In the beginning…
Clean, Fresh
Mountain Water
from
Mt. Shasta
NATIONAL
BEVERAGE
CORP.
2014 Annual Report
FRESH
$1.3
BILLION
2,988%
GROWTH OVER
22 YEARS
Water is our life at National
Beverage Corp.
...soda water, carbonated
water, sparkling water and
flavored water. These last 22
years from a humble start,
we were able to generate
a value for many; reaching
nearly $1.3 billion. We
dedicate our thanks to all
who played a part in these
wonderful drops of water.
May our wonderful future
together bring all of us much
happiness and prosperity!
CLEARLY
POWERFUL
$42
MILLION
“
ALL GREATNESS . . .
STARTS WITH THE NEED FOR IT!
”
Coves and waters at the shoreline of serenity . . .
This place where peace is present and thoughts of business
and our Company seem more in focus – kind of like the
perception from a slow moving hot-air balloon. Writing
this Annual Report message here is anticipatory – with
good thoughts abounding!
Prior to this writing, I planned to say as little as possible
about FY2014 and place more emphasis on the future; no
excuse or explanation will make up the difference between
our reported results and our target. We feel that the first
quarter is on track and our humility influences us to be a
smarter, better team. FY2014 validated that our creative
once again ‘hit’ the mark with Cúrate. That’s a certainty
. . . and a just farewell to a so-so year.
1979 . . .
One evening years ago in a crowded Omni ballroom, I
slightly stooped enabling a special man to encircle my neck
with a very coveted American award. At 43 and quite
young for a public company green CEO, notwithstanding
being an awardee also . . . the man, as he embraced me,
whispered in my ear, “Think Nick – time allows you to
seek a unique destiny! Congratulations . . . ” Dr. Norman
Vincent Peale, the noted character who empowered
thousands with his ‘Power of Positive Thinking’ – mentally
embraced me with his stimulating words. These words
would have been excellent for any corporate youngster –
and, most especially for me, so embroiled at that time.
Today, those words of promise by Dr. Peale are just as
meaningful as that special evening many years ago – in
fact . . . maybe more so! Why? Opportunity is more
prolific than at any time in the recent past, while time is
so frugal with her charity.
FY2015 . . .
While actual time may be limited certainly – this present time is
especially perfect for National Beverage to lead the transformation
within the soft drink industry. Our discipline to place the long-range
interests of shareholders ahead of short-term gains, our flexibility of
speed to market and our creativity that leads the industry, places us
at the forefront to innovate the gravitating ‘crossover’ consumer. We
are sincerely committed to the health and wellness consumer and
plan to expedite our innovation across all of our brands.
Authenticity in a beverage is . . . and All-ways will be . . . Sparkling
Pure (Innocent) Water!
High Yield Ideas . . .
There is but one ultimate goal in a public company and that is to
create shareholder value! How much and how long it takes – is the
dynamic paradigm.
Sparkling water refreshment, juice and juice drinks and Rip It functional
beverages are the categories of preference for our Company. These
are proving to not only be a must choice for the health-conscious
consumer, but also are oriented to the more athletic and resourceful
enthusiast.
In our FY2013 Annual Report, we announced a plan to develop Shasta’s
new sparkling waters. At this time, we have finalized packaging,
graphics and formulations for duplicating the famous delicious flavors
that kept Shasta Cola, Shasta Root Beer, Shasta Black Cherry and
SPARKLING WATER CONSUMPTION
(PER CAPITA)
USA 24 8 OZ. DRINKS
EUROPE AREA EST.
137 8 OZ. DRINKS
As CSD’s (Diet & Regular) decline and Sparkling Water in USA grows
to match Europe – the category will expand $6.1 billion from present.
8 OZ. DRINK CONSUMPTION
561
GERMANY
325
AUSTRIA
305
HUNGARY
275
SWITZERLAND
245
ITALY
the other wonderful Shasta flavorites as America’s true
iconic flavors. A healthier Shasta is on its way . . .
Within this message, we have provided a chart showing
that the European consumer has switched to healthier
beverages and foresee the North American consumer to
follow this trend. You will notice that countries consuming
more and more sparkling waters are doing so because of
more health-conscious and smarter consumers. Likewise,
we believe that more and more carbonated cola drinkers
in North America will be crossover regulars to our Shasta
sparkling and LaCroix sparkling water beverages. A healthier,
no calorie, no harm (Innocent) refreshment such as LaCroix
Cúrate has recently become the number one choice of
North American health-conscious consumers coast to coast.
Conclusion . . .
Bold, innovative dynamics offering a total family beverage
(namely LaCroix with various themes), will continue to
unfold throughout the balance of FY2015. We have
chosen LaCroix as that family beverage due to the wide
acceptance of LaCroix Cúrate. Chateaux LaCroix, LaCroix
Jardin and a new package, LaCroix teen drink, are under
development and nearing market presentation. We have
just tested and released LaCroix NiCola which will allow that
cola enthusiast to continue to enjoy a great essence,
taste and soothing refreshment in a sodium – calorie –
sweetener ‘Innocent’ (fabulously beautiful) tall, fun container.
We do not have to say healthy any longer when we say
LaCroix – LaCroix exemplifies the true definition of healthy.
It truly does . . . Yes!
Our brands and their potential represent the maximum
value creation of our Company. Over the recent months,
we have stated that the maximum value of certain of our
brands would be achieved by enhancement of distribution.
More recent interests have necessitated the plan to
formalize a method to further this exploration.
National Beverage Corp. has enjoyed providing yield and
dividend returns to its shareholders, consumers and
employees for the past 22 years. $100 of investment
22 years ago would have provided $4,115 in yield and
appreciation at the end of FY2014 and also a tremendous
amount of heartfelt fun and excitement. My personal goal
is to make good on my promise to have everyone enjoy
a Happy Ending to the story of . . . ! Maybe
Dr. Norman Vincent Peale was a bit of a psychic and saw
that my destiny was refreshments, caring and goodness
. . . and our National Beverage Corp. would prove to
be the ultimate corporate vehicle in which to make that
dream come true. What better way could there be to
generate a happy conclusion – but through the use of the
. . . ‘Power of Positive Thinking’!
Patience – Innovation – Agility – Timing = Excellent Results!
(As the story goes, this worked for a Fabled Goose – but I also think it
could be the formula for teaching that Goose to provide more than – one!)
Magnificently Essenced LaCroix to you – and a Refreshingly
Prosperous FY2015.
Let’s tip a can of LaCroix NiCola together – Cheers!
Nick A. Caporella
Chairman and Chief Executive Officer
…HEALTHY OUTLOOK …HEALTHY ATTITUDE PEOPLE WILL ALWAYS BUY . . .
WHAT’S STUNNING TO THE EYE.
CÚRATE . . . DOES IT!
(COO-RAH-TAY) . . . Say it,
adore it, embrace its beauty
and love its taste. We have
created bold, vivid flavors that
will ‘cure’ your longing for the
best. Cúrate means ‘to cure
yourself.’ Do it . . .
GET YOUR
TUMMY
READY FOR AN
ORCHARD TREAT –
DELICIOUS
EVERFRESH
APPLES!
Juice – Juice Drinks – Rip It Energy
and enhanced beverages are in
our portfolio for the consumer who
wants more functionality along with
refreshment! And they do just that
. . . many good things for many
good choices!
CHOOSE A FAVORITE . . . AND
MAKE REALITY TASTE GREAT!
7
SHASTA IS TRUST . . .
IN A PACKAGE OF HEALTH –
CARBONATED WATER,
NATURALLY ESSENCED!
Once in a lifetime – a great
soda is transformed into a
distinctive tasting sparkling
water – a special formula
makes it . . . Fabulous!
YES . . . THE TREE OF LIFE SAYS:
LET ZEST BE YOUR WAY OF LIFE!
Parties – weddings – picnics are times
for celebration. Family outings create
a scrapbook of reflections touching the
heart. Shasta makes memories . . .
memorable! Smile . . .
EARNING TRUST SINCE 1889
NOSTALGIC MEMORIES ARE
125
FLAVORS OF THE MIND . . .
years
8
…HEALTHY FEELING …HEALTHY LIFESTYLE HEALTHY, SEXY LOOKING
PACKAGES CREATE BIG DESIRE . . .
FOR NICOLA!
Cola, an All-American favorite,
can now be enjoyed by a smart,
healthy, savvy consumer with
(Innocent) repercussions!
The essence will tickle your
taste buds – then Wow . . .
you’ll never go back to the
. . . ‘same old’ cola!
ENGAGING LACROIX NICOLA . . .
WITH LA COLA MAKES JOY A DARING
DEBUT – TRY IT!
LaCroix flavors are not just a
name on a package, but instead
a package of vibrant . . . always
tempting, always delicious, always
. . . LaCroix!
NATURAL FUN FLAVORS ARE THE
ESSENCE OF . . . LACROIX!
11
OFTEN A FLINCH IN ONE’S HONOR –
CONCERNING DISAPPOINTING PERFORMANCE . . .
ACUTELY HEIGHTENS THEIR DETERMINATION –
WHILE FUELING THEIR SENSE OF URGENCY . . .
