National Beverage Corp. Annual Report 2017

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FY2017 Annual Report · National Beverage Corp.

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National Beverage Corp.
2017 Annual Report

GROSS PRICE / EARNINGS INDEX
TRIFECTA PROFILE*

Ambi tious – Delicious
and Healthy . . .

55x

50x

35x
35x

45x

40x

(SDA)

Facts . . .

National’s innovation sets the standards
for healthy sparkling water

Recognized leader of natural sparkling
water category

Carbonated soda sales facing accelerated
declines due to health alerts and soda tax

Major shareholder senior prominence

Growth momentum bridled to agile and
passionate organization

*INDUSTRY LEADING REVENUES + OPERATING MARGIN GROWTH + SHAREHOLDER VALUE

lovely

overfly this

appy, squawking seagulls
lagoon, high-fiving
wingtips over such a beautiful New England
cove . . . (winking in) another glorious crisp morning!
Aromas are scenting, seaweed is smiling and ducks are
hooting . . . what’s all the fuss about? FIZZ – that’s what!!
Yes, grateful, thankful, ever so blessed Team National and
yours truly have so much to smile about – and smile, we are
graciously going to do until those happy, squawking seagulls
roost! WOW . . . what a year! Best Revenues, Best Earnings,
Best Industry Growth, Stock Hits $100, Company pays $3.00
in dividends, Team National is healthy and smiles abound . . .
I hope those seagulls never land! I mean it . . .

I believe for good fortune to prevail, a combination of
things must occur! First, one should have that special
‘sidekick’ relationship with their spiritual guardian and,
next, be genetically equipped to be the master of their
destiny! Then, they should choose to engage in making
lif e be tter fo r m or e th an they a r e c a pa bl e of a nd ,
finally . . . they should love what they do! I fully believe
that good fortune beckons for these characters – yes!

If the daring truth be told, National Beverage Corp. at the
outset, and still relevant today, is an enterprise of caring
purpose. Initially, to save the innocent from the clutches
of a terrible corporate raider and, today, to bring ‘innocent’
healthy beverages to an ailing America!

FY2017 was a pivotal year for National Beverage Corp. on
several fronts. First, moving FIZZ into the growth stock
segment; second, capturing top place in market performance
in 40 of 42 key markets in the United States; third, leading
the natural sparkling water category with such force as to
influence the total sparkling water category in the U.S.
and, finally, moving the Company’s revenues into the billion
dollar range this FY2018. Creativity and innovation, plus
new geographic distribution advances, continue to fuel our
dynamic momentum.

Catching the tide of ‘change’ (healthier consumables) has
been quite advantageous. I certainly agree . . . and the
building momentum of that incoming tide widens by the
hour as is the case with an actual rising tide! As more
people consume our healthy beverages, they expect to find
them readily available and retailers continue to provide
more and more space! Retailers across North America
are discovering that healthy is in demand and will also
produce healthy profits!

The performance of the first quarter FY2018, both
financial and FIZZ market activities, collaborating
with new dynamic distribution results in Canada,
will certainly make this period – a La La summer for
LaCroix.

FY2018 will continue to be a great year for FIZZ due to our
ever-increasing momentum and also an accelerating movement
in a large part of the planet to challenge any and all presently-
stated claims made by beverage manufacturers. All consumer
beverages will be affected and regulatory agencies will insist
that labels represent the truth to consumers. This will promote
brands like LaCroix and Shasta Sparkling Water SDA (Soft Drink
Alternative) because of the standards with which these waters
are developed, labeled and manufactured. Today, ratings agencies
that monitor water products, especially sparkling water, are very
unfair in their analysis by combining various products together
regardless of their ingredients. Our Company will clearly benefit
as more and more consumers become educated with the truth.

Presently, misleading the consumer is quite prevalent – anyone can
label something as all natural, organic or pure to induce a consumer
purposely for their advantage. 2018 will see the pendulum return
to more normal and more honest again . . . protecting those of us
who diligently strive to do the right thing.

Additionally, FY2018 will witness wonderful, new innovations
with packaging, new theme additions, shelf demographic concepts
and a new LaCroix Key Lime flavor introduced with this Annual
Report. Much love and caring goes into all that we do, but when
it comes to naturally essenced, sparkling water taste, we go the
limit and several sips beyond!

So . . . those shareholders who requested that their Annual
Report and Proxy Statement be mailed to them will also get
to try our new Key Lime flavor. Please let us know how you
feel . . . Please!

If you open this Annual Report to the inside back cover,
we have defined our place in the sparkling water category.
Please revisit this powerful page and understand National
Beverage’s real purpose in making you aware of our leadership
role in this sparkling water industry – and that is to make our
healthy, authentically-genuine, great beverages the choice for all
consumers searching for excellence. The right selection makes
excellence a habit!

National Beverage Corp. is benefitting from choices made years
ago and this feeling is wonderful. Standing here at the precipice
of a solar eclipse that heartens another eclipse happening
simultaneously, where a jubilant team of aggressive humans are
moving ‘innocent’ brands of fantastic sparkling water, LaCroix and
Shasta SDA across North America, leaving in its wake healthy, joyful,
refreshed and contented consumers.

Wishing you continued good fortune,

Nick A. Caporella
Chairman and Chief Executive Officer

Mindfulness

FINANCIAL
REVIEW

SELECTED FINANCIAL DATA

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Fiscal Year Ended

OVERVIEW

and Shasta Sparkling Water® products; Rip It® energy

drinks and shots; and Everfresh®, Everfresh Premier

(In thousands, except per share and footnote amounts)

SUMMARY OF OPERATIONS

Net sales

Cost of sales

Gross profit

April 29,
2017

April 30,
2016

May 2,
2015

May 3,
2014(3)

April 27,
2013

$826,918

$704,785

$645,825

$641,135

$662,007

500,841

463,348

426,685

423,480

444,757

326,077

241,437

219,140

217,655

217,250

Selling, general and administrative expenses

163,600

148,384

145,157

153,220

146,223

Interest expense

Other (income) expense - net

Income before income taxes

Provision for income taxes

Net income

PER SHARE DATA

189

(537)

203

145

371

(1,101)

660

666

403

173

162,825

92,705

74,713

63,109

70,451

55,780

31,507

25,402

19,474

23,531

$107,045

$ 61,198

$ 49,311

$ 43,635

$ 46,920

Basic earnings per common share(1)

$ 2.30

$1.31

$ 1.06

$ .93

$ 1.01

National Beverage Corp. proudly refreshes America

Varietals™ and Mr. Pure® 100% juice and juice-based

with a distinctive portfolio of Sparkling Waters, Juices,

products. Our Carbonated Soft Drinks portfolio

Energy Drinks and Carbonated Soft Drinks. We

includes Shasta® and Faygo®, iconic brands whose

believe that our ingenious product designs, innovative

flavor development spans more than 125 years.

packaging and imaginative flavors, along with our

To service a diverse customer base that includes

corporate culture and philosophy, makes National

numerous national retailers, as well as thousands of

Beverage unique in the beverage industry. The

smaller “up-and-down-the-street” accounts, we utilize

Company’s primary market focus is North America,

a hybrid distribution system to deliver our products

but our products are also distributed in various other

primarily through the take-home, convenience and

countries. National Beverage Corp. was incorporated

food-service channels.

in Delaware in 1985 and began trading as a public

Our strategy emphasizes the growth of our

company on the NASDAQ Stock Market in 1991. In

products by (i) developing healthier beverages in

this report, the terms “we,” “us,” “our,” “Company”

response to the global shift in consumer buying habits

and “National Beverage” mean National Beverage

and tailoring the variety and types of beverages in our

Corp. and its subsidiaries unless indicated otherwise.

portfolio to satisfy the preferences of a diverse mix of

Diluted earnings per common share(1)

2.29

1.31

1.05

.92

1.01

National Beverage is evolving to meet the

‘crossover consumers’ – a growing group desiring a

Closing stock price

88.59

46.74

22.42

19.21

14.57

Dividends paid on common stock(2)

1.50

—

2.55

BALANCE SHEET DATA

Cash and equivalents(2)

Working capital(2)

$136,372

$105,577

$ 52,456

$ 29,932

$ 18,267

185,021

148,057

101,478

78,618

67,504

healthy hydration demands of consumers. Health

change to better-for-you beverages; (ii) emphasizing

and wellness awareness has increased significantly,

unique flavor development and variety throughout our

resulting in growing demand for beverages with little

product lines and brands; (iii) leveraging our efficient

or no calories and wholesome natural ingredients.

production and distribution systems, cost-effective

Our brands emphasize distinctly-flavored beverages

social media platforms and

regionally

focused

in attractive packaging that appeal to multiple

marketing programs to profitably deliver high-quality

Property, plant and equipment - net

65,150

61,932

60,182

59,494

57,307

demographic groups. The attentive, health-conscious

products at optimal consumer price-points; and (iv)

Total assets(2)

Long-term debt

Deferred income tax liability

Shareholders' equity(2)

357,889

305,498

247,750

222,841

208,642

—

10,000

30,000

50,000

15,993

14,474

15,245

13,873

14,327

245,618

206,152

147,782

106,201

70,316

Dividends paid on common stock(2)

69,850

—

118,139

(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 $69.9 million ($1.50 per share) on January 27, 2017 and $118.1 million ($2.55 per
share) on December 27, 2012.

