 25.2% due to improved volume and prices.

冷凍食品銷售額較前一年增加 1,160 萬美元，部分原因是我們在 2010 年 8 月（2011 財年第二季中期）收購了黎巴嫩冷凍業務。由於銷量和價格上漲，年初至今美國農業部銷售額增加了 440 萬美元，增幅為 25.2%。

Trade promotions, which we deduct from sales when we report net sales, decreased by $6.3 million or 30.2% in the second quarter 2012 versus prior year. On a year-to-date basis trade promotions decreased by $9.3 million or 24.1% from prior year. As Kraig said, this is indicative of a more balanced inventory position versus prior year.

貿易促銷費用（我們在報告淨銷售額時將其從銷售額中扣除）在2012年第二季度較上年同期減少了630萬美元，降幅為30.2%。年初至今，貿易促銷費用較上年同期減少了930萬美元，降幅為24.1%。正如Kraig所說，這顯示庫存狀況較上年同期更加均衡。

As Kraig also talked about, we are experiencing significantly higher LIFO charges in fiscal 2012 versus prior year, reflecting the increased costs for produce another purchase materials and the fact that our short packs this year have resulted in higher unit costs. Our second-quarter fiscal 2012 results include a LIFO charge of $12.8 million versus a credit of $0.6 million in second quarter fiscal 2011.

正如Kraig也提到的，我們2012財年的後進先出法費用較上年大幅增加，這反映了生產其他採購材料成本的增加，以及我們今年的短包裝導致單位成本上升。我們2012財年第二季的業績包含1,280萬美元的後進先出法費用，而2011財年第二季的後進先出法費用僅為60萬美元。

On a year-to-date basis fiscal 2012 results include a LIFO charge of $19.3 million versus a credit of $4.8 million in fiscal 2011. These year-over-year increases in LIFO charge of $13.4 million in the second quarter and $24.1 million in the first six months mitigated some of the favorable impact that improved selling price and sales mix had on gross margin.

從年初至今，2012 財年的業績包括 1,930 萬美元的後進先出法費用，而 2011 財年的貸項為 480 萬美元。第二季後進先出法費用年增 1,340 萬美元，前六個月後進先出法費用年增 2,410 萬美元，抵銷了銷售價格和銷售組合改善對毛利率產生的一些有利影響。

Second-quarter fiscal 2012 gross margin was 7.5% versus 6.9% in second quarter fiscal 2011 while year-to-date gross margins were 5.0% in fiscal 2012 and 9.0% in fiscal 2011. On a FIFO basis gross margins were 12% in the second quarter of fiscal 2012 versus 6.7% in second quarter fiscal 2011 and was 8.6% for the first six months of fiscal 2012 versus 8% for the same period last year.

2012 財年第二季毛利率為 7.5%，而 2011 財年第二季為 6.9%，年初至今的毛利率為 5.0%，2011 財年為 9.0%。以先進先出法 (FIFO) 計算，2012 財年第二季毛利率為 12%，而 2011 財年第二季為 6.7%；2012 財年上半年毛利率為 8.6%，而去年同期為 8%。

Second-quarter fiscal 2012 selling expenses as a percent of net sales was 3.0% compared to 2.9% a year ago. On a year-to-date basis selling expenses, as a percent of net sales, were 3.2% which is unchanged from the prior year.

2012財年第二季銷售費用佔淨銷售額的3.0%，去年同期為2.9%。年初至今，銷售費用佔淨銷售額的3.2%，與去年同期持平。

Second-quarter fiscal 2012 general and administrative expenses increased by $1 million from prior year due to higher employment costs and represent a 2.5% of sales versus 2.2% in fiscal 2011. Year-to-date fiscal 2012 general and administrative expenses were $0.6 million more than a year ago, but on a percent of sales basis decreased from 2.7% in fiscal 2011 to 2.6% in fiscal 2012 due to increased sales.

