# National Beverage Corp: Form 10-Q for the period ended Jan 29, 2022

- Company: [National Beverage Corp](/companies/fizz.md) (CIK 69891)
- Form: 10-Q
- Filed: 2022-03-10
- Accepted by EDGAR: Mar 10, 2022, 21:44 ET
- Period: 2022-01-29
- Accession: 0001437749-22-005876
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/69891/000143774922005876/fizz20220129_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/69891/000143774922005876/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-01-29.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2021-10-31 to 2022-01-29 | $258.9m | us-gaap:Revenues |
| Revenue | 9 months, 2021-05-02 to 2022-01-29 | $853.8m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2021-10-31 to 2022-01-29 | $165.1m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2021-05-02 to 2022-01-29 | $533.7m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2021-10-31 to 2022-01-29 | $93.8m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2021-05-02 to 2022-01-29 | $320.1m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2021-10-31 to 2022-01-29 | $53.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2021-05-02 to 2022-01-29 | $157.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2021-10-31 to 2022-01-29 | $40.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2021-05-02 to 2022-01-29 | $162.6m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2021-10-31 to 2022-01-29 | $9.5m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2021-05-02 to 2022-01-29 | $38.3m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2021-10-31 to 2022-01-29 | $31.1m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2021-05-02 to 2022-01-29 | $124.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2021-10-31 to 2022-01-29 | $33.00 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2021-05-02 to 2022-01-29 | $1.33 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2021-10-31 to 2022-01-29 | $33.00 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2021-05-02 to 2022-01-29 | $1.33 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2021-10-31 to 2022-01-29 | 93,611 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2021-05-02 to 2022-01-29 | 93,608 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2021-05-02 to 2022-01-29 | $92.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2021-05-02 to 2022-01-29 | $16.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2021-05-02 to 2022-01-29 | $280.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2022-01-29 | $40.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2022-01-29 | $236.7m | us-gaap:AssetsCurrent |
| Total assets | at 2022-01-29 | $428.3m | us-gaap:Assets |
| Current liabilities | at 2022-01-29 | $119.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-01-29 | $222.0m | us-gaap:Liabilities |
| Long-term debt | at 2022-01-29 | $50.0m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2022-01-29 | $206.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 8,730 characters.

### OVERVIEW

National Beverage Corp. innovatively refreshes America with a distinctive portfolio of sparkling waters, juices, energy drinks (Power+ Brands) and, to a lesser extent, Carbonated Soft Drinks. We believe our creative product designs, innovative packaging and imaginative flavors, along with our corporate culture and philosophy, make National Beverage unique as a stand-alone entity in the beverage industry.

Our strategy seeks the profitable growth of our products by (i) developing healthier beverages in response to the global shift in consumer buying habits and tailoring our beverage portfolio to the preferences of a diverse mix of ‘crossover consumers’ – a growing group desiring a healthier alternative to artificially sweetened and high-caloric beverages; (ii) emphasizing unique flavor development and variety throughout our brands that appeal to multiple demographic groups; (iii) maintaining points of difference through innovative marketing, packaging and consumer engagement and (iv) responding faster and more creatively to changing consumer trends than larger competitors who are burdened by legacy production and distribution complexity and costs.

The majority of our brands are geared to the active and health-conscious consumer including sparkling waters, energy drinks, and juices. Our portfolio of Power+ Brands includes LaCroix®, LaCroix Cúrate®, and LaCroix NiCola® sparkling water products; Clear Fruit® non-carbonated water beverages enhanced with fruit flavor; Rip It® energy drinks and shots; and Everfresh®, Everfresh Premier Varietals™ and Mr. Pure® 100% juice and juice-based products. Additionally, we produce and distribute carbonated soft drinks including Shasta® and Faygo®, iconic brands whose consumer loyalty spans more than 130 years.

Presently, our primary market focus is the United States and Canada. Certain of our products are also distributed on a limited basis in other countries and options to expand distribution to other regions are being considered. To service a diverse customer base that includes numerous national retailers, as well as thousands of smaller “up-and-down-the-street” accounts, we utilize a hybrid distribution system consisting of warehouse and direct-store delivery. The warehouse delivery system allows our retail partners to further maximize their assets by utilizing their ability to pick up product at our warehouses, further lowering their/our product costs.

Our operating results are affected by numerous factors, including fluctuations in the costs of raw materials, holiday and seasonal programming, changes in consumer purchasing habits and weather conditions. Beverage sales are seasonal with higher sales volume realized during the summer months when outdoor activities are more prevalent.

### RESULTS OF OPERATIONS

#### Three Months Ended January 29, 2022 (third quarter of fiscal 2022) compared to

#### Three Months Ended January 30, 2021 (third quarter of fiscal 2021)

Net sales for the third quarter of fiscal 2022 increased 5.3% to $258.9 million from $245.9 million for the third quarter of fiscal 2021. The increase in sales resulted primarily from a 10.1% increase in average selling price per case, partially offset by a 4.1% decline in case volume.

Gross profit for the third quarter of fiscal 2022 decreased to $93.8 million from $95.7 million for the third quarter of fiscal 2021. The decrease in gross profit is due to increased packaging, ingredients and freight costs. These cost increases were partially offset by the increase in average selling price. The cost of sales per case increased 15.0% and gross margin decreased to 36.2% from 38.9% for the third quarter of fiscal 2021.

Selling, general and administrative expenses for the third quarter of fiscal 2022 increased $5.6 million to $53.1 million from $47.5 million for the third quarter of fiscal 2021. The increase was primarily due to an increase in shipping and marketing costs. As a percent of net sales, selling, general and administrative expenses increased to 20.5% from 19.3% for the third quarter of fiscal 2021.