(3) Fiscal 2014 consisted of 53 weeks.

and discriminating consumer is ever more alert to

responding faster and more creatively to consumer

wellness choices and better-for-you ingredients that

trends than competitors who are burdened by

align to this transition and strategic focus.

production and distribution complexity as well as

Our brands consist of (i) beverages geared to

legacy costs.

the active and health-conscious consumer (“Power+

Our operating results are affected by numerous

Brands”) including sparkling waters, energy drinks,

factors, including fluctuations in the costs of raw

and juices, and (ii) Carbonated Soft Drinks in a variety

materials, changes

in consumer preference

for

of flavors including regular, sugar-free and reduced

beverage products, competitive pricing

the

calorie options. Our portfolio of Power+ Brands

marketplace and weather conditions. Beverage sales

includes LaCroix®, LaCroix Cúrate™, LaCroix NiCola™

are seasonal with the highest volume typically realized

NATIONAL BEVERAGE CORP.NATIONAL BEVERAGE CORP.MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

during the summer and warmer months. As a result,

The increase in gross profi t is primarily due to

credit. Due to prior year repayments on borrowings,

equipment amounted to $14.0 million for Fiscal

our operating results from one fi scal quarter to the

higher sales and a decline in cost of sales per case

interest expense decreased to $189,000 in Fiscal

2017. The Company expects to increase capital

next may not be comparable.

RESULTS OF OPERATIONS

Net Sales Net sales for fi scal year ended April 29,

2017 (“Fiscal 2017”) increased 17.3% to $826.9

million compared to $704.8 million for fi scal year

ended April 30, 2016 (“Fiscal 2016”). The increase

in sales resulted primarily from a 16.6% increase in

case volume and, to a lesser extent, a higher average

selling price. Power+ Brands volume increased

42.6%; branded carbonated soft drinks volume was

fl at.

Net sales for Fiscal 2016 increased 9.1% to

$704.8 million compared to $645.8 million for the

fi scal year ended May 2, 2015 (“Fiscal 2015”). The

higher sales resulted from a 9.0% increase in case

volume and a slight increase in average selling

price. The volume increase includes 31.4% growth

of our Power+ Brands, partially offset by a decline in

carbonated soft drinks.

of .4%. The decrease in cost of sales per case was

2017 from $203,000 in Fiscal 2016 and $371,000 in

expenditures in Fiscal 2018 to support volume growth.

due to favorable product mix changes and lower raw

Fiscal 2015. Other expense is net of interest income

On January 25, 2013, the Company sold 400,000

material costs. As a result, gross margin improved to

of $641,000 for Fiscal 2017, $107,000 for Fiscal

shares of Special Series D Preferred Stock, par value

34.3%.

2016 and $30,000 for Fiscal 2015. The change in

$1 per share (“Series D Preferred”) for an aggregate

Shipping and handling costs are included in

interest income is due to changes in average invested

purchase price of $20 million. Series D Preferred

selling, general and administrative expenses, the

balances and increased return on investments. Other

had a liquidation preference of $50 per share and

classifi cation of which is consistent with many

income for Fiscal 2015 includes a $1.3 million gain on

dividends were accrued on this amount at an annual

beverage companies. However, our gross margin

sale of property.

rate of 3% through April 30, 2014 and, pursuant

to subsequent amendments, 2.5%

thereafter.

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.

Income Taxes Our effective tax rate was 34.3% for

Dividends were cumulative and payable quarterly.

Fiscal 2017, 34% for Fiscal 2016 and 34% for Fiscal

The net proceeds of $19.7 million were used to repay

2015. The difference between the effective rate and

borrowings under the Credit Facilities. On May 2,

Selling, General and Administrative Expenses

the federal statutory rate of 35% was primarily due to

2014, the Company redeemed 160,000 shares of

Selling, general and administrative expenses were

the effects of state income taxes and the domestic

Series D Preferred for an aggregate price of $8 million

$163.6 million or 19.8% of net sales for Fiscal 2017,

manufacturing deduction. See Note 7 of Notes to

plus accrued dividends. On August 1, 2014, the

increasing $15.2 million or 10.3% from Fiscal 2016.

Consolidated Financial Statements.

Company redeemed an additional 120,000 shares of

The increase was primarily due to shipping and other

volume related expenses and marketing spending

increases. As a percent of Net sales, Selling, general

LIQUIDITY AND FINANCIAL CONDITION

plus accrued dividends. The fi nal redemption of the

Series D Preferred for an aggregate price of $6 million

remaining 120,000 shares of Series D Preferred was

and administrative expenses decreased primarily due

Liquidity and Capital Resources Our principal source

made on April 29, 2016 for an aggregate price of $6

to the leveraging effects of higher volume on fi xed

of funds is cash generated from operations. At April

million plus accrued dividends. See Note 5 of Notes

costs and growth of products distributed by customer

29, 2017, we maintained $100 million unsecured

to Consolidated Financial Statements.

Gross Proﬁ t Gross profi t for Fiscal 2017 increased

35.1% to $326.1 million compared to $241.4 million

for Fiscal 2016. The increase in gross profi t is due to

increased volume, growth in higher margin Power+

pick-up.

revolving credit facilities, under which no borrowings

The Company paid a special cash dividend on

Selling, general and administrative expenses

were outstanding and $2.2 million was reserved for

common stock of $69.9 million ($1.50 per share) on

were $148.4 million or 21.1% of net sales for Fiscal

2016 compared to $145.2 million or 22.5% of net

sales for Fiscal 2015. Fiscal 2016 expenses refl ect

standby letters of credit. We believe that existing

January 27, 2017. On May 5, 2017, the Company

capital resources will be suffi cient to meet our liquidity

declared a special cash dividend of $1.50 per share

and capital requirements for the next twelve months.

to shareholders of record on June 5, 2017. The cash

Brands and a decline in cost of sales per case of

higher distribution, selling and other volume related

See Note 4 of Notes to Consolidated Financial

dividend of $69.9 million will be paid from available

5.7%. The decline in cost of sales per case was

costs, partially offset by lower marketing costs.

Statements.

cash on or before August 4, 2017. The Company

due to favorable product mix changes and lower raw

We continually evaluate capital projects

has announced that it plans to develop a program to

material costs. Gross margin expanded to 39.4%.

Interest Expense and Other Expense (Income) - Net

expand our production capacity, enhance packaging

increase distribution to shareholders based on the

Gross profi t for Fiscal 2016 increased 10.2% to

Interest expense

is comprised of

interest on

capabilities or improve effi ciencies at our production

length of time they have owned their shares.

$241.4 million compared to $219.1 million for Fiscal 2015.

borrowings and fees related to maintaining lines of

facilities. Expenditures for property, plant and

NATIONAL BEVERAGE CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Pursuant to a management agreement, we

Financial Position During Fiscal 2017, our working

CONTRACTUAL OBLIGATIONS

incurred a fee to Corporate Management Advisors,

capital increased to $185.0 million from $148.1 million

Inc. (“CMA”) of $8.3 million for Fiscal 2017, $7.0

at April 30, 2016. The increase in working capital

million for Fiscal 2016 and $6.5 million for Fiscal

resulted from higher cash, trade receivables and

2015. At April 29, 2017, management fees payable

inventory, partially offset by higher accounts payable

to CMA were $2.1 million. See Note 5 of Notes to

and accrued liabilities. Trade receivables increased

Consolidated Financial Statements.

