ty
innovation and evolution...nutrients for profound opportuni
revolut
ion,
.when better is attainable revolution is the staircase to innovation
.
good is not enough.
a constant progressive change
ev•o•lu•tion
a radical and pervasive movement
rev•o•lu•tion
n atio n a l b eve ra g e co r p.
e v o l u t i o n
20 0 5 a n n u a l re p o r t
2005 annual report
evolution
national beverage corp.
rev •o• l u •tio n
a radical and pervasive movement
ev •o• l u •tio n
a constant progressive change
g o o d i s n o t e n o u g h .
.
. w h e n b e t t e r i s a t t a i n a b l e revolution is the staircase to i n n ov a t i o n
r e v o l u t
i o n ,
i n n o v a t i o n a n d e v o l u t i o n...nutrients for profound o p p o r t u n i
t y
2005 annual report
evolution
national beverage corp.
rev •o• l u •tio n
a radical and pervasive movement
ev •o• l u •tio n
a constant progressive change
g o o d i s n o t e n o u g h .
.
. w h e n b e t t e r i s a t t a i n a b l e revolution is the staircase to i n n ov a t i o n
r e v o l u t
i o n ,
i n n o v a t i o n a n d e v o l u t i o n...nutrients for profound o p p o r t u n i
t y
e v o l u t i o n
i n n o v a t i n g i n a
c h a n g i n g w o r l d
t special and rare times…a forced effort to bring about change occurs…a Revolution of sorts.
One is underway within the soft-drink industry and, over the past two years, has had a dramatic
effect. What started this revolution was the consumers’ demand for flavor variety and a more
healthy thirst quencher. The consumer revolt against the brown, sugary colas expanded further
with the demand for more ‘kick’ and excitement. Thus, the energy beverage gave relief to those
who wanted more from their soft drinks and got it! ‡ While all of this was occurring, a
soft drink more acceptable for children was demanded by moms and school supervisors.
Government reports about obesity and diabetes heightened awareness for ‘better-for-you
thirst relievers’. The revolution was further fueled by rising costs of health care and the
aging of America. And so…a full-fledged revolt by the sophisticated beverage consumer
developed with a fervor…that has forever realigned the consumers’ demands…a new
tasteful evolution is underway! Full swing—as they say. ‡ As with any revolution,
there are associated risks and costs. Bitter-Sweet envelops everything during this time
(no flavor-able remark intended). Some examples of bitter are the lowering of revenues
as rising costs are forced upon our retail partner and, ultimately, the consumer. And,
yes, a sweet margin increase and robust demand for our Rip It energy beverage is
[
energy drinks are rising in popularity as consumers
are demanding more ‘kick’ and excitement.
]
[
sugar-free, waters and juices are a dynamic segment due to
the public’s conscious efforts at living a healthier lifestyle.
]
extremely enlightening. Shasta and Faygo are both flavor-oriented soft drinks that have loyal
consumers who demand value and taste alike. While we are devoted to these long-time
dedicated consumers, much effort is being expended in developing soft drinks, unique
flavors, fun tastes…more in tune to the current health conscious consumer—especially
the vibrant, fun-crazed teen. ‘OOOH Shasta’—a new offering for the no-calorie, no-carb,
good-for-you, female consumer is one of Shasta’s uniquely packaged introductions.
Tweaking our great flavors, while developing better-for-you beverages is quite a challenge,
but one that has tradition and over a century of leadership and certification. Believe
me…when someone pops open a tab, puts it to their lips and, with no hesitation, takes
a big gulp and swallows…that trust is priceless! ‡ We are capitalizing on these
time-tested, flavor brands—Shasta and Faygo—and may soon give the soft-drink
techie something to have fun with…maybe even experiment as a wanna-be beverage
chemist with creating their favorite flavored soft drinks. If someone walked into
one of our bottling plants during the filling process of Peach Mango Fiz…an
exotic mouth-watering aroma would smother their senses. Well, this same
aromatic stimulant energizes our tantalizing creative…and that is sweet—real
sweet! ‡ These are a few examples relative to the climate of change within
our Company. The most significant change brought about and one that we
had previously underutilized is…Focus! This consumer revolution has ignited a fever within us to
further excel at what is the ‘best’ of National Beverage Corp. Our ‘brilliance’ is innovation—we
create and market new flavors, new beverages, new packages and new tastes better than any
other beverage company. The alarm went off…we are 100% focused and innovating! ‡ What
does the future hold? Describe the evolution! Excitement for starters. New and innovative soft
drinks, creative packaging and the demanding variety consumer to satisfy…with the ‘best’ of
National Beverage, is magnified right now. We have aggressive and talented management,
a new focus and a balance sheet of ammo to do anything we desire. ‡ Those bitter
revenue reductions are reversing and new beverages are in ‘test’ market as of this writing.
Flavor chemists are burning the midnight oil, for certain, and the strong balance sheet is
getting stronger. Opportunity has targeted our hoard of cash…therefore, focus a watchful
eye on us…careful not to miss a wonderful happening in our passionate evolution!
Nick A. Caporella
Chairman and Chief Executive Officer
[
variety, diversity and NEW...what our
customers demand for the future.
]
management’s discussion and analysis of financial condition and results of operations (continued)
F i n a n c i a l s
selected financial data
(In thousands, except per share amounts)
S TAT E M E N T O F I N C O M E DATA :
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Interest expense
Other income—net
Income before income taxes
Provision for income taxes
Net income
Net income per share(2):
Basic
Diluted
B A L A N C E S H E E T DATA :
Working capital
Property—net
Total assets
Long-term debt
Deferred income taxes—net
Shareholders’ equity(1)
Cash dividends per share(1)
Fiscal Year Ended
April 30,
2005
May 1,
2004
May 3,
2003(3)
April 27,
2002
April 28,
2001
$ 495,572
$ 512,061
$ 500,430
$ 502,778
$ 480,415
340,206
343,316
335,457
339,041 323,743
155,366
130,037
168,745
139,058
164,973
136,902
163,737
136,925
106
1,199
132
544
316
706
857
867
156,672
131,852
2,110
1,506
26,422
30,099
9,536
11,408
28,461
10,872
26,822
24,216
10,270
9,236
$ 16,886 $ 18,691
$ 17,589
$ 16,552 $ 14,980
$
.45
$
.44
$
.51
.49
.48
.46
$
.45
$
.44
.41
.40
$ 81,962
$ 64,967
$ 79,785
$ 70,164
$ 62,444
62,879
59,535
60,432
60,658
62,215
224,587
205,378
218,195
205,685
203,868
—
—
300
15,958
14,930
14,843
10,981
12,072
24,136
10,208
143,296
125,376
143,292
125,677 108,488
$
— $
1.00
$
—
$
— $
—
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(1) In April 2004, the Company paid a special “one-time” cash dividend of $1.00 per share, aggregating $38.4 million.
(2) Basic net income per share is computed by dividing earnings applicable to common shares by the weighted average number of shares outstanding. Diluted net
income per share includes the dilutive effect of stock options. Share amounts have been adjusted for the 100% stock dividend distributed on March 22, 2004.
