2020 ANNUAL REPORT
on Form 10K
United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
[✓] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended May 2, 2020
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to _________
Commission file number 1-14170
(Exact name of Registrant as specified in its charter)
Delaware
(State of incorporation)
59-2605822
(I.R.S. Employer Identification No.)
8100 SW Tenth Street, Suite 4000, Fort Lauderdale, Florida 33324
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code: (954) 581-0922
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share
The NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
IIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ( ) No (✓)
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes ( ) No (✓)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.
Yes (✓) No ( )
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months. Yes (✓) No ( )
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer (✓) Accelerated filer ( ) Non-accelerated filer ( ) Smaller reporting company ( ) Emerging growth company ( )
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ( )
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. Yes (✓) No ( )
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ( ) No (✓)
The aggregate market value of the common stock held by non-affiliates of Registrant computed by reference to the closing sale price
of $49.89 on October 25, 2019 was approximately $585 million.
The number of shares of Registrant’s common stock outstanding as of June 29, 2020 was 46,625,628.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement for the 2020 Annual Meeting of Shareholders are incorporated by reference in Part III
of this report.
TABLE OF CONTENTS
PART I
ITEM 1.
Business
ITEM 1A.
Risk Factors
ITEM 1B.
Unresolved Staff Comments
ITEM 2.
Properties
ITEM 3.
Legal Proceedings
ITEM 4.
Mine Safety Disclosures
PART II
ITEM 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
ITEM 6.
Selected Financial Data
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
ITEM 7A.
Quantitative and Qualitative Disclosure About Market Risk
ITEM 8.
Financial Statements and Supplementary Data
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
ITEM 9A.
Controls and Procedures
ITEM 9B.
Other Information
PART III
ITEM 10.
Directors, Executive Officers and Corporate Governance
ITEM 11.
Executive Compensation
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
ITEM 14.
Principal Accounting Fees and Services
PART IV
ITEM 15.
Exhibits, Financial Statement Schedules
SIGNATURES
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PART I
ITEM 1.
BUSINESS
GENERAL
National Beverage Corp. innovatively refreshes America
with a distinctive portfolio of sparkling waters, juices,
energy drinks and, to a lesser extent, carbonated
soft drinks. We believe our creative product designs,
innovative packaging and imaginative flavors, along
with our corporate culture and philosophy, make
National Beverage unique as a stand-alone entity in the
beverage industry.
Points of differentiation include the following:
Healthy Transformation – We focus on developing
and delighting consumers with healthier beverages in
response to the global shift in consumer buying habits
and lifestyles. We are committed to tailoring the variety
and types of beverages in our portfolio to satisfy the
preferences of a diverse mix of consumers including
‘crossover consumers’ – a growing group desiring a
healthier alternative to artificially sweetened or high-
calorie beverages.
Creative Innovations – Building on a rich tradition
of flavor and brand innovation with more than a 130-
year history of development with iconic brands such
as Shasta® and Faygo®, we have extended our flavor
and essence leadership and technical expertise to
the sparkling water category. Proprietary flavors and
our naturally-essenced beverages are developed and
tested in-house and made commercially available
only after extensive concept and sensory evaluation.
Our variety of distinctive flavors provides us a unique
advantage with today’s consumers who demand variety
and refreshing beverage alternatives.
that
innovative
Innovation Ethic – We believe
marketing, packaging and consumer engagement is
more effective in today’s marketplace than traditional
higher-cost national advertising. In addition to our cost-
effective social media platforms, we utilize regionally-
focused marketing programs and in-store “brand
ambassadors” to interact with and obtain feedback
from our consumers. We also believe the design of
our packages and the overall optical effect of their
placement on the shelf (“shelf marketing”) has become
more important as millennials and younger generations
become increasingly influential consumers, and are
now influencing baby boomers and older generations.
In a beverage
Creative Dynamics –
industry
dominated by the “cola giants”, we pride ourselves
on being able to respond faster and more creatively to
consumer trends than competitors burdened by legacy
production and distribution complexity and costs. The
ability to identify consumer trends and create new market-
leading concepts define our new product development
model. Speed to market with the appropriate concept,
unique flavor creation and trend-forward ‘better-for-you’
ingredients continues to be our goal. Internal development
teams are responsible for concept creation, packaging
and design, which allow for rapid ‘go to market’ timing
and reduced development costs.
Presently, our primary market focus is the United
States and Canada. Certain of our products are also
distributed on a limited basis in other countries and
options to expand distribution to other regions are
being considered.
National Beverage Corp. is incorporated in Delaware
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.
1
NATIONAL BEVERAGE CORP.
Presently, our primary market focus is the United
States and Canada. Certain of our products are also
distributed on a limited basis in other countries and
options to expand distribution to other regions are
being considered.
National Beverage Corp. is incorporated in Delaware
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.
BRANDS
Our brands consist of beverages geared to the active
and health-conscious consumer (“Power+ Brands”)
including sparkling waters, energy drinks, and juices.