FY2014 Revenues $641 mil Net Income $44 mil EPS $.93
There is no line upon which to record certain
values – the richness of Character; the
robustness of Passion; the wealth of Creativity
and, most precious, the strength of our Will!
Do intently probe our results! For within each
and every symbol, comma or simply a dash . . .
is embodied our supreme worth –
the intensity of our determination and the
power of our – Focus!
W
E
I
V
E
R
L
A
I
C
N
A
N
I
F
NATIONAL BEVERAGE CORP.
SELECTED FINANCIAL DATA
(In thousands, except per share and footnote amounts)
SUMMARY OF OPERATIONS:
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Interest expense
Other expense—net
Income before income taxes
Provision for income taxes
Net income
PER SHARE DATA:
Basic earnings per common share(1)
Diluted earnings per common share(1)
Closing stock price
Dividends paid on common stock(2)
BALANCE SHEET DATA:
Cash and equivalents(2)
Working capital(2)
Property, plant and equipment—net
Total assets(2)
Long-term debt
Deferred income tax liability
Shareholders’ equity(2)
Dividends paid on common stock(2)
Fiscal Year Ended
May 3,
2014(3)
April 27,
2013
April 28,
2012
April 30,
2011
May 1,
2010
$ 641,135
423,480
$ 662,007
444,757
$ 628,886
415,629
$ 600,193
381,539
$ 593,465
396,450
217,655
153,220
660
666
63,109
19,474
217,250
146,223
403
173
70,451
23,531
213,257
146,169
107
85
66,896
22,903
218,654
155,885
99
20
62,650
21,896
197,015
145,159
120
351
51,385
18,532
$ 43,635
$ 46,920
$ 43,993
$ 40,754
$ 32,853
$
.93
.92
19.21
—
$
1.01
1.01
14.57
2.55
$
.95
.95
14.68
—
$
.88
.88
13.92
2.30
$
.71
.71
11.60
1.35
$ 29,932
78,618
59,494
222,841
30,000
13,873
106,201
$ 18,267
67,504
57,307
208,642
50,000
14,327
70,316
— 118,139
$ 35,626
69,818
56,729
222,988
—
14,214
121,636
$ 7,372
30,930
55,337
182,810
—
14,548
80,336
— 106,314
$ 68,566
92,898
53,401
240,359
—
15,597
141,572
62,295
(1) Basic earnings per common share is computed by dividing earnings available to common shareholders by the weighted average number
of common shares outstanding. Diluted earnings per common share includes the dilutive effect of stock options.
(2) The Company paid special cash dividends on Common Stock of $118.1 million ($2.55 per share) on December 27, 2012, $106.3 million
($2.30 per share) on February 14, 2011 and $62.3 million ($1.35 per share) on January 22, 2010.
(3) Fiscal 2014 consisted of 53 weeks.
14
NATIONAL BEVERAGE CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
National Beverage Corp. is an acknowledged leader in
the development, manufacturing, marketing and sale
of a diverse portfolio of flavored beverage products.
Our primary market focus is the United States, but our
products are also distributed in Canada, Mexico, the
Caribbean, Latin America, the Pacific Rim, Asia,
Europe and the Middle East. A holding company for
various operating subsidiaries, National Beverage
Corp. was incorporated in Delaware in 1985 and began
trading as a public company on the NASDAQ Stock
Market in 1991. In this report, the terms “we,” “us,”
“our,” “Company” and “National Beverage” mean
National Beverage Corp. and its subsidiaries unless
indicated otherwise.
Our brands consist of (i) beverages geared toward
the active and health-conscious consumer (“Power+
Brands”), including energy drinks and shots, juices,
sparkling waters and enhanced beverages, and (ii)
Carbonated Soft Drinks in a variety of flavors as well as
regular, diet and reduced-calorie options. In addition,
we produce soft drinks for certain retailers (“Allied
Brands”) that endorse the “Strategic Alliance” concept
of having our brands and Allied Brands marketed
to effectuate enhanced growth of both. We employ a
philosophy that emphasizes vertical integration; our
manufacturing model integrates the procurement of
raw materials and production of concentrates with
the manufacture of finished products in our twelve
manufacturing facilities. To service a diverse customer
base that includes numerous national retailers as well
as thousands of smaller “up-and-down-the-street”
accounts, we have developed a hybrid distribution
system that promotes and utilizes customer warehouse
distribution facilities and our own direct-store delivery
fleet plus the direct-store deliver y systems of
independent distributors and wholesalers.
We consider ourselves to be a leader in the
development and sale of flavored beverage products.
The National Beverage Corp. brand portfolio contains
a wide variety of beverages to meet consumer needs
in a multitude of market segments. Our portfolio of
Power+ Brands is targeted to consumers seeking
healthier and functional alternatives to complement
their active lifestyles, and includes LaCroix® and
LaCroix Cúrate™ sparkling water products; Rip It®
energy drinks and shots; and Everfresh® and Everfresh
Premier Varietals™, 100% juice and juice-based
products. Our Carbonated Sof t Drink flavor
development spans 125 years originating with our
flagship brands, Shasta® and Faygo®.
Our strategy emphasizes the growth of our
products by (i) expanding our focus on healthier and
functional beverages tailored toward healthy, active
lifestyles, (ii) offering a beverage portfolio of proprietary
flavors with distinctive packaging and broad
demographic appeal, (iii) supporting the franchise
value of regional brands, (iv) appealing to the “quality-
value” expectations of the family consumer, and (v)
responding to demographic trends by developing
innovative products designed to expand distribution.
The majority of our sales are seasonal with the
highest volume typically realized during the summer
months. As a result, our operating results from one
fiscal quarter to the next may not be comparable.
Additionally, our operating results are affected by
numerous factors, including fluctuations in the costs
of raw materials, changes in consumer preference
for beverage products, competitive pricing in the
marketplace and weather conditions.
15
NATIONAL BEVERAGE CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
RESULTS OF OPERATIONS
Net Sales Net sales for the fiscal year ended May 3,
2014 (“Fiscal 2014”) decreased 3.2% to $641.1 million
as compared to $662.0 million for the fiscal year ended
April 27, 2013 (“Fiscal 2013”). The lower sales resulted
from a 7.5% volume decline in Carbonated Soft Drinks,
principally due to extended periods of unfavorable
weather conditions and industry-wide consumption
decline. This volume decline was partially offset by
case volume growth of 8.2% for our Power+ Brands.
Average net selling price per case was approximately
the same for both years.
Net sales for the fiscal year ended April 27, 2013
Shipping and handling costs are included in selling,
general and administrative expenses, the classification
of which is consistent with many beverage companies.
However, our gross margin may not be comparable to
companies that include shipping and handling costs in
cost of sales. See Note 1 of Notes to Consolidated
Financial Statements.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were
$153.2 million or 23.9% of net sales for Fiscal 2014
compared to $146.2 million or 22.1% of net sales for
Fiscal 2013. Fiscal 2014 expenses reflect higher selling
and mar keting costs, primarily due to increased
increased 5.3% to $662.0 million as compared to
advertising expenses.
$628.9 million for the fiscal year ended April 28, 2012
(“Fiscal 2012”). This sales improvement is due to case
volume growth of our Power+ Brands of 5.4% and
growth of Carbonated Soft Drinks, which includes
Allied Brands, of 6.4%. Average net selling price
per case decreased .8% primarily due to changes in
Selling, general and administrative expenses were
$146.2 million or 22.1% of net sales for Fiscal 2013
compared to $146.2 million or 23.2% of net sales
for Fiscal 2012. Fiscal 2013 expenses reflect higher
shipping and handling costs due to increased case
volume, offset by reduced marketing and administrative
product mix.
expenses.
Gross Profit Gross profit was 33.9% of net sales
for Fiscal 2014, which represents a 1.1% margin
improvement compared to Fiscal 2013. The gross
margin improvement is primarily due to favorable
product mix changes and lower raw material costs.
Cost of sales decreased 1.7% on a per case basis.
Gross profit was 32.8% of net sales for Fiscal
2013, which represents a 1.1% margin decline
compared to Fiscal 2012. The gross margin decline is
primarily due to product mix changes. Cost of sales
increased .8% on a per case basis.
Interest Expense and Other Expense—Net Interest
expense is comprised of interest on borrowings and
fees related to maintaining lines of credit. The Company
paid a special cash dividend of $118.1 million ($2.55
per common share) on December 27, 2012 from
available cash and borrowings under our credit
facilities. Due to increased borrowings, interest
expense increased to $660,000 in Fiscal 2014 from
$403,000 in Fiscal 2013 and $107,000 in Fiscal 2012.
Other expense is net of interest income of $15,000
for Fiscal 2014, $37,000 for Fiscal 2013 and $69,000
for Fiscal 2012. The decline in interest income for
Fiscal 2014 and Fiscal 2013 is due to lower average
invested balances.
