FIZZ 10-Q
National Beverage Corp (FIZZ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period Ended
or
Commission file number
NATIONAL BEVERAGE CORP.
(Exact name of registrant as specified in its charter)
| (State of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices including zip code)
(
(Registrant’s telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of registrant’s common stock outstanding as of December 2, 2024 was
QUARTERLY REPORT ON FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION
| Item 1A. Risk Factors | 17 |
| Item 6. Exhibits | 17 |
| Signature | 18 |
PART I - FINANCIAL INFORMATION
| NATIONAL BEVERAGE CORP. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
| (In thousands, except share data) |
| October 26, | April 27, | |||||||
| 2024 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Trade receivables, net | ||||||||
| Inventories | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Goodwill | ||||||||
| Intangible assets | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Operating lease liabilities | ||||||||
| Income taxes payable | ||||||||
| Total current liabilities | ||||||||
| Deferred income taxes, net | ||||||||
| Operating lease liabilities | ||||||||
| Other liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders' equity: | ||||||||
| Preferred stock, $ par value - shares authorized: Series C - shares issued | ||||||||
| Common stock, $ par value - shares authorized; and shares issued, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ||||||||
| Treasury stock - at cost: | ||||||||
| Series C preferred stock - shares | ( | ) | ( | ) | ||||
| Common stock - shares | ( | ) | ( | ) | ||||
| Total shareholders' equity | ||||||||
| Total liabilities and shareholders' equity | $ | $ | ||||||
| See accompanying Notes to Condensed Consolidated Financial Statements. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
| (In thousands, except per share amounts) |
| Three Months Ended |
Six Months Ended |
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| October 26, |
October 28, |
October 26, |
October 28, |
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| 2024 |
2023 |
2024 |
2023 |
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| Net sales |
$ | $ | $ | $ | ||||||||||||
| Cost of sales |
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| Gross profit |
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| Selling, general and administrative expenses |
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| Operating income |
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| Other income, net |
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| Income before income taxes |
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| Provision for income taxes |
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| Net income |
$ | $ | $ | $ | ||||||||||||
| Earnings per common share: |
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| Basic |
$ | $ | $ | $ | ||||||||||||
| Diluted |
$ | $ | $ | $ | ||||||||||||
| Weighted average common shares outstanding: |
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| Basic |
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| Diluted |
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| See accompanying Notes to Condensed Consolidated Financial Statements. |
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) |
| (In thousands) |
| Three Months Ended |
Six Months Ended |
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| October 26, |
October 28, |
October 26, |
October 28, |
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| 2024 |
2023 |
2024 |
2023 |
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| Net income |
$ | $ | $ | $ | ||||||||||||
| Other comprehensive income, net of tax: |
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| Cash flow hedges |
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| Comprehensive income |
$ | $ | $ | $ | ||||||||||||
| See accompanying Notes to Condensed Consolidated Financial Statements. |
| CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) |
| (In thousands) |
| Three Months Ended |
Six Months Ended |
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| October 26, 2024 |
October 28, 2023 |
October 26, 2024 |
October 28, 2023 |
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| Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
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| Series C Preferred Stock |
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| Beginning and end of period |
$ | $ | $ | $ | ||||||||||||||||||||||||||||
| Common Stock |
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| Beginning of period |
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| Stock options exercised |
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| End of Period |
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| Additional Paid-In Capital |
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| Beginning of period |
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| Stock options exercised |
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| Stock-based compensation expense |
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| End of period |
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| Retained Earnings |
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| Beginning of period |
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| Net income |
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| Common stock cash dividend |
( |
) | ||||||||||||||||||||||||||||||
| End of period |
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| Accumulated Other Comprehensive Income (Loss) |
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| Beginning of period |
( |
) | ( |
) | ( |
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| Cash flow hedges, net of tax |
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| End of period |
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| Treasury Stock - Series C Preferred |
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| Beginning and end of period |
( |
) | ( |
) | ( |
) | ( |
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| Treasury Stock - Common |
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| Beginning and end of period |
( |
) | ( |
) | ( |
) | ( |
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| Total Shareholders' Equity |
$ | $ | $ | $ | ||||||||||||||||||||||||||||
| See accompanying Notes to Condensed Consolidated Financial Statements. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
| (In thousands) |
| Six Months Ended |
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| October 26, |
October 28, |
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| 2024 |
2023 |
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| Operating Activities: |
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| Net income |
$ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation and amortization |
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| Deferred income taxes |
( |
) | ||||||
| Loss on disposal of property, plant and equipment, net |
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| Stock-based compensation expense |
