Executive Summary

Q3 FY2023 delivered solid sales and margin improvement: revenue $473.3M (+6.2% YoY), gross margin 11.4% (vs 10.1% YoY), and diluted EPS $2.74 (vs $2.14 YoY), driven primarily by higher selling prices and favorable mix despite another large non‑cash LIFO charge .
Underlying operating performance strong on a FIFO basis: FIFO EBITDA was $73.2M vs $54.2M YoY, and adjusted net earnings reached $44.7M vs $33.2M YoY, highlighting core profitability masked by LIFO .
Sequential trajectory improved vs Q2 FY2023: revenue rose from $439.8M to $473.3M, gross margin expanded from 9.5% to 11.4%, and diluted EPS increased from $2.03 to $2.74, supported by pricing actions and stabilized supply chain/inventory levels .
Stock reaction catalysts: sustained margin expansion on pricing/mix, and continued moderation of inflation headwinds (on a FIFO basis), alongside announced CFO succession (effective April 1, 2023), which may be viewed as continuity with a finance leader familiar with the business .

What Went Well and What Went Wrong

What Went Well
- Pricing actions and favorable sales mix expanded gross margin YoY (11.4% vs 10.1%) and lifted revenue to $473.3M; CEO: “Third quarter results delivered solid sales and earnings growth…” and the team “worked diligently to mitigate the supply chain challenges” .
- FIFO results showed robust underlying profitability: FIFO EBITDA $73.2M (vs $54.2M YoY) and adjusted net earnings $44.7M (vs $33.2M YoY) .
- Successful raw product pack season and adequate inventory to support customer needs (from Q2 and reiterated in Q3 commentary), reducing out‑of‑stock risk .
What Went Wrong
- Inflation drove a large non‑cash LIFO charge ($30.9M in Q3), suppressing GAAP earnings despite stronger underlying performance .
- Plant restructuring costs tied to ceasing green bean production at a NY facility resulted in $1.8M charges; additional minor other operating expense from write‑downs of idle equipment .
- Continued labor and raw material cost pressure noted as ongoing headwinds; management emphasized pricing and cost mitigation actions to offset inflation .

Metric	Q1 2023	Q2 2023	Q3 2023
Revenue ($USD Millions)	$265.2	$439.8	$473.3
Gross Margin (%)	8.6%	9.5%	11.4%
Basic EPS ($)	$0.62	$2.05	$2.77
Diluted EPS ($)	$0.62	$2.03	$2.74
Operating Income ($USD Millions)	$6.6	$21.8	$29.8
EBITDA ($USD Millions)	$17.9	$33.4	$42.3
FIFO EBITDA ($USD Millions)	$37.1	$62.6	$73.2
LIFO Charge (Pre‑Tax, $USD Millions)	$19.2	$29.2	$30.9

Segment Breakdown: Not disclosed in the Q3 press release/8‑K .

KPIs and Non‑GAAP

KPI	Q1 2023	Q2 2023	Q3 2023
Adjusted Earnings Before Income Taxes ($USD Millions)	$26.0	$50.2	$58.5
Adjusted Net Earnings ($USD Millions)	$19.7	$38.5	$44.7

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2023/Q4 2023	N/A	No formal quantitative guidance provided in releases	Maintained: No guidance
Margins	FY2023/Q4 2023	N/A	No formal quantitative guidance provided; commentary notes inflation/LIFO impacts	Maintained: No guidance
OpEx	FY2023/Q4 2023	N/A	Not provided	N/A
Tax Rate	FY2023/Q4 2023	N/A	Not provided	N/A
Segment Guidance	FY2023/Q4 2023	N/A	Not provided	N/A
Dividends	FY2023/Q4 2023	N/A	Not provided	N/A

Note: Seneca did not issue formal numeric guidance in these releases; commentary focuses on cost inflation, supply chain, and pricing actions .

No Q3 FY2023 earnings call transcript was available in our document search window.

Topic	Previous Mentions (Q1 2023)	Previous Mentions (Q2 2023)	Current Period (Q3 2023)	Trend
Inflation/LIFO	Historic inflation created significant non‑cash LIFO charge; pricing actions implemented	Inflation continues to impact earnings; non‑cash LIFO $29.2M; pricing advances and cost mitigation	Another large LIFO charge ($30.9M); margin improvement from pricing/mix	LIFO charges remain high, but margin improving
Supply Chain/Inventory	Solid start to raw product pack increased inventory; aim to avoid out‑of‑stocks	Inventory levels sufficient to support customer needs	Team mitigated supply chain challenges; inventory adequate	Stabilizing and supportive
Pricing/Mix	Pricing actions drove sales growth	Needed pricing advances reflecting persistent inflation	Higher selling prices and improved mix drove YoY margin uplift	Positive impact sustained
Labor/Costs	Labor inflation noted as a risk	Labor and raw material costs remain headwinds	Ongoing cost increases necessitated pricing actions	Persistent headwind
Restructuring/Operations	—	—	Ceased green bean production at NY facility; restructuring & equipment write‑down	One‑time actions in Q3

“Third quarter results delivered solid sales and earnings growth despite persistent inflationary pressures that led to another large non‑cash LIFO charge. Cost increases, particularly for raw materials and labor, have necessitated pricing actions to minimize the impact of inflation on our results. Additionally, our team has worked diligently to mitigate the supply chain challenges we have faced.” — Paul Palmby, President & CEO (Q3 FY2023) .
“Inflation continues to have an impact on our reported earnings as a non‑cash pre‑tax LIFO charge of $29.2 million was incurred… [W]e have been able to minimize the impact… [and] inventory levels are sufficient to fully support customer needs.” — Paul Palmby (Q2 FY2023) .
“First quarter results delivered strong sales growth mostly driven by pricing actions. However, historic inflation has created a significant non‑cash LIFO charge of $19.2 million… solid start to our raw product pack… will help us… avoid out of stock situations…” — Paul Palmby (Q1 FY2023) .
CFO succession: Michael Wolcott appointed CFO effective April 1, 2023; continuity of finance leadership and strategic involvement (tax, treasury, IR, M&A) .

No earnings call transcript was available for Q3 FY2023; therefore, no Q&A highlights or guidance clarifications could be extracted.

Wall Street consensus estimates via S&P Global were unavailable for Q1–Q3 FY2023 in this session due to request limits; as a result, we cannot present beat/miss comparisons to consensus for Q3 FY2023. Values would normally be retrieved from S&P Global.

Core operating performance is strong on FIFO: Q3 FIFO EBITDA $73.2M (+35% YoY) and adjusted net earnings $44.7M (+35% YoY), indicating healthy underlying profitability despite LIFO noise .
Sequential improvement across revenue, gross margin, and diluted EPS vs Q2 suggests momentum into year‑end, aided by pricing/mix and normalized inventory positioning .
LIFO remains the primary headwind to GAAP optics; investors should focus on FIFO EBITDA and adjusted earnings to assess run‑rate profitability .
Operational actions (facility restructuring, equipment write‑downs) are modest relative to scale but reflect ongoing optimization; monitor further consolidation or cost actions .
CFO transition to Michael Wolcott provides continuity and potentially sharper focus on capital allocation and investor relations as the company navigates inflation and supply dynamics .
Near‑term trading: narrative likely hinges on margin trajectory and evidence of moderating LIFO charges; FIFO metrics and pricing discipline are key signals .
Medium‑term thesis: private‑label leadership, pricing power, and improved supply chain/inventory should support margin resilience; watch labor/raw material inflation and crop/weather variability .