16
Income Taxes Our effective tax rate would have been
with the partial redemption, the annual dividend rate
approximately 34%* for Fiscal 2014, compared with
on the outstanding Series D Preferred was reduced to
33.4% for Fiscal 2013 and 34.2% for Fiscal 2012. The
2.5% for the twelve month period beginning May 1,
difference between the effective rate and the federal
2014. See Note 5 of Notes to Consolidated Financial
statutory rate of 35% was primarily due to the effects
Statements.
of state income taxes, the manufacturing deduction;
The Company paid special cash dividends on
and for Fiscal 2014, adjustment of unrecognized tax
common stock of $118.1 million ($2.55 per share) on
benefits related to the resolution of certain open tax
December 27, 2012, $106.3 million ($2.30 per share)
years, which resulted in a 30.9% tax rate. *See Note 7
on February 14, 2011 and $62.3 million ($1.35 per
of Notes to Consolidated Financial Statements.
share) on January 22, 2010.
LIQUIDITY AND FINANCIAL CONDITION
Liquidity and Capital Resources Our principal
source of funds is cash generated from operations and
borrowings available under our credit facilities. At
May 3, 2014, we maintained $100 million unsecured
revolving credit facilities, of which $30 million of
Pursuant to a management agreement, we incurred
a fee to Corporate Management Advisors, Inc. (“CMA”)
of approximately $6.4 million for Fiscal 2014, $6.6
million for Fiscal 2013 and $6.3 million for Fiscal 2012.
At May 3, 2014, management fees payable to CMA
were $1.6 million. See Note 5 of Notes to Consolidated
Financial Statements.
borrowings were outstanding and $2.2 million was
Cash Flows During Fiscal 2014, $52.4 million was
used for standby letters of credit. We believe that
provided by operating activities, $12.1 million was used
existing capital resources will be sufficient to meet our
in investing activities and $28.7 million was used
liquidity and capital requirements for the next twelve
in financing activities. Cash provided by operating
months. See Note 4 of Notes to Consolidated Financial
activities increased $12.1 million primarily due to
Statements.
changes in working capital. Cash used in investing
We continually evaluate capital projects to
activities increased to $12.1 million reflecting higher
expand our production capacity, enhance packaging
capital expenditures in Fiscal 2014. Cash used in
capabilities or improve efficiencies at our manufacturing
financing activities was $28.7 million reflecting $8
facilities. Expenditures for proper ty, plant and
million redemption of preferred stock and $20 million
equipment amounted to $12.1 million for Fiscal
repayment of debt.
2014. There were no material capital expenditure
During Fiscal 2013, $40.3 million was provided by
commitments at May 3, 2014.
operating activities, which was offset by $9.6 million
On January 25, 2013, the Company sold 400,000
used in investing activities and $48.0 million used in
shares of Special Series D Preferred Stock (“Series D
financing activities. Cash provided by operating
Preferred”), par value $1 per share for an aggregate
activities increased $2.6 million primarily due to
purchase price of $20 million. On May 2, 2014, the
increased earnings. Cash used in financing activities
Company redeemed 160,000 shares of Series D
increased $48.4 million due to the special dividend
Preferred, representing 40% of the amount outstanding,
payment of $118.1 million in Fiscal 2013, partially offset
for an aggregate price of $8 million. In conjunction
17
NATIONAL BEVERAGE CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
by $19.7 million in proceeds from the issuance of the
During Fiscal 2013, our working capital decreased
Series D Preferred and $50.0 million in net borrowings
$2.3 million to $67.5 million due to a decline in cash
under credit facilities.
Financial Position During Fiscal 2014, our working
capital increased $11.1 million to $78.6 million primarily
due to cash generated from operating activities. Trade
receivables decreased $5.9 million due to lower sales
activity as days sales outstanding remain unchanged
at 34.7 days. Inventories increased $4.7 million primarily
due to higher quantities related to new products and to
support more frequent customer promotions. At May
3, 2014, the current ratio was 2.2 to 1 as compared to
2.1 to 1 at April 27, 2013.
resulting from the payment of the special cash
dividend. Trade receivables increased $2.5 million,
which represents an increase in days sales outstanding
from approximately 33.9 days to 34.7 days, and
inventories decreased $1.6 million, which represents
an improvement in annual inventory turns from 11.0
to 11.2 times. Accounts payable decreased $10.6
million due to the timing of payments to vendors
at the end of the fiscal year. At April 27, 2013, the
current ratio was 2.1 to 1 as compared to 1.9 to 1 at
April 28, 2012.
CONTRACTUAL OBLIGATIONS
Contractual obligations at May 3, 2014 are payable as follows:
(In thousands)
Long-term debt
Operating leases
Purchase commitments
Total
Total
$ 30,000
19,548
32,847
Less Than
1 Year
1 to 3
Years
3 to 5
Years
More Than
5 Years
$ — $ 30,000
7,248
—
4,768
32,847
$ —
5,055
—
$ —
2,477
—
$ 82,395
$37,615
$ 37,248
$ 5,055
$2,477
As of May 3, 2014, we guaranteed the residual
We contribute to certain pension plans under
value of certain leased equipment in the amount of
collective bargaining agreements and to a discretionary
$5.3 million. If the proceeds from the sale of such
profit sharing plan. Total contributions were $2.7
equipment are less than the balance required by the
million for Fiscal 2014, $2.6 million for Fiscal 2013 and
lease when the lease terminates July 31, 2014, the
$2.5 million for Fiscal 2012. See Note 9 of Notes to
Company shall be required to pay the difference up
Consolidated Financial Statements.
to such guaranteed amount. The Company expects to
have no loss on such guarantee.
18
We maintain self-insured and deductible programs
Credit Risk We sell products to a variety of customers
for certain liability, medical and workers’ compensation
and extend credit based on an evaluation of each
exposures. Other long-term liabilities include known
customer’s financial condition, generally without
claims and estimated incurred but not reported claims
requiring collateral. Exposure to credit losses varies by
not otherwise covered by insurance, based on actuarial
customer principally due to the financial condition of
assumptions and historical claims experience. Since
each customer. We monitor our exposure to credit
the timing and amount of claim payments vary
losses and maintain allowances for anticipated losses
significantly, we are not able to reasonably estimate
based on specific customer circumstances, credit
future payments for the specific periods indicated in
conditions and historical write-offs.
the table above. Standby letters of credit aggregating
$2.2 million have been issued in connection with our
self-insurance programs. These standby letters of
credit expire through June 2015 and are expected to
be renewed.
OFF-BALANCE SHEET ARRANGEMENTS
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.
CRITICAL ACCOUNTING POLICIES
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
Impairment of Long-Lived Assets All long-lived assets,
excluding 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. Goodwill and intangible
assets not subject to amortization are evaluated for
impairment annually or sooner if we believe such
assets may be impaired. An impairment loss is
recognized if the carrying amount or, for goodwill, the
carrying amount of its reporting unit, is greater than its
fair value.
are based on management’s knowledge of current
Income Taxes Our effective income tax rate is based
events and actions it may undertake in the future, they
on estimates of taxes which will ultimately be payable.
may ultimately differ from actual results. We believe
Deferred taxes are recorded to give recognition to
that the critical accounting policies described in the
temporary differences between the tax bases of assets
following paragraphs comprise the most significant
or liabilities and their reported amounts in the financial
estimates and assumptions used in the preparation
statements. Valuation allowances are established to
of our consolidated financial statements. For these
reduce the carrying amounts of deferred tax assets
policies, we caution that future events rarely develop
when it is deemed, more likely than not, that the benefit
exactly as estimated and the best estimates routinely
of deferred tax assets will not be realized.
require adjustment.
19
NATIONAL BEVERAGE CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Insurance Programs We maintain self-insured and
to our stockholders. Certain statements including,
deductible programs for certain liability, medical and
without limitation, statements containing the
workers’ compensation exposures. Accordingly, we
words “believes,” “anticipates,” “intends,” “plans,”
accrue for known claims and estimated incurred but
“expects,” and “estimates” constitute “forward-looking
not reported claims not otherwise covered by insurance
statements” and involve known and unknown risk,
based on actuarial assumptions and historical claims
uncertainties and other factors that may cause the
experience.
Sales Incentives We offer various sales incentive
arrangements to our customers that require customer
performance or achievement of certain sales volume
targets. When the incentive is paid in advance, we
amortize the amount paid over the period of benefit or
contractual sales volume; otherwise, we accrue the
expected amount to be paid over the period of benefit
or expected sales volume. The recognition of these
incentives involves the use of judgment related to
performance and sales volume estimates that are
made based on historical experience and other factors.
Sales incentives are accounted for as a reduction of
sales and actual amounts ultimately realized may vary
from accrued amounts.
FORWARD-LOOKING STATEMENTS
National Beverage 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, filings with the Securities and Exchange
Commission and other reports or communications
actual results, performance or achievements of our
Company to be materially different from any future
results, performance or achievements expressed or
implied by such forward-looking statements. Such
factors include, but are not limited to, the following:
general economic and business conditions, pricing of
competitive products, success in acquiring other
beverage businesses, success of new product and
flavor introductions, fluctuations in the costs of raw
materials and packaging supplies, ability to pass along
cost increases to our customers, labor strikes or work
stoppages or other interruptions in the employment of
labor, continued retailer support for our products,
changes in consumer preferences and our success in
creating products geared toward consumers’ tastes,
success in implementing business strategies, changes
in business strategy or development plans, government
regulations, taxes or fees imposed on the sale of our
products, unseasonably cold or wet weather conditions
and other factors referenced in this report, filings with
the Securities and Exchange Commission and other
reports or communications to our stockholders. We
disclaim an obligation to update any such factors or to
publicly announce the results of any revisions to any
forward-looking statements contained herein to reflect
future events or developments.