Our portfolio of Power+ Brands includes LaCroix®,
LaCroix Cúrate®,and LaCroix NiCola® sparkling water
products; Clear Fruit®; Rip It® energy drinks and
shots; and Everfresh®, Everfresh Premier Varietals™
and Mr. Pure® 100% juice and juice-based products.
Additionally, we produce and distribute carbonated soft
drinks (“CSDs”) including Shasta® and Faygo®, iconic
brands whose consumer loyalty spans more than 130
years.
merchandisers, club stores, drug stores, mainstream
supermarkets and natural and specialty food retailers.
Early in Fiscal year 2020, LaCroix launched Hi-Biscus!, a
unique flavor that adds the delicate essence of the hibiscus
flower to sparkling water. LaCroix Hi-Biscus! delights taste
buds with pleasing floral aroma and exquisite taste.
In the fourth quarter of Fiscal year 2020, two new
naturally-essenced flavors of LaCroix, the enticing savor
of LimonCello and the refreshing taste of Pastèque
(French for watermelon), began rolling out to retailers
throughout the U.S. Fans are instantly transported to the
Italian Riviera with the refreshing finesse of LimonCello.
Pastèque, one of LaCroix’s most highly-anticipated
flavors to date, captures lusciousness of a sweet picnic
watermelon. These innovative new varieties join the
LaCroix family of 27 refreshingly innocent flavors.
‘theme’
LaCroix
LaCroix’s dynamic
Cúrate®
(‘Cure Yourself’) celebrates
French sophistication with Spanish zest
and bold flavor pairings. Cúrate naturally
refreshes in tall, sleek 12 oz. consumer-
friendly cans. Eloquent graphics, robust
aroma, naturally ‘essenced’ and premium-
priced, Cúrate is an attractive alternative
for today’s consumers.
POWER+ BRANDS –
LaCroix
LaCroix® Sparkling Water,
our most significant brand,
redefined
has uniquely
the
Sparkling Water
category that is rapidly
becoming the alternative
to traditional carbonated
soda. With zero calories,
zero sweeteners and zero
sodium, LaCroix
leads
the premium domestic
sparkling water category.
Naturally essenced, LaCroix has gained the support of
national retailers in multiple channels, including mass-
NiCola® by LaCroix, an
innovative
sparkling water, captures the ‘crossover’
cola consumers with its ‘innocent’ effect
of no calories, sodium, sweetener or any
other ingredient that the health-conscious
consumer avoids. NiCola is designed for
those cola and diet cola consumers within
the $87 billion U.S. carbonated soft drink
market that are looking to continue to
quench their cola-craving taste without negative health
consequences. In late Fiscal year 2019, we introduced
three new additions to our LaCroix NiCola theme −
Coconut Cola, Cubana (Mojito), and Coffea Exotica
(Sumatra coffee and cola).
Additional LaCroix themes are in development that
feature unique packaging and ground-breaking flavor
concepts designed to capitalize on LaCroix brand
loyalty and growth of the sparkling water category.
2
NATIONAL BEVERAGE CORP.
Everfresh and Mr. Pure
CARBONATED SOFT DRINKS –
Everfresh® and Mr. Pure® 100%
juice and juice drinks are available
in a variety of flavors, from such
classics as Orange, Cranberry
and
to
include Premium
exotics that
Pineapple Mango,
Papaya,
Peach Watermelon and Island Punch. The brands’
signature package is a hot-filled, 16 oz. glass bottle
designed for single-serve consumption.
lemonades
flavored
Everfresh Premier Varietals™, a unique theme from
Everfresh, is positioned as a stand-alone brand for
display in the produce section of supermarkets.
Everfresh Premier Varietals is a premium line of apple
juice derived from a variety of apples specific to the
taste of the varietal, such as Granny Smith, McIntosh,
Honey Crisp, Golden Delicious, Fuji and Pink Lady.
Clear Fruit
Clear Fruit® is a crisp, clear,
non-carbonated water beverage
enhanced with
fruit flavors.
Clear Fruit is available in 12
delicious
including
flavors,
consumer favorites Cherry Blast,
Strawberry Watermelon, and
Fruit Punch. Clear Fruit is available in 20 oz and 16.9 oz
bottles with consumer-favored sports caps.
Rip It
RIP IT® Energy Fuel is “Real Energy for Real People” with
14 unique flavors and six sugar-free options. Building
on the flavor tradition of original Rip It, a 2 oz. sugar-free
shot version in eight flavors is marketed in displayable
package configurations. RIP
IT proudly supports military
and first responder heroes at
home and abroad with such
energetic flavors as Tribute,
Citrus X, Cherry Lime and
Atomic Pom.
Shasta® has been recognized
as a bottling industry pioneer
and innovator for more than
130 years. Shasta
features
multiple flavors and has earned
consumer loyalty by delivering
value
convenience
with such unique tastes as
Raspberry Crème, Tiki Punch, and California Dreamin’.
and
With more than 110 years
of brand history, Faygo®
products include numerous
unique flavors such as Red
Pop®, Moon Mist®, and
Rock’n’Rye®. Faygo recently
reintroduced
fan-favorite
Faygo Pineapple Orange.