Other income (expense), net includes interest income of $39,000 for the third quarter of fiscal 2022 and $109,000 for the third quarter of fiscal 2021. Other income (expense), net for the third quarter of fiscal 2022 also includes interest expense of $62,000 relating to borrowings under the Loan Facility. The decrease in interest income is due to lower investment balances.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.6% for the third quarter of fiscal 2022 and 23.9% for the third quarter of fiscal 2021. The difference between the effective rate and the federal statutory rate of 21% was primarily due to the effects of state income taxes.

#### Nine Months Ended January 29, 2022 (first nine months of fiscal 2022) compared to

#### Nine Months Ended January 30, 2021 (first nine months of fiscal 2021)

Net sales for the first nine months of fiscal 2022 increased 5.3% to $853.8 million from $811.1 million for the first nine months of fiscal 2021. The increase in sales resulted primarily from a 6.1% increase in average selling price per case, partially offset by a modest decrease in case volume.

Gross profit for the first nine months of fiscal 2022 was flat to the first nine months of fiscal 2021. The cost of sales per case increased 9.8% and gross margin decreased to 37.5% from 39.6% for the first nine months of fiscal 2021. The decrease in gross margin is due to increased packaging, ingredients and freight costs along with supply chain disruptions, which adversely affected manufacturing efficiencies.

Selling, general and administrative expenses for the first nine months of fiscal 2022 increased $13.0 million to $157.5 million from $144.5 million for the first nine months of fiscal 2021. The increase was primarily due to increased shipping and marketing costs, partially offset by decreased administrative costs. As a percent of net sales, selling, general and administrative expenses increased to 18.4% from 17.8% for the first nine months of fiscal 2021.

Other income (expense), net includes interest income of $136,000 for the first nine months of fiscal 2022 and $506,000 for the first nine months of fiscal 2021. The decrease in interest income is due to lower investment balances.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.6% for the first nine months of fiscal 2022 and for the first nine months of fiscal 2021. The difference between the effective rate and the federal statutory rate of 21% was primarily due to the effects of state income taxes.

### LIQUIDITY AND FINANCIAL CONDITION

### Liquidity and Capital Resources

Our principal source of funds is cash generated from operations. At January 29, 2022, we maintained $150 million unsecured revolving credit facilities, under which $50 million in borrowings were outstanding and $3 million was reserved for standby letters of credit. We believe existing capital resources will be sufficient to meet our liquidity and capital requirements for the next twelve months.

### Cash Flows

The Company’s cash position decreased $153.2 million for the nine months of fiscal 2022, due primarily to the $280 million cash dividend paid on December 29, 2021.

Net cash provided by operating activities for the first nine months of fiscal 2022 amounted to $92.6 million compared to $145.2 million for the nine months of fiscal 2021. Net cash provided by operating activities for the first nine months of fiscal 2022 was principally provided by net income of $124.2 million, depreciation and amortization of $13.7 million, and amortization of operating right of use assets of $10.1 million, offset in part by changes in working capital and other accounts.

Net cash used in investing activities for the first nine months of fiscal 2022 reflects capital expenditures of $16.1 million, compared to capital expenditures of $17.0 million for the first nine months of fiscal 2021. We intend to continue production capacity and efficiency improvement projects, and expect fiscal 2022 capital expenditures to be comparable to fiscal 2021 levels.

### Financial Position

At January 29, 2022, our working capital decreased to $117.3 million compared to $217.7 million at May 1, 2021. The current ratio was 2.0 to 1 at January 29, 2022 compared to 2.5 to 1 at May 1, 2021. The decrease in working capital and current ratio was due primarily to the payment of the $280 million cash dividend. Trade receivables decreased $4.3 million and days sales outstanding declined to 28.9 from 30.1. Inventories increased $17.2 million and inventory turns declined to 8.7 times from 9.6 times.

## Market risk

As filed, 144 characters.

There have been no material changes in market risks from those reported in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

## Controls and procedures

As filed, 3,296 characters.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective to ensure information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### FORWARD-LOOKING STATEMENTS

National Beverage Corp. and its representatives may make written or oral statements relating to future events or results relative to our financial, operational and business performance, achievements, objectives and strategies. These statements are “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995 and include statements contained in this report and other filings with the Securities and Exchange Commission and in reports to our stockholders. Certain statements including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “plans,” “expects,” and “estimates” constitute “forward-looking statements” and involve known and unknown risk, uncertainties and other factors that may cause the actual results, performance or achievements of our Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the following: general economic and business conditions, pricing of competitive products, success of new product and flavor introductions, fluctuations in the costs and availability of raw materials and packaging supplies, ability to pass along cost increases to our customers, labor strikes or work stoppages or other interruptions in the employment of labor, continued retailer support for our products, changes in brand image, consumer demand and preferences and our success in creating products geared toward consumers’ tastes, success in implementing business strategies, changes in business strategy or development plans, government regulations, taxes or fees imposed on the sale of our products, unfavorable weather conditions and other factors referenced in this report, filings with the Securities and Exchange Commission and other reports to our stockholders. We disclaim an obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained herein to reflect future events or developments.

## Risk factors

As filed, 144 characters.

There have been no material changes in risk factors from those reported in our Annual Report on Form 10-K for the fiscal year ended May 1, 2021.

Filed Mar 10, 2022.
Source: SEC EDGAR, the filing index for accession 0001437749-22-005876. Last ingested by Listed: Oct 24, 2026, 14:53 ET. No prices; not investment advice.