(3) Fiscal 2003 consisted of 53 weeks.
management’s discussion and analysis of financial condition and results of operations
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O V E R V I E W
National Beverage Corp. develops, manufactures, markets and
distributes a complete portfolio of quality beverage products
throughout the United States. Incorporated in Delaware in 1985,
National Beverage Corp. is a holding company for various oper-
ating subsidiaries. When used in this report, the terms “we,”
“us,” “our,” “Company” and “National Beverage” mean National
Beverage Corp. and its subsidiaries.
Our lines of multi-flavored soft drinks, including those of our
flagship brands, Shasta® and Faygo®, emphasize distinctive flavor
variety. In addition, we offer an assortment of premium beverages
geared to the health-conscious consumer, including Everfresh®,
Home Juice®, and Mr. Pure® 100% juice and juice-based products;
and LaCroix®, Mt. Shasta™, Crystal Bay® and ClearFruit® flavored
and spring water products. We also produce specialty products,
including Rip It™, an energy drink geared toward young consum-
ers, Ohana® fruit-flavored drinks and St. Nick’s® holiday soft drinks.
Substantially all of our brands are produced in 14 manufacturing
facilities that are strategically located in major metropolitan mar-
kets throughout the continental United States. To a lesser extent,
we develop and produce soft drinks for retail grocery chains,
warehouse clubs, mass-merchandisers and wholesalers (“allied
brands”) as well as soft drinks for other beverage companies.
Our strategy emphasizes the growth of our products by
offering a branded beverage portfolio of proprietary flavors; by
supporting the franchise value of regional brands and expanding
those brands with new packaging and broader demographic
emphasis; by developing and acquiring innovative products
tailored toward healthy lifestyles; and by appealing to the “quality-
price” expectations of the family consumer. We believe that the
“regional share dynamics” of our brands perpetuate consumer
loyalty within local regional markets, resulting in more retailer-
sponsored promotional activities.
Over the last several years, we have focused on increasing
penetration of our brands in the convenience channel through
Company-owned and independent distributors. The convenience
channel is composed of convenience stores, gas stations and
other smaller “up-and-down-the-street” accounts. Because of
the higher retail prices and margins that typically prevail, we have
undertaken specific measures to expand distribution in this chan-
nel. These include development of products specifically targeted
to this market, such as ClearFruit, Everfresh, Mr. Pure, Crystal Bay,
and Rip It. Additionally, we have created proprietary and special-
ized packaging for these products with distinctive graphics. We
intend to continue our focus on enhancing growth in the conve-
nience channel through both specialized packaging and innovative
product development.
Beverage industry sales are seasonal with the highest volume
typically realized during the summer months. Additionally, our
operating results are subject to numerous factors, including
fluctuations in the costs of raw materials, changes in consumer
preference for beverage products and competitive pricing in
the marketplace.
R E S U LT S O F O P E R AT I O N S
Fiscal 2005 and fiscal 2004 consisted of 52 weeks while fiscal
Net Sales During fiscal 2005, we initiated a series of price
increases to offset unprecedented raw material cost increases,
especially in the latter part of the year as sustained increases in
2003 consisted of 53 weeks.
Gross Profit Gross profit approximated 31.4% of net sales for
fiscal 2005 and 33.0% for fiscal 2004. This decline was due to the
fuel and resin continued to rise to historical new highs. Price
effect of the sales decrease and higher cost of goods sold. Cost
increases tend to have an adverse effect on case volume and the
of goods sold per unit increased approximately 4%, primarily due
industry generally experienced reduced case volume, especially
to higher packaging and energy costs.
for carbonated soft drinks. As a result, our branded case volume
Gross profit, approximating 33.0% of net sales for both fiscal
was relatively flat for the year while net pricing was up slightly,
2004 and 2003, increased $3.8 million in fiscal 2004. An increase
due to higher selling prices and a change in product mix. This
in higher margin business and a reduction in certain fixed manu-
product mix change included increased sales of our alternative
facturing costs were partially offset by increases in certain raw
beverages as obesity and other health issues caused consumers
material costs.
to consume less carbonated soft drinks. Also impacting sales was
Shipping and handling costs are included in selling, general
a nineteen percent (19%) volume decline in allied branded prod-
and administrative expenses, the classification of which is consis-
ucts related to a retailer’s change in philosophy, which affected
tent with many beverage companies. However, our gross margin
their sales and our earlier decision to eliminate certain lower
may not be comparable to companies that include shipping and
margin business. Net sales included $1.8 million received from a
handling costs in cost of sales. See Note 1 of Notes to Consoli-
customer relative to the recovery of pricing and promotional
dated Financial Statements.
allowances for product shipped in a previous year.
Net sales for fiscal 2004 increased approximately $11.6 million,
or 2.3%, to $512.1 million. This sales growth was due primarily to
increased volume of National Beverage’s branded soft drinks and
favorable changes in product mix. This improvement was partially
offset by a decline in lower margin allied branded business.
Selling, General and Administrative Expenses Selling, general
and administrative expenses for fiscal 2005 were $130.0 million or
26.2% of net sales compared to $139.1 million or 27.2% of net sales
for fiscal 2004. The decline in expenses was due primarily to lower
selling and marketing costs of $3.2 million and $5.6 million,
respectively, partially offset by higher energy costs.
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management’s discussion and analysis of financial condition and results of operations (continued)
Selling, general and administrative expenses for fiscal 2004
L I Q U I D I T Y A N D F I N A N C I A L C O N D I T I O N
were $139.1 million or 27.2% of net sales compared to $136.9 million
or 27.4% of net sales for fiscal 2003. Due to the effect of higher
volume, selling, general and administrative expenses as a percent
of sales marginally declined, partially offset by higher marketing
costs related to new product introductions.
Interest Expense and Other Income—Net
decreased $26,000 in fiscal 2005 and $184,000 in fiscal 2004 as a
Interest expense
Capital Resources Our current sources of capital are cash flow
from operations and borrowings under existing credit facilities.
The Company maintains unsecured revolving credit facilities
aggregating $45 million of which approximately $42 million
was available for future borrowings at April 30, 2005. We believe
that existing capital resources are sufficient to meet our capital
requirements and those of the parent company for the fore-
result of a decline in outstanding debt. Other income includes
seeable future.
interest income of $581,000 for fiscal 2005, $603,000 for fiscal
2004, and $816,000 for fiscal 2003. The decrease in interest income
for fiscal 2005 is primarily due to a decline in average investments
outstanding, while the decline in fiscal 2004 is related to a reduc-
tion in investment yields. In addition, other income for fiscal 2005
includes a gain of $633,000 related to a contract settlement with
a customer.
Cash Flows During fiscal 2005, cash of $32.9 million was gener-
ated from operating activities, which was partially offset by $3.9
million used for investing activities. Cash provided by operating
activities for fiscal 2005 increased $11.6 million due to an increase
in non-cash charges and favorable changes in working capital
requirements. Cash used in investing activities increased $3.8
million primarily due to increased capital expenditures to enhance
Income Taxes Our effective tax rate was approximately 36.1%
for fiscal 2005, 37.9% for fiscal 2004, and 38.2% for fiscal 2003.
packaging capabilities and improve manufacturing efficiencies.