2012 財年第二季的一般和行政費用較上年同期增加 100 萬美元，原因是僱用成本增加，佔銷售額的 2.5%，而 2011 財年為 2.2%。 2012 財年年初至今的一般和行政費用較上年同期增加 60 萬美元，但由於銷售額增加，佔銷售額的百分比從 2011 財年的 2.7% 下降到 2012 財年的 2.6%。

Total second-quarter selling, general, and administrative expenses were 5.4% in fiscal 2012 versus 5.0% in fiscal 2011. For the year-to-date selling, general, and administrative expenses were 5.8% in both fiscal year 2012 and 2011.

2012 財年第二季銷售、一般及管理費用總額為 5.4%，而 2011 財年為 5.0%。 2012 財年及 2011 財年迄今的銷售、一般及管理費用均為 5.8%。

Second-quarter and year-to-date fiscal 2011 results included a restructuring charge of $1.2 million related to changes implemented at the Buhl, Idaho, and Mayville, Wisconsin, plants and headcount reductions at certain other locations. Fiscal 2012 results had immaterial restructuring amounts.

2011財年第二季及年初至今的業績包含120萬美元的重組費用，該費用與愛達荷州布爾工廠和威斯康辛州梅維爾工廠實施的變革以及其他一些工廠的員工裁員有關。 2012財年業績中重組費用不大。

Net interest expense decreased by $0.4 million in the second quarter and by $0.5 million in the first six months of fiscal 2012 compared to their respective periods a year ago. The decreases were due in part to scheduled long-term debt amortization and from interest income earned on the Allens credit facility.

2012財年第二季淨利息支出較去年同期減少40萬美元，上半年淨利息支出較去年同期減少50萬美元。淨利息支出減少的部分原因是計劃內的長期債務攤銷以及Allens信貸額度產生的利息收入。

Average borrowings on the line of credit increased by approximately $9.4 million in the second quarter and by approximately $16 million for the six-month period compared to a year ago. The August 2010 acquisition of our Lebanon operations for $20.3 million in cash was the major reason for the increased line of credit borrowings.

第二季度，信用額度平均借款額較去年同期增加約940萬美元，上半年平均借款額較去年同期增加約1,600萬美元。 2010年8月，我們以2,030萬美元現金收購了黎巴嫩業務，這是信用額度借款增加的主要原因。

EBITDA increased from $9.5 million in second quarter fiscal 2011 to $11.5 million in second quarter 2012 due to increased gross margins. On a year-to-date basis the $24.1 million increase in our LIFO charge versus last year caused EBITDA to decrease from $25 million in the first six months of fiscal 2011 to $6.8 million in the first six months of fiscal 2012 despite improved selling prices.

由於毛利率上升，息稅折舊攤銷前利潤 (EBITDA) 從2011財年第二季的950萬美元增至2012財年第二季的1,150萬美元。年初至今，儘管銷售價格有所上漲，但由於後進先出法費用較上年同期增加2,410萬美元，導致EBITDA從2011財年上半年的2,500萬美元降至2012財年上半年的680萬美元。

On a FIFO basis EBITDA increased from $8.8 million in second quarter fiscal 2011 to $24.2 million in second quarter fiscal 2012, and from $20.2 million in the first six months last year to $26.1 million for the first six months of fiscal 2012.

以先進先出法 (FIFO) 計算，EBITDA 從 2011 財年第二季的 880 萬美元增至 2012 財年第二季的 2,420 萬美元，EBITDA 從去年上半年的 2,020 萬美元增至 2,012 財年上半年的 2,610 萬美元。

Our fiscal 2012 year-to-date effective tax rate is a more normalized 35.1% versus 19.3% for the first half of fiscal 2011. This increase is due to a $1.5 million favorable settlement in the second quarter of last year due to the settlement of an Internal Revenue Service audit of the Company's fiscal 2006, 2007, and 2008 tax years.

我們 2012 財年年初至今的有效稅率為 35.1%，與 2011 財年上半年的 19.3% 相比更為正常。這一增長是由於去年第二季度因美國國稅局對公司 2006、2007 和 2008 財年稅務年度的審計達成和解而獲得的 150 萬美元的有利和解金。

LIFO diluted earnings per share was up $0.24 in second quarter fiscal 2012 versus $0.23 in second quarter fiscal 2011. For the six-month periods we had a LIFO diluted loss per share of $0.42 compared to earnings of $0.66 per share in fiscal 2011.