Many of our carbonated soft drink brands enjoy a
regional identification that fosters long-term consumer
loyalty and makes them more competitive as a consumer
choice. In addition, products produced locally may
generate retailer-sponsored promotional activities and
receive media exposure through community activities
rather than costly national advertising.
In recent years, we reformulated many of our brands
to reduce caloric content while still preserving their
time-tested flavor profiles. Our brands, optically and
ingredient-wise, are continually evolving. We always
strive to make all our drinks healthier while maintaining
their iconic taste profiles.
PRODUCTION
integrates
Our philosophy emphasizes vertical integration; our
the procurement of
production model
raw materials and crafting flavors and concentrates
with the production of finished products. Our twelve
strategically-located production
facilities are near
major metropolitan markets across the continental
United States. The locations of our facilities enable
us to efficiently produce and distribute beverages
the
to substantially all geographic markets
in
3
NATIONAL BEVERAGE CORP.
United States, including the top 25 metropolitan
statistical areas. Each facility is generally equipped to
produce both canned and bottled beverage products in
a variety of package sizes.
of
We believe the innovative
and controlled vertical
our
integration
production
facilities
provides an advantage
over certain of our
competitors that rely on
independent third-party
bottlers to manufacture
and market
their
products. Since we
control
national
all
production, distribution
and marketing of our
brands, we believe we can more effectively manage
quality control and consumer appeal while responding
quickly to changing market conditions.
We craft a substantial portion of our flavors and
concentrates. By controlling our own
formulas
throughout our bottling network, we are able to
produce beverages in accordance with uniform quality
standards while innovating flavors to meet changing
consumer preferences. We believe the combination
of a Company-owned bottling network, together
with uniform standards for packaging, formulations
and customer service, provides us with a strategic
advantage in servicing national retailers and mass-
merchandisers. We also maintain
research and
development laboratories at multiple locations. These
laboratories continually test products for compliance
with our strict quality control standards as well as
conduct research for new products and flavors.
DISTRIBUTION
To service a diverse customer base that includes
numerous national retailers, as well as thousands of
smaller “up-and-down-the-street” accounts, we utilize
a hybrid distribution system to deliver our products
through three primary distribution channels: take-
home, convenience and food-service.
4
The take-home distribution channel consists of national
and regional grocery stores, club stores, mass-
merchandisers, wholesalers, e-commerce stores, drug
stores and dollar stores. We distribute our products
to this channel primarily through the warehouse
distribution system and, to a lesser extent, the direct-
store delivery system.
Under the warehouse distribution system, products are
shipped from our production facilities to the retailer’s
centralized distribution centers and then distributed
by the retailer to each of its store locations with other
goods. This method allows our retail partners to further
maximize their assets by utilizing their ability to pick-
up product at our warehouses, thus lowering their/
our product costs. Products sold through the direct-
store delivery system are distributed directly to the
customer’s retail outlets by our direct-store delivery
fleet and by independent distributors.
We distribute our products to the convenience channel
through our own direct-store delivery fleet and those
of independent distributors. The convenience channel
consists of convenience stores, gas stations and other
smaller “up-and-down-the-street” accounts. Because
of the higher retail prices and margins that typically
prevail, we have developed packaging and graphics
specifically targeted to this market.
Our food-service division
distributes products
to
independent, specialized
distributors who sell to
hospitals, schools, military
bases, airlines, hotels and
food-service wholesalers.
Also, our Company-owned
direct-store delivery fleet
distributes products
to
certain schools and other food-service customers.
and
take-home,
Our
food-service
convenience
operations use vending machines and glass-door coolers
as marketing and promotional tools for our brands. We
provide vending machines and coolers on a placement
or purchase basis to our customers. We believe vending
and cooler equipment expands on-site visual trial, thereby
increasing sales and enhancing brand awareness.
NATIONAL BEVERAGE CORP.
SALES AND MARKETING
through
We sell and market our
products
an
internal sales
force as
well as specialized broker
networks. Our sales force
is organized to serve a
specific market, focusing
on one or more geographic
territories,
distribution
channels or product lines.
focus
We believe
allows our sales group to provide high level, responsive
service and support to our customers and markets.
this
Our marketing emphasizes programs designed to reach
consumers directly through innovative digital marketing,
digital social marketing, social media engagement,
sponsorships and creative content. We are focused
on increasing our digital presence and capabilities to
further enhance the consumer experience across our
brands. We may retain agencies to assist with social
media content creative and platform selection for our
brands.
Additionally, we maintain and enhance consumer
brand recognition and loyalty through a combination of
participation in regional events, special event marketing,
endorsements, consumer coupon distribution and
product sampling. We also offer numerous promotional
programs to retail customers, including cooperative
in-
advertising support,
store promotional activities and other
incentives.
These elements allow marketing and other consumer
programs to be tailored to meet local and regional
demographics.