Cash provided by financing activities of $146,000 was comprised
The difference between the effective rate and the federal statu-
of proceeds from stock options exercised.
tory rate of 35% was primarily due to the effects of state income
During fiscal 2004, cash of $21.3 million was generated from
taxes, nondeductible expenses, and nontaxable interest income.
operating activities, which was offset by $39.2 million used for
See Note 8 of Notes to Consolidated Financial Statements.
financing activities. Cash provided by operating activities for fiscal
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2004 decreased $14.7 million due to an increase in working capi-
tal requirements. Cash used in investing activities declined $25.6
million due to changes in net marketable securities sold. Cash
used in financing activities increased $29.5 million due to cash
In January 1998, the Board of Directors authorized the pur-
dividends paid in April 2004, which was partially offset by a reduc-
chase of up to 800,000 shares of National Beverage common
tion in net debt repayments.
Financial Position During fiscal 2005, our working capital
increased $17.0 million to $82.0 million from $65.0 million, primar-
ily due to an increase in cash balances generated from operating
activities. Trade receivables decreased $2.6 million due primarily
to lower sales. Prepaid and other assets declined $684,000 due
to lower income tax refund receivables. At April 30, 2005, the cur-
rent ratio was 2.4 to 1 compared to 2.1 to 1 for the prior year.
During fiscal 2004, our working capital decreased $14.8 mil-
lion to $65.0 million from $79.8 million primarily due to the cash
dividend payment. The increase in trade receivables is due to the
effect of higher sales volume and change in terms with certain
customers. The increase in prepaid and other assets is due to a
reclassification from noncurrent assets and an increase in income
tax refund receivables. At May 1, 2004, the current ratio was 2.1
to 1 compared to 2.4 to 1 for the prior year.
Liquidity We continually evaluate capital projects designed to
expand capacity and improve efficiency at our manufacturing
facilities. In fiscal 2005, we incurred increased capital expenditures
to enhance packaging capabilities and improve manufacturing
efficiencies. Such programs are expected to continue in fiscal
2006; however, capital expenditures in fiscal 2006 should not
exceed fiscal 2005 amounts.
stock. In fiscal 2004 and 2003, we purchased 18,000 shares and
18,250 shares, respectively, and aggregate shares purchased
since January 1998 were 502,060. There were no shares purchased
in fiscal 2005.
Pursuant to a management agreement, we incurred a fee to
Corporate Management Advisors, Inc. (“CMA”) of approximately
$5.0 million for fiscal 2005, $5.1 million for fiscal 2004, and $5.0
million for fiscal 2003. At April 30, 2005, we owed $1.2 million to
CMA for unpaid fees. See Note 6 of Notes to Consolidated
Financial Statements.
C O N T R AC T UA L O B L I G AT I O N S
Long-term contractual obligations at April 30, 2005 are payable
as follows:
(In thousands)
Total
2006
2007– 2009–
2008 2010 Thereafter
Operating leases
$ 10,730
$ 4,866
$ 4,328
$1,311
$225
Purchase
commitments
50,021
22,723
27,298
—
—
Total
$ 60,751 $ 27,589 $ 31,626 $1,311
$225
The Company contributes to certain pension plans under
collective bargaining agreements based on hours worked and
to a discretionary profit sharing plan, neither of which have any
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management’s discussion and analysis of financial condition and results of operations (continued)
long-term contractual funding requirements. Contributions were
estimates are based on management’s knowledge of current
$2.3 million for fiscal 2005, $2.2 million for fiscal 2004, and $2.2
events and actions it may undertake in the future, they may ulti-
million for fiscal 2003.
mately differ from actual results. We believe that the critical
We maintain self-insured and deductible programs for certain
accounting policies described in the following paragraphs affect
liability, medical and workers’ compensation exposures. Other
the most significant estimates and assumptions used in the
long-term liabilities include known claims and estimated incurred,
preparation of our consolidated financial statements. For these
but not reported, claims not otherwise covered by insurance,
policies, we caution that future events rarely develop exactly as
based on actuarial assumptions and historical claims experience.
estimated, and the best estimates routinely require adjustment.
Since the timing and amount of claims settlement varies signifi-
cantly, we are not able to reasonably estimate future payments
for the periods indicated.
We have standby letters of credit aggregating $3 million
related to our self-insurance programs, which expire in fiscal 2006.
We expect to renew these standby letters of credit until they are
no longer required.
O F F - B A L A N C E S H E E T A R R A N G E M E N T S
We do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future material effect on
our financial condition.
C R I T I C A L AC C O U N T I N G P O L I C I E S
The preparation of financial statements in conformity with gener-
ally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Although these
Credit Risk We sell products to a variety of customers and
extend credit based on an evaluation of each customer’s financial
condition, generally without requiring collateral. Exposure to
losses on receivables varies by customer principally due to the
financial condition of each customer. We monitor our exposure to
credit losses and maintain allowances for anticipated losses
based on specific customer circumstances, credit conditions, and
historical write-offs and collections.
Impairment of Long-Lived Assets All long-lived assets, exclud-
ing goodwill and intangible assets not subject to amortization,
are evaluated for impairment on the basis of undiscounted cash
flows whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. An
impaired asset is written down to its estimated fair market value
based on the best information available. Estimated fair market
value is generally measured by discounting future cash flows.
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Goodwill and intangible assets not subject to amortization are
expected amount to be paid over the period of benefit or
evaluated for impairment annually or sooner in accordance with
expected sales volume. The recognition of expense for these
SFAS No. 142. An impairment loss is recognized if the carrying
incentives involves the use of judgment related to performance
amount, or for goodwill, the carrying amount of its reporting unit,
and sales volume estimates that are made based on historical
is greater than its fair value.
Income Taxes Our effective income tax rate and the tax bases
of assets and liabilities are based on estimates of taxes which will
ultimately be payable. Deferred taxes are recorded to give recog-
nition to temporary differences between the tax bases of assets
or liabilities and their reported amounts in the financial state-
ments. Valuation allowances are established when it is deemed,
more likely than not, that the benefit of deferred tax assets will
not be realized.
Insurance Programs We maintain self-insured and deductible
programs for certain liability, medical and workers’ compensation
exposures. Accordingly, we accrue for known claims and esti-
mated incurred but not reported claims not otherwise covered
by insurance, based on actuarial assumptions and historical
claims experience.
experience and other factors. Sales incentives are accounted for
as a reduction of revenues and actual amounts may vary from
reported amounts.