$10.3 million or 17% due to increased sales while days

Contractual obligations at April 29, 2017 are payable as follows:

(In thousands)

Operating leases

Total

Less Than
1 Year

1 to 3
Years

3 to 5
Years

More Than
5 Years

$30,276

$ 8,216

$13,714

$ 5,424

$ 2,922

Purchase commitments

15,239

9,472

4,718

1,049

—

sales outstanding improved to 30.6 days from 31.0

Total

$45,515

$17,688

$18,432

$ 6,473

$ 2,922

Cash Flows During Fiscal 2017, $113.8 million was

days. Inventories increased $5.4 million or 11% as a

provided by operating activities, $14.0 million was

result of the Company maintaining increased fi nished

As of April 29, 2017, we guaranteed the residual

credit aggregating $2.2 million have been issued in

used in investing activities and $69.0 million was used

goods to support sales increases. Annual inventory

value of certain leased equipment in the amount of

connection with our self-insurance programs. These

in fi nancing activities. Cash provided by operating

turns remained unchanged at 9.5 times. As of April

$2.5 million. If the proceeds from the sale of such

standby letters of credit expire through March 2018

activities increased $34.8 million primarily due to

29, 2017, the current ratio was 3.1 to 1 compared to

equipment are less than the balance required by the

and are expected to be renewed.

increased earnings offset in part by increased working

3.0 to 1 at April 30, 2016.

lease when the lease terminates on August 1, 2017,

capital. Cash used in investing activities increased

During Fiscal 2016, our working capital increased

the Company shall be required to pay the difference

OFF-BALANCE SHEET ARRANGEMENTS

$2.0 million refl ecting increased capital expenditures

to $148.1 million from $101.5 million at May 2, 2015.

up to such guaranteed amount. The Company does

to support volume growth. Cash used in fi nancing

The increase in working capital resulted from higher

not expect to incur a loss on such guarantee.

We do not have any off-balance sheet arrangements

activities includes the $69.9 million ($1.50 per share)

cash, trade receivables and inventory, partially offset

We contribute to certain pension plans under

that have, or are reasonably likely to have, a current or

special common stock dividend paid on January 27,

by higher accounts payable and accrued liabilities.

collective bargaining agreements and to a discretionary

future material effect on our fi nancial condition.

2017.

Trade receivables increased $1.1 million due to higher

profi t sharing plan. Annual contributions were $3.1

During Fiscal 2016, $79.0 million was provided

sales activity while days sales outstanding improved to

million for Fiscal 2017, $2.9 million for Fiscal 2016 and

CRITICAL ACCOUNTING POLICIES

by operating activities, $12.0 million was used in

31.0 days from 33.1 days. Inventories increased $5.0

$2.7 million for Fiscal 2015. See Note 9 of Notes to

investing activities and $13.8 million was used in

million as a result of the Company maintaining higher

Consolidated Financial Statements.

The preparation of fi nancial statements in conformity

fi nancing activities. Cash provided by operating

fi nished goods levels to support increases in sales

maintain self-insured and deductible

with generally accepted accounting principles requires

activities increased $20.9 million primarily due to

and new product introductions. Annual inventory

programs for certain liability, medical and workers’

management to make estimates and assumptions that

increased earnings and favorable changes in working

turns decreased to 9.5 from 10.2 times. At April 30,

compensation exposures. Other long-term liabilities

affect the amounts reported in the fi nancial statements

capital. Cash used in investing activities increased

2016, the current ratio was 3.0 to 1 compared to 2.5

include known claims and estimated incurred but not

and accompanying notes. Although these estimates

$2.3 million refl ecting higher capital expenditures and

to 1 at May 2, 2015.

lower proceeds from the sale of property. Cash used

in fi nancing activities was $13.8 million which included

a $6 million redemption of preferred stock and $10

million in principal repayments under credit facilities.

reported claims not otherwise covered by insurance,

are based on management’s knowledge of current

based on actuarial assumptions and historical

events and actions it may undertake in the future, they

claims experience. Since the timing and amount of

may ultimately differ from actual results. We believe

claim payments vary signifi cantly, we are not able

that the critical accounting policies described in the

to reasonably estimate future payments for specifi c

following paragraphs comprise the most signifi cant

periods and therefore such payments have not

estimates and assumptions used in the preparation of

been included in the table above. Standby letters of

our consolidated fi nancial statements.

NATIONAL BEVERAGE CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

For these policies, we caution that future events rarely

or liabilities and their reported amounts in the fi nancial

and business performance, achievements, objectives

develop exactly as estimated and the best estimates

statements. Valuation allowances are established to

routinely require adjustment.

reduce the carrying amounts of deferred tax assets

when it is deemed, more likely than not, that the

Credit Risk We sell products to a variety of customers

benefi t of deferred tax assets will not be realized.

and extend credit based on an evaluation of each

customer’s fi nancial condition, generally without

requiring collateral. Exposure to credit losses varies

by customer principally due to the fi nancial condition

of each customer. We monitor our exposure to credit

losses and maintain allowances for anticipated losses

based on specifi c customer circumstances, credit

conditions and historical write-offs.

Insurance Programs We maintain self-insured and
deductible programs for certain liability, medical and

workers’ compensation exposures. Accordingly,

we accrue for known claims and estimated incurred

but not reported claims not otherwise covered by

insurance based on actuarial assumptions and

historical claims experience.

Impairment of Long-Lived Assets All

long-lived

assets, excluding goodwill and intangible assets not

subject to amortization, are evaluated for impairment

Sales Incentives We offer various sales incentive
arrangements to our customers that require customer

performance or achievement of certain sales volume

targets. Sales incentives are accrued over the period

on the basis of undiscounted cash fl ows whenever

of benefi t or expected sales volume. When the

events or changes in circumstances indicate that the

incentive is paid in advance, the aggregate incentive is

carrying amount of an asset may not be recoverable.

recorded as a prepaid and amortized over the period

An impaired asset is written down to its estimated fair

of benefi t or contractual sales volume. The recognition

market value based on the best information available.

Estimated fair market value is generally measured by

discounting future cash fl ows. 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.

Income Taxes Our effective income tax rate is based

on estimates of taxes which will ultimately be payable.

Deferred taxes are recorded to give recognition to

temporary differences between the tax bases of assets

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 fi nancial, operational

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, fi lings with the Securities

and Exchange Commission and in reports to our

stockholders. Certain statements including, without

limitation, statements containing the words “believes,”

“anticipates,” “intends,” “plans,” “expects,” and

“estimates” constitute “forward-looking statements”

and involve known and unknown risk, uncertainties

and other factors that may cause the actual results,

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 fl uctuate 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

performance or achievements of our Company

the use of supplier pricing agreements that enable us

to be materially different from any future results,

to establish all, or a portion of, the purchase prices for

performance or achievements expressed or implied

certain raw materials. Additionally, we use derivative

by such forward-looking statements. Such factors

fi nancial instruments to partially mitigate our exposure

include, but are not limited to, the following: general

to changes in certain raw material costs.

Interest Rates During Fiscal 2016, the Company

repaid $10 million in borrowings under its credit

facilities. At April 29, 2017, the Company had no

borrowings outstanding. We had no debt-related

interest rate exposure during Fiscal 2017.

economic and business conditions, pricing of

competitive products, success of new product and

fl avor introductions, fl uctuations 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 brand image, 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, unfavorable

weather conditions and other factors referenced in

this report, fi lings with the Securities and Exchange

Commission and other reports to our stockholders.

We disclaim an obligation to update any such factors

or to publicly announce the results of any revisions to

any forward-looking statements contained herein to

refl ect future events or developments.

NATIONAL BEVERAGE CORP.

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF INCOME

(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

Deferred income taxes - net

Other liabilities

Shareholders' equity:

April 29,
2017

April 30,
2016

$136,372

$105,577

71,319

53,355

3,906

7,275

61,046

47,922

4,454

4,672

272,227

223,671

65,150

13,145

1,615

5,752

61,932

13,145

1,615

5,135

$357,889

$305,498

$ 58,100

$ 49,391

29,017

26,195

87,206

15,993

9,072

75,614

14,474

9,258

(In thousands, except per share amounts)

Net sales

Cost of sales

Gross profit

Selling, general and administrative expenses

Interest expense

Other (income) expense - net

Income before income taxes

Provision for income taxes

Net income

Less preferred dividends and accretion

Earnings available to common shareholders

Earnings per common share:
Basic
Diluted

Weighted average common shares outstanding:
Basic
Diluted

See accompanying Notes to Consolidated Financial Statements.

Fiscal Year Ended

April 29,
2017

April 30,
2016

May 2,
2015

$826,918

$704,785

$645,825

500,841

463,348

426,685

326,077

163,600

189

(537)

162,825

55,780

107,045

—

241,437

219,140

148,384

145,157

203

145

92,705

31,507

61,198

(238)

371

(1,101)

74,713

25,402

49,311

(275)

$107,045

$ 60,960

$ 49,036

$ 2.30
$ 2.29

$ 1.31
$ 1.31

$ 1.06
$ 1.05

46,564
46,770

46,452
46,671

46,353
46,559

Preferred stock, $1 par value - 1,000,000 shares authorized

Series C - 150,000 shares issued

150

Common stock, $.01 par value - 75,000,000 shares authorized;

50,616,134 shares (2017) and 50,588,734 shares (2016) 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.