20
Interest Rates At May 3, 2014, the Company had $30
million in borrowings outstanding under its credit
facilities with a weighted average interest rate of 1.1%.
Interest rate hedging products are not currently used
to mitigate risk from interest fluctuations. If the interest
rate on our debt changed by 100 basis points (1%), our
interest expense for Fiscal 2014 would have changed
by approximately $400,000.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Commodities We purchase various raw materials,
including aluminum cans, plastic bottles, high fructose
corn syrup, corrugated packaging and 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.
At times, we manage our exposure to this risk through
the use of supplier pricing agreements that enable
us to establish the purchase prices for certain
commodities. Additionally, we use derivative financial
instruments to partially mitigate our exposure to
changes in certain raw material costs.
21
NATIONAL BEVERAGE CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
ASSETS
Current assets:
Cash and equivalents
Trade receivables—net
Inventories
Deferred income taxes—net
Prepaid and other assets
Total current assets
Property, plant and equipment—net
Goodwill
Intangible assets
Other assets
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities
Long-term debt
Deferred income taxes—net
Other liabilities
Shareholders’ equity:
Preferred stock, $1 par value—1,000,000 shares authorized
Series C—150,000 shares issued
Series D—240,000 shares (2014) and 400,000 shares (2013) issued,
aggregate liquidation preference of $12,000 (2014) and $20,000 (2013)
Common stock, $.01 par value—75,000,000 shares authorized;
50,367,799 shares (2014) and 50,361,799 shares (2013) issued
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Treasury stock—at cost:
Series C preferred stock—150,000 shares
Common stock—4,032,784 shares
Total shareholders’ equity
Total liabilities and shareholders’ equity
See accompanying Notes to Consolidated Financial Statements.
22
May 3,
2014
April 27,
2013
$ 29,932
58,205
43,914
2,685
8,405
143,141
59,494
13,145
1,615
5,446
$ 18,267
64,069
39,234
3,665
5,706
130,941
57,307
13,145
1,615
5,634
$ 222,841
$ 208,642
$ 45,606
18,873
44
$ 44,261
19,142
34
64,523
30,000
13,873
8,244
150
240
504
42,775
80,737
(205)
63,437
50,000
14,327
10,562
150
400
504
50,398
37,828
(964)
(5,100)
(12,900)
(5,100)
(12,900)
106,201
70,316
$ 222,841
$ 208,642
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Interest expense
Other expense—net
Income before income taxes
Provision for income taxes
Net income
Less preferred dividends and accretion
Fiscal Year Ended
May 3,
2014
$ 641,135
423,480
217,655
153,220
660
666
63,109
19,474
43,635
(726)
April 27,
2013
$ 662,007
444,757
217,250
146,223
403
173
70,451
23,531
46,920
(153)
April 28,
2012
$ 628,886
415,629
213,257
146,169
107
85
66,896
22,903
43,993
—
Earnings available to common shareholders
$ 42,909
$ 46,767
$ 43,993
Earnings per common share:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
See accompanying Notes to Consolidated Financial Statements.
$
$
.93
.92
$
$
1.01
1.01
$
$
.95
.95
46,331
46,519
46,310
46,482
46,267
46,448
23
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Net income
Other comprehensive income (loss), net of tax:
Cash flow hedges
Other
Total
Comprehensive income
See accompanying Notes to Consolidated Financial Statements.
Fiscal Year Ended
May 3,
2014
April 27,
2013
April 28,
2012
$ 43,635
$ 46,920
$ 43,993
610
149
759
(295)
(27)
(322)
(3,063)
(330)
(3,393)
$ 44,394
$ 46,598
$ 40,600
24
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
SERIES C PREFERRED STOCK
Beginning and end of year
SERIES D PREFERRED STOCK
Beginning of year
Series D preferred (redeemed) issued
End of year
COMMON STOCK
Beginning of year
Stock options exercised
End of year
ADDITIONAL PAID-IN CAPITAL
Beginning of year
Series D preferred (redeemed) issued
Stock options exercised
Stock-based compensation
Other
End of year
RETAINED EARNINGS
Beginning of year
Net income
Common stock dividends
Preferred stock dividends & accretion
End of year
ACCUMULATED OTHER COMPREHENSIVE LOSS
Beginning of year
Cash flow hedges
Other
End of year
TREASURY STOCK—SERIES C PREFERRED
Beginning and end of year
TREASURY STOCK—COMMON
Beginning and end of year
TOTAL SHAREHOLDERS’ EQUITY
Fiscal Year Ended
May 3, 2014
April 27, 2013
April 28, 2012
Shares
Amount
Shares
Amount
Shares
Amount
150
$
150
150
$
150
150
$
150
400
(160)
240
50,362
6
50,368
400
(160)
240
—
400
400
—
400
400
—
—
—
504
—
50,322
40
503
1
50,262
60
504
50,362
504
50,322
50,398
(7,722)
47
95
(43)
42,775
37,828
43,635
—
(726)
80,737
(964)
610
149
(205)
30,425
19,304
238
230
201
50,398
109,200
46,920
(118,139)
(153)
37,828
(642)
(295)
(27)
(964)
—
—
—
503
—
503
29,725
—
115
290
295
30,425
65,207
43,993
—
—
109,200
2,751
(3,063)
(330)
(642)
150
(5,100)
150
(5,100)
150
(5,100)
4,033
(12,900)
4,033
(12,900)
4,033
(12,900)
$ 106,201
$ 70,316
$ 121,636
See accompanying Notes to Consolidated Financial Statements.
25
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization
Deferred income tax provision (benefit)
Loss on disposal of property, net
Stock-based compensation
Changes in assets and liabilities:
Trade receivables
Inventories
Prepaid and other assets
Accounts payable
Accrued and other liabilities
Fiscal Year Ended
May 3,
2014
April 27,
2013
April 28,
2012
$ 43,635
$ 46,920
$ 43,993
11,708
79
51
95
5,864
(4,680)
(2,548)
1,345
(3,167)
11,002
172
63
230
(2,478)
1,628
(2,466)
(10,614)
(4,193)
10,651
(477)
7
290
(5,679)
(7,509)
(2,239)
5,618
(6,959)
Net cash provided by operating activities
52,382
40,264
37,696
INVESTING ACTIVITIES:
Additions to property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash used in investing activities
FINANCING ACTIVITIES:
Dividends paid on common stock
Dividends paid on preferred stock
(Repayments) borrowings under credit facilities
(Redemption) issuance of preferred stock
Proceeds from stock options exercised
Other
Net cash (used in) provided by financing activities
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
CASH AND EQUIVALENTS—BEGINNING OF YEAR
CASH AND EQUIVALENTS—END OF YEAR
OTHER CASH FLOW INFORMATION:
Interest paid
Income taxes paid
See accompanying Notes to Consolidated Financial Statements.
26
(12,124)
62
(12,062)
—
(659)
(20,000)
(8,000)
47
(43)
(28,655)
11,665
18,267
(9,693)
77
(9,616)
(9,905)
53
(9,852)
(118,139)
(12)
50,000
19,704
239
201
(48,007)
(17,359)
35,626
—
—
—
—
115
295
410
28,254
7,372
$ 29,932
$ 18,267
$ 35,626
$
723
23,079
$
341
24,327
$
95
23,127
NATIONAL BEVERAGE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
National Beverage Corp. develops, manufactures,
standards for counterparties and frequent cash
markets and sells a diverse portfolio of flavored
settlements. See Note 6.
beverage products primarily in Nor th America.
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
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 amounting to 188,000 shares in
Fiscal 2014, 172,000 shares in Fiscal 2013 and 181,000
Basis of Presentation The consolidated financial
shares in Fiscal 2012.
statements have been prepared in accordance with
United States generally accepted accounting prin ciples
(“GAAP”) and rules and regulations of the Securities
and Exchange Commission. The consolidated financial
statements include the accounts of National Beverage
Corp. and all subsidiaries. All significant intercompany
transactions and accounts have been eliminated. Our
fiscal year ends the Saturday closest to April 30 and,
as a result, an additional week is added every five or
six years. Fiscal 2014 consisted of 53 weeks while
Fair Value The fair value of long-term debt
approximates its carrying value due to its variable
interest rate and lack of prepayment penalty. The
estimated fair values of derivative financial instruments
are calculated based on market rates to settle the
instruments. These values represent the estimated
amounts we would receive upon sale, taking into
consideration current market prices and credit
worthiness. See Note 6.
Fiscal 2013 and Fiscal 2012 consisted of 52 weeks.
Impairment of Long-Lived Assets All long-lived
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 of three months
or less.
assets, excluding 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
Derivative Financial Instruments We use derivative
fair value based on the best information available.
financial instruments to partially mitigate our exposure
Estimated fair value is generally measured by
to changes in raw material costs. All derivative
discounting future cash flows. Goodwill and intangible
financial instruments are recorded at fair value in
assets not subject to amortization are evaluated for
our Consolidated Balance Sheets. We do not use
impairment annually or sooner if we believe such
derivative financial instruments for trading or speculative
assets may be impaired. An impairment loss is
purposes. Credit risk related to derivative financial
recognized if the carrying amount or, for goodwill, the
instruments is managed by requiring high credit
carrying amount of its reporting unit, is greater than
its fair value.