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| Non-cash operating lease expense |
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| Changes in assets and liabilities: |
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| Trade receivables |
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| Inventories |
( |
) | ||||||
| Prepaid and other assets |
( |
) | ( |
) | ||||
| Accounts payable |
( |
) | ( |
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| Accrued and other liabilities |
( |
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| Operating lease liabilities |
( |
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) | ||||
| Net cash provided by operating activities |
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| Investing Activities: |
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| Purchases of property, plant and equipment |
( |
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| Proceeds from sale of property, plant and equipment |
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| Net cash used in investing activities |
( |
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| Financing Activities: |
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| Dividends paid on common stock |
( |
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| Proceeds from stock options exercised |
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| Net cash (used in) provided by financing activities |
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| Net (Decrease) Increase in Cash and Cash Equivalents |
( |
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| Cash and Cash Equivalents - Beginning of Period |
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| Cash and Cash Equivalents - End of Period |
$ | $ | ||||||
| Supplemental Cash Flow Information: |
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| Interest paid |
$ | $ | ||||||
| Income taxes paid |
$ | $ | ||||||
| Non-Cash Activities: |
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| Right-of-use assets obtained in exchange for lease liabilities |
$ | $ | ||||||
| See accompanying Notes to Condensed Consolidated Financial Statements. |
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
National Beverage Corp. develops, produces, markets and sells a distinctive portfolio of sparkling waters, juices, energy drinks and carbonated soft drinks primarily in the United States and Canada. Incorporated in Delaware in 1985, National Beverage Corp. is a holding company for various operating subsidiaries. When used in this report, the terms “we,” “us,” “our,” “Company” and “National Beverage” mean National Beverage Corp. and its subsidiaries.
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements include the accounts of National Beverage Corp. and its subsidiaries. Significant intercompany transactions and accounts have been eliminated.
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles and rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all information and notes presented in the annual consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended April 27, 2024. The accounting policies used in these interim unaudited condensed consolidated financial statements are consistent with those used in the annual consolidated financial statements.
Segment Reporting
The Company operates as a single operating segment for purposes of presenting financial information and evaluating performance. As such, the accompanying consolidated financial statements present financial information in a format that is consistent with the internal financial information used by management.
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the interim unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Results for the interim periods presented are not necessarily indicative of results which might be expected for the entire fiscal year.
Fair Value of Financial Instruments
The carrying values of the Company’s financial instruments, including cash and cash equivalents, trade receivables, accounts payable and accrued liabilities, approximate fair value due to the relatively short maturity of the respective instruments. Derivative financial instruments which are used to partially mitigate our exposure to changes in certain raw material costs are recorded at fair value. Derivative financial instruments are not used for trading or speculative purposes. Credit risk related to derivative financial instruments is managed by requiring high credit standards for counterparties and frequent cash settlements. The estimated fair values of derivative financial instruments are calculated based on market rates to settle the instruments. See Note 5-Derivative Financial Instruments.
Trade Receivables, Net
Inventories
Inventories are stated at the lower of first-in, first-out cost or net realizable value. Adjustments, if required, to reduce the cost of the inventory to net realizable value are made for estimated excess, obsolete or impaired balances. Inventories at October 26, 2024 were comprised of finished goods of $
Shipping and Handling Costs
Shipping and handling costs are reported in selling, general and administrative expenses in the accompanying condensed consolidated statements of income. Such costs were $
Marketing Costs
The Company utilizes a variety of marketing programs, including cooperative advertising programs with customers, to advertise and promote its beverages to consumers. Marketing costs are expensed when incurred, except for prepaid advertising and production costs, which are expensed when the advertising takes place. Marketing costs, which are included in selling, general and administrative expenses, were $
Earnings Per Common Share
Basic earnings per common share is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is calculated in a similar manner, but includes the dilutive effect of stock options that was
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires entities to disaggregate operating expenses into specific categories such as employee compensation, depreciation, and intangible asset amortization, by relevant expense caption on the statement of operations. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted on either a prospective or retrospective basis. We are currently evaluating the impact of adopting ASU 2024-03 on our consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of specific categories in the rate reconciliation, including additional information for reconciling items that meet a quantitative threshold and specific disaggregation of income taxes paid and tax expense. The amendment is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and does not expect a material impact upon adoption.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires additional disclosure of significant segment expenses included in the reported measure of segment profit or loss and regularly provided to the Chief Operating Decision Maker. This standard does not change how an entity identifies its operating segments or applies quantitative thresholds to determine its reportable segments The standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and does not expect a material impact upon adoption.
2. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net consist of the following:
| (In thousands) | ||||||||
| October 26, 2024 | April 27, 2024 | |||||||
| Land | $ | $ | ||||||
| Buildings and improvements | ||||||||
| Machinery and equipment | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
Property, plant and equipment included construction-in-progress in the amounts of $
3. LEASES
The Company has entered into various non-cancelable operating lease agreements for certain offices, buildings and machinery and equipment which expire at various dates through May 2036. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. Lease agreements generally do not contain material residual value guarantees or material restrictive covenants. Operating lease costs were $
The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases as of October 26, 2024:
| (In thousands) | ||||
| Fiscal 2025 – Remaining 2 quarters | $ | |||
| Fiscal 2026 | ||||
| Fiscal 2027 | ||||
| Fiscal 2028 | ||||
| Fiscal 2029 | ||||
| Thereafter | ||||
| Total minimum lease payments including interest | ||||
| Less: amounts representing interest | ( | ) | ||
| Present value of minimum lease payments | ||||
| Less: current portion of lease obligations | ( | ) | ||
| Non-current portion of lease obligations | $ | |||
4. DEBT
At October 26, 2024, a subsidiary of the Company maintained unsecured revolving credit facilities with banks aggregating $
On December 21, 2021, a subsidiary of the Company entered into an unsecured revolving term loan facility with a national bank aggregating $
The Credit Facilities and Loan Facility require the subsidiary to maintain certain financial ratios, including debt to net worth and debt to EBITDA (as defined in the credit agreements), and contain other restrictions, none of which are expected to have a material effect on operations or financial position. At October 26, 2024, the subsidiary was in compliance with all loan covenants.
5. DERIVATIVE FINANCIAL INSTRUMENTS
From time to time, we enter into aluminum swap contracts to partially mitigate our exposure to changes in the cost of aluminum containers. Such financial instruments are designated and accounted for as cash flow hedges. Accordingly, gains or losses attributable to the effective portion of the cash flow hedge are reported in accumulated other comprehensive income (loss) (“AOCI”) and reclassified into cost of sales in the period in which the hedged transaction affects earnings. The ineffective portion of the change in fair value of our cash flow hedge was immaterial. The following summarizes the gains (losses) recognized in the Condensed Consolidated Statements of Income and AOCI:
| (In thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| October 26, 2024 | October 28, 2023 | October 26, 2024 | October 28, 2023 | |||||||||||||
| Recognized in AOCI: | ||||||||||||||||
| Income (loss) before income taxes | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Less: income tax provision (benefit) | ( | ) | ( | ) | ||||||||||||
| Net | ( | ) | ( | ) | ||||||||||||
| Reclassified from AOCI to cost of sales: | ||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less: income tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net change to AOCI | $ | $ | $ | $ | ||||||||||||
As of October 28, 2024, the notional amount of our outstanding aluminum swap contracts was $
As of October 28, 2024, the fair value of the derivative asset was $
6. RELATED PARTIES
The Company is a party to a management agreement with Corporate Management Advisors, Inc. (CMA), a corporation owned by our Chairman and Chief Executive Officer. The management agreement provides that the Company will pay CMA an annual base fee equal to percent of the consolidated net sales of the Company. Management fees to CMA were $
7. CASH DIVIDEND
On June 12, 2024, the Company's board of directors declared a special cash dividend of $
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 October 26, 2024 (second quarter of fiscal 2025) compared to
Three Months Ended October 28, 2023 (second quarter of fiscal 2024)
Net sales for the second quarter of fiscal 2025 decreased 3.0% to $291.2 million compared to $300.1 million for the second quarter of fiscal 2024. The decrease in sales resulted primarily from a 4.6% decrease in case volume, partially offset by a 2.2% increase in average selling price per case. The decrease in case volume impacted both Power + Brands and carbonated soft drink brands.