2012 財年第二季度，後進先出法稀釋每股收益成長 0.24 美元，而 2011 財年第二季為 0.23 美元。六個月期間，我們的後進先出法稀釋每股虧損為 0.42 美元，而 2011 財年每股收益為 0.66 美元。

On a FIFO basis, however, diluted earnings per share were $0.91 in the second quarter of fiscal 2012 versus $0.20 in fiscal 2011. On a year-to-date basis FIFO diluted earnings were $0.61 in fiscal 2012 compared to $0.41 in fiscal 2011.

然而，以先進先出法 (FIFO) 計算，2012 財年第二季每股攤薄收益為 0.91 美元，而 2011 財年為 0.20 美元。以年初至今計算，2012 財年的 FIFO 攤薄收益為 0.61 美元，而 2011 財年為 0.41 美元。

Free cash flow, defined as cash from operations less CapEx, was a negative $120.2 million for second quarter fiscal 2012 versus negative $80.1 million for second quarter fiscal 2011. Second-quarter negative cash flow reflects the seasonal nature of our business and that we make significant payments to our growers during this period. The $40.1 million increase versus prior year is due to a $20.4 million increase in inventory and a $21.8 million reduction in accounts payable and accrued expenses.

自由現金流（定義為經營活動產生的現金減去資本支出）2012財年第二季為負1.202億美元，而2011財年第二季為負8,010萬美元。第二季的負現金流反映了我們業務的季節性，以及我們在此期間向種植者支付了大量款項。與去年同期相比，4,010萬美元的增加是由於庫存增加2,040萬美元，應付帳款和應計費用減少2,180萬美元。

On a year-to-date basis, the Company had negative cash flow of $94.4 million in fiscal 2012 versus $60.5 million in fiscal 2011. This $33.9 million decrease is primarily attributable to the $13.2 million decrease in net earnings between years and decreased accounts payable and accrued expenses.

從年初至今，該公司 2012 財年的現金流量為負 9,440 萬美元，而 2011 財年為負 6,050 萬美元。 3,390 萬美元的減少主要歸因於年度間淨利潤減少 1,320 萬美元以及應付帳款和應計費用減少。

CapEx was $3.7 million during the second quarter fiscal 2012 versus $3 million during the same period last year. For the first six months of fiscal 2012 CapEx was $9.2 million versus $9.6 million for the first half of last year.

2012財年第二季資本支出為370萬美元，去年同期為300萬美元。 2012財年上半年資本支出為920萬美元，去年上半年為960萬美元。

Inventory decreased by $24.6 million from the second quarter of fiscal 2011 to the second quarter of fiscal 2012. This consisted of a $44 million decrease in finished goods and work-in-process, which is a result of increased sales volume and the short packs discussed by Kraig. Raw materials and supplies inventory is up $19.4 million from last year due to increased can and steel quantities.

2012財年第二季度，庫存較2011財年第二季減少了2,460萬美元。其中，成品和在製品庫存減少了4400萬美元，這是由於銷量增加以及Kraig提到的短包裝造成的。原料和供應品庫存較去年同期增加了1,940萬美元，原因是罐頭和鋼材數量增加。

We closed on a new five-year, $350 million seasonal ABL credit facility in July 2011. The interest rate on the facility is based upon LIBOR plus the spread. While the effective rate is somewhat higher than the previous five-year facility, we believe the terms are favorable to the market and that the facility, along cash from operations, will provide good liquidity and funding resources.

我們於2011年7月完成了一筆新的五年期3.5億美元季節性ABL信貸安排。此安排的利率是根據倫敦銀行同業拆借利率（LIBOR）加上利差。雖然實際利率略高於先前的五年期安排，但我們認為其條款對市場有利，並且該安排連同營運現金流將提供良好的流動性和融資資源。

Also during second quarter fiscal 2011, the Company announced the execution of a memorandum of understanding to merge with Allens, Inc. In connection with the planned merger we purchased a $10 million participation in Allens' line of credit facility which matures on March 30, 2012. Interest earned on this participation is recorded as interest income and netted against interest expense on the income statement.