27
NATIONAL BEVERAGE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Income Taxes Our effective income tax rate is based
New Accounting Pronouncement In May 2014,
on estimates of taxes which will ultimately be payable.
the FASB issued Accounting Standards Update No.
Deferred taxes are recorded to give recognition to
2014-09, “Revenue from Contracts with Customers
temporary differences between the tax bases of assets
(Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires
or liabilities and their reported amounts in the financial
an entity to recognize revenue in an amount that
statements. Valuation allowances are established to
reflects the consideration to which the entity expects
reduce the carrying amounts of deferred tax assets
to receive in exchange for goods or services. ASU
when it is deemed, more likely than not, that the benefit
2014-09 is effective for our fiscal year beginning April
of deferred tax assets will not be realized.
30, 2017. We are currently evaluating the potential
Insurance Programs We maintain self-insured and
deductible programs for certain liability, medical and
impact of adopting this guidance on our consolidated
financial statements.
workers’ compensation exposures. Accordingly, we
Property, Plant and Equipment Property, plant
accrue for known claims and estimated incurred but
and equipment are recorded at cost. Additions,
not reported claims not otherwise covered by insurance
replacements and betterments are capitalized, while
based on actuarial assumptions and historical claims
maintenance and repairs that do not extend the useful
experience.
Intangible Assets Intangible assets as of May 3, 2014
and April 27, 2013 consisted of non-amortizable
trademarks.
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
equipment. Leasehold improvements are amortized
Inventories Inventories are stated at the lower of
using the straight-line method over the shorter of the
first-in, first-out cost or market. Inventories at May 3,
remaining lease term or the estimated useful life of the
2014 were comprised of finished goods of $27.2 million
improvement. When assets are retired or otherwise
and raw materials of $16.7 million. Inventories at April
disposed, the cost and accumulated depreciation are
27, 2013 were comprised of finished goods of $23.2
removed from the respective accounts and any related
million and raw materials of $16.0 million.
gain or loss is recognized.
Marketing Costs We are involved in a variety of
Revenue Recognition Revenue from product sales
marketing programs, including cooperative advertising
is recognized when title and risk of loss pass to the
programs with customers, to advertise and promote
customer, which generally occurs upon delivery. Our
our products to consumers. Marketing costs are
policy is not to allow the return of products once they
expensed when incurred, except for prepaid advertising
have been accepted by the customer. However, on
and production costs which are expensed when the
occasion, we have accepted returns or issued credit to
advertising takes place. Marketing costs, which
customers, primarily for damaged goods. The amounts
are included in selling, general and administrative
have been immaterial and, accordingly, we do not
expenses, totaled $50.2 million in Fiscal 2014, $44.6
provide a specific valuation allowance for sales returns.
million in Fiscal 2013 and $45.8 million in Fiscal 2012.
28
Sales Incentives We offer various sales incentive
value estimated using the Black-Scholes model. See
arrangements to our customers that require customer
Note 8.
performance or achievement of certain sales volume
targets. When the incentive is paid in advance, we
amortize the amount paid over the period of benefit or
contractual sales volume; otherwise, we accrue the
expected amount to be paid over the period of benefit
or expected sales volume. The recognition of these
incentives involves the use of judgment related to
performance and sales volume estimates that are
made based on historical experience and other factors.
Sales incentives are accounted for as a reduction of
sales and actual amounts ultimately realized may vary
from accrued amounts.
Trade Receivables We record trade receivables at net
realizable value, which includes an appropriate
allowance for doubtful accounts. We extend credit
based on an evaluation of each customer’s financial
condition, generally without requiring collateral.
Exposure to credit losses 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. Activity in the allowance for
doubtful accounts was as follows:
Segment Reporting We operate as a single operating
segment for purposes of presenting financial
(In thousands)
information and evaluating performance. As such, the
accompanying consolidated financial statements
present financial information in a format that is
Balance at beginning of year
Net charge to expense
Net charge-off
Fiscal
2014
Fiscal
2013
Fiscal
2012
$ 454
95
(150)
$399
96
(41)
$452
4
(57)
consistent with the internal financial information used
Balance at end of year
$ 399
$454
$399
by management. We do not accumulate revenues by
product classi fication and, therefore, it is impractical
to present such information.
As of May 3, 2014 and April 27, 2013, we did not
have any customer that comprised more than 10% of
trade receivables. No one customer accounted for
Shipping and Handling Costs Shipping and handling
more than 10% of net sales during any of the last three
costs are reported in selling, general and administrative
fiscal years.
expenses in the accompanying consolidated
statements of income. Such costs aggregated
$44.4 million in Fiscal 2014, $44.2 million in Fiscal
2013 and $41.8 million in Fiscal 2012. Although our
classification is consistent with many beverage
companies, our gross margin may not be comparable
to companies that include shipping and handling costs
in cost of sales.
Use of Estimates The preparation of financial
statements in conformity with United States 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
Stock-Based Compensation Compensation expense
from reported amounts.
for stock-based compensation awards is recognized
over the vesting period based on the grant-date fair
29
NATIONAL BEVERAGE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of May 3, 2014 and
Facilities were used for standby letters of credit and
$67.8 million were available for borrowings.
April 27, 2013 consisted of the following:
(In thousands)
Land
Buildings and improvements
Machinery and equipment
2014
2013
$
9,779
51,494
148,699
$
9,779
49,391
141,314
Total
Less accumulated depreciation
209,972
(150,478)
200,484
(143,177)
Property, plant and
equipment—net
$ 59,494
$ 57,307
Depreciation expense was $9.8 million for Fiscal
2014, $9.0 million for Fiscal 2013 and $8.5 million for
Fiscal 2012.
3. ACCRUED LIABILITIES
Accrued liabilities as of May 3, 2014 and April 27, 2013
consisted of the following:
(In thousands)
Accrued compensation
Accrued promotions
Accrued insurance
Other
Total
2014
2013
$ 7,049
3,812
2,238
5,774
$ 8,051
3,912
1,451
5,728
$ 18,873
$ 19,142
4. DEBT
At May 3, 2014, a subsidiar y of the Company
The Credit Facilities require the subsidiary to
maintain certain financial ratios, principally debt to
net worth and debt to EBITDA (as defined in the
Credit Facilities), and contain other restrictions, none of
which are expected to have a material effect on our
operations or financial position. At May 3, 2014, we
were in compliance with all loan covenants.
5. CAPITAL STOCK AND TRANSACTIONS WITH
RELATED PARTIES
The Company paid special cash dividends on common
stock of $118.1 million ($2.55 per share) on December
27, 2012, $106.3 million ($2.30 per share) on February
14, 2011 and $62.3 million ($1.35 per share) on January
22, 2010.
On January 25, 2013, the Company sold 400,000
shares of Special Series D Preferred Stock, par value
$1 per share (“Series D Preferred”) for an aggregate
purchase price of $20 million. Series D Preferred has a
liquidation preference of $50 per share and accrues
dividends on this amount at an annual rate of 3%
through April 30, 2014 and, thereafter, at an annual
rate equal to 370 basis points above the 3-Month
LIBOR. Dividends are cumulative and payable quarterly.
Accrued dividends at May 3, 2014 and April 27, 2013
were $90,000 and $141,000, respectively. The Series
maintained unsecured revolving credit facilities with
D Preferred is nonvoting and redeemable at the option
banks aggregating $100 million (the “Credit Facilities”).
of the Company beginning May 1, 2014 at $50 per
The Credit Facilities expire from November 22, 2015 to
share. The net proceeds of $19.7 million were used to
April 30, 2016 and current borrowings bear interest at
repay borrowings under the Credit Facilities. In addition,
.9% above one-month LIBOR (1.1% at May 3, 2014).
the Company has 150,000 shares of Series C Preferred
Borrowings outstanding under the Credit Facilities
Stock, par value $1 per share, which are held as
were $30 million at May 3, 2014 and $50 million at
treasury stock and, therefore, such shares have no
April 27, 2013. At May 3, 2014, $2.2 million of the Credit
liquidation value.
30
On May 2, 2014, the Company redeemed 160,000
and financings by the Company, including identifying
shares of Series D Preferred, representing 40% of the
and profiling acquisition candidates, negotiating and
amount outstanding, for an aggregate price of $8
structuring potential transactions and arranging
million plus accrued dividends. In connection therewith,
financing for any such transaction. CMA, through its
the Company accreted and charged to retained
personnel, also provides, to the extent possible, the
earnings $118,000 of original issuance costs, which
stimulus and creativity to develop an innovative and
was deducted from income available to common
dynamic persona for the Company, its products and
shareholders for earnings per share calculation. In
corporate image. In order to fulfill its obligations
conjunction with the partial redemption, the annual
under the management agreement, CMA employs
dividend rate on the outstanding Series D Preferred
numerous individuals, whom, acting as a unit, provide
was reduced to 2.5% for the twelve month period
management, administrative and creative functions for
beginning May 1, 2014. In evaluating the impact of the
the Company. The management agreement provides
rate change, the Company determined that the related
that the Company will pay CMA an annual base
fair value change was immaterial and that no
fee equal to one percent of the consolidated net
adjustment was required.
sales of the Company, and further provides that the
In April 2012, the Board of Directors authorized an
Compensation and Stock Option Committee and
increase in the Company’s Stock Buyback Program
the Board of Directors may from time to time award
from 800,000 to 1.6 million shares of common stock.
additional incentive compensation to CMA. The Board
As of May 3, 2014, 502,060 shares were purchased
of Directors on numerous occasions contemplated
under the program and 1,097,940 shares were available
incentive compensation and, while shareholder value
for purchase. There were no shares purchased during
has increased over 2,000% since the inception of this
the last three fiscal years.
agreement, no incentive compensation has been paid.
