11-K December 31, 2006
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

Form 11-K

ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Year Ended December 31, 2006

Commission File Number: 0-01989

Seneca Foods Corporation Employees' Savings Plan
(Full title of the Plan)


Seneca Foods Corporation
(Name of issuer of the securities held pursuant to the Plan)

3736 South Main Street, Marion, New York 14505
(Address of principal executive office)




REQUIRED INFORMATION


1. Plan financial statements and schedules examined by an independent
accountant prepared in accordance with financial reporting requirements
of ERISA.

See accompanying index on page 3.

2. Signature
 






 
 
 






 

SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN
 

 
 
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES

 
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
 











Bobbitt, Pittenger & Company, P.A.


SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN
 
CONTENTS

 
                                                                                                                                   PAGE

FINANCIAL STATEMENTS
  
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
1 
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 
2
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
3
NOTES TO FINANCIAL STATEMENTS 
4
SUPPLEMENTAL SCHEDULE
  
SCHEDULE OF ASSETS HELD AT END OF YEAR 
9

 






June 11, 2007



Seneca Foods Corporation
Employees’ Savings Plan
Marion, New York

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We have audited the accompanying statements of net assets available for benefits of Seneca Foods Corporation Employees' Savings Plan (“the Plan”) as of December 31, 2006 and 2005, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2006 and 2005, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule listed in the foregoing Table of Contents is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

 
/s/Bobbitt, Pittenger & Company, P.A.
Certified Public Accountants




1


SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN
          
           
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
          
           
           
           
   
December 31,
 
   
2006
  
2005
  
           
           
ASSETS
          
           
INVESTMENTS:
          
At fair value:
          
American Beacon Balanced Fund
  
$
16,105,959
  
$
  
Seneca Foods Corporation Employer Stock Fund
   
11,962,106
   
8,391,234
 
U.S. Bank Stable Asset Fund
    
10,524,955
   
9,671,584
 
First American Equity Index Fund Y
    
10,047,333
   
8,673,669
 
Federated Capital Appreciation Fund A
    
8,215,211
   
7,105,330
 
Dreyfus Mid-Cap Index Fund
    
4,517,572
   
4,078,614
 
Wells Fargo Small Cap Value Fund Z
    
4,449,007
   
3,811,453
 
Dreyfus International Stock Index
    
4,114,400
   
3,023,353
 
American Growth Fund of America Class R4
    
2,992,252
       
PIMCO Real Return Fund
    
2,300,275
       
Dodge & Cox Stock Fund
    
2,142,400
       
Principal cash
    
30,882
   
(304
)
First American Small Cap Select Fund Class Y
    
13,378
       
First American Intermediate Term Bond Fund A
    
8,117
   
2,466,256
 
MFS Total Return Fund A
        
15,086,470
 
Massachusetts Investors Growth Fund A
        
3,029,133
 
MFS Value Fund A
        
1,230,203
 
               
Total investments
    
77,423,847
   
66,566,995
 
               
LOANS RECEIVABLE
    
391,973
   
424,016
 
               
CONTRIBUTIONS RECEIVABLE
              
Employer
    
1,300,472
   
1,553,247
 
Employee
    
252,404
   
96,846
 
               
Total contributions receivable
    
1,552,876
   
1,650,093
 
               
NET ASSETS AVAILABLE FOR BENEFITS
  
$
79,368,696
  
$
68,641,104
  
               
               

See notes to financial statements.
 
 
2


SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN
  
           
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
  
FOR THE YEAR ENDED DECEMBER 31,
    
           
           
   
2006
 
2005
  
           
ADDITIONS:
          
           
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
          
Net appreciation in fair value of investments
  
$
8,524,423
  
$
2,441,788
  
Interest and dividend income
    
887,485
   
881,817
 
Contributions:
              
Participant
    
5,536,310
   
5,400,980
 
Employer
    
1,295,204
   
1,461,919
 
Transfer of assets
        
9,729
 
               
Total additions
    
16,243,422
   
10,196,233
 
               
DEDUCTIONS:
              
Deductions from net assets attributed to:
              
Withdrawals by participants/other
    
(5,505,717
)
  
(7,956,623
)
Other expenses
    
(10,113
)
  
(39,540
)
     
(5,515,830
)
  
(7,996,163
)
               
NET INCREASE
    
10,727,592
   
2,200,070
 
               
NET ASSETS AVAILABLE FOR BENEFITS,
              
BEGINNING OF YEAR
    
68,641,104
   
66,441,034
 
               
NET ASSETS AVAILABLE FOR BENEFITS,
              
END OF YEAR
  
$
79,368,696
  
$
68,641,104
  





See notes to the financial statements.
 
3



SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2006 AND 2005

NOTE A - DESCRIPTION OF PLAN

The following description of Seneca Foods Corporation Employees' Savings Plan ("the Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions.

General

The Plan is a defined contribution plan intended to qualify as a cash or deferred arrangement under Section 401(k) of the Internal Revenue Code. Substantially all employees of Seneca Foods Corporation ("the Company") are eligible to participate after completion of twelve months employment and attainment of age eighteen. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").

Contributions

Participants may elect to contribute, on a pre-tax basis (elective deferrals), from 1% to 60% of their compensation up to regulatory maximums. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Company may contribute additional amounts at the discretion of the Company's Board of Directors. The Company contribution is invested directly in the Seneca Foods Corporation Employer Stock Fund and are allocated to participants based on the participants’ pro rata share of total participating payroll.

Participant Accounts

Each participants’ account is credited with the participants’ contribution and allocations of (a) the Company’s contributions and (b) Plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participants’ vested account.

Vesting

Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company’s contribution portion of their accounts is based on continuous years of service. A participant is fully vested after three years of credited service.

Participant Loans

Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. The loans are secured by the balance in the participant’s account and bear a reasonable rate of interest, as determined by the Company. Principal and interest is paid ratably through monthly payroll deductions. The term of the loan should not exceed five years except in the case of a loan used to acquire a dwelling unit that is to be the principal residence of the participant.
 
4
 
SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS


NOTE A - DESCRIPTION OF PLAN (CONTINUED)

Payment of Benefits

On termination of service due to death, disability or retirement, a participant may elect to receive an amount equal to the value of the participant’s vested interest in his or her account in a current lump sum if the balance is less than $5,000 or a deferred lump sum if the balance is greater than $5,000. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump sum distribution, however, if the value exceeds $1,000 ($5,000 before March 28, 2005), no distribution shall be made before the participant’s 65th birthday without written consent.

Forfeited Accounts

At December 31, 2006 and 2005 forfeited non-vested accounts totaled approximately $8,000 and $44,000. These accounts will be used to reduce future employer contributions.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting.

Valuation of Investments

The Plan’s investments are stated at fair value. Quoted market prices are used to value investments. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year-end. Participant loans are valued at their outstanding balances, which approximate fair value.

Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date.

Payment of Benefits

Benefits are recorded when paid.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.


 
5

SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS


NOTE C - TAX STATUS

The Plan obtained its latest determination letter on April 30, 1999, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

NOTE D - INVESTMENTS

The following presents investments that represent 5 percent or more of the Plan’s net assets at December 31:
 

   
2006
  
2005
  
           
American Beacon Balanced Fund
  
$ 16,105,959
 
$
 
Seneca Foods Corporation Employer Stock Fund
   
11,962,106
   
8,391,234
 
U.S. Bank Stable Asset Fund
    
10,524,955
   
9,671,584
 
First American Equity Index Fund Y
    
10,047,333
   
8,673,669
 
Federated Capital Appreciation Fund A
    
8,215,211
   
7,105,330
 
Dreyfus Mid-Cap Index Fund
    
4,517,572
   
4,078,614
 
Wells Fargo Small Cap Value Fund Z
    
4,449,007
   
3,811,453
 
Dreyfus International Stock Index
    
4,114,400
       
MFS Total Return Fund A
        
15,086,470
 

 
* Nonparticipant-directed

During 2006, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $8,524,423 as follows:

 
 Mutual funds   $ 4,567,645  
 Collective investment funds     3,956,778  
    $ 8,524,423  
 
 

 

NOTE E - PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and/or to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts. Any unallocated assets of the Plan shall be allocated to participant accounts and distributed in such a manner as the company may determine.

 
6

SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS


NOTE F - NONPARTICIPANT-DIRECTED INVESTMENTS

Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows at December 31:

   
 2006 
  
  2005 
  
 Net assets:          
 Seneca Foods Corporation Employer Stock Fund
   $ 11,962,106   $ 8,391,234  
               
 Changes in net assets:              
 Contributions
   $ 250,916   $ 203,595  
 Net appreciation in fair value
     3,852,840     1,859,591  
 Withdrawals by participants
     (532,884 )   (746,402 )
               
    $ 3,570,872   $ 1,316,784  
               
               
NOTE G - RECONCILIATION OF FINANCIAL STATEMENTS
TO SCHEDULE H OF FORM 5500

No reconciliation of net assets available for benefits and changes in net assets available for benefits per the financial statements to the Form 5500 is required.

NOTE H - RISKS AND UNCERTAINTIES

The plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.



7

SUPPLEMENTAL SCHEDULE




 
8





SENECA FOODS CORPORATION EMPLOYEES' SAVINGS PLAN

 
SCHEDULE OF ASSETS HELD AT END OF YEAR
DECEMBER 31, 2006

 
   
Description of investment
    
 
Identity of issue,
including maturity date,
    
 
borrower, lessor
rate of interest, collateral,
  
Current
 
or similar party
par or maturity value
Cost
Value
(a)
(b)
(c)
(d)
(e)
         
 
American Beacon
Balanced Fund
 
$ 16,105,959
 
 
 
 
 
 
American Funds
Growth Fund of America Class R4
 
2,992,252
 
 
 
 
 
 
Dodge & Cox
Stock Fund
 
2,142,400
 
 
 
 
 
 
Dreyfus
Mid Cap Index Fund
 
4,517,572
 
 
 
 
 
 
 
International Stock Index Fund
 
4,114,400
 
 
 
 
 
 
Federated
Capital Appreciation Fund A
 
8,215,211
 
 
 
 
 
 
First American
Small Cap Select Fund Class Y
 
13,378
 
 
 
 
 
 
 
Intermediate Term Bond Fund A
 
8,117
 
 
 
 
 
 
 
Equity Index Fund Y
 
10,047,333
 
 
 
 
 
 
Pimco Funds
Real Return Fund
 
2,300,275
 
 
 
 
 
 
Wells Fargo Advantage
Small Cap Value Fund Z
 
4,449,007
 
 
 
 
 
 
 
Contribution Account
 
30,882
 
 
 
 
 
*
U.S. Bank
Stable Asset Fund
 
10,524,955
 
 
 
 
 
*
Seneca Foods
 
 
 
 
Corporation
Employer Stock Fund
7,776,078
11,962,106
 
 
 
 
 
 
 
 
 
 
 
Participant Loans
Interest rates 4% - 9.5%
  
391,973
         

* Indicates a party-in-interest

9
 
SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.





Seneca Foods Corporation
Employees' Savings Plan
(Name of Plan)
 

/s/Kraig H. Kayser
-----------------------
Kraig H. Kayser        June 27, 2007
Sponsor of Seneca Foods
Corporation Employees'
Savings Plan