F O R WA R D - L O O K I N G S TAT E M E N T S
National Beverage and its representatives may from time to time
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 Annual Report, filings with the Securities and Exchange
Commission and other reports to our stockholders. Certain state-
ments including, without limitation, statements containing the
words “believes,” “anticipates,” “intends,” “expects,” and “esti-
mates” constitute “forward-looking statements” and involve
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Sales Incentives We offer various sales incentive arrangements
to our customers, which require customer performance or
known and unknown risk, uncertainties and other factors that may
cause the actual results, performance or achievements of our
achievement of certain sales volume targets. In those circum-
Company to be materially different from any future results, per-
stances when the incentive is paid in advance, we amortize the
formance or achievements expressed or implied by such forward-
amount paid over the period of benefit or contractual sales
looking statements. Such factors include, but are not limited to,
volume. When the incentive is paid in arrears, we accrue the
the following: general economic and business conditions; pricing
management’s discussion and analysis of financial condition and results of operations (concluded)
of competitive products; success in acquiring other beverage
Q UA N T I TAT I V E A N D Q UA L I TAT I V E D I S C L O S U R E S A B O U T
businesses; success of new product and flavor introductions;
M A R K E T R I S K
fluctuations in the costs of raw materials and the ability to pass
along any cost increases to our customers; our ability to increase
prices for our products; labor strikes or work stoppages or other
interruptions or difficulties in the employment of labor; continued
retailer support for our products; changes in consumer preferences
and our success in creating products geared toward consumers’
tastes; success of implementing business strategies; changes in
business strategy or development plans; government regulations;
unseasonably cold or wet weather conditions; and other factors
referenced in this Annual Report. 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.
Commodities We purchase various raw materials, including
aluminum cans, plastic bottles, high fructose corn syrup, and var-
ious juice concentrates, the prices of which fluctuate based on
commodity market conditions. Our ability to recover increased
costs through higher pricing may be limited by the competitive
environment in which we operate.
Interest Rates We had no outstanding debt or debt-related
interest rate exposure during fiscal 2005.
Our investment portfolio is comprised of highly liquid securi-
ties consisting primarily of short-term money market instruments
and auction rate securities, the yields of which fluctuate based
largely on short-term Treasury rates. If the yield of these instru-
ments had changed by 100 basis points (1%), interest income for
fiscal 2005 would have changed by approximately $300,000.
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consolidated balance sheets
As of April 30, 2005 and May 1, 2004
(In thousands, except share amounts)
A S S E T S
Current assets:
Cash and equivalents
Marketable securities
Trade receivables—net of allowances of $585 (2005) and $608 (2004)
Inventories
Deferred income taxes—net
Prepaid and other assets
Total current assets
Property—net
Goodwill
Intangible assets—net
Other assets
L I A B I L I T I E S A N D S H A R E H O L D E R S ’ E Q U I T Y
Current liabilities:
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities
Deferred income taxes—net
Other liabilities
Shareholders’ equity:
Preferred stock, 7% cumulative, $1 par value, aggregate liquidation preference of $15,000—
1,000,000 shares authorized; 150,000 shares issued; no shares outstanding
Common stock, $.01 par value—authorized 50,000,000 shares; issued 41,018,960 shares (2005) and
40,894,440 shares (2004); outstanding 36,986,176 shares (2005) and 36,861,656 shares (2004)
Additional paid-in capital
Retained earnings
Treasury stock—at cost:
Preferred stock—150,000 shares
Common stock—4,032,784 shares
Total shareholders’ equity
See accompanying Notes to Consolidated Financial Statements.
2005
2004
$ 54,557
—
46,135
29,738
1,759
7,657
$ 25,365
9,000
48,776
29,754
1,622
8,341
139,846
62,879
13,145
1,939
6,778
122,858
59,535
13,145
1,948
7,892
$ 224,587 $ 205,378
$ 38,012
18,290
1,582
$ 37,138
18,801
1,952
57,884
15,958
7,449
57,891
14,930
7,181
150
150
410
19,679
141,057
409
18,646
124,171
(5,100)
(12,900)
(5,100)
(12,900)
143,296
125,376
$ 224,587 $ 205,378
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consolidated statements of income
For the Fiscal Years Ended April 30, 2005, May 1, 2004 and May 3, 2003
(In thousands, except per share amounts)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Interest expense
Other income—net
Income before income taxes
Provision for income taxes
Net income
Net income per share—
Basic
Diluted
Average common shares outstanding—
Basic
Diluted
See accompanying Notes to Consolidated Financial Statements.
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2005
2004
2003
$ 495,572
340,206
$ 512,061
343,316
$ 500,430
335,457
155,366
130,037
106
1,199
168,745
139,058
132
544
26,422
9,536
30,099
11,408
164,973
136,902
316
706
28,461
10,872
$ 16,886 $ 18,691
$ 17,589
$
$
.45 $
.44 $
.51
.49
$
$
.48
.46
37,579
36,937
36,800
38,254
38,166
38,120
consolidated statements of shareholders’ equity
For the Fiscal Years Ended April 30, 2005, May 1, 2004 and May 3, 2003
(In thousands, except share amounts)
Shares
Amount
Shares
Amount
Shares
Amount
2005
2004
2003
P R E F E R R E D S TO C K
Beginning and end of year
C O M M O N S TO C K
Beginning of year
Stock options exercised
100% stock dividend
End of year
A D D I T I O N A L PA I D - I N C A P I TA L
Beginning of year
Stock options exercised
Other
End of year
R E TA I N E D E A R N I N G S
Beginning of year
Net income
Cash dividends paid
End of year
T R E A S U R Y S TO C K — P R E F E R R E D
Beginning and end of year
T R E A S U R Y S TO C K — C O M M O N
Beginning of year
Purchase of stock
End of year
150,000
$
150
150,000
$
150
150,000
$
150
40,894,440
124,520
—
41,018,960
409
1
—
410
22,250,202
338,510
18,305,728
40,894,440
223
3
183
409
22,209,312
40,890
—
22,250,202
18,646
506
527
19,679
124,171
16,886
—
141,057
16,818
2,011
(183)
18,646
143,846
18,691
(38,366)
124,171
222
1
—
223
16,526
292
—
16,818
126,257
17,589
—
143,846
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150,000
(5,100)
150,000
(5,100)
150,000
(5,100)
4,032,784
—
(12,900)
—
4,014,784
18,000
(12,645)
(255)
3,996,534
18,250
(12,378)
(267)
4,032,784
(12,900)
4,032,784
(12,900)
4,014,784
(12,645)
TOTA L S H A R E H O L D E R S ’ E Q U I T Y
$ 143,296
$ 125,376
$ 143,292
See accompanying Notes to Consolidated Financial Statements.
consolidated statements of cash flows
For the Fiscal Years Ended April 30, 2005, May 1, 2004 and May 3, 2003
(In thousands)
O P E R AT I N G AC T I V I T I E S :
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Deferred income tax provision
Loss on sale of assets
Changes in assets and liabilities:
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Trade receivables
Inventories
Prepaid and other assets
Accounts payable
Accrued and other liabilities, net
Net cash provided by operating activities
I N V E S T I N G AC T I V I T I E S :
Marketable securities purchased
Marketable securities sold
Property additions
Proceeds from sale of assets
Net cash used in investing activities
F I N A N C I N G AC T I V I T I E S :
Debt repayments
Common stock cash dividend
Purchase of common stock
Proceeds from stock options exercised
Net cash provided by (used in) financing activities
N E T I N C R E A S E ( D E C R E A S E ) I N C A S H A N D E Q U I VA L E N T S
C A S H A N D E Q U I VA L E N T S — B E G I N N I N G O F Y E A R
C A S H A N D E Q U I VA L E N T S — E N D O F Y E A R
OT H E R C A S H F L O W I N F O R M AT I O N :
Interest paid
Income taxes paid
See accompanying Notes to Consolidated Financial Statements.