The Company is a par ty to a management
We incurred management fees to CMA of $6.4 million
agreement with Corporate Management Advisors, Inc.
for Fiscal 2014, $6.6 million for Fiscal 2013 and $6.3
(“CMA”), a corporation owned by our Chairman and
million for Fiscal 2012. Included in accounts payable
Chief Executive Officer. This agreement was originated
were amounts due CMA of $1.6 million at May 3, 2014
in 1991 for the efficient use of management of two
and $3.1 million at April 27, 2013.
public companies at the time. In 1994, one of those
public entities, through a merger, no longer was
managed in this manner. Under the terms of the
6. DERIVATIVE FINANCIAL INSTRUMENTS
From time to time, we enter into aluminum swap
agreement, CMA provides, subject to the direction and
contracts to partially mitigate our exposure to changes
supervision of the Board of Directors of the Company,
in the cost of aluminum cans. Such financial
(i) senior corporate functions (including supervision of
instruments are designated and accounted for as a
the Company’s financial, legal, executive recruitment,
cash flow hedge. Accordingly, gains or losses
internal audit and management information systems
attributable to the effective portion of the cash
departments) as well as the services of a Chief
flow hedge are reported in Accumulated Other
Executive Officer and Chief Financial Officer, and (ii)
Comprehensive Income (Loss) (“AOCI”) and reclassified
services in connection with acquisitions, dispositions
into earnings through cost of sales in the period in
31
NATIONAL BEVERAGE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
which the hedged transaction affects earnings. The
as defined by the fair value hierarchy as they are
ineffective portion of the change in fair value of
observable market based inputs or unobservable
our cash flow hedge was immaterial. The following
inputs that are corroborated by market data.
summarizes the gains (losses) recognized in the
Consolidated Statements of Income and AOCI relative
to the cash flow hedge for Fiscal 2014, Fiscal 2013 and
7. INCOME TAXES
The provision (benefit) for income taxes consisted of
Fiscal 2012:
(In thousands)
Recognized in AOCI:
Loss before income taxes
Less income tax benefit
Fiscal
2014
Fiscal
2013
Fiscal
2012
$ (1,059) $ (2,521) $ (4,484)
(1,642)
(935)
(393)
Net
(666)
(1,586)
(2,842)
Reclassified from AOCI to
cost of sales:
(Loss) gain before
income taxes
Less income tax
(2,028)
(2,060)
290
(benefit) provision
(752)
(769)
Net
(1,276)
(1,291)
69
221
Net change to AOCI
$ 610
$
(295) $ (3,063)
the following:
(In thousands)
Current
Deferred
Total
Fiscal
2014
Fiscal
2013
Fiscal
2012
$ 19,395
79
$ 23,359
172
$ 23,380
(477)
$ 19,474
$ 23,531
$ 22,903
Deferred taxes are recorded to give recognition to
temporary differences between the tax bases of assets
or liabilities and their reported amounts in the financial
statements. Valuation allowances are established to
reduce the carrying amounts of deferred tax assets
when it is deemed more likely than not that the benefit
of deferred tax assets will not be realized. Deferred tax
assets and liabilities as of May 3, 2014 and April 27,
As of May 3, 2014, the notional amount of our
2013 consisted of the following:
outstanding aluminum swap contracts was $2.3 million
(In thousands)
and, assuming no change in the commodity prices,
$5,000 of unrealized gain before tax will be reclassified
Deferred tax assets:
Accrued expenses and other
from AOCI and recognized in earnings over the next
Inventory and amortizable assets
2014
2013
$ 4,126
400
$ 5,241
355
month. See Note 1.
Total deferred tax assets
4,526
5,596
As of May 3, 2014, the fair value of the derivative
asset was $5,000, which was included in prepaid and
other assets. As of April 27, 2013, the fair value of the
derivative liability was $964,000, which was included in
Deferred tax liabilities:
Property
Intangibles and other
15,616
98
16,159
99
Total deferred tax liabilities
15,714
16,258
accrued liabilities. Such valuation does not entail a
Net deferred tax liabilities
$ 11,188
$ 10,662
significant amount of judgment and the inputs that are
Current deferred tax assets—net
$ 2,685
$ 3,665
significant to the fair value measurement are Level 2
Noncurrent deferred tax liabilities—net
$ 13,873
$ 14,327
32
The reconciliation of the statutory federal income
We recognize accrued interest and penalties
tax rate to our effective tax rate is as follows:
related to unrecognized tax benefits in income tax
Statutory federal income
Fiscal
2014*
Fiscal
2013
Fiscal
2012
expense. As of May 3, 2014, unrecognized tax benefits
included accrued interest of $351,000, of which
approximately $163,000 was recognized as a tax
tax rate
35.0% 35.0% 35.0%
benefit in Fiscal 2014.
State income taxes,
net of federal benefit
Manufacturing deduction
benefit
Adjustment of unrecognized
2.3
1.6
2.7
(3.0)
(3.1)
(3.1)
tax benefit
Other differences
(3.3)
(.1)
(.2)
.1
(.1)
(.3)
Effective income tax rate
30.9% 33.4% 34.2%
* During April 2014, the Company reached an agreement with the Internal
Revenue Service with respect to its review of the Company’s federal income
tax returns for the three years ended April 2013. No material adjustments
were proposed and, accordingly, the Company adjusted the related
unrecognized tax benefits during the fourth quarter of Fiscal 2014.
As of May 3, 2014, the gross amount of
unrecognized tax benefits was $2.1 million and $2.1
million was recognized as a tax benefit in Fiscal 2014.
If we were to prevail on all uncertain tax positions, the
net effect would be to reduce our tax expense by
approximately $1.4 million. A reconciliation of the
changes in the gross amount of unrecognized tax
benefits, which amounts are included in other liabilities
in the accompanying consolidated balance sheets, is
Fiscal
2014
Fiscal
2013
Fiscal
2012
$ 4,349
$ 4,548 $ 4,687
as follows:
(In thousands)
Beginning balance
Increases due to current
period tax positions
Decreases due to lapse
of statute of limitations
and audit resolutions
(2,494)*
(614)
(547)
Ending balance
$ 2,123
$ 4,349 $ 4,548
* Includes $1,907 related to the Internal Revenue Service review of the
Company’s federal income tax returns for the three years ended April 2013
noted above.
We file annual income tax returns in the United
States and in various state and local jurisdictions. A
number of years may elapse before an uncertain tax
position, for which we have unrecognized tax benefits,
is resolved. While it is often difficult to predict the
final outcome or the timing of resolution of any
particular uncertain tax position, we believe that our
unrecognized tax benefits reflect the most probable
outcome. We adjust these unrecognized tax benefits,
as well as the related interest, in light of changing facts
and circumstances. The resolution of any particular
uncertain tax position could require the use of cash
and an adjustment to our provision for income taxes in
the period of resolution. Federal income tax returns
for fiscal years subsequent to 2013 are subject to
examination. Generally, the income tax returns for the
various state jurisdictions are subject to examination
for fiscal years ending after fiscal 2009.
8. STOCK-BASED COMPENSATION
Our stock-based compensation program is a broad-
based program designed to attract and retain
employees while also aligning employees’ interests
with the interests of the stockholders.
Plan”) provides for compensatory awards consisting of
(i) stock options or stock awards for up to 4,800,000
shares of common stock, (ii) stock appreciation rights,
dividend equivalents, other stock-based awards in
amounts up to 4,800,000 shares of common stock
and (iii) performance awards consisting of any
combination of the above. The Omnibus Plan is
33
268
415
408
The 1991 Omnibus Incentive Plan (the “Omnibus
NATIONAL BEVERAGE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
designed to provide an incentive to officers and certain
Options under the KEEP Program are forfeited in the
other key employees and consultants by making
event of the sale of shares used to acquire such
available to them an opportunity to acquire a proprietary
options. Options are granted at an initial exercise price
interest or to increase such interest in National
of 60% of the purchase price paid for the shares
Beverage. The number of shares or options which may
acquired and the exercise price reduces to the stock
be issued under stock-based awards to an individual is
par value at the end of the six-year vesting period.
limited to 1,680,000 during any year. Awards may be
We account for stock options under the fair value
granted for no cash consideration or such minimal
method of accounting using a Black-Scholes valuation
cash consideration as may be required by law. Options
model to estimate the stock option fair value at date of
generally have an exercise price equal to the fair market
grant. The fair value of stock options is amortized to
value of our common stock on the date of grant, vest
expense over the vesting period. Stock options granted
over a five-year period and expire after ten years.
were 5,245 KEEP shares in Fiscal 2014, 2,000 KEEP
The Special Stock Option Plan provides for the
shares in Fiscal 2013 and 3,000 KEEP shares in Fiscal
issuance of stock options to purchase up to an
2012. The weighted average Black-Scholes fair value
aggregate of 1,800,000 shares of common stock.
assumptions for stock options granted are as follows:
Options may be granted for such consideration as
weighted average expected life of 8 years for Fiscal
determined by the Board of Directors. The vesting
2014, 8 years for Fiscal 2013 and 8 years for Fiscal
schedule and exercise price of these options are tied
2012; weighted average expected volatility of 35.8% for
to the recipient’s ownership level of common stock
Fiscal 2014, 38.1% for Fiscal 2013 and 42.9% for Fiscal
and the terms generally allow for the reduction in
2012; weighted average risk free interest rates of 1.9%
exercise price upon each vesting period. Also, the
for Fiscal 2014, 1.6% for Fiscal 2013 and 2.5% for
Board of Directors authorized the issuance of options
Fiscal 2012; and expected dividend yield of 4.6% for
to purchase up to 50,000 shares of common stock to
Fiscal 2014, 5.0% for Fiscal 2013 and 5.3% for Fiscal
be issued at the direction of the Chairman.