此外，在 2011 財年第二季度，本公司宣布簽署與 Allens, Inc. 合併的諒解備忘錄。結合計畫中的合併，我們購買了 Allens 1000 萬美元的信用額度參與權，該參與權將於 2012 年 3 月 30 日到期。此項參與所賺取的利息記錄為利息收入，並在損益表中抵扣利息支出。

Although merger discussions were terminated in September of 2011, we have continued our participation in the Allens facility and include this on the balance sheet as a loan receivable.

儘管合併談判已於 2011 年 9 月終止，但我們仍繼續參與 Allens 工廠，並將其作為應收貸款計入資產負債表。

Now I would like to turn it back to Kraig for concluding comments.

現在我想請克雷格作總結性評論。

Bottom line, it was an improving quarter as selling prices advanced as predicted, as a result of the inventories getting back in line after one of those challenging periods that periodically occur in a business that rely on Mother Nature each year to deliver its crops. We are experienced in dealing with the inevitable cycles of our business and are looking forward to continued improvement going forward.

總而言之，本季業績有所改善，銷售價格如預期般上漲，這得益於庫存在經歷了一段艱難時期後恢復正常，而對於一個每年都依賴大自然提供農作物的企業來說，這種情況時有發生。我們經驗豐富，能夠應對業務中不可避免的周期性波動，並期待未來業績持續改善。

I will be happy, and Roland will be happy, to answer any questions.

我和羅蘭都很樂意回答任何問題。

(Operator Instructions) Brian Spillane, Bank of America.

（操作員指示）美國銀行 Brian Spillane。

Good morning. Just I guess the first question just regarding the supply/demand situation or the improving supply/demand conditions. Kraig, are -- so if I -- I just want to make sure I understand it right. What has occurred so far is you have been able to move clear inventory without having to promote as much as you have done the last few years?

早安.我想第一個問題是關於供需情況，或者說是供需狀況的改善。 Kraig，我只是想確認我的理解是否正確。到目前為止，你們已經能夠清空庫存，而不需要像過去幾年那樣大力促銷。

Will you be able to actually raise list prices, given some of the supply shortages on some of our products? Is there a potential that you can actually have increases, price increases over the next 12 months?

鑑於我們部分產品供應短缺，你們真的能提高標價嗎？未來12個月，你們有可能提高價格嗎？

We have certainly been -- it's a combination of raising list prices and lower trade promotions, Brian. And with private-label and our non-branded businesses, like foodservice and international, those are all list price increases by and large. There is a little bit of trade promotions in the non-branded business, but mostly it's a list price business.

我們確實一直在這樣做——這是提高標價和降低貿易促銷的結合，布萊恩。對於自有品牌和非品牌業務，例如餐飲和國際業務，基本上都是提高標價。非品牌業務有一些貿易促銷，但主要還是標價業務。

On the branded side, list prices, I don't believe we have any intentions or have raised list prices significantly on our branded business. But we manage that through trade promotions.

就品牌產品而言，我認為我們目前沒有大幅提高品牌產品定價的意圖，也沒有大幅提高過。但我們透過貿易促銷來做到這一點。

Okay. And then as you have moved more inventory out, is your channel mix improving? I guess the perception that I had when there was too much inventory, not only was it -- do you have to discount more to move the product but also the channel mix gets skewed because you are having to find maybe less profitable channels to move product into.

好的。那麼，隨著庫存的減少，你們的通路組合是否有所改善？我之前的看法是，當庫存過多時，不僅需要打更多折扣才能把產品賣出去，而且通路組合也會被扭曲，因為你必須找到利潤更低的管道來銷售產品。

So A) is that true? And then I guess next is there sort of a channel mix benefit that you should see or that you are seeing now, because you just have less inventory to move?

那麼，A）這是真的嗎？接下來我想，由於庫存減少，您應該會看到或​​現在看到的通路組合優勢嗎？

That is a good question and I think that is absolutely true. When we have too much inventory we are evaluating any and all opportunities to move that inventory, and when inventories are more balanced you have more of an approach of finding the most profitable channels to move that inventory.