2005
2004
2003
$ 16,886
$ 18,691
$ 17,589
12,464
891
15
2,641
16
(1,165)
874
275
11,394
143
59
(7,745)
(1,059)
(7,784)
2,169
5,453
11,319
2,709
110
1,924
2,345
(1,834)
4,150
(2,324)
32,897
21,321
35,988
(233,900)
242,900
(13,003)
152
(3,851)
(205,700)
213,700
(8,696)
623
(58,000)
41,000
(8,936)
312
(73)
(25,624)
—
—
—
146
(1,450)
(38,366)
(255)
854
146
(39,217)
(9,531)
—
(267)
122
(9,676)
29,192
(17,969)
688
25,365
43,334
42,646
$ 54,557 $ 25,365
$ 43,334
$
106
6,910
$
133
11,049
$
336
7,863
notes to consolidated financial statements
National Beverage Corp. develops, manufactures, markets and
distributes a complete portfolio of multi-flavored soft drinks,
Credit Risk We sell products to a variety of customers and
extend credit based on an evaluation of each customer’s financial
juice drinks, water and specialty beverages throughout the United
condition, generally without requiring collateral. Exposure to
States. Incorporated in Delaware in 1985, National Beverage
losses on receivables varies by customer principally due to the
Corp. is a holding company for various operating subsidiaries.
financial condition of each customer. We monitor our exposure to
When used in this report, the terms “we,” “us,” “our,” “Company”
credit losses and maintain allowances for anticipated losses
and “National Beverage” mean National Beverage Corp. and its
based on specific customer circumstances, credit conditions, and
subsidiaries.
1. S I G N I F I C A N T AC C O U N T I N G P O L I C I E S
Basis of Presentation The consolidated financial statements
include the accounts of the Company and all subsidiaries. All sig-
nificant intercompany balances have been eliminated. Our fiscal
year ends the Saturday closest to April 30th and, as a result, a
53rd week is added every five or six years. Fiscal 2005 and fiscal
2004 consist of 52 weeks while fiscal 2003 consists of 53 weeks.
Cash and Equivalents Cash and equivalents are comprised of
cash and highly liquid securities (consisting primarily of short-
term money-market investments) with an original maturity or
redemption option of three months or less.
historical write-offs and collections. At April 30, 2005 and May 1,
2004, we did not have any customer that comprised more than
10% of trade receivables. No one customer accounted for more
than 10% of net sales during any of the last three fiscal years.
Fair Value of Financial Instruments The fair values of financial
instruments are estimated based on market rates. The carrying
amounts of financial instruments reflected in the balance sheets
approximate their fair values.
Impairment of Long-Lived Assets All long-lived assets, exclud-
ing goodwill and intangible assets not subject to amortization,
are evaluated for impairment on the basis of undiscounted cash
flows whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. An
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Changes in Accounting Standards Management has reviewed
the current changes in accounting standards and does not expect
impaired asset is written down to its estimated fair market value
based on the best information available. Estimated fair market
any of these changes to have a material impact on the Company.
value is generally measured by discounting future cash flows.
notes to consolidated financial statements (continued)
Goodwill and intangible assets not subject to amortization are
evaluated for impairment annually or sooner in accordance with
Marketing Costs We are involved in a variety of marketing pro-
grams, including cooperative advertising programs with custom-
SFAS No. 142. An impairment loss is recognized if the carrying
ers, which advertise and promote our products to consumers.
amount, or for goodwill, the carrying amount of its reporting unit,
Marketing costs are expensed when incurred, except for prepaid
is greater than its fair value.
Income Taxes Our effective income tax rate and the tax bases
of assets and liabilities are based on estimates of taxes which will
ultimately be payable. Deferred taxes are recorded to give recog-
advertising and production costs of future media advertising.
Marketing costs, which are included in selling, general and admin-
istrative expenses, were $35.6 million in fiscal 2005, $41.2 million
in fiscal 2004, and $39.4 million in fiscal 2003.
nition to temporary differences between the tax bases of assets
or liabilities and their reported amounts in the financial state-
Net Income Per Share Basic net income per share is computed
by dividing net income by the weighted average number of com-
ments. Valuation allowances are established when it is deemed,
mon shares outstanding. Included in average common shares
more likely than not, that the benefit of deferred tax assets will
outstanding are shares of common stock that option holders have
not be realized.
Insurance Programs We maintain self-insured and deductible
programs for certain liability, medical and workers’ compensation
exposures. Accordingly, we accrue for known claims and esti-
mated incurred but not reported claims not otherwise covered
by insurance, based on actuarial assumptions and historical
claims experience.
Inventories
out cost or market. Inventories at April 30, 2005 are comprised of
Inventories are stated at the lower of first-in, first-
finished goods of $17,411,000 and raw materials of $12,327,000.
Inventories at May 1, 2004 are comprised of finished goods of
$16,349,000 and raw materials of $13,405,000.
elected to defer physical delivery following the exercise of stock
options. Diluted net income per share also includes the dilutive
effect of stock options, which amounted to 675,000 shares (2005),
1,229,000 shares (2004), and 1,320,000 shares (2003).
Property Property is recorded at cost. Property additions, replace-
ments and betterments are capitalized, while maintenance and
repairs that do not extend the useful life of an asset are expensed
as incurred. Depreciation is recorded using the straight-line
method over estimated useful lives of 7 to 30 years for buildings
and improvements, and 3 to 15 years for machinery and equip-
ment. Leasehold improvements are amortized using the straight-
line method over the shorter of the remaining lease term or the
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estimated useful life of the improvement. When assets are retired
that are made based on historical experience and other factors.
or otherwise disposed, the cost and accumulated depreciation
Sales incentives are accounted for as a reduction of revenues and
are removed from the respective accounts and any related gain
actual amounts may vary from reported amounts.
or loss is recognized.
Reclassifications Reclassifications have been made to prior year
amounts to conform to the current year presentation, including
Segment Reporting We operate as a single operating segment
for purposes of presenting financial information and evaluating
performance. As such, the accompanying consolidated financial
reclassifying $9 million of auction rate securities from their previ-
statements present financial information in a format that is consis-
ously reported classification as cash equivalents to marketable
tent with the internal financial information used by management.
securities at May 1, 2004. We have also made corresponding
reclassifications to our Consolidated Statements of Cash Flows
for fiscal 2004 and 2003 to reflect the gross purchases and sales
of these securities as investing activities rather than as a compo-
nent of cash and equivalents.
Revenue Recognition Revenue from product sales is recognized
when title and risk of loss passes to the customer, which generally
occurs upon delivery.