Gross profit for the second quarter of fiscal 2025 increased to $109.4 million compared to $107.9 million for the second quarter of fiscal 2024. The increase in gross profit was primarily due to a decline in certain packaging costs and an increase in average selling price per case, partially offset by the decrease in case volume. The average cost of sales per case decreased 0.3% and gross margin increased to 37.6% compared to 35.9% for the second quarter of fiscal 2024.
Selling, general and administrative expenses for the second quarter of fiscal 2025 decreased $2.1 million to $51.5 million from $53.6 million for the second quarter of fiscal 2024. The decrease was primarily due to a decrease in marketing and shipping and handling costs. As a percentage of net sales, selling, general and administrative expenses decreased to 17.7% for the second quarter of fiscal 2025 compared to 17.8% for the second quarter of fiscal 2024.
Other income, net includes interest income of $1.7 million for the second quarter of fiscal 2025 and $2.2 million for the second quarter of fiscal 2024. The decrease in interest income is due primarily to lower average invested balances.
The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.4% for the second quarter of fiscal 2025 and 23.2% for the second 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.
Six Months Ended October 26, 2024 (first six months of fiscal 2025) compared to
Six Months Ended October 28, 2023 (first six months of fiscal 2024)
Net sales for the first six months of fiscal 2025 decreased 0.6% to $620.7 million from $624.3 million for the first six months of fiscal 2024. The decrease in sales resulted primarily from a 1.8% decrease in case volume, partially offset by a 1.4% increase in average selling price per case. The decrease in case volume impacted both Power+ Brands and carbonated soft drink brands.
Gross profit for the first six months of fiscal 2025 increased to $231.8 million from $222.3 million for the first six months of fiscal 2024. The increase in gross profit was primarily due to a decline in certain packaging costs and an increase in average selling price per case, partially offset by the decrease in case volume. The average cost of sales per case decreased 1.2% and gross margin increased to 37.3% compared to 35.6% for the first six months of fiscal 2024.
Selling, general and administrative expenses for the first six months of fiscal 2025 decreased $0.5 million to $104.4 million from $104.9 million for the first six months of fiscal 2024. The decrease was primarily due to a decrease in marketing and shipping and handling costs. As a percentage of net sales, selling, general and administrative expenses remained at 16.8% for both of the first six months of fiscal 2025 and fiscal 2024.
Other income, net includes interest income of $6.0 million for the first six months of fiscal 2025 and $4.0 million for the first six months of fiscal 2024. The increase in interest income is due to increased average invested balances and higher yields.
The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.3% for the first six months of fiscal 2025 and 23.5% for the first six months 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.
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 October 28, 2024, we maintained unsecured credit facilities 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 $214.2 million for the first six months of fiscal 2025 compared to an increase of $89.6 million for the first six months 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 six months of fiscal 2025 was $100.1 million compared to $102.1 million for the first six months of fiscal 2024. For the first six months 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 net income.
Net cash used in investing activities for the first six months of fiscal 2025 reflects capital expenditures of $10.6 million, compared to capital expenditures of $12.8 million for the first six months 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 six months of fiscal 2025 reflects the payment of a special dividend of $304.1 million.
Financial Position
At October 26, 2024, working capital decreased to $196.8 million from $398.9 million at April 27, 2024. The current ratio was 2.5 to 1 at October 26, 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 decreased $3.2 million and days sales outstanding decreased to 31.1 from 31.5 days. Inventories increased $6.4 million and inventory turns declined to 8.2 times from 8.6 times.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.
ITEM 4. CONTROLS AND PROCEDURES
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,” “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.
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.
| Exhibit No. | Description |
| 10.16 | Credit Agreement between NewBevCo, Inc. and lender therein dated September 10, 2024 |
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2 | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101 | The following financial information from National Beverage Corp. Quarterly Report on Form 10-Q for the quarterly period ended October 26, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets (Unaudited); (ii) Condensed Consolidated Statements of Income (Unaudited); (iii) Condensed Consolidated Statements of Comprehensive Income (Unaudited); (iv) Condensed Consolidated Statements of Shareholders’ Equity (Unaudited); (v) Condensed Consolidated Statements of Cash Flows (Unaudited); and (vi) the Notes to Condensed Consolidated Financial Statements (Unaudited). |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: December 5, 2024
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National Beverage Corp. (Registrant) |
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By: |
/s/ George R. Bracken |
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George R. Bracken |
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Executive Vice President – Finance (Principal Financial Officer) |
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