這個問題問得好，我認為絕對正確。當庫存過多時，我們會評估所有可能消化庫存的機會；而當庫存更加平衡時，我們就能更好地找到最有利可圖的渠道來消化庫存。

And then in terms of the rising raw material costs and I guess the effect that will have I guess on this year's pack and I guess potentially next year's pack, is the -- just if you could give us some color in terms of which inputs are more troublesome. Is it packaging cans, is it the actual cost of the produce?

說到原物料成本上漲，我猜想這會對今年的產量以及明年的產量產生影響，您能否具體說明哪些投入品比較麻煩？是包裝罐的成本，還是農產品的實際成本？

Just trying to get a sense for as we are trying to think about next year's pack even at this point, just where the areas of potential concern are.

當我們試著思考明年的包裝時，即使到了現在，我們也只是想了解潛在的焦點在哪裡。

In this current pack season, which is just about over, the price of everything went up -- produce, fuel. More petroleum and gas as opposed to natural gas. We fuel our plants with natural gas, but we use a lot of gasoline in moving our product around the country.

眼下這個包裝季即將結束，所有東西的價格都上漲了——農產品、燃料等等。石油和天然氣的價格上漲，天然氣的價格卻比天然氣高。我們的工廠以天然氣作為燃料，但在全國範圍內運輸產品時，我們消耗了大量汽油。

And so we had increases in fuel, we had increases in steel, and then produce went up quite a bit year over year. So that is the reason for the significant increase in the LIFO charges.

因此，燃料價格上漲，鋼鐵價格上漲，產量也較去年同期大幅成長。這就是後進先出法費用大幅增加的原因。

As you look out next year it's obviously pretty early to predict. I can only tell you that the commodity prices for field corn and soy beans are higher now than they were when we contracted for our acreage last year. So if all things being equal, we will, in all likelihood, have to pay more for produce this coming season next summer. But we don't know that yet because markets move up and down.

展望明年，現在預測顯然還為時過早。我只能告訴你，現在玉米和大豆的商品價格比我們去年簽訂種植合約時高。所以，如果所有因素都一樣，我們很可能會在明年夏天即將到來的這個季節支付更高的農產品價格。但由於市場波動，我們目前還無法確定。

Steel and fuel, it seems like things are settling down on the fuel side but again we are a long way off from there. And on steel, we haven't begun any discussions yet regarding what next year's steel costs are going to be.

在鋼鐵和燃料方面，燃料方面的情況似乎正在穩定下來，但距離穩定還有很長的路要走。至於鋼鐵方面，我們還沒有就明年的鋼鐵成本展開任何討論。

Okay. And then I guess just trying to get a gauge of -- in terms of profitability, I guess the best scenario in your industry is you have priced and then you actually see it decline in input costs. And there is a window of time when margins can be -- I don't know how to best way to describe it -- well above the mean.

好的。然後我想，就獲利能力而言，我想你所在行業的最佳情況是，你已經定價，然後你實際上看到投入成本下降。並且存在一個利潤率可以遠高於平均水平的時期——我不知道該如何最好地描述它。

This scenario right now is sort of a middle scenario, I guess, in terms of coming out of the worst part of the industry. Now you have got prices -- you are covering your costs, or more than covering your costs, but you still have rising costs. So I guess just looking back historically at sort of peaks and troughs in your earnings, is this -- just if you could give some color in terms of what the current sort of upswing looks like relative to the past.

我認為，就產業走出低谷而言，目前的這種狀況算是中間情況。現在價格已經回升——成本已經收回，或者說已經超過了成本，但成本仍然在上漲。所以，我想，回顧一下歷史上獲利的高峰和低谷，您能否解釋一下，相對於過去而言，目前的上漲趨勢是什麼樣的？

Well, I think that is a fair summation. Clearly, being on LIFO increasing costs has a significant impact on our GAAP reported earnings. The prior year, for example, we had a LIFO credit against earnings because costs had decreased. So there is no question that by and large that has a huge impact on our reported earnings.