Sales Incentives We offer various sales incentive arrangements
to our customers, which require customer performance or achieve-
Shipping and Handling Costs Shipping and handling costs are
reported in selling, general and administrative expenses in the
accompanying statements of income. Such costs aggregated
$41.4 million in fiscal 2005, $41.4 million in fiscal 2004, and $40.6
million in fiscal 2003.
Stock-Based Compensation We apply Accounting Principles
Board Opinion No. 25, “Accounting for Stock Issued to Employ-
ees” (“APB 25”), and related interpretations, in accounting for
stock-based awards to employees. Under APB 25, we generally
recognize no compensation expense with respect to such awards
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ment of certain sales volume targets. In those circumstances
unless the exercise price of options granted is less than the mar-
when the incentive is paid in advance, we amortize the amount
ket price on the date of grant.
paid over the period of benefit or contractual sales volume. When
We apply Statement of Financial Accounting Standards
the incentive is paid in arrears, we accrue the expected amount
No. 123, “Accounting and Disclosure of Stock-Based Compensa-
to be paid over the period of benefit or expected sales volume.
tion” (“SFAS 123”) for awards granted to non-employees after
The recognition of expense for these incentives involves the use
December 15, 1994. The fair value of option grants was estimated
of judgment related to performance and sales volume estimates
using the Black-Scholes option-pricing model with the following
notes to consolidated financial statements (continued)
assumptions: expected life of 10 years; volatility factor of 41% for
Depreciation expense was $9,492,000 for fiscal 2005, $8,911,000
fiscal 2005, 41% for 2004, and 42% for 2003; risk-free interest rates
for fiscal 2004, and $8,740,000 for fiscal 2003.
of approximately 5% for fiscal 2005, 4% for 2004, and 4% for 2003;
and no dividend payments.
3 . I N TA N G I B L E A S S E T S
Had compensation cost for options granted to employees
Intangible assets as of April 30, 2005 and May 1, 2004 consisted
been recorded using the Black-Scholes option-pricing model, net
of the following:
income and basic and diluted earnings per share for each of the
(In thousands)
2005
2004
last three fiscal years would have been reduced on a pro forma
basis by less than $200,000 and $.01 per share.
Use of Estimates The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying
notes. Although these estimates are based on management’s
knowledge of current events and anticipated future actions,
actual results may vary from reported amounts.
2 . P R O P E R T Y
Property as of April 30, 2005 and May 1, 2004 consisted of the
Nonamortizable trademarks
$ 1,654
$ 1,587
Amortizable distribution rights and other
Less accumulated amortization
Net
Total—net
882
(597)
285
882
(521)
361
$ 1,939 $ 1,948
Amortization expense related to intangible assets was $83,000
for fiscal 2005, $63,000 for fiscal 2004, and $59,000 for fiscal 2003.
4 . AC C R U E D L I A B I L I T I E S
Accrued liabilities as of April 30, 2005 and May 1, 2004 consisted
following:
(In thousands)
Land
Buildings and improvements
Machinery and equipment
Total
Less accumulated depreciation
of the following:
(In thousands)
2005
2004
Accrued compensation
$ 10,187
$ 10,187
Accrued promotions
38,743
37,693
119,850
108,989
168,780
156,869
(105,901)
(97,334)
Other accrued liabilities
Total
Property—net
$ 62,879
$ 59,535
2005
2004
$ 5,383
$ 5,539
4,971
7,936
5,490
7,772
$ 18,290 $ 18,801
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5 . D E B T
On April 30, 2004, the Company paid a special “one-time”
A subsidiary of the Company maintains unsecured revolving credit
cash dividend of $1.00 per share to shareholders of record on
facilities aggregating $45 million (the “Credit Facilities”) with
March 26, 2004, including holders of deferred shares and vested
banks. The Credit Facilities expire through May 1, 2007 and bear
stock options.
interest at ½% below the banks’ reference rate or ¾% above
In January 1998, the Board of Directors authorized the pur-
LIBOR, at the subsidiary’s election. At April 30, 2005, there was
chase of up to 800,000 shares of National Beverage common stock.
no outstanding debt under the Credit Facilities and approxi-
In fiscal 2004 and 2003, we purchased 18,000 shares and 18,250
mately $42 million was available for future borrowings.
shares, respectively, which are classified as treasury stock. There
The Credit Facilities require the subsidiary to maintain certain
were no shares purchased in fiscal 2005. Aggregate shares pur-
financial ratios and contain other restrictions, none of which are
chased since January 1998 were 502,060.
expected to have a material impact on our operations or financial
National Beverage is a party to a management agreement
position. Significant financial ratios and restrictions include: fixed
with Corporate Management Advisors, Inc. (“CMA”), a corporation
charge coverage; net worth ratio; and limitations on incurrence of
owned by the Company’s Chairman and Chief Executive Officer.
debt. At April 30, 2005, we were in compliance with all loan cov-
Under the agreement, the employees of CMA provide our Com-
enants and approximately $25 million of retained earnings were
pany with corporate finance, strategic planning, business devel-
restricted from distribution.
6 . C A PITA L S TO CK A N D TR A NSAC TI O NS W ITH R EL ATE D PA R TIE S
On March 22, 2004, the Company distributed a 100% stock divi-
dend to shareholders of record on March 8, 2004. As a result of
the stock dividend, approximately $183,000, representing the
par value of the shares issued, was reclassified from additional
paid-in capital to common stock. Average shares outstanding,
stock option data and per share data presented in these financial
opment and other management services for an annual base fee
equal to one percent of consolidated net sales plus incentive
compensation based on certain factors to be determined by the
Compensation Committee of our Company’s Board of Directors.
We incurred fees to CMA of $5.0 million for fiscal 2005, $5.1 million
for fiscal 2004, and $5.0 million for fiscal 2003. No incentive com-
pensation has been incurred or approved under the management
agreement since its inception. Included in accounts payable at
April 30, 2005 and May 1, 2004 were amounts due CMA of $1.2
statements have been adjusted retroactively for the effects of
million and $1.3 million, respectively.
the stock dividend.
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notes to consolidated financial statements (continued)
7. OT H E R I N C O M E
Other income consisted of the following:
(In thousands)
Interest income
Loss on sale of assets, net
Gain on contract settlement
2005
2004
2003
$ 581
$
603
$
816
(15)
633
(59)
—
(110)
—
Deferred taxes are recorded to give recognition to tempo-
rary differences between the tax bases of assets or liabilities and
their reported amounts in the financial statements. Valuation
allowances are established when it is deemed, more likely than
not, that the benefit of deferred tax assets will not be realized.