2012. The expected life of stock options was estimated
The Key Employee Equity Partnership Program
based on historical experience. The expected volatility
(“KEEP Program”) provides for the granting of stock
was estimated based on historical stock prices for a
options to purchase up to 240,000 shares of common
period consistent with the expected life of stock
stock to key employees, consultants, directors and
options. The risk free interest rate was based on the
officers. Participants who purchase shares of stock in
U.S. Treasury constant maturity interest rate whose
the open market receive grants of stock options equal
term is consistent with the expected life of stock
to 50% of the number of shares purchased, up to a
options. Forfeitures were estimated based on historical
maximum of 6,000 shares in any two-year period.
experience.
34
The following is a summary of stock option activity
outstanding as of May 3, 2014 was 3.9 years and $5.1
for Fiscal 2014:
Options outstanding, beginning of year
Granted
Exercised
Cancelled
Number
of Shares
441,810
5,245
(6,000)
(36,700)
Price(a)
$6.86
7.42
7.87
7.74
Options outstanding, end of year
404,355
$6.67
Options exercisable, end of year
269,169
$5.69
(a) Weighted average exercise price.
million, respectively. The weighted average remaining
contractual term and the aggregate intrinsic value for
options exercisable as of May 3, 2014 was 3.0 years
and $3.6 million, respectively.
We have a stock purchase plan which provides for
the purchase of up to 1,536,000 shares of common
stock by employees who (i) have been employed for at
least two years, (ii) are not part-time employees and (iii)
are not owners of five percent or more of our common
stock. As of May 3, 2014, no shares have been issued
Stock-based compensation expense was $95,000
under the plan.
for Fiscal 2014, $230,000 for Fiscal 2013 and $290,000
for Fiscal 2012. The total fair value of shares vested
was $90,000 for Fiscal 2014, $453,000 for Fiscal 2013
9. PENSION PLANS
The Company contributes to certain pension plans
and $513,000 for Fiscal 2012. The total intrinsic value
under collective bargaining agreements and to a
for stock options exercised was $76,000 for Fiscal
discretionary profit sharing plan. Total contributions
2014, $406,000 for Fiscal 2013 and $758,000 for
(including contributions to multi-employer plans
Fiscal 2012. Net cash proceeds from the exercise of
reflected below) were $2.7 million for Fiscal 2014, $2.6
stock options were $47,000 for Fiscal 2014, $239,000
million for Fiscal 2013 and $2.5 million for Fiscal 2012.
for Fiscal 2013 and $115,000 for Fiscal 2012. Stock-
The Company participates in various multi-
based income tax benefits aggregated $17,000 for
employer defined benefit pension plans covering
Fiscal 2014, $201,000 for Fiscal 2013 and $295,000
certain employees whose employment is covered
for Fiscal 2012. The weighted average fair value for
under collective bargaining agreements. Under the
stock options granted was $12.50 for Fiscal 2014,
Pension Protection Act (“PPA”), if a participating
$8.76 for Fiscal 2013 and $8.16 for Fiscal 2012.
employer stops contributing to the plan, the unfunded
As of May 3, 2014, unrecognized compensation
obligations of the plan may be borne by the remaining
expense related to the unvested portion of our stock
participating employers. If the Company chooses to
options was $262,000, which is expected to be
stop participating in the multi-employer plan, the
recognized over a weighted average period of 2.7
Company could be required to pay the plan a
years. The weighted average remaining contractual
withdrawal liability based on the underfunded status of
term and the aggregate intrinsic value for options
the plan.
35
NATIONAL BEVERAGE CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Summarized below is certain information regarding the Company’s participation in significant multi-employer
pension plans including the financial improvement plan or rehabilitation plan status (“FIP/RP Status”). The most
recent PPA zone status available in Fiscal 2014 and Fiscal 2013 is for the plans’ years ending December 31, 2012
and 2011, respectively.
Pension Fund
PPA Zone Status
Fiscal
2014
Fiscal
2013
FIP/RP Status
Surcharge
Imposed
Central States, Southeast and Southwest Areas Pension Plan
(EIN no. 36-6044243) (the “CSSS Fund”)
Red
Red
Implemented
Yes
Western Conference of Teamsters Pension Trust Fund
(EIN no. 91-6145047) (the “WCT Fund”)
Green Green Not applicable
No
For the plan years ended December 31, 2012 and
into account when calculating the minimum lease
December 31, 2011, respectively, the Company was
payment and recognized on a straight-line basis over
not listed in the pension trust fund forms 5500 as
the lease term. Rent expense under operating lease
providing more than 5% of the total contributions
agreements totaled approximately $7.9 million for Fiscal
for the plans. The collective bargaining agreements
2014, $8.9 million for Fiscal 2013 and $9.3 million for
covering the above pension trust funds expire on
Fiscal 2012.
October 18, 2016 for the CSSS Fund and May 14,
Our minimum lease payments under non-
2016 for the WCT Fund.
cancelable operating leases as of May 3, 2014 were
The Company’s contributions for all multi-employer
as follows:
pension plans for the last three fiscal years are as
(In thousands)
follows:
(In thousands)
Pension Fund
CSSS Fund
WCT Fund
Other multi-employer
pension funds
Fiscal
2014
Fiscal
2013
Fiscal
2012
$ 1,079
476
$ 1,051
471
$ 944
455
Fiscal 2015
Fiscal 2016
Fiscal 2017
Fiscal 2018
Fiscal 2019
Thereafter
295
262
244
Total minimum lease payments
$ 4,768
3,829
3,419
2,700
2,355
2,477
$19,548
Total
$ 1,850
$ 1,784
$ 1,643
As of May 3, 2014, we guaranteed the residual
10. COMMITMENTS AND CONTINGENCIES
We lease buildings, machinery and equipment under
various non-cancelable operating lease agreements
expiring at various dates through 2023. Certain of
these leases contain scheduled rent increases and/or
value of certain leased equipment in the amount of
$5.3 million. If the proceeds from the sale of such
equipment are less than the balance required by the
lease when the lease terminates July 31, 2014, the
Company shall be required to pay the difference up to
such guaranteed amount. The Company expects to
renewal options. Contractual rent increases are taken
have no loss on such guarantee.
36
We enter into various agreements with suppliers
From time to time, we are a party to various
for the purchase of raw materials, the terms of which
litigation matters arising in the ordinary course of
may include variable or fixed pricing and minimum
business. We do not expect the ultimate disposition of
purchase quantities. As of May 3, 2014, we had
such matters to have a material adverse effect on our
purchase commitments for raw materials of $32.8
consolidated financial position or results of operations.
million for Fiscal 2015.
11. QUARTERLY FINANCIAL DATA (UNAUDITED)
(In thousands, except per share amounts)
FISCAL 2014
Net sales
Gross profit
Net income
Earnings per common share—basic
Earnings per common share—diluted
FISCAL 2013
Net sales
Gross profit
Net income
Earnings per common share—basic
Earnings per common share—diluted
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter(1)
$ 172,353
58,749
12,070
.26
.26
$
$
$ 167,666
58,830
12,497
.27
.27
$
$
$ 136,774
44,688
7,136
.15
.15
$
$
$ 164,342
55,388
11,932
.25
.25
$
$
$ 182,849
58,293
14,392
.31
.31
$
$
$ 166,568
54,591
12,017
.26
.26
$
$
$ 144,723
46,353
8,414
.18
.18
$
$
$ 167,867
58,013
12,097
.26
.26
$
$
(1) The fourth quarter of Fiscal 2014 consisted of 14 weeks while other quarters consisted of 13 weeks.
37
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
National Beverage Corp.
We have audited the accompanying consolidated
balance sheets of National Beverage Corp. as of
May 3, 2014 and April 27, 2013 and the related
consolidated statements of income, comprehensive
income, shareholders’ equity and cash flows for each
of the years in the three-year period ended May 3,
2014. We also have audited National Beverage
Corp.’s internal control over financial reporting
as of May 3, 2014, based on criteria established
in Internal Control—Integrated Framework issued by
the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) in 1992. National
Beverage Corp.’s management is responsible for
these financial statements, for maintaining effective
internal control over financial reporting and for its
assessment of the effectiveness of internal control over
financial reporting included in the accompanying
Management’s Repor t on Internal Control over
Financial Reporting. Our responsibility is to express an
opinion on these financial statements and an opinion
on the Company’s internal control over financial
reporting based on our audits.