506

35,638

34,570

227,928

190,733

(604)

(1,807)

(5,100)

(12,900)

(5,100)

(12,900)

245,618

206,152

$357,889

$305,498

NATIONAL BEVERAGE CORP.NATIONAL BEVERAGE CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(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

April 29,
2017

April 30,
2016

May 2,
2015

$107,045

$ 61,198

$ 49,311

1,110

1,203

783

(66)

717

(2,350)

(2,319)

$108,248

$ 61,915

$ 46,992

(In thousands)

Amount

Fiscal Year Ended

April 29, 2017

April 30, 2016

May 2, 2015

SERIES C PREFERRED STOCK

Beginning and end of year

SERIES D PREFERRED STOCK

Beginning of year

Series D preferred redeemed

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

Stock options exercised

Stock-based compensation

Stock-based tax benefits

End of year

RETAINED EARNINGS

Beginning of year

Net income

Common stock cash dividend

Preferred stock dividends & accretion

End of year

ACCUMULATED OTHER COMPREHENSIVE
LOSS

Beginning of year

Cash flow hedges

Other

End of year

150 $ 150

—

120

(120)

120

(120)

— —

240

(120)

120

50,589

506

50,418

504

50,368

—

171

50,616

506

50,589

506

50,418

34,570

—

365

208

495

35,638

190,733

107,045

(69,850)

—

227,928

(1,807)

1,110

(604)

37,759

(5,791)

846

228

1,528

34,570

129,773

61,198

—

(238)

190,733

(2,524)

783

(66)

(1,807)

240

(120)

120

504

—

504

42,775

(5,791)

228

307

240

37,759

80,737

49,311

—

(275)

129,773

(205)

(2,350)

(2,524)

TREASURY STOCK - SERIES C PREFERRED

Beginning and end of year

150

(5,100)

150

(5,100)

150

(5,100)

TREASURY STOCK - COMMON

Beginning and end of year

4,033

(12,900)

4,033

(12,900)

4,033

(12,900)

TOTAL SHAREHOLDERS’ EQUITY

$245,618

$206,152

$147,782

See accompanying Notes to Consolidated Financial Statements.

NATIONAL BEVERAGE CORP.NATIONAL BEVERAGE CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fiscal Year Ended

April 29,
2017

April 30,
2016

May 2,
2015

National Beverage Corp. develops, produces, markets

use derivative financial instruments for trading or

and sells a diverse portfolio of flavored beverage

speculative purposes. Credit risk related to derivative

products primarily in North America. Incorporated

financial instruments is managed by requiring high

in Delaware in 1985, National Beverage Corp. is a

credit standards for counterparties and frequent cash

$107,045

$ 61,198

$ 49,311

holding company for various operating subsidiaries.

settlements. See Note 6.

(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 (gain) 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

12,834

1,358

208

(10,273)

(5,433)

(2,205)

8,709

1,457

12,056

(1,299)

129

228

(1,095)

(4,998)

(485)

4,495

8,726

11,580

1,076

(1,188)

307

(1,746)

990

(605)

(710)

(995)

Net cash provided by operating activities

113,772

78,955

58,020

INVESTING ACTIVITIES

Additions to property, plant and equipment

(14,015)

(12,140)

(11,630)

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 under credit facilities, net

Redemption of preferred stock

Proceeds from stock options exercised

Stock-based tax benefits

Net cash used in financing activities

NET INCREASE IN CASH AND EQUIVALENTS

CASH AND EQUIVALENTS - BEGINNING OF YEAR

116

(13,987)

(12,024)

1,905

(9,725)

—

(239)

—

(186)

(10,000)

(20,000)

(6,000)

848

1,528

228

240

(13,810)

(25,771)

53,121

52,456

22,524

29,932

(69,850)

—

365

495

(68,990)

30,795

105,577

CASH AND EQUIVALENTS - END OF YEAR

$136,372

$105,577

$ 52,456

OTHER CASH FLOW INFORMATION

Interest paid

Income taxes paid

See accompanying Notes to Consolidated Financial Statements.

$ 202

$ 116

$ 380

$ 55,901

$ 29,473

$ 24,745

When used in this report, the terms “we,” “us,” “our,”

“Company” and “National Beverage” mean National

Earnings Per Common Share Basic earnings per

Beverage Corp. and its subsidiaries.

common share is computed by dividing earnings

1. SIGNIFICANT ACCOUNTING POLICIES

average number of common shares outstanding

available to common shareholders by the weighted

Basis of Presentation The consolidated financial

share is calculated in a similar manner, but includes the

statements have been prepared in accordance with

dilutive effect of stock options amounting to 206,000

United States generally accepted accounting principles

shares in Fiscal 2017, 219,000 shares in Fiscal 2016

(“GAAP”) and rules and regulations of the Securities

and 206,000 shares in Fiscal 2015.

during the period. Diluted earnings per common

and Exchange Commission.

The consolidated

financial statements include the accounts of National

Fair Value The

fair value of

long-term debt

Beverage Corp. and all subsidiaries. All significant

approximates its carrying value due to its variable

intercompany transactions and accounts have been

interest rate and lack of prepayment penalty. The

eliminated. Our fiscal year ends the Saturday closest

estimated fair values of derivative financial instruments

to April 30 and, as a result, an additional week is

are calculated based on market rates to settle the

added every five or six years. Fiscal 2017, Fiscal

instruments. These values represent the estimated

2016 and Fiscal 2015 consisted of 52 weeks.

amounts we would receive upon sale, taking into

consideration current market prices and credit

Cash and Equivalents Cash and equivalents are

worthiness. See Note 6.

comprised of cash and highly

liquid securities

(consisting primarily of short-term money-market

Impairment of Long-Lived Assets All

long-lived

investments) with an original maturity of three months

assets, excluding goodwill and intangible assets not

or less.

subject to amortization, are evaluated for impairment

on the basis of undiscounted cash flows whenever

Derivative Financial Instruments We use derivative

events or changes in circumstances indicate that the

financial instruments to partially mitigate our exposure

carrying amount of an asset may not be recoverable.

to changes in raw material costs. All derivative

An impaired asset is written down to its estimated fair

financial instruments are recorded at fair value in

market value based on the best information available.

our Consolidated Balance Sheets. We do not

Estimated

fair value

is generally measured by

NATIONAL BEVERAGE CORP.NATIONAL BEVERAGE CORP.

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

discounting future cash fl ows. Goodwill and intangible

Inventories Inventories are stated at the lower of

2016-02”). ASU 2016-02 requires the lease rights

maintenance and repairs that do not extend the useful

assets not subject to amortization are evaluated for

fi rst-in, fi rst-out cost or market. Inventories at April

and obligations arising from lease contracts, including

life of an asset are expensed as incurred. Depreciation

impairment annually or sooner if we believe such

29, 2017 were comprised of fi nished goods of $35.0

existing and new arrangements, to be recognized

is recorded using the straight-line method over

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.

Income Taxes Our effective income tax rate is based

on estimates of taxes which will ultimately be payable.

Deferred taxes are recorded to give recognition to

temporary differences between the tax bases of assets

or liabilities and their reported amounts in the fi nancial

statements. Valuation allowances are established to

million and raw materials of $18.4 million. Inventories

as assets and liabilities on the balance sheet. ASU

estimated useful lives of 7 to 30 years for buildings and

at April 30, 2016 were comprised of fi nished goods of

2016-02 is effective for our fi scal year beginning April

improvements and 3 to 15 years for machinery and

$29.1 million and raw materials of $18.8 million.

28, 2019. We are currently evaluating the potential

equipment. Leasehold improvements are amortized

impact of adopting this guidance on our consolidated

using the straight-line method over the shorter of the

Marketing Costs We are

involved

in a variety

fi nancial statements.

remaining lease term or the estimated useful life of the

of marketing programs,

including cooperative

In November 2015, the FASB issued Accounting

improvement. When assets are retired or otherwise

advertising programs with customers, to advertise

Standards Update No. 2015-17, “Balance Sheet

disposed, the cost and accumulated depreciation

and promote our products to consumers. Marketing

Classifi cation of Deferred Taxes” (“ASU 2015-17”).

are removed from the respective accounts and any

costs are expensed when incurred, except for

ASU 2015-17 requires companies to classify all

related gain or loss is recognized.

prepaid advertising and production costs which

deferred tax liabilities and assets as noncurrent on the

are expensed when the advertising takes place.

balance sheet. ASU 2015-17 is effective for our fi scal

Revenue Recognition Revenue from product sales

Marketing costs, which are included in selling, general

year beginning April 30, 2017. When implemented,

is recognized when title and risk of loss pass to the

reduce the carrying amounts of deferred tax assets

and administrative expenses, totaled $44.9 million in

current deferred tax asset will be reclassifi ed to

customer, which generally occurs upon delivery. Our

when it is deemed, more likely than not, that the

Fiscal 2017, $38.8 million in Fiscal 2016 and $42.4

noncurrent in the consolidated balance sheet.

policy is not to allow the return of products once they

benefi t of deferred tax assets will not be realized.

million in Fiscal 2015.