‘BrandED’ ambassadors,
RAW MATERIALS
Our
centralized procurement group maintains
relationships with numerous suppliers of ingredients
and packaging. By consolidating the purchasing
function for our production facilities, we believe we are
able to procure more competitive arrangements with
our suppliers, thereby enhancing our ability to compete
as an efficient producer of beverages.
The products we produce and sell are made from
various materials including aluminum cans, glass and
plastic bottles, water, carbon dioxide, juice and flavor
concentrates, sweeteners, cartons and closures.
We craft a substantial portion of our flavors and
concentrates while purchasing the remaining raw
materials from multiple suppliers.
control
regulations,
Substantially all of the materials and ingredients we
purchase are presently available from several suppliers,
although strikes, weather conditions, utility shortages,
national
or
governmental
emergencies, quality, price or supply fluctuations or
other events outside our control could adversely affect
the supply of specific materials. A significant portion of
our raw material purchases, including aluminum cans,
plastic bottles, high fructose corn syrup, corrugated
packaging and juice concentrates, are derived from
commodities. Therefore, pricing and availability tend
to fluctuate based upon worldwide commodity market
conditions. In certain cases, we may elect to enter into
multi-year agreements for the supply of these materials
with one or more suppliers, the terms of which may
include variable or fixed pricing, minimum purchase
quantities and/or the requirement to purchase all
supplies for specified locations. Additionally, we use
derivative financial instruments to partially mitigate our
exposure to changes in certain raw material costs.
SEASONALITY
Our operating results are affected by numerous
factors, including fluctuations in costs of raw materials,
holiday and seasonal programming and weather
conditions. Beverage sales are seasonal with higher
volume realized during summer months when outdoor
activities are more prevalent.
5
NATIONAL BEVERAGE CORP.
COMPETITION
GOVERNMENTAL REGULATION
While LaCroix® Sparkling Water is the brand of choice
as the number one premium domestic sparkling water
throughout the United States, the beverage industry is
highly competitive and our competitive position may
vary by market area. Our products compete with
many varieties of liquid refreshment, including water
products, soft drinks, juices, fruit drinks, energy drinks
and sports drinks, as well as powdered drinks, coffees,
teas, dairy-based drinks, functional beverages and
various other nonalcoholic beverages. We compete
with bottlers and distributors of national, regional and
private label products. Several competitors, including
those that dominate the beverage industry, such as
Nestlé S.A., PepsiCo and The Coca-Cola Company,
have greater financial resources than we have and
aggressive promotion of their products may adversely
affect sales of our brands.
Principal methods of competition in the beverage
industry are price and promotional activity, advertising
and marketing programs, point-of-sale merchandising,
retail space management, customer service, product
differentiation, packaging innovations and distribution
methods. We believe our Company differentiates
itself through novel methods of innovation, key brand
recognition, focused social media, innovative flavor
variety, attractive packaging, efficient distribution
methods, and, for some product lines, value pricing.
The production, distribution and sale of our products
in the United States are subject to the Federal Food,
Drug and Cosmetic Act; the Dietary Supplement Health
and Education Act of 1994; the Occupational Safety
and Health Act; the Lanham Act; various environmental
statutes; and various other federal, state and local
statutes regulating the production, transportation, sale,
safety, advertising, labeling and ingredients of such
products. We believe that we are in compliance, in all
material respects, with such existing legislation.
Certain states and localities require a deposit or tax
on the sale of certain beverages. These requirements
vary by each jurisdiction. Similar legislation has been
or may be proposed in other states or localities or
by Congress. We are unable to predict whether such
legislation will be enacted or what impact its enactment
would have on our business, financial condition or
results of operations.
All of our facilities in the United States are subject
to federal, state and local environmental laws and
regulations. Compliance with these provisions has
not had any material adverse effect on our financial or
competitive position. We believe our current practices
and procedures for the control and disposition of toxic
or hazardous substances comply in all material respects
with applicable law.
TRADEMARKS
EMPLOYEES
As of May 2, 2020, we employed approximately
1,550 people, of which 360 are covered by collective
bargaining agreements. We believe we maintain good
relations with our employees.
SUSTAINABILITY
We own numerous trademarks for our brands that are
significant to our business. We intend to continue to
maintain all registrations of our significant trademarks
and use the trademarks in the operation of our
businesses.
National Beverage Corp. is dedicated to sustainable
operations and responsible business initiatives. All our
beverage products are produced in the U.S., providing
thousands of jobs in local communities and boasting a
lower carbon footprint than imported brands.
6
NATIONAL BEVERAGE CORP.
All of our packaging is recyclable and we continually
focus on reducing packaging content. More than 80%
of our products are in aluminum cans, which generally
contain approximately 73% recycled material. Each of
our facilities has programs in place designed to minimize
the use of water, energy, and other natural resources.
image and cause consumers to choose other products.
In addition, if we do not adequately anticipate and react
to changing demographics, consumer trends, health
concerns and product preferences, our financial results
could be adversely affected.