Our deferred tax assets and liabilities as of April 30, 2005 and
May 1, 2004 consisted of the following:
Total
$ 1,199
$
544
$
706
(In thousands)
8 . I N C O M E TA X E S
The provision for income taxes consisted of the following:
Deferred tax assets:
Accrued expenses and other
Inventory and amortizable assets
(In thousands)
Current
Deferred
Total
2005
2004
2003
Total deferred tax assets
$ 8,645
$ 11,265
$ 8,163
891
143
2,709
$ 9,536
$ 11,408
$ 10,872
Deferred tax liabilities:
Property
Intangibles and other
Total deferred tax liabilities
2005
2004
$ 2,280
$ 3,074
279
388
2,559
3,462
16,492
14,861
266
1,909
16,758
16,770
The reconciliation of the statutory federal income tax rate to
Net deferred tax liabilities
$ 14,199
$ 13,308
our effective tax rate was as follows:
Statutory federal income tax rate
State income taxes, net of federal benefit
Other differences
2005 2004 2003
35.0% 35.0% 35.0%
3.0
(1.9)
3.0
(.1)
2.9
.3
Effective income tax rate
36.1% 37.9% 38.2%
Current deferred tax assets—net
$ 1,759
$ 1,622
Noncurrent deferred tax liabilities—net
$ 15,958
$ 14,930
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9. I N C E N T I V E A N D R E T I R E M E N T P L A N S
options to purchase up to 100,000 shares of common stock to be
The 1991 Omnibus Incentive Plan (the “Omnibus Plan”) provides
for compensatory awards consisting of (i) stock options or stock
awards for up to 4,000,000 shares of common stock, (ii) stock
appreciation rights, dividend equivalents, other stock-based
awards in amounts up to 4,000,000 shares of common stock and
(iii) performance awards consisting of any combination of the
above. The Omnibus Plan is designed to provide an incentive to
the officers (including those who are also directors) and certain
other key employees and consultants of our Company by making
available to them an opportunity to acquire a proprietary interest
or to increase such interest in National Beverage. The number of
shares or options which may be issued under stock-based awards
to an individual is limited to 1,400,000 during any year. Awards
may be granted for no cash consideration or such minimal cash
consideration as may be required by law. Options generally vest
over a five-year period and expire after ten years.
Pursuant to a Special Stock Option Plan, National Beverage
has authorized the issuance of options to purchase up to an
aggregate of 1,500,000 shares of common stock. Options may be
granted for such consideration as determined by the Board of
Directors. National Beverage also authorized the issuance of
issued at the direction of the Chairman.
The Key Employee Equity Partnership Program (“KEEP Pro-
gram”) provides for the granting of stock options to purchase up
to 200,000 shares of common stock to key employees, consul-
tants, directors and officers of the Company. Participants who
purchase shares of stock in the open market receive grants of
stock options equal to 50% of the number of shares purchased,
up to a maximum of 12,000 shares in any two-year period. Options
under the KEEP Program are automatically forfeited in the event
of the sale of shares originally acquired by the participant. The
options are granted at an initial exercise price of 60% of the pur-
chase price paid for the shares acquired and reduces to the par
value of the stock at the end of the six-year vesting period. The
difference between the exercise price and the fair market value of
the stock on date of grant is amortized over the vesting period.
The 1991 Stock Purchase Plan provides for the purchase of up
to 1,280,000 shares of common stock by employees who (i) have
been employed by our Company for at least two years, (ii) are not
part-time employees and (iii) are not owners of five percent or
more of National Beverage common stock. As of April 30, 2005,
no shares have been issued under the plan.
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notes to consolidated financial statements (continued)
The following is a summary of stock option activity:
The following is a summary of stock options outstanding as
2005
2004
2003
of April 30, 2005:
(Shares in thousands)
Shares Price(1)
Shares Price(1) Shares Price(1)
(Shares in thousands)
Options Outstanding
Options Exercisable
Outstanding at
beginning of year
1,033
$2.82
1,869
$2.17
1,993
$2.30
Range of
Exercise Price
Remaining
Life(1)
Shares
Exercise
Price(2)
Shares
Exercise
Price(2)
Options granted
Options exercised
Options canceled
Outstanding at
year-end
Exercisable at
year-end
Available for grant at
15
(56)
(16)
4.61
2.60
2.99
15
(748)
(103)
5.33
1.14
2.19
1
(82)
(43)
4.21
1.48
2.33
976
2.81
1,033
2.82
1,869
2.17
$ .01–$1.91
$2.07–$2.84
$3.20–$3.69
$4.06–$6.82
4 years
5 years
7 years
9 years
7 years
235
388
185
168
976
$ .92
2.60
3.67
4.98
2.81
212
292
142
145
791
$ .92
2.53
3.69
4.94
2.75
(1) Reflects weighted average remaining contractual life.
791
$2.75
817
$2.74
1,629
$2.03
(2) Reflects weighted average exercise price.
year-end
2,960
2,459
2,351
Weighted average
fair value of
options granted
$6.01
$5.37
$4.59
(1) Reflects weighted average exercise price except where noted.
During fiscal 2005, 2004 and 2003, approximately $361,000,
$1,160,000, and $171,000, respectively, of accrued compensation
and tax benefits related to stock options exercised was credited
to additional paid-in capital. In addition, tax benefits related to
cash dividends paid to holders of deferred shares and vested
stock options aggregating $527,000 was credited to additional
paid-in capital in fiscal 2005.
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The Company contributes to certain pension plans under
From time to time, we are a party to various litigation matters
collective bargaining agreements based on hours worked and to
arising in the ordinary course of business. In our opinion, the ulti-
a discretionary profit sharing plan, neither of which have any long-
mate disposition of such matters will not have a material adverse
term contractual funding requirements. Contributions were $2.3
effect on our consolidated financial position or results of operations.
million for fiscal 2005, $2.2 million for fiscal 2004, and $2.2 million
for fiscal 2003.
11. S U B S E Q U E N T E V E N T S
10 . C O M M I T M E N T S A N D C O N T I N G E N C I E S
In June 2005, we received approximately $7.7 million from the
settlement of our claim in a class action lawsuit known as “In re: High
We lease buildings, machinery and equipment under various
Fructose Corn Syrup Antitrust Litigation Master File No. 95-1477 in
non-cancelable operating lease agreements expiring at various
the United States District Court for the Central District of Illinois.”
dates through 2012. Certain of these leases contain scheduled
The lawsuit related to purchases of high fructose corn syrup made
rent increases and/or renewal options. Contractual rent increases
by the Company and others. The settlement amount was allo-
are taken into account when calculating the minimum lease pay-
cated to each class action recipient based on the proportion of
ment and recognized on a straight-line basis over the lease term.
its purchases to total purchases by all class action recipients. The
Rent expense under operating lease agreements totaled approx-
proceeds less certain offsets and expenses will be recorded in
imately $9,298,000 for fiscal 2005, $8,828,000 for fiscal 2004, and
our first quarter ended July 30, 2005. The amount received to
$8,934,000 for fiscal 2003.
date represents approximately 90% of the expected recovery and
Our minimum lease payments under non-cancelable operat-
payment of the remaining balance is subject to final resolution of
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ing leases as of April 30, 2005 are as follows:
all claims.