In May 2014, the FASB issued Accounting

have been accepted by the customer. However, on

Standards Update No. 2014-09, “Revenue from

occasion, we have accepted returns or issued credit

Insurance Programs We maintain self-insured and

New Accounting Pronouncements In March 2016,

Contracts with Customers” (“ASU 2014-09”). ASU

to customers, primarily for damaged goods. The

deductible programs for certain liability, medical and

workers’ compensation exposures. Accordingly, we

accrue for known claims and estimated incurred but

not reported claims not otherwise covered by insurance

based on actuarial assumptions and historical claims

experience. At April 29, 2017 and April 30, 2016,

other liabilities included accruals of $6.9 million and

$5.8 million, respectively, for estimated non-current

risk retention exposures, of which $5.4 million and

$4.8 million were covered by insurance.

the Financial Accounting Standards Board (“FASB”)

2014-09 requires an entity to recognize revenue in an

amounts have been immaterial and, accordingly, we

issued Accounting Standards Update 2016-09,

amount that refl ects the consideration it expects to

do not provide a specifi c valuation allowance for sales

“Compensation-Stock Compensation: Improvements

receive in exchange for goods or services. On August

returns.

to Employee Share-Based Payment Accounting”

12, 2015, the FASB issued ASU 2015-14 which

(“ASU 2016-09”). This amendment addresses several

deferred the effective date of ASU 2014-09 by one

Sales Incentives We offer various sales incentive

aspects of the accounting for share-based payment

year and is effective for our fi scal year beginning April

arrangements to our customers that require customer

transactions, including the income tax consequences,

29, 2018. We are currently evaluating the potential

performance or achievement of certain sales volume

classifi cation of awards as either equity or liabilities

impact of adopting this guidance on our consolidated

targets. When the incentive is paid in advance, we

and classifi cation on the statement of cash fl ows.

fi nancial statements; however, adoption

is not

amortize the amount paid over the period of benefi t

ASU 2016-09 is effective for our fi scal year beginning

expected to have a material impact on our fi nancial

or contractual sales volume; otherwise, we accrue

April 30, 2017. Adoption is not expected to have a

position, results of operations or cash fl ows.

the expected amount to be paid over the period of

material impact on our fi nancial position, results of

benefi t or expected sales volume. The recognition

Intangible Assets Intangible assets as of April 29,

operations or cash fl ows.

Property, Plant and Equipment Property, plant

of these incentives involves the use of judgment

2017 and April 30, 2016 consisted of non-amortizable

In February 2016, the FASB issued Accounting

and equipment are recorded at cost. Additions,

related to performance and sales volume estimates

trademarks.

Standards Update No. 2016-02, “Leases” (“ASU

replacements and betterments are capitalized, while

that are made based on historical experience and

NATIONAL BEVERAGE CORP.

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

other factors. Sales incentives are accounted for as

generally without requiring collateral. Exposure to

2. PROPERTY, PLANT AND EQUIPMENT

April 30, 2021 and any borrowings would currently

a reduction of sales and actual amounts ultimately

credit losses varies by customer principally due to the

bear interest at .9% above one-month LIBOR. There

realized may vary from accrued amounts.

fi nancial condition of each customer. We monitor our

Property, plant and equipment as of April 29, 2017

were no borrowings outstanding under the Credit

exposure to credit losses and maintain allowances

and April 30, 2016 consisted of the following:

Facilities at April 29, 2017 or April 30, 2016. At April

Segment Reporting We operate as a single operating

for anticipated losses based on specifi c customer

segment

for purposes of presenting fi nancial

circumstances, credit conditions and historical write-

information and evaluating performance. As such,

offs. Activity in the allowance for doubtful accounts

the accompanying consolidated fi nancial statements

was as follows:

present fi nancial information in a format that is

consistent with the internal fi nancial information used

(In thousands)

Fiscal
2017

Fiscal
2016

Fiscal
2015

by management. We do not accumulate revenues by

product classifi cation and, therefore, it is impractical

to present such information.

Balance at beginning of year

$484

$330 $399

Net charge to expense

74 232

Net charge-off

(90)

(78)

117

(186)

Balance at end of year

$468

$484 $330

(In thousands)

Land

29, 2017, $2.2 million of the Credit Facilities was

2017

2016

reserved for standby letters of credit and $97.8 million

$ 9,500

was available for borrowings.

Buildings and improvements

51,157 50,856

Machinery and equipment

172,257 162,195

Total

232,914 222,551

Less accumulated depreciation

(167,764)

(160,619)

Property, plant and equipment – net $65,150

$61,932

The Credit Facilities require the subsidiary to

maintain certain fi nancial ratios, including debt to net

worth and debt to EBITDA (as defi ned in the Credit

Facilities), and contain other restrictions, none of

which are expected to have a material effect on our

Depreciation expense was $10.7 million for Fiscal

operations or fi nancial position. At April 29, 2017, we

2017, $10.1 million for Fiscal 2016 and $10.2 million

were in compliance with all loan covenants.

Shipping and Handling Shipping and handling costs

As of April 29, 2017 and April 30, 2016, we did not

for Fiscal 2015.

are reported in selling, general and administrative

have any customer that comprised more than 10%

expenses

the accompanying consolidated

of trade receivables. No one customer accounted

3. ACCRUED LIABILITIES

statements of income. Such costs aggregated $50.0

for more than 10% of net sales during any of the last

5. CAPITAL STOCK AND TRANSACTIONS
WITH RELATED PARTIES

million in Fiscal 2017, $44.6 million in Fiscal 2016 and

three fi scal years.

$44.4 million in Fiscal 2015. Although our classifi cation

is consistent with many beverage companies, our

Use of Estimates The preparation of fi nancial

gross margin may not be comparable to companies

statements in conformity with United States generally

that include shipping and handling costs in cost of

accepted accounting principles requires management

sales.

to make estimates and assumptions that affect the

amounts reported in the fi nancial statements and

Stock-Based Compensation Compensation expense

accompanying notes. Although these estimates are

for stock-based compensation awards is recognized

based on management’s knowledge of current events

over the vesting period based on the grant-date fair

and anticipated future actions, actual results may vary

value estimated using the Black-Scholes model. See

from reported amounts.

Note 8.

Trade Receivables We record trade receivables at net

realizable value, which includes an estimated allowance

for doubtful accounts. We extend credit based on

an evaluation of each customer’s fi nancial condition,

Accrued liabilities as of April 29, 2017 and April 30,

The Company paid a special cash dividend on

2016 consisted of the following:

common stock of $69.9 million ($1.50 per share) on

January 27, 2017.

On May 5, 2017, the Company declared a special

(In thousands)

2017

2016

cash dividend of $1.50 per share to shareholders of

Accrued compensation

$ 9,967

$ 9,217

record on June 5, 2017. The cash dividend of $69.9

Accrued promotions

Accrued insurance

Other

Total

4. DEBT

8,403

2,938

7,709

5,888

2,786

8,304

$29,017

$26,195

million will be paid on or before August 4, 2017.

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

had a liquidation preference of $50 per share and

accrued dividends on this amount at an annual rate

At April 29, 2017, a subsidiary of the Company

of 3% through April 30, 2014 and, thereafter, at an

maintained unsecured revolving credit facilities with

annual rate equal to 370 basis points above the

banks aggregating $100 million (the “Credit Facilities”).

3- Month LIBOR rate. Dividends were cumulative and

The Credit Facilities expire from October 10, 2017 to

payable quarterly. There were no accrued dividends

NATIONAL BEVERAGE CORP.

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

at April 29, 2017 and at April 30, 2016. The Series D

impact of the rate change, the Company determined

and profi ling acquisition candidates, negotiating

losses attributable to the effective portion of the

Preferred was nonvoting and redeemable at the option

that the related fair value change was immaterial and

and structuring potential transactions and arranging

cash fl ow hedge are reported in Accumulated

of the Company beginning May 1, 2014 at $50 per

that no adjustment was required.

fi nancing for any such transaction. CMA, through

Other Comprehensive Income (Loss) (“AOCI”) and

share. In addition, the Company has 150,000 shares

On April 29, 2016, the Company redeemed the

its personnel, also provides, to the extent possible,

reclassifi ed into cost of sales in the period in which the

of Series C Preferred Stock, par value $1 per share,

fi nal remaining 120,000 shares of Series D Preferred

the stimulus and creativity to develop an innovative

hedged transaction affects earnings. The ineffective

which are held as treasury stock and, therefore, such

for an aggregate price of $6 million plus accrued

and dynamic persona for the Company, its products

portion of the change in fair value of our cash fl ow

shares have no liquidation value.