AVAILABLE INFORMATION
Our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, proxy
statements and amendments to those reports are
available free of charge on our website at www.
nationalbeverage.com
reasonably
as
practicable after such reports are electronically filed with
the Securities and Exchange Commission. In addition,
our Code of Ethics is available on our website. The
information on the Company’s website is not part of this
Annual Report on Form 10-K or any other report that
we file with, or furnish to, the Securities and Exchange
Commission.
soon
as
ITEM 1A.
RISK FACTORS
In addition to other information in this Annual Report on
Form 10-K, the following risk factors should be considered
carefully in evaluating the Company’s business. Our
business, financial condition and results of operations
could be materially and adversely affected by any of these
risks. Additional risks and uncertainties, including risks
and uncertainties not presently known to the Company,
or that the Company currently deems immaterial, may
also impair our business and results of operations.
Brand image and consumer preferences Our
beverage portfolio is comprised of a number of unique
brands with reputations and consumer loyalty that have
been built over time. Our investments in social media
and marketing as well as our strong commitment to
product quality are intended to have a favorable impact
on brand image and consumer preferences. Unfavorable
publicity, or allegations of quality issues, even if false
or unfounded, may tarnish our reputation and brand
industry
Competition The beverage
is extremely
competitive. Our products compete with a broad range
of beverage products, most of which are manufactured
and distributed by companies with substantially greater
financial, marketing and distribution resources. In
order to generate future revenues and profits, we must
continue to sell products that appeal to our customers
and consumers. Discounting and other actions by our
competitors could adversely affect our ability to sustain
revenues and profits.
Customer relationships Our retail customer base has
been consolidating over the last several years resulting
in fewer customers with increased purchasing power.
This increased purchasing power can limit our ability
to increase pricing for our products with certain of our
customers. Additionally, e-commerce transactions and
value stores are experiencing rapid growth. Our inability
to adapt to customer requirements could lead to a loss
of business and adversely affect our financial results.
Raw materials and energy The production of our
products is dependent on certain raw materials,
including aluminum, resin, corn, linerboard, water and
fruit juice. In addition, the production and distribution of
our products is dependent on energy sources, including
natural gas, fuel and electricity. These items are subject to
price volatility caused by numerous factors. Commodity
price increases ultimately result in a corresponding
increase in the cost of raw materials and energy. We
may be limited in our ability to pass these increases on
to our customers or may incur a loss in sales volume
to the extent price increases are taken. In addition,
strikes, weather conditions, governmental controls,
tariffs, national emergencies, natural disasters, supply
shortages or other events could affect our continued
supply and cost of raw materials and energy. If raw
materials or energy costs increase, or the availability is
limited, our financial results could be adversely affected.
7
NATIONAL BEVERAGE CORP.
Our business and
Governmental regulation
properties are subject to various federal, state and
local laws and regulations, including those governing
labeling and
the production, packaging, quality,
distribution of beverage products.
In addition,
various governmental agencies have enacted or are
considering additional taxes on soft drinks and other
sweetened beverages. Compliance with or changes
in existing laws or regulations could require material
expenses and negatively affect our financial results
through lower sales or higher costs.
Sustained increases in the cost of employee benefits
Our profitability is affected by the cost of medical,
statutory and other benefits provided to employees,
including employees covered under collective
bargaining agreements and multi-employer pension
plans. In recent years, we have experienced increases
in these costs, certain of which are self-insured.
Although we seek to limit these cost increases,
continued upward pressure in these costs could
reduce our profitability.
Unfavorable weather conditions Unfavorable weather
conditions could have an adverse impact on our
revenue and profitability. Unusually cold or rainy weather
may temporarily reduce demand for our products and
contribute to lower sales, which could adversely affect
our profitability for such periods. Prolonged drought
conditions in the geographic regions in which we do
business could lead to restrictions on the use of water,
which could adversely affect our ability to produce and
distribute products.
Dependence on key personnel Our performance
significantly depends upon the continued contributions
of our executive officers and key employees, both
individually and as a group, and our ability to retain
and motivate them. Our officers and key personnel
have many years of experience with us and in our
industry and it may be difficult to replace them. If we
lose key personnel or are unable to recruit qualified
personnel, our operations and ability to manage our
business may be adversely affected.
COVID-19 pandemic The magnitude and duration of
the current COVID-19 pandemic is uncertain, rapidly
changing and may be impacted by events beyond our
knowledge or control. Such events could include a
shutdown of one or more of our facilities resulting from
illness or government restrictions, and the disruption
of operations of our customers and suppliers. Such
events could adversely impact our business, results of
operations, financial condition and cash flows.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
Our principal properties include twelve production facilities
located in ten states, which aggregate approximately
two million square feet. We own ten production facilities
in the following states: California (2), Georgia, Kansas,
Michigan (2), Ohio, Texas, Utah and Washington. Two
production facilities, located in Maryland and Florida, are
leased subject to agreements that expire through 2025.
We believe our facilities are generally in good condition
and sufficient to meet our present needs.
The production of beverages is capital intensive but
is not characterized by rapid technological change.