(In thousands)
Fiscal 2006
Fiscal 2007
Fiscal 2008
Fiscal 2009
Fiscal 2010
Thereafter
Total minimum lease payments
$ 4,866
2,720
1,608
1,024
287
225
$10,730
notes to consolidated financial statements (concluded)
12 . Q UA R T E R LY F I N A N C I A L DATA ( U N AU D I T E D )
(In thousands, except per share amounts)
First Quarter
Second Quarter Third Quarter Fourth Quarter
Fiscal 2005
Net sales
Gross profit
Net income
Net income per share—basic
Net income per share—diluted
Fiscal 2004
Net sales
Gross profit
Net income
Net income per share—basic
Net income per share—diluted
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$146,512
$124,858
$103,511
$120,691
48,337
8,856
$ .24
$ .23
39,482
4,120
$ .11
$ .11
32,542
586
$ .02
$ .02
35,005
3,324
$ .09
$ .09
$145,665
$129,373
$107,026
$129,997
48,628
8,450
$ .23
$ .22
42,342
4,021
$ .11
$ .11
35,164
1,356
$ .04
$ .04
42,611
4,864
$ .13
$ .13
report of independent registered certified public accounting firm
To the Board of Directors and
Shareholders of National Beverage Corp.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, shareholders’ equity
and cash flows present fairly, in all material respects, the financial position of National Beverage Corp. and its subsidiaries at April 30,
2005 and May 1, 2004, and the results of their operations and their cash flows for each of the three years in the period ended April 30,
2005, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance with 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 dis-
closures in the financial statements, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Fort Lauderdale, Florida
July 29, 2005
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market for registrant’s common equity, related stockholder matters and
issuer purchases of equity securities
The common stock of National Beverage Corp., par value $.01 per share, (“the Common Stock”) is listed on the American Stock
Exchange (“AMEX”) under the symbol “FIZ.” The following table shows the range of high and low sale prices per share of the Common
Stock as reported by the AMEX for the fiscal quarters indicated:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal 2005
Fiscal 2004
High
Low
High
Low
$ 10.29
$ 9.30
$ 9.89
$7.50
$7.74
$8.06
$ 7.70
$ 7.69
$ 8.37
$6.75
$6.98
$7.43
$ 9.20
$7.00
$ 11.60
$8.05
Excluding beneficial owners of our Common Stock whose securities are held in the names of various dealers and/or clearing agencies,
there were approximately 800 shareholders of record at July 15, 2005, according to records maintained by our transfer agent.
On April 30, 2004, the Company paid a special “one-time” cash dividend of $1.00 per share. Currently, the Board of Directors has
no plans to declare additional cash dividends. See Note 5 of Notes to Consolidated Financial Statements for certain restrictions on the
payment of dividends.
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corporate data
D I R E C T O R S
Nick A. Caporella
Chairman of the Board
& Chief Executive Officer
National Beverage Corp.
Joseph G. Caporella
President
National Beverage Corp.
Samuel C. Hathorn, Jr.*
President
Trendmaker
Development Co.
S. Lee Kling*
Chairman of the Board
The Kling Company
Joseph P. Klock, Jr., Esq.*
Senior Partner
Steel, Hector & Davis
*Member Audit Committee
C O R P O R AT E
M A N AG E M E N T
Nick A. Caporella
Chairman of the Board
& Chief Executive Officer
Joseph G. Caporella
President
Edward F. Knecht
Executive Vice President—
Procurement
George R. Bracken
Senior Vice President—
Finance
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Dean A. McCoy
Senior Vice President &
Chief Accounting Officer
Raymond J. Notarantonio
Executive Director—IT
John S. Bartley
Director—Internal Audit
Paul L. Barton
Director—Human Resources
Brent R. Bott
Director—Consumer
Marketing
H. Don Hatcher
Director—Insurance
Gregory J. Kwederis
Director—Beverage Analyst
Lawrence P. Parent
Director—Credit
Management
S U B S I D I A R Y
M A N AG E M E N T
Edward F. Knecht
President
Shasta Sweetener Corp.
PACO, Inc.
William R. Phillips
President
National BevPak
Sanford E. Salzberg
President
Shasta, Inc.
Michael J. Bahr
Executive Vice President
Shasta West, Inc.
Alan A. Chittaro
Executive Vice President
Faygo Beverages, Inc.
Alan D. Domzalski
Executive Vice President
Everfresh Beverages, Inc.
Brian M. Gaggin
Executive Vice President
National Retail Brands, Inc.
Charles A. Maier
Executive Vice President
Foodservice
Shasta Sales, Inc.
Victor R. Nastasia
Executive Vice President
Sundance Beverage
Company
Michael J. Perez
Executive Vice President
Shasta Midwest, Inc.
Dennis L. Thompson
Executive Vice President
BevCo Sales, Inc.
John F. Hlebica
Vice President
Shasta Beverages
International, Inc.
Worth B. Shuman, III
Vice President
Military Sales
Martin J. Rose
General Manager
Shasta Vending
S U B S I D I A R I E S
BevCo Sales, Inc.
Beverage Corporation
International, Inc.
Big Shot Beverages, Inc.
Everfresh Beverages, Inc.
Faygo Beverages, Inc.
Home Juice Corp.
National Retail Brands, Inc.
NewBevCo, Inc.
PACO, Inc.
Shasta Beverages, Inc.
Shasta Beverages
International, Inc.
Shasta, Inc.
Shasta Midwest, Inc.
Shasta Northwest, Inc.
Shasta Sales, Inc.
Shasta Sweetener Corp.
Shasta West, Inc.
Sundance Beverage
Company
C O R P O R AT E O F F I C E S
One North University Drive
Fort Lauderdale, FL 33324
954-581-0922
A N N UA L M E E T I N G
The Annual Meeting of
Shareholders will be held
on Friday, September 30,
2005 at 2:00 p.m. local
time at the Hyatt Regency
Orlando International
Airport, 9300 Airport
Boulevard, Orlando,
FL 32827.
F I N A N C I A L A N D
O T H E R I N F O R M AT I O N
Copies of National
Beverage Corp.’s Annual
Report, Annual Report
on Form 10-K and supple-
mental quarterly financial
data are available free of
charge on our website or
contact our Shareholder
Relations department at
the Company’s corporate
address listed above or
at 888-4-NBCFIZ.
Earnings and other financial
results, corporate news and
other Company information
are available on National
Beverage’s website at
www.nationalbeverage.com.
S T O C K E X C H A N G E
L I S T I N G
Common Stock is listed on
the American Stock
Exchange—symbol FIZ.
T R A N S F E R AG E N T A N D
R E G I S T R A R
Mellon Investor Services LLC
P.O. Box 3315
South Hackensack, NJ
07606
877-484-5045
www.melloninvestor.com
I N D E P E N D E N T
A U D I T O R S
PricewaterhouseCoopers LLP
Ft. Lauderdale, FL
management’s discussion and analysis of financial condition and results of operations (continued)
NATIONAL BEVERAGE CORP.
ONE NORTH UNIVERSITY DRIVE, FORT LAUDERDALE, FLORIDA 33324
954-581-0922 WWW.NATIONALBEVERAGE.COM
ty
innovation and evolution...nutrients for profound opportuni
revolut
ion,
.when better is attainable revolution is the staircase to innovation
.
good is not enough.
a constant progressive change
ev•o•lu•tion
a radical and pervasive movement
rev•o•lu•tion
n atio n a l b eve ra g e co r p.
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20 0 5 a n n u a l re p o r t