dividends. In connection therewith, the Company

and corporate image. In order to fulfi ll its obligations

hedge was immaterial. The following summarizes

On May 2, 2014, the Company redeemed

accreted and charged to retained earnings $89,000

under the management agreement, CMA employs

the gains (losses) recognized in the Consolidated

160,000 shares of Series D Preferred, representing

of original issuance costs, which was deducted

numerous individuals, whom, acting as a unit, provide

Statements of Income and AOCI relative to the cash

40% of the amount outstanding, for an aggregate price

from income available to common shareholders for

management, administrative and creative functions

fl ow hedge for Fiscal 2017, Fiscal 2016 and Fiscal

of $8 million plus accrued dividends. In connection

earnings per share calculation.

for the Company. The management agreement

2015:

therewith, the Company accreted and charged to

The Company is authorized under its stock

provides that the Company will pay CMA an annual

retained earnings $118,000 of original issuance

buyback program to repurchase 1.6 million shares of

base fee equal to one percent of the consolidated

costs, which was deducted from income available

Common Stock. As of April 29, 2017, 502,060 shares

net sales of the Company, and further provides that

(In thousands)

Recognized in AOCI-

Fiscal
2017

Fiscal
2016

Fiscal
2015

to common shareholders for earnings per share

were purchased under the program and 1,097,940

the Compensation and Stock Option Committee

Loss before income taxes

$ (984) $(5,743) $(3,488)

calculation. In conjunction with the partial redemption,

shares were available for purchase. No shares of

and the Board of Directors may from time to time

Less income tax benefi t

(365)

(2,131)

(1,294)

the annual dividend rate on the outstanding Series D

Common Stock have been repurchased during the

award additional incentive compensation to CMA.

Preferred was reduced to 2.5% for the twelve month

last three fi scal years.

The Board of Directors on numerous occasions

period beginning May 1, 2014. In evaluating the

The Company is a party to a management

contemplated incentive compensation and, while

impact of the rate change, the Company determined

agreement with Corporate Management Advisors,

shareholder value has increased over $4.5 billion (or

that the related fair value change was immaterial and

Inc. (“CMA”), a corporation owned by our Chairman

10,000%) since the inception of this agreement, no

Net
Reclassifi ed from AOCI to
cost of sales-
(Loss) gain before

income taxes
Less income tax

(619)

(3,612)

(2,194)

(2,749)

(6,987)

248

(benefi t) provision

(1,020)

(2,592)

that no adjustment was required.

and Chief Executive Offi cer. This agreement was

On August 1, 2014, the Company redeemed

originated in 1991 for the effi cient use of management

incentive compensation has been paid. We incurred

Net

(1,729)

(4,395)

156

management fees to CMA of $8.3 million for Fiscal

Net change to AOCI

$ 1,110 $ 783 $(2,350)

120,000 shares of Series D Preferred, representing

of two public companies at the time. In 1994, one

2017, $7.0 million for Fiscal 2016 and $6.5 million

50% of the amount outstanding, for an aggregate

of those public entities, through a merger, no longer

for Fiscal 2015. Included in accounts payable were

As of April 29, 2017, the notional amount of our

price of $6 million plus accrued dividends. In

was managed in this manner. Under the terms of the

amounts due CMA of $2.1 million at April 29, 2017

outstanding aluminum swap contracts was $56.7

connection therewith, the Company accreted and

agreement, CMA provides, subject to the direction and

and $1.8 million at April 30, 2016.

charged to retained earnings $89,000 of original

supervision of the Board of Directors of the Company,

million and, assuming no change in the commodity

prices, $246,000 of unrealized loss before tax will be

issuance costs, which was deducted from income

(i) senior corporate functions (including supervision of

6. DERIVATIVE FINANCIAL INSTRUMENTS

reclassifi ed from AOCI and recognized in earnings

available to common shareholders for earnings per

the Company’s fi nancial, legal, executive recruitment,

over the next 12 months. See Note 1.

share calculation.

internal audit and management information systems

From time to time, we enter into aluminum swap

As of April 29, 2017, the fair value of the derivative

On May 1, 2015, the Company and the holders

departments) as well as the services of a Chief

contracts to partially mitigate our exposure to

asset, derivative liability and derivative long-term

of the Series D Preferred agreed to extend the 2.5%

Executive Offi cer and Chief Financial Offi cer, and (ii)

changes in the cost of aluminum cans. Such

liability was $602,000, $848,000 and $476,000, which

annual dividend rate on the outstanding Series D

services in connection with acquisitions, dispositions

fi nancial instruments are designated and accounted

was included in prepaid and other assets, accrued

Preferred through April 30, 2016. In evaluating the

and fi nancings by the Company, including identifying

for as a cash fl ow hedge. Accordingly, gains or

liabilities and other liabilities, respectively. As of April

NATIONAL BEVERAGE CORP.

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

30, 2016, the fair value of the derivative liability was

$2.5 million, which was included in accrued liabilities.

Such valuation does not entail a signifi cant amount of

judgment and the inputs that are signifi cant to the fair

value measurement are Level 2 as defi ned by the fair

(In thousands)

Deferred tax assets:

2017

2016

Accrued expenses and other

$ 4,740 $ 5,655

Inventory and amortizable assets

538

Total deferred tax assets

5,278

6,193

value hierarchy as they are observable market based

Deferred tax liabilities:

inputs or unobservable inputs that are corroborated

Property

by market data.

Intangibles and other

15,157

14,049

2,208

2,164

7. INCOME TAXES

The provision (benefi t) for income taxes consisted of

the following:

(In thousands)

Current

Deferred

Fiscal
2017

Fiscal
2016

Fiscal
2015

$54,422 $32,806 $24,326

1,358

(1,299)

1,076

(In thousands)

Total $55,780 $31,507 $25,402

Deferred taxes are recorded to give recognition to

temporary differences between the tax bases of assets

or liabilities and their reported amounts in the fi nancial

statements. Valuation allowances are established to

reduce the carrying amounts of deferred tax assets

when it is deemed more likely than not that the benefi t

of deferred tax assets will not be realized. Deferred

tax assets and liabilities as of April 29, 2017 and April

30, 2016 consisted of the following:

Total deferred tax liabilities

17,365

16,213

Net deferred tax liabilities

$12,087 $10,020

Current deferred tax assets–net

$ 3,906 $ 4,454

Noncurrent deferred tax liabilities–net $15,993 $14,474

The reconciliation of the statutory federal income tax

rate to our effective tax rate is as follows:

Fiscal
2017

Fiscal
2016

Fiscal
2015

35.0% 35.0% 35.0%

2.2

2.3

Statutory federal income
tax rate
State income taxes,
net of federal benefi t
Domestic manufacturing
deduction benefi t

Other differences

(.2)

(3.0)

(.3)

Effective income tax rate

34.3% 34.0% 34.0%

As of April 29, 2017, the gross amount of

unrecognized tax benefi ts was $1.7 million and

$66,000 was recognized as a tax benefi t in Fiscal 2017.

If we were to prevail on all uncertain tax positions,

the net effect would be to reduce our tax expense

by approximately $1.2 million. A reconciliation of the

changes in the gross amount of unrecognized tax

benefi ts, which amounts are included in other liabilities

(In thousands)

Fiscal
2017

Fiscal
2016

Fiscal
2015

8. STOCK-BASED COMPENSATION

Beginning balance

$1,678

$1,801

$2,123

Our stock-based compensation program is a broad-

Increases due to current
period tax positions

Decreases due to lapse of
statute of limitations and
audit resolutions

150

145

122

based program designed to attract and retain

employees while also aligning employees’ interests

(85)

(268)

(444)

The 1991 Omnibus Incentive Plan (the “Omnibus

with the interests of the shareholders.

Ending balance

$1,743

$1,678

$1,801

Plan”) provides for compensatory awards consisting

of (i) stock options or stock awards for up to 4,800,000

We recognize accrued interest and penalties

shares of common stock, (ii) stock appreciation rights,

related to unrecognized tax benefi ts in income tax

dividend equivalents, other stock-based awards

expense. As of April 29, 2017, unrecognized tax

benefi ts included accrued interest of $239,000, of

which approximately $12,000 was recognized as a

tax benefi t in Fiscal 2017.

We fi le annual income tax returns in the United

States and in various state and local jurisdictions.

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 designed to provide an incentive to offi cers and

certain other key employees and consultants by

making available to them an opportunity to acquire

a proprietary interest or to increase such interest in

A number of years may elapse before an uncertain

National Beverage.

tax position, for which we have unrecognized tax

The number of shares or options which may be

benefi ts, is resolved. While it is often diffi cult to predict

issued under stock-based awards to an individual is

the fi nal outcome or the timing of resolution of any

limited to 1,680,000 during any year. Awards may

particular uncertain tax position, we believe that our

be granted for no cash consideration or such minimal

unrecognized tax benefi ts refl ect the most probable

cash consideration as may be required by law.

outcome. We adjust these unrecognized tax benefi ts,

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 fi scal years subsequent to 2013 are subject to

Options generally have an exercise price equal to the

fair market value of our common stock on the date

of grant, vest over a fi ve-year period and expire after

ten years.