The technological advances that have occurred have
generally been of an incremental cost-saving nature, such
as the industry’s conversion to lighter weight containers
or improved blending processes that enhance ingredient
yields. We are not aware of any anticipated industry-
wide changes in technology that would adversely impact
our current physical production capacity or cost of
production.
We own and lease trucks, vans and automobiles used
in the sale, delivery and distribution of our products.
In addition, we lease warehouse and office space,
transportation equipment, office equipment and certain
manufacturing equipment.
8
NATIONAL BEVERAGE CORP.
ITEM 3.
LEGAL PROCEEDINGS
ingredients and
The Company has been named in certain legal
proceedings, including those containing derivative
and class action allegations. One complaint alleges
the Company’s LaCroix branded products contain
therefore violate state
synthetic
consumer protection statutes and other laws. A similar
consumer complaint was voluntarily dismissed during
the fiscal year along with a full written retraction of all
claims by the plaintiff and counsel. The Company is
vigorously defending all legal proceedings and believes
litigation will not have a material adverse effect on the
Company’s financial position, cash flows or results of
operations.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
9
NATIONAL BEVERAGE CORP.
PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The common stock of National Beverage Corp., par
value $.01 per share, (“Common Stock”) is listed on
The NASDAQ Global Select Market under the symbol
“FIZZ”.
At June 24, 2020, there were approximately 29,500
holders of our Common Stock, the majority of which
hold their shares in the names of banks, brokers and
other financial institutions.
The Company paid special cash dividends on Common
Stock of $135.2 million ($2.90 per share) on January
29, 2019 and $69.9 million ($1.50 per share) on August
4, 2017.
Our Board of Directors has authorized a program to
repurchase 1.6 million shares of our common stock of
repurchases.
which 943,428 shares remain available and authorized
the Company
for
purchased 47,651 shares of its common stock at an
average price per share of $40.94 for a total of $1.9
million.
In March 2020,
Performance Graph
The following graph shows a comparison of the five-
year cumulative returns of an investment of $100 cash
on May 2, 2015, assuming reinvestment of dividends,
of our Common Stock with the NASDAQ Composite
Index, the S&P 500 Index, a Company-constructed Peer
Group (the “Peer Group”) and the newly-added Dow
Jones US Soft Drinks Index. The Peer Group consists
of Coca-Cola Bottling Company Consolidated and Cott
Corporation and will be replaced by the Dow Jones US
Soft Drinks Index to provide a broader representation of
our industry peers. Going forward, the Peer Group will
be excluded from this performance graph.
among National Beverage Corp., the NASDAQ Composite Index, Dow Jones US Soft Drinks Index, S&P 500 Index and Peer Group
Comparison of 5 - Year Cumulative Total Return
National Beverage Corp.
NASDAQ Composite - Total Return
Dow Jones US Soft Drinks Index
S&P 500 Index - Total Return
Peer Group
5/02/2015
4/30/2016
4/29/2017
4/28/2018
4/27/2019
5/02/2020
National Beverage Corp.
$ 100.00
$ 208.47
$ 406.77
$ 418.81
$ 277.32
$ 241.48
NASDAQ Composite - Total Return
Dow Jones US Soft Drinks Index
S&P 500 Index - Total Return
Peer Group
100.00
100.00
100.00
100.00
96.56
112.05
100.11
147.10
123.78
117.75
118.05
171.78
147.27
119.03
134.81
163.29
170.08
143.22
151.44
241.14
181.89
145.11
148.79
165.61
10
NATIONAL BEVERAGE CORP.
ITEM 6.
SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and consolidated financial statements and notes thereto
contained in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
(In thousands, except per share and footnote amounts)
SUMMARY OF OPERATIONS
Fiscal Year Ended
May 2,
2020 (3)
April 27,
2019
April 28,
2018
April 29,
2017
April 30,
2016
Net sales
Cost of sales
Gross profit
$ 1,000,394 $ 1,014,105
$ 975,734
$ 826,918
$ 704,785
630,254
629,755
584,599
500,841
463,348
370,140
384,350
391,135
326,077
241,437
Selling, general and administrative expenses
204,394
204,415
186,947
163,600
148,384
Other (income) expense - net
Income before income taxes
Provision for income taxes
Net income
PER SHARE DATA
(3,709)
(3,942)
(1,301)
(348)
169,455
183,877
205,489
162,825
39,483
43,024
55,715
55,780
348
92,705
31,507
$ 129,972 $ 140,853
$ 149,774 $ 107,045
$ 61,198
Basic earnings per common share (1)
$ 2.79 $ 3.02
$ 3.21 $ 2.30
$ 1.31
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)
2.78
50.07
-
3.00
57.50
2.90
3.19
89.78
1.50
2.29
88.59
1.50
1.31
46.74
-
$ 304,518 $ 156,200
$ 189,864 $ 136,372
$ 105,577
319,024
224,420
248,297
181,115
143,603
Property, plant and equipment - net
120,627
111,316
85,807
65,150
61,932
Total assets (2)
Long-term lease obligations
Deferred income tax liability
Total shareholders' equity (2)
648,646
452,193
458,832
353,983
301,044
32,159
14,823
-
-
-
-
15,987
14,502
12,087
10,020
452,337
331,609
331,440
245,618
206,152
Dividends paid on common stock (2)
-
135,247
69,878
69,850
-
(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 $135.2 million ($2.90 per share) on January 29, 2019 and $69.9 million
($1.50 per share) on August 4, 2017 and January 27, 2017.