We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight
Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are
free of material misstatement and whether effective
internal control over financial reporting was maintained
in all material respects. Our audits of the financial
statements included examining, on a test basis,
evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting
principles used and significant estimates made by
management and evaluating the overall financial
statement presentation. Our audit of internal control
over financial repor ting included obtaining an
understanding of internal control over financial
reporting, assessing the risk that a material weakness
exists and testing and evaluating the design and
operating effectiveness of internal control based on the
assessed risk. Our audits also included performing
such other procedures as we considered necessary in
the circumstances. We believe that our audits provide
a reasonable basis for our opinions.
38
A company’s internal control over financial
reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles. A company’s internal control
over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit
preparation of financial statements in accordance with
generally accepted accounting principles and that
receipts and expenditures of the company are being
made only in accordance with authorizations of
management and directors of the company; and (3)
provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control
over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk
that controls may become inadequate because of
changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects,
the financial position of National Beverage Corp. as of
May 3, 2014 and April 27, 2013 and the results of their
operations and their cash flows for each of the years in
the three-year period ended May 3, 2014, in conformity
with accounting principles generally accepted in the
United States of America. Also in our opinion, National
Beverage Corp. maintained, in all material respects,
effective internal control over financial reporting as of
May 3, 2014, based on criteria established in Internal
Control—Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission
(COSO) in 1992.
McGladrey LLP
West Palm Beach, Florida
July 17, 2014
NATIONAL BEVERAGE CORP.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
The common stock of National Beverage Corp., par
On January 25, 2013, the Company sold 400,000
value $.01 per share, (“Common Stock”) is listed on
shares of Special Series D Preferred Stock, par value
The NASDAQ Global Select Market under the symbol
$1 per share (“Series D Preferred”) for an aggregate
“FIZZ”. The following table shows the range of high
purchase price of $20 million. Series D Preferred has a
and low prices per share of the Common Stock for the
liquidation preference of $50 per share and accrues
fiscal quarters indicated:
Fiscal Year Ended
May 3, 2014
High
Low
April 27, 2013
Low
High
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
$18.66
$18.96
$21.71
$22.26
$14.48
$15.63
$18.06
$18.58
$15.85
$15.83
$17.75
$14.72
$13.57
$14.05
$13.62
$13.21
dividends on this amount at an annual rate of 3%
through April 30, 2014 and, thereafter, at an annual
rate equal to 370 basis points above the 3-Month
LIBOR. Dividends are cumulative and payable quarterly.
The Series D Preferred is nonvoting and redeemable at
the option of the Company beginning May 1, 2014 at
$50 per share. Upon a change of control, as such term
is defined in the Certificate of Designation of the
At July 8, 2014, there were approximately 6,200
Special Series D Preferred Stock, the holder shall have
holders of our Common Stock, the majority of which
the right to convert the Series D Preferred into shares
hold their shares in the names of various dealers and/
of Common Stock at a conversion price equal to the
or clearing agencies.
tender price per share offered to the holders of the
The Company paid special cash dividends on
Common Stock. The net proceeds of $19.7 million
Common Stock of $118.1 million ($2.55 per share) on
were used to repay borrowings under the Credit
December 27, 2012, $106.3 million ($2.30 per share)
Facilities. The Series D Preferred was issued by the
on February 14, 2011 and $62.3 million ($1.35 per
Company pursuant to the exemption from registration
share) on January 22, 2010.
provided by Section 4(2) of the Securities Act of 1933.
In April 2012, the Board of Directors authorized an
On May 2, 2014, the Company redeemed 160,000
increase in the Company’s Stock Buyback Program
shares of Series D Preferred, representing 40% of the
from 800,000 to 1.6 million shares of Common Stock.
amount outstanding, for an aggregate price of $8
As of May 3, 2014, 502,060 shares were purchased
million plus accrued dividends. In conjunction with the
under the program and 1,097,940 shares were available
partial redemption, the annual dividend rate on the
for purchase. There were no shares of Common Stock
outstanding Series D Preferred was reduced to 2.5%
purchased during the last three fiscal years.
for the twelve-month period beginning May 1, 2014.
39
NATIONAL BEVERAGE CORP.
PERFORMANCE GRAPH
The following graph shows a comparison of the five-year cumulative returns of an investment of $100 cash on
May 2, 2009, assuming reinvestment of dividends, in (i) Common Stock, (ii) the NASDAQ Composite Index and
(iii) a Company-constructed peer group consisting of Coca-Cola Bottling Company Consolidated and Cott
Corporation. Based on the cumulative total return below, an investment in our Common Stock on May 2, 2009
provided a compounded annual return of approximately 24.1% as of May 3, 2014.
Comparison of 5-Year Cumulative Total Return
among National Beverage Corp., the NASDAQ Composite Index, and a Peer Group
$300
$280
$260
$240
$220
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
0
5/2/09
5/1/10
4/30/11
4/28/12
4/27/13
5/3/14
National Beverage
NASDAQ Composite
Peer Group
5/2/09
5/1/10
4/30/11
4/28/12
4/27/13
5/3/14
$100.00
100.00
100.00
$122.56
144.47
155.94
$172.20
170.25
181.56
$181.61
183.72
148.70
$211.11
199.01
200.44
$278.34
253.53
195.68
5/1/10
4/30/11
4/28/12
4/27/13
5/3/14
300
National Beverage Corp.
280
NASDAQ Composite
260
Peer Group
240
220
200
180
160
140
120
100
80
60
40
20
0
5/2/09
40
S U B S I D I A R I E S
BevCo Sales, Inc.
Beverage Corporation Intl., Inc.
Big Shot Beverages, Inc.
Everfresh Beverages, Inc.
Faygo Beverages, Inc.
Home Juice Corp.
National Beverage Vending
Company
National Retail Brands, Inc.
NewBevCo, Inc.
NutraFizz Products Corp.
PACO, Inc.
Shasta Beverages, Inc.
Shasta Beverages Intl., 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
8100 Southwest Tenth Street
Fort Lauderdale, FL 33324
954-581-0922
A N N U A L M E E T I N G
The Annual Meeting of
Shareholders will be held on
Friday, October 3, 2014 at
2:00 p.m. local time at the
Hyatt Regency Orlando
International Airport,
9300 Jeff Fuqua 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
supplemental quarterly financial
data are available free of charge
on our website or contact
our Shareholder Relations
department at the Company’s
corporate address or at
877-NBC-FIZZ (877-622-3499).
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
NASDAQ Global Select Market–
symbol FIZZ.
T R A N S F E R AG E N T A N D
R E G I S T R A R
Computershare
250 Royall Street
Canton, MA 02021
888-313-1476
www.computershare.com/investor
I N D E P E N D E N T R E G I S T E R E D
P U B L I C A C C O U N T I N G F I R M
McGladrey LLP
West Palm Beach, FL
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.
Cecil D. Conlee*
Founding Partner
CGR Advisors
Samuel C. Hathorn, Jr.*
Retired Chief Executive Officer
Trendmaker Development Co.
Stanley M. Sheridan*
Retired President
Faygo Beverages, Inc.
*Member Audit Committee
C O R P O R AT E M A N A G E M E N T
Nick A. Caporella
Chairman of the Board &
Chief Executive Officer
Joseph G. Caporella
President
George R. Bracken
Executive Vice President–
Finance
Dean A. McCoy
Senior Vice President–
Operational Guidance
Gregory P. Cook
Vice President–Controller &
Chief Accounting Officer
Brent R. Bott
Executive Director–
Consumer Marketing
Gregory J. Kwederis
Executive Director–
Beverage Analyst
Timothy C. Barker
Senior Director–Strategic IT
Vanessa C. Walker
Senior Director–
Strategic Brand Management
Richard S. Berkes
Director–Risk Management
Glenn G. Bryan
Director–Tax
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S U B S I D I A R Y M A N A G E M E N T
Michael J. Bahr
Executive Vice President
Shasta West
James Bolton
Executive Vice President
PACO, Inc.
Alan A. Chittaro
Executive Vice President
Faygo Beverages, Inc.
Alan D. Domzalski
Executive Vice President
Sundance Beverage Company
James H. Erwin III
Executive Vice President–Sales
Shasta Beverages, Inc.
Stephen Flis
Executive Vice President
Shasta Sweetener, Inc.
Brian M. Gaggin
Executive Vice President
National Retail Brands
Arthur Hanrehan
Executive Vice President
National BevPak
James M. Jones
Executive Vice President
Shasta Foodservice
Kevin B. Swift
Senior Vice President
La Croix Beverages Group
John F. Hlebica
Vice President
Shasta Beverages International
Chad Palma
Vice President
BevCo Sales
Worth B. Shuman III
Vice President
Military Sales
National Beverage Corp.
8100 Southwest Tenth Street, Fort Lauderdale, Florida 33324
954.581.0922 www.nationalbeverage.com