The Special Stock Option Plan provides for

the issuance of stock options to purchase up to an

aggregate of 1,800,000 shares of common stock.

Options may be granted for such consideration as

examination. Generally, the income tax returns for the

determined by the Board of Directors. The vesting

in the accompanying consolidated balance sheets, is

various state jurisdictions are subject to examination

schedule and exercise price of these options are tied

as follows:

for fi scal years ending after fi scal 2010.

to the recipient’s ownership level of common stock

NATIONAL BEVERAGE CORP.

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

and the terms generally allow for the reduction in

life of stock options was estimated based on historical

value for stock options granted was $20.09 for Fiscal

9. PENSION PLANS

exercise price upon each vesting period. Also, the

experience. The expected volatility was estimated

2016 and $8.30 for Fiscal 2015.

Board of Directors authorized the issuance of options

based on historical stock prices for a period consistent

As of April 29, 2017, unrecognized compensation

The Company contributes to certain pension plans

to purchase up to 50,000 shares of common stock to

with the expected life of stock options. The risk free

expense related to the unvested portion of our stock

under collective bargaining agreements and to a

be issued at the direction of the Chairman.

interest rate was based on the U.S. Treasury constant

options was $425,000, which is expected to be

discretionary profi t sharing plan. Annual contributions

The Key Employee Equity Partnership Program

maturity interest rate whose term is consistent with

recognized over a weighted average period of 3.9

(“KEEP Program”) provides for the granting of stock

the expected life of stock options. Forfeitures were

years. The weighted average remaining contractual

options to purchase up to 240,000 shares of common

estimated based on historical experience and ranged

term and the aggregate intrinsic value for options

stock to key employees, consultants, directors and

in values up to 16% for Fiscal 2017 and Fiscal 2016.

outstanding as of April 29, 2017 was 5.5 years and

offi cers. Participants who purchase shares of stock

$29.6 million, respectively. The weighted average

in the open market receive grants of stock options

The following is a summary of stock option activity

remaining contractual term and the aggregate intrinsic

(including contributions

to multi-employer plans

refl ected below) were $3.1 million for Fiscal 2017,

$2.9 million for Fiscal 2016 and $2.7 million for Fiscal

2015.

The Company participates in three multi-employer

defi ned benefi t pension plans with respect to certain

collective bargaining agreements. If the Company

chooses to stop participating in the multi-employer

plan or if other employers choose to withdraw to the

extent that a mass withdrawal occurs, the Company

could be required to pay the plan a withdrawal liability

based on the underfunded status of the plan. During

value for options exercisable as of April 29, 2017 was

4.7 years and $17 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

Fiscal 2017, a subsidiary of the Company reached a

and (iii) are not owners of fi ve percent or more of our

settlement with respect to a notifi cation of withdrawal

common stock. As of April 29, 2017, no shares have

liability by one of the multi-employer pension plans not

been issued under the plan.

considered signifi cant. The settlement did not have

a material effect on its fi nancial position or results of

operations.

equal to 50% of the number of shares purchased, up

for Fiscal 2017:

to a maximum of 6,000 shares in any two-year period.

Options under the KEEP Program are forfeited in the

event of the sale of shares used to acquire such

options. Options are granted at an initial exercise

price of 60% of the purchase price paid for the shares

acquired and the exercise price reduces to the stock

par value at the end of the six-year vesting period.

We account for stock options under the fair value

method of accounting using a Black-Scholes valuation

Number
of Shares Price(a)

Options outstanding, beginning of year 418,895 $12.44

Granted

Exercised

—

(27,400)

13.31

Canceled

(7,900)

16.01

Options outstanding, end of year

383,595

$11.47

Options exercisable, end of year

215,803

$ 9.64

(a) Weighted average exercise price.

model to estimate the stock option fair value at date

Stock-based

compensation

expense was

of grant. The fair value of stock options is amortized

$208,000 for Fiscal 2017, $228,000 for Fiscal

to expense over the vesting period. No stock options

2016 and $307,000 for Fiscal 2015. The total fair

were granted in Fiscal 2017, 3,500 shares were

value of shares vested was $362,000 for Fiscal

granted in Fiscal 2016 and 276,800 shares in Fiscal

2017, $652,000 for Fiscal 2016 and $371,000

2015. The weighted average Black-Scholes fair value

for Fiscal 2015. The total intrinsic value for stock

assumptions for stock options granted are as follows:

options exercised was $1,506,000 for Fiscal 2017,

weighted average expected life of 8.0 years for

$5,161,000 for Fiscal 2016 and $917,000 for Fiscal

Fiscal 2016 and 7.4 years for Fiscal 2015; weighted

2015. Net cash proceeds from the exercise of stock

average expected volatility of 29.0% for Fiscal 2016

options were $365,000 for Fiscal 2017, $848,000

and 32.8% for Fiscal 2015; weighted average risk free

for Fiscal 2016 and $228,000 for Fiscal 2015. Stock

interest rates of 2.1% for Fiscal 2016 and 2.2% for

based income tax benefi ts aggregated $495,000

Fiscal 2015; and expected dividend yield of 3.3% for

for Fiscal 2017, $1,528,000 for Fiscal 2016 and

Fiscal 2016 and 4.6% for Fiscal 2015. The expected

$240,000 for Fiscal 2015. The weighted average fair

NATIONAL BEVERAGE CORP.

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summarized below is certain information regarding the Company’s participation in signifi cant multi-employer

As of April 29, 2017, we guaranteed the residual

purchase quantities. As of April 29, 2017, we had

pension plans including the fi nancial improvement plan or rehabilitation plan status (“FIP/RP Status”) and the

value of certain leased equipment in the amount of

purchase commitments for raw materials of $12.7

zone status under the Pension Protection Act (“PPA”). The most recent PPA zone status available in Fiscal

$2.5 million. If the proceeds from the sale of such

million through 2021.

2017 and Fiscal 2016 is for the plans’ years ending December 31, 2015 and 2014, respectively.

equipment are less than the balance required by the

As of April 29, 2017, we had purchase

Pension Fund

Central States, Southeast and Southwest Areas Pension Plan
(EIN no. 36-6044243) (the “CSSS Fund”)

PPA Zone Status

Fiscal
2017

Fiscal
2016

FIP/RP
Status

Surcharge
Imposed

lease when the lease terminates on August 1, 2017,

commitments for plant and equipment of $2.6 million

the Company shall be required to pay the difference

for Fiscal 2018.

up to such guaranteed amount.

From time to time, we are a party to various

The Company does not expect to incur a loss on

litigation matters and claims arising in the ordinary

Red

Implemented

Yes

such guarantee.

course of business. We do not expect the ultimate

Western Conference of Teamsters Pension Trust Fund
(EIN no. 91-6145047) (the “WCT Fund”)

Green

Not
Applicable

For the plan years ended December 31, 2015

10. COMMITMENTS AND CONTINGENCIES

and December 31, 2014, the Company was not listed

in the Form 5500 Annual Returns as providing more

We lease buildings, machinery and equipment under

than 5% of the total contributions for the above plans.

various non-cancelable operating lease agreements

The collective bargaining agreements for employees

expiring at various dates through 2026. Certain of

in the CSSS Fund and the WCT Fund expire on

these leases contain scheduled rent increases and/or

October 18, 2021 and May 14, 2021, respectively.

renewal options. Contractual rent increases are taken

The Company’s contributions

for all multi-

payment and recognized on a straight-line basis over

employer pension plans for the last three fi scal years

the lease term. Rent expense under operating lease

into account when calculating the minimum lease

are as follow:

(In thousands)
Pension Fund

CSSS Fund

WCT Fund

Other multi-employer
pension funds

Total

Fiscal
2017

Fiscal
2016

Fiscal
2015

$1,262 $1,172 $1,103

477

485

637

201

448

306

$1,940 $2,105 $2,046

agreements totaled $12.0 million for Fiscal 2017, $9.2

million for Fiscal 2016 and $8.2 million for Fiscal 2015.

Our minimum

lease payments under non-

cancelable operating leases as of April 29, 2017 were

as follows:

(In thousands)

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Thereafter

Total minimum lease payments

$ 8,216

7,546

6,168

3,520

1,904

2,922

$30,276

We enter into various agreements with suppliers

disposition of such matters to have a material adverse

for the purchase of raw materials, the terms of which

effect on our consolidated fi nancial position or results

may include variable or fi xed pricing and minimum

of operations.