(3) Fiscal 2020 consisted of 53 weeks.
11
NATIONAL BEVERAGE CORP. ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
National Beverage Corp. innovatively refreshes America
with a distinctive portfolio of sparkling waters, juices,
energy drinks (Power+ Brands) and, to a lesser extent,
carbonated soft drinks. We believe our creative product
designs, innovative packaging and imaginative flavors,
along with our corporate culture and philosophy, make
National Beverage unique as a stand-alone entity in the
beverage industry.
in
National Beverage Corp.,
recent years, has
transformed to an innovative, healthier refreshment
company. From our corporate philosophy, development
of products and marketing to manufacturing, we are
converting consumers to a ‘Better for You’ thirst
quencher that compassionately cares for their nutritional
health. We are committed to our quest to innovate
for the joy, benefit and enjoyment of our consumers’
healthier lifestyle!
National Beverage Corp. is uniquely positioned in three
distinctive ways:
(1) The retail industry is in revolution. In prior years,
each retailer induced their consumer with a
proprietary brand (especially soft drinks), but
today understands that the well-informed, smart
consumer is demanding that retailers provide
recognizable brands
their
respective consumer standing on their merits.
that have earned
(2) Retail today is in the most competitively-indexed
service industry, without exception. Innovation,
plus the urgent time demands on the consumer,
requires quick, expedient shopping. Home delivery
is even more of a current shoppers’ choice.
Retailers cannot carry slower-moving items that
home delivery will not support.
(3) The new consumer is the most competent/
knowledgeable product analyzer ever, and
personal mental/physical lifestyles demand that
healthier is their preferred choice. Calories must
qualify as worthy; sugar being enemy #1 in the life
of the Millennial and younger consumers.
Our strategy seeks the profitable growth of our
products by (i) developing healthier beverages in
response to the global shift in consumer buying habits
and tailoring our beverage portfolio to the preferences
of a diverse mix of ‘crossover consumers’ – a growing
group desiring a healthier alternative to artificially
sweetened and high-caloric beverages; (ii) emphasizing
unique flavor development and variety throughout our
brands that appeal to multiple demographic groups;
(iii) maintaining points of difference through innovative
marketing, packaging and consumer engagement and
(iv) responding faster and more creatively to changing
consumer trends than larger competitors who are
burdened by
legacy production and distribution
complexity and costs.
Presently, our primary market focus is the United
States and Canada. Certain of our products are also
distributed on a limited basis in other countries and
options to expand distribution to other regions are
being considered. To service a diverse customer
base that includes numerous national retailers, as well
as thousands of smaller “up-and-down-the-street”
accounts, we utilize a hybrid distribution system
consisting of warehouse and direct-store delivery. The
warehouse delivery system allows our retail partners to
further maximize their assets by utilizing their ability to
pick up product at our warehouses, further lowering
their/our product costs.
National Beverage Corp. is incorporated in Delaware
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 operating results are affected by numerous
factors, including fluctuations in the costs of raw
materials, holiday and seasonal programming and
weather conditions. While prior years witnessed more
seasonality, higher sales are realized during the summer
when outdoor activities are more prevalent.
Our highly innovative business, where new beverages
are developed and produced for selective holidays
and ceremonial dates, should not be analyzed on the
common three-month (quarterly) periods, traditionally
12
NATIONAL BEVERAGE CORP.
found acceptable. Today, costly development projects
and seasonal weather periods plus promotional
packaging, make quarter-to-quarter comparisons
unworthy statistics and forces companies to decision
making for that purpose, not truly beneficial for investors
and shareholders alike.
Traditional and typical are not a part of an innovator’s
vocabulary.
RESULTS OF OPERATIONS
The following section generally discusses the fiscal
years ended May 2, 2020 (Fiscal 2020) and April 27,
2019 (Fiscal 2019) items and year-to-year comparisons
between Fiscal 2020 and Fiscal 2019. Discussions of
fiscal year ended April 28, 2018 (Fiscal 2018) items and
year-to-year comparisons between Fiscal 2019 and
Fiscal 2018 can be found in “Management’s Discussion
and Analysis of Financial Condition and Results of
Operations” in Part II, Item 7 of our Annual Report on
Form 10-K for the year ended April 27, 2019, which
is available free of charge on our website at www.
nationalbeverage.com. Fiscal 2020 consisted of 53
weeks; Fiscal 2019 and Fiscal 2018 both consisted of
52 weeks.
Net Sales Net sales for Fiscal 2020 declined 1.4%
to $1,000 million compared to $1,014 million for Fiscal
2019. The decline in sales resulted from a 1.4%
reduction in average selling price per case due primarily
to changes in product mix. Power+ Brands volume
declined 3.4% and branded carbonated soft drinks
volume increased 6.6%.
