# National Beverage Corp: Form 10-Q for the period ended Jul 27, 2024

- Company: [National Beverage Corp](/companies/fizz.md) (CIK 69891)
- Form: 10-Q
- Filed: 2024-09-05
- Accepted by EDGAR: Sep 5, 2024, 20:22 ET
- Period: 2024-07-27
- Accession: 0001437749-24-028554
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/69891/000143774924028554/fizz20240727_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/69891/000143774924028554/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-07-27.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-28 to 2024-07-27 | $329.5m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2024-04-28 to 2024-07-27 | $207.0m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-04-28 to 2024-07-27 | $122.4m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-04-28 to 2024-07-27 | $52.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-04-28 to 2024-07-27 | $69.5m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-04-28 to 2024-07-27 | $17.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-28 to 2024-07-27 | $56.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-28 to 2024-07-27 | $0.61 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-28 to 2024-07-27 | $0.61 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-28 to 2024-07-27 | 93,667,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-04-28 to 2024-07-27 | $57.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-04-28 to 2024-07-27 | $3.7m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2024-04-28 to 2024-07-27 | $304.1m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-07-27 | $77.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-07-27 | $293.2m | us-gaap:AssetsCurrent |
| Total assets | at 2024-07-27 | $522.6m | us-gaap:Assets |
| Current liabilities | at 2024-07-27 | $147.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-07-27 | $216.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-07-27 | $306.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 7,188 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.

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 beverages; 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 beverages. Additionally, we produce and distribute carbonated soft drinks including Shasta® and Faygo®, iconic brands whose consumer loyalty spans more than 135 years.

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.

Presently, our primary market focus is the United States and Canada. Certain of our beverages are also distributed on a limited basis in other countries and options to expand distribution to other regions are being pursued. 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 beverages at our warehouses, further lowering their/our costs.

Our operating results are affected by numerous factors, including fluctuations in the costs of raw materials, supply chain disruptions, holiday and seasonal programming, 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 July 27, 2024 (first quarter of fiscal 2025) compared to

#### Three Months Ended July 29, 2023 (first quarter of fiscal 2024)

Net sales for the first quarter of fiscal 2025 increased 1.6% to $329.5 million compared to $324.2 million for the first quarter of fiscal 2024. The increase in sales resulted primarily from a 0.7% increase in case volume and a 0.7% increase in average selling price per case. The increase in case volume primarily impacted carbonated soft drink brands, partially offset by a slight decrease in Power+ Brands.

Gross profit for the first quarter of fiscal 2025 increased to $122.4 million compared to $114.5 million for the first quarter of fiscal 2024. The increase in gross profit was primarily due to a decline in packaging costs, the increase in average selling price per case and the increase in case volume. The cost of sales per case decreased 1.9% and gross margin increased to 37.2% compared to 35.3% for the first quarter of fiscal 2024.

Selling, general and administrative expenses for the first quarter of fiscal 2025 increased $1.5 million to $52.9 million from $51.4 million for the first quarter of fiscal 2024. The increase was primarily due to an increase in administrative and marketing costs, partially offset by a decrease in shipping costs. As a percentage of net sales, selling, general and administrative expenses increased to 16.1% for the first quarter of fiscal 2025 compared to 15.8% for the first quarter of fiscal 2024.

Other income, net includes interest income of $4.3 million for the first quarter of fiscal 2025 and $1.8 million for the first quarter of fiscal 2024. The increase in interest income is due primarily to increased average invested balances.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.1% for the first quarter of fiscal 2025 and 23.8% for the first quarter of fiscal 2024. The difference between the effective rate and the federal statutory rate of 21% was primarily due to the effects of state income taxes, partially offset by excess tax benefits realized from stock options exercised.

### LIQUIDITY AND FINANCIAL CONDITION

### Liquidity and Capital Resources

Our principal sources of liquidity are our existing cash and cash-equivalents, cash generated from operations and borrowing capacity. At July 27, 2024, we maintained unsecured revolving Credit Facilities and Loan Facility totaling $150 million, under which no borrowings were outstanding and $2.2 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 $250.0 million for the first quarter of fiscal 2025 compared to an increase of $64.7 million for the first quarter of fiscal 2024 primarily due to the special cash dividend of $304.1 million paid on July 24, 2024.

Net cash provided by operating activities for the first quarter of fiscal 2025 was $57.5 million compared to $70.1 million for the first quarter of fiscal 2024. For the first quarter of fiscal 2025, cash flow provided by operating activities decreased primarily due to increases in working capital excluding cash, partially offset by an increase in operating income and interest income.

Net cash used in investing activities for the first quarter of fiscal 2025 reflects capital expenditures of $3.7 million, compared to capital expenditures of $5.5 million for the first quarter of fiscal 2024. Certain production capacity and efficiency improvement projects are in progress and we anticipate fiscal 2025 capital expenditures will be in the range of $25 to $30 million.

Net cash used in financing activities for the first quarter of fiscal 2025 reflects the payments of a special dividend of $304.1 million.

### Financial Position

At July 27, 2024, working capital decreased to $145.7 million from $398.9 million at April 27, 2024. The current ratio was 2.0 to 1 at July 27, 2024 compared to 3.9 to 1 at April 27, 2024. The decrease in working capital and current ratio was due primarily to the payment of the $304.1 million cash dividend. Trade receivables increased $13.2 million and days sales outstanding increased to 32.0 from 31.5 days. Inventories increased $6.0 million and inventory turns declined to 8.3 times from 8.6 times.

## Market risk

As filed, 147 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 April 27, 2024.

## Controls and procedures

As filed, 4,959 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).

As previously disclosed in the Form 10-K for the year ended April 27, 2024, management identified a material weakness in our internal financial reporting controls over the review of the Consolidated Statements of Cash Flows at January 27, 2024 and previous periods, including operating lease disclosures and presentation. The controls did not operate at a level precise enough to detect errors in certain calculations within the Consolidated Statements of Cash Flows and the presentation of right-of-use assets obtained in exchange for lease liabilities as supplemental non-cash items. As a result, we implemented additional review procedures in the fourth quarter of fiscal 2024 that included the hiring of additional financial professionals to review the calculations underlying the cash flow presentation, enhanced procedures for assuring that right-of-use assets are reported on a timely basis by subsidiary personnel and additional quarter-end reviews of operating lease liabilities.

During the first quarter of our current fiscal year, we completed our testing of the effectiveness of internal controls impacted by these remediation measures and concluded that the material weakness has been remediated.

Based upon these evaluations, 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, except for those improvements in internal controls described above.

### 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,” “estimates”, ”may,” “will,” “should,” “could,” and similar expressions 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 beverages, 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 beverages, changes in brand image, consumer demand and preferences and our success in creating beverages geared toward consumers’ tastes, success in implementing business strategies, changes in business strategy or development plans, technology failures or cyberattacks on our technology systems or our effective response to technology failures or cyberattacks on our customers’, suppliers’ or other third parties’ technology systems, government regulations, taxes or fees imposed on the sale of our beverages, unfavorable weather conditions, changing weather patterns and natural disasters, climate change or legislative or regulatory responses to such change and other factors referenced in this report, filings with the Securities and Exchange Commission and other reports to our stockholders. We disclaim any 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, 147 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 April 27, 2024.

Filed Sep 5, 2024.
Source: SEC EDGAR, the filing index for accession 0001437749-24-028554. Last ingested by Listed: Oct 24, 2026, 14:53 ET. No prices; not investment advice.