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

(In thousands, except per share amounts)

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

$217,108

$203,180

$194,564

$212,066

85,494

78,717

75,920

85,946

28,995

24,604

24,285

29,161

$ .62

$ .53

$ .52

$ .63

$ .62

$ .53

$ .52

$ .62

$185,386

$178,678

$161,687

$179,034

62,899

60,621

52,552

65,365

17,113

15,312

11,236

17,537

$ .37

$ .33

$ .24

$ .37

$ .33

$ .24

$ .37

FISCAL 2017

Net sales

Gross profi t

Net income

Earnings per common share – basic

Earnings per common share – diluted

FISCAL 2016

Net sales

Gross profi t

Net income

Earnings per common share – basic

Earnings per common share – diluted

12. SUBSEQUENT EVENT

On May 5, 2017, the Company declared a special

cash dividend of $1.50 per share to shareholders of

record on June 5, 2017. The cash dividend of $69.9

million will be paid on or before August 4, 2017.

NATIONAL BEVERAGE CORP.

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
April 29, 2017 and April 30, 2016 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 April
29, 2017. We also have audited National Beverage
Corp.’s internal control over financial reporting as
of April 29, 2017, based on criteria established in
Internal Control — Integrated Framework issued by
the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in 2013. 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 Report 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
internal control over financial
whether effective
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 reporting 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.

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 April 29, 2017 and April 30,
2016 and the results of their operations and their cash
flows for each of the years in the three-year period
ended April 29, 2017, 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 April 29, 2017,
based on criteria established in Internal Control—
Integrated Framework issued by the Committee
of Sponsoring Organizations of
the Treadway
Commission (COSO) in 2013.

/s/ RSM US LLP
Ft. Lauderdale, Florida
July 13, 2017

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 had a

and low prices per share of the Common Stock for

liquidation preference of $50 per share and dividends

the fiscal quarters indicated:

were accrued on this amount at an annual rate of 3%

Fiscal Year Ended

April 29, 2017

April 30, 2016

High

Low

High

Low

through April 30, 2014 and, pursuant to subsequent

amendments, 2.5% thereafter. Dividends were

cumulative and payable quarterly. The net proceeds

of $19.7 million were used to repay borrowings under

First Quarter

$64.73

$46.50

$24.94

$19.98

the Credit Facilities.

Second Quarter

58.30

39.14

38.91

23.05

On May 2, 2014, the Company redeemed

Third Quarter

54.65

44.21

48.01

35.50

160,000 shares of Series D Preferred for an aggregate

Fourth Quarter

92.85

48.81

47.00

32.35

price of $8 million plus accrued dividends. On August

1, 2014, the Company redeemed an additional

At June 26, 2017 there were approximately

120,000 shares of Series D Preferred for an aggregate

19,000 holders of our Common Stock, the majority

price of $6 million plus accrued dividends. The final

of which hold their shares in the names of various

redemption of the remaining 120,000 shares of

dealers and/or clearing agencies.

Series D Preferred was made on April 29, 2016 for an

The Company paid special cash dividends on

aggregate price of $6 million plus accrued dividends.

Common Stock of $69.9 million ($1.50 per share) on

January 27, 2017. On May 5, 2017, the Company

declared a special cash dividend of $1.50 per share

to holders of record as of June 5, 2017 to be paid on

or before August 4, 2017.

The Company is authorized under its stock

buyback program to repurchase 1.6 million shares of

Common Stock. As of April 29, 2017, 502,060 shares

were purchased under the program and 1,097,940

shares were available for purchase. No shares of

Common Stock have been repurchased during the

last three fiscal years.

NATIONAL BEVERAGE CORP.NATIONAL BEVERAGE CORP.PERFORMANCE GRAPH

The following graph shows a comparison of the fi ve-year cumulative returns of an investment of $100 cash on

April 28, 2012, 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 April 28,

2012 provided a compounded annual return of approximately 49% as of April 29, 2017.

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
among National Beverage Corp., the NASDAQ Composite Index, and a Peer Group

$$880000

$$775500

$$770000

$$665500

$$660000

$$555500

$$550000

$$445500

$$440000

$$335500

$$330000

$$225500

$$220000

$$115500

$$110000

$$5500

$$00

4/28/2012

4/27/2013

5/3/2014

5/2/2015

4/30/2016

4/29/2017

National Beverage Corp.

NASDAQ Composite-Total Returns

Peer Group

4/28/2012

4/27/2013

5/3/2014

5/2/2015

4/30/2016

4/29/2017

National Beverage Corp.

$100.00

$116.25

$153.27

$178.88

$372.92

$727.64

NASDAQ Composite

100.00

108.32

137.99

169.47

163.64

209.76

Peer Group

100.00

134.80

131.60

163.15

239.99

280.27

NATIONAL BEVERAGE CORP.

Fulfillment . . .

SUBSIDIARIES
BevCo Sales, Inc.
Beverage Corporation Intl., Inc.
Big Shot Beverages, Inc.
Everfresh Beverages, Inc.
Faygo Beverages, Inc.
LaCroix Sparkling Water, Inc.
National Beverage Vending Co.
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

CORPORATE OFFICES
8100 Southwest Tenth Street
Fort Lauderdale, FL 33324
954-581-0922

ANNUAL MEETING
The Annual Meeting of
Shareholders will be held on
Friday, October 6, 2017 at
2:00 p.m. local time at the
Hyatt Regency Orlando
International Airport Hotel,
9300 Jeff Fuqua Boulevard,
Orlando, FL 32827.

FINANCIAL AND OTHER
INFORMATION
A copy of National Beverage
Corp.’s Annual Report, Annual
Report on Form 10-K, and other
financial information can be
found on the company’s website
(www.nationalbeverage.com) or
may be obtained without charge
by writing or calling:
National Beverage Corp.
Shareholder Relations
8100 Southwest Tenth Street
Fort Lauderdale, FL 33324
Telephone:
877-NBC-FIZZ (877-622-3499)

STOCK EXCHANGE LISTING
Common Stock is listed on
The NASDAQ Global Select
Market – symbol FIZZ.

TRANSFER AGENT AND
REGISTRAR
Computershare
462 South 4th Street
Suite 1600
Louisville, KY 40202
888-313-1476
www.computershare.com/investor

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
RSM US LLP
Fort Lauderdale, FL

CORPORATE DATA

DIRECTORS

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

SUBSIDIARY
MANAGEMENT

Alan A. Chittaro
President
Faygo Beverages, Inc.

Michael J. Bahr
Executive Vice President
Shasta West

James C.T. Bolton
Executive Vice President
PACO, Inc.

Samuel C. Hathorn, Jr.*
Retired Chief Executive Officer
Trendmaker Development Co.

Alan D. Domzalski
Executive Vice President
Sundance Beverage Company

James H. Erwin III
Executive Vice President-Sales
Shasta Beverages, Inc.

Stephen E. Flis
Executive Vice President
Shasta Sweetener, Inc.

Arthur D. Hanrehan
Executive Vice President
National BevPak

James M. Jones
Executive Vice President
Shasta Foodservice

Tammera K. Atkins
Vice President
Rip It Energy Fuel

John F. Hlebica
Vice President
Shasta Beverages Intl.

Worth B. Shuman III
Vice President
Military Sales

Stanley M. Sheridan*
Retired President
Faygo Beverages, Inc.

*Member Audit Committee

CORPORATE
MANAGEMENT

Nick A. Caporella
Chairman of the Board &
Chief Executive Officer

Joseph G. Caporella
President

George R. Bracken
Executive Vice President-
Finance

Gregory P. Cook
Vice President-Controller &
Chief Accounting Officer

Timothy C. Barker
Executive Director-
Strategic IT

Brent R. Bott
Executive Director-
Consumer Marketing

Gregory J. Kwederis
Executive Director-
Beverage Analyst

Kenneth A. Finneran
Senior Director-
Human Resources

Dominic H. Angelina
Director-Internal Audit

Richard S. Berkes
Director-Risk Management

Glenn G. Bryan
Director-Tax

Michael M. King
Special Corporate Counsel

LACROIX BRAND POWER
CATEGORY GROWTH RATE VS. LACROIX GROWTH RATE

TOTAL SPARKLING WATER CATEGORY
GROWTH RATE: +16.2%

2015 - 2016

+16.2%
CATEGORY
TOTAL
GROWTH
RATE

+72.7%
LACROIX
GROWTH
RATE

NATURAL SPARKLING WATER
LACROIX GROWTH RATE
4.5X FASTER*

$13 — $15 BILLION CATEGORY BY 2021
PROJECTED CATEGORY GROWTH RATE**

*Source: Nielsen Spectra June 2017

Hell o . . .
dandelion!

The common and humble
Dandelion has a surprising amount of
different meanings.

Healing from emotional pain and physical injury alike.
Intelligence, especially in an emotional and spiritual sense.
The warmth and power of the rising sun.
Surviving through all challenges and difﬁ culties.
Long-lasting happiness and youthful joy.
Getting your wish fulﬁ lled!

8100 Southwest Tenth Street, Fort Lauderdale, Florida 33324
954.581.0922
www.nationalbeverage.com