嗯，我覺得這個總結很合理。顯然，採用後進先出法會增加成本，這對我們依照 GAAP 報告的收益有顯著影響。例如，前一年，由於成本下降，我們用後進先出法抵扣了收益。所以，毫無疑問，總的來說，這對我們的報告收益有巨大影響。

I would say that as we look out very much earnings are dependent on the industry's and Seneca's own inventory balance. As long as inventories are balanced or even short, the outlook is positive. The issues that existed for the last two years were a result of inventory oversupply.

我想說，從我們的角度來看，獲利很大程度上取決於產業和Seneca本身的庫存平衡。只要庫存平衡甚至短缺，前景就樂觀。過去兩年存在的問題正是庫存過剩所造成的。

And because we pack in a short window of 60 to 90 days each year, you really have to move whatever you pack as an industry and as a company so that you can run your plants efficiently the following year. So that puts a lot of pressure on companies like Seneca to move their pack and reduce prices in an inventory oversupply situation.

而且由於我們每年的包裝時間只有短短的60到90天，所以作為一個行業和一家公司，你必須把所有包裝都運走，這樣才能確保來年工廠高效運作。因此，這給像Seneca這樣的公司帶來了極大的壓力，迫使他們不得不在庫存過剩的情況下，盡快運輸包裝並降低價格。

That is, hopefully, in the rearview mirror. And that going forward, and certainly this coming year, things are in much more balanced and favorable conditions.

希望這一切都過去了。展望未來，尤其是明年，情況會更加平衡，更加有利。

And then, Kraig, if you could just give us some thoughts on the thinking behind the proposal to merge with Allens. Just some color on what happened and what was attractive about it and why it ultimately didn't happen.

然後，Kraig，您能否談談您提出與 Allens 合併提議背後的考量？請您簡單介紹一下當時的情況、合併的吸引力以及最終未能實現的原因。

Allens is a company that is in the same space that we are in. Seneca has been acquisitive over the years. We have made over 50 acquisitions in our history. And we saw an opportunity to get into southern vegetables, which we are not in, and grow larger in the frozen vegetable business, which has been one of our objectives.

Allens 是一家與我們處於同一領域的公司。 Seneca 多年來一直積極收購。我們歷史上已經進行了 50 多次收購。我們看到了進軍南方蔬菜市場的機會，而我們目前還沒有涉足這一領域，並且在冷凍蔬菜業務上取得更大發展，這一直是我們的目標之一。

It was -- Allens is a private company and so I really can't really discuss the financial situation, but I can tell you that one of the challenges that we faced as we tried to put this transaction together was what I would describe as the more difficult financing environment. Challenges are going on in Europe among lenders and the costs associated with putting a transaction together were greater than we expected, and that was a big factor in our decision not to proceed.

的確如此——Allens 是一家私人公司，所以我真的無法談論其財務狀況，但我可以告訴你，我們在嘗試完成這筆交易時面臨的挑戰之一，就是我所說的更加困難的融資環境。歐洲的貸款機構面臨挑戰，完成交易的成本也超出了我們的預期，這是我們決定放棄交易的重要因素。

Thank you again.

再次感謝您。

Bruce Zessar, Advisory Research.

布魯斯‧澤薩爾 (Bruce Zessar)，諮詢研究員。

I have two questions; one related to Allens. On the balance sheet you have a loan receivable to them of $10 million and I just wanted to understand why you chose to become a creditor to Allens.

我有兩個問題，一個與Allens有關。資產負債表上顯示，你們有一筆1000萬美元的應收貸款，我只是想了解一下，為什麼你們選擇成為Allens的債權人。

That is a good question. In the negotiations with Allens the Company had some creditors that were interested in exiting. We were in the midst of negotiations and we decided that it made sense for the Company to invest and take those investors out to keep the transaction moving along.

這個問題問得好。在與Allens的談判中，公司有一些債權人有意退出。我們當時正處於談判階段，我們認為公司投資並帶走這些投資者以推動交易進展是合理的。

Later on we decided not to proceed, but at the time it was a decision to allow us to continue the negotiations and due diligence.

後來我們決定不再繼續，但當時的決定是為了讓我們繼續談判和盡職調查。

Okay. And you fully expect that Allens will pay off this $10 million loan at March 31, 2012?