Gross Profit Gross profit for Fiscal 2020 was $370.1
million compared to $384.4 million for Fiscal 2019. The
change in gross profit is due to a 1.0% increase in cost
per case resulting primarily from changes in product
mix and increased manufacturing costs. Gross margin
was 37.0% for Fiscal 2020 compared to 37.9% in
Fiscal 2019.
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
$204.4 million for both Fiscal 2020 and Fiscal 2019
or approximately 20% of net sales for both periods.
Selling, general and administrative expenses reflect
increased selling and administrative costs offset by
reduced shipping and distribution costs.
Interest Expense and Other Expense (Income) - Net
Other income, net is primarily interest income of $3.9
million for Fiscal 2020 and $4.1 million for Fiscal
2019. The change in interest income is due to lower
investment yields on an increased average investment
balances. Interest expense is comprised of fees related
to maintaining lines of credit. Interest expense was
essentially flat for all years presented.
Income Taxes Our effective tax rate was 23.3% for
Fiscal 2020 and 23.4% for Fiscal 2019. The differences
between the effective rate and the federal statutory rate
were primarily due to the effects of state income taxes.
LIQUIDITY AND FINANCIAL CONDITION
Liquidity and Capital Resources At May 2, 2020,
we maintained $100 million unsecured revolving credit
facilities, under which no borrowings were outstanding
and $3.4 million was reserved for standby letters of
credit. Cash generated from operations is our principal
source of funds. We believe that existing capital
resources will be sufficient to meet our liquidity and
capital requirements for the next twelve months. See
Note 5 of Notes to Consolidated Financial Statements.
Expenditures
for property, plant and equipment
amounted to $23.9 million for Fiscal 2020 primarily to
expand production capacity. We continually evaluate
capital projects to expand our production capacity,
enhance packaging capabilities or improve efficiencies
at our production facilities. We intend to continue
production capacity and efficiency
improvement
projects
in fiscal year 2021 and expect capital
expenditures to be comparable to Fiscal 2020.
13
NATIONAL BEVERAGE CORP.
The Company paid special cash dividends on Common
Stock of $135.2 million ($2.90 per share) on January
29, 2019 and $69.9 million ($1.50 per share) on August
4, 2017.
The Board of Directors has authorized the Company
to repurchase up to 1.6 million shares of common
stock. During Fiscal 2020, the Company purchased an
aggregate 154,512 shares for a cost of $6.2 million.
As of May 2, 2020, 656,572 shares were purchased
under the program and 943,428 shares were available
for repurchase.
Pursuant to a management agreement, we incurred a
fee to Corporate Management Advisors, Inc. (CMA) of
$10.0 million for Fiscal 2020 and $10.2 million for Fiscal
2019. At May 2, 2020, management fees payable
to CMA were $2.6 million. See Note 6 of Notes to
Consolidated Financial Statements.
Cash Flows During Fiscal 2020, $177.7 million was
provided by operating activities, $23.9 million was
used in investing activities and $5.5 million was used
in financing activities. Cash provided by operating
activities increased $38.3 million primarily due to
decreased working capital requirements and increased
depreciation and amortization offset in part by lower net
income. Cash used in investing activities decreased
due to reduced capital expenditures. Cash used in
financing activities includes the $6.2 million of stock
repurchased during Fiscal 2020. In Fiscal 2019, $135.2
million ($2.90 per share) special cash dividend was paid
on January 29, 2019.
increased to $319.0 million
Financial Position During Fiscal 2020, our working
capital
from $224.4
million at April 27, 2019. The increase in working
capital resulted from increased cash and equivalents
generated by operations and reduced inventories offset
in part by increased current liabilities. Current liabilities
in Fiscal 2020 increased in part due to the adoption of
the new lease Accounting Standards Update No. 2016-
02, “Leases.” (Topic 842). Trade receivables increased
slightly and days sales outstanding was 29.5 days
compared to 32.2 days for 2019. Inventories decreased
$7.2 million or 10.2% as a result of reductions in
finished goods and raw materials. Annual inventory
turns increased to 9.4 from 8.8 times. As of May 2,
2020 and April 27, 2019, the current ratio was 3.3 to 1.
CONTRACTUAL OBLIGATIONS
Contractual obligations at May 2, 2020 are payable as follows:
(In thousands)
Operating leases
Total
1 Year
Or less
2 to 3 Years
3 to 5 Years
More Than
5 Years
$ 52,394
$ 14,206
$ 22,251
$ 11,836
$ 4,101
Purchase commitments
22,598
17,505
5,093
-
-
Total
$ 74,992
$ 31,711
$ 27,344
$ 11,836
$ 4,101
We contribute to certain pension plans under collective
bargaining agreements and to a discretionary profit
sharing plan. Annual contributions were $3.6 million for
Fiscal 2020, $3.8 million for Fiscal 2019 and $3.4 million
for Fiscal 2018. See Note 11 of Notes to Consolidated
Financial Statements.
We maintain self-insured and deductible