Allens Inc. for Sale, Bankruptcy Filings Show

by Mark Friedman  on Monday, Nov. 25, 2013 12:00 am  

Sales of canned vegetables reached $3.16 billion in 2011 before falling to $3.131 billion in 2012, according to Euromonitor International’s report.

And the number of cans of vegetables shipped fell 6.6 percent between 2010 and 2012 to 9.05 billion in the United States, according to the Can Manufacturers Institute in Washington, D.C.

Trouble Worsens

In 2011, Allens started “to face significant operating challenges related to the production of canned vegetables,” Allen’s Hickman said in his report.

That year, “a historically strong harvest led to high inventory levels that processors, including [Allens], were unable to sell before the pack season,” he said. “Consequently, many processors lowered prices and increased promotional activity, decreasing dollar sales and adversely impacting margins.”

Making matters worse, prices rose on items such as the cans and fuel.

Allens’ earnings before interest, taxes, depreciation and amortization totaled $46 million for its fiscal year that ended in February 2010. A year later, it had fallen to $8.5 million, Hickman said. Revenue that year was $672 million.

Taking a knife to costs, Allens closed a Fort Worth plant in 2011, eliminating 70 jobs.

Also in July 2011, Seneca Foods Corp. of Marion, N.Y., and Allens entered into talks to merge the two companies “in a stock for stock transaction,” according to a joint news release. But the deal collapsed within two months.

Meanwhile, Allens’ frozen division still wasn’t performing as Allens had hoped.

Carrying out a business plan for the frozen division “proved difficult, and it resulted in significant operating loses,” Hickman wrote.

Allens sold off the most of its frozen-vegetable business in March 2012 to the Bonduelle Group in France for a price that wasn’t disclosed.

 

 

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