好的。您完全預期艾倫斯公司會在2012年3月31日償還這筆1000萬美元的貸款嗎？

Yes.

是的。

Okay. Then I wanted to turn to a question relating to the litigation that is disclosed in the 10-Q, the California litigation relating to lead. What exactly is the nature of that claim? Do you view it as just a nuisance suit? And who are some of the other companies named as defendants?

好的。接下來我想問一個問題，關於10-Q表中披露的訴訟，即加州與鉛有關的訴訟。這項索賠的具體性質是什麼？您是否認為這只是一起滋擾訴訟？其他被告公司有哪些？

Well, Proposition 65 is a law on the books of California related to labeling. The litigation relates to the fact that the companies named in the suit are not labeling the fact that there are minute particles of lead which are, in the Company's opinion, naturally occurring, which is an exemption under the law.

嗯，65號提案是加州現行的一項與標籤相關的法律。訴訟涉及的事實是，訴訟中提到的公司沒有標註產品中含有的微小鉛顆粒，而這些鉛顆粒在公司看來是天然存在的，根據法律屬於豁免情況。

But there are large multinational companies, like Coke is named, and so there is -- of the 28 companies there are large juice and fruit processing companies and smaller ones as well. We do not believe it is a material issue for the Company, but nevertheless it is something that we are going to have to deal with.

但像可口可樂這樣的大型跨國公司也在其中。這28家公司中，既有大型果汁和水果加工公司，也有規模較小的公司。我們認為這對公司來說不是一個重大問題，但無論如何，我們都必須處理。

Okay. And then in coming back to the loan receivable just for a second, why is it that you felt you had to do this to keep the transaction going? And have you ever been in a position before where you have been a creditor to a company that you were seeking to acquire?

好的。那麼，回到應收貸款的問題上，為什麼您覺得必須這樣做才能維持交易？您之前有沒有遇過這樣的情況：您是某個想要收購的公司的債權人嗎？

Well, I have not in my years as President. I can't speak for the Company prior to that. But every transaction has its own set of dynamics and this particular transaction the dynamics were such that it was our opinion and decision that it made sense for the Company to make the investment.

嗯，我擔任總裁期間沒有。在那之前，我無法代表公司發言。但每筆交易都有其自身的動態，而這筆交易的動態是這樣的，我們認為並決定公司進行這項投資是合理的。

I really don't want to get into more detail than that.

我真的不想談得更詳細。

All right. So I guess, I mean was it a concern that these other investors wanted to get out. Were they concerned about the financial position of Allens and you were comfortable that if you closed the transaction it was a nonissue, is that what was going on here?

好的。所以，我的意思是，其他投資人想要退出是不是出於擔憂？他們是否擔心 Allens 的財務狀況？而您覺得，如果交易完成，這就不會成為問題，是這樣嗎？

I don't necessarily believe that it was a -- that was the concern. I think it had to do more with the fact of the -- a new facility or an amended facility was being put in place and they were not necessarily in favor of that. It was a small piece of the overall transaction where the other lenders were all in favor of it, and so we decided to move it along.

我並不認為這有什麼問題——這才是真正令人擔憂的。我認為，這更多的是因為——一項新的貸款安排或一項修訂後的貸款安排正在實施，而他們並不一定支持。這只是整個交易的一小部分，其他貸款機構都支持，所以我們決定繼續前進。

So when you say the new facility, you are talking about Allens was negotiating a new credit facility at about the same time that Seneca was entering its own new credit facility?

所以當您說新的信貸安排時，您是指 Allens 正在協商一項新的信貸安排，而 Seneca 則正在進入自己的新信貸安排，這兩者幾乎同時發生？

That is correct.

沒錯。

Okay. All right, thanks a lot. I appreciate it.

好的。好的，非常感謝。我很感激。

(Operator Instructions) There appear to be no further questions at this time.

（操作員指示）目前似乎沒有其他問題。

All right. Well, thank you very much, everyone.

好的。非常感謝大家。

Ladies and gentlemen, this does conclude the conference for today. We thank you for your participation and ask that you please disconnect your lines.

女士們，先生們，今天的會議到此結束。感謝各位的參與，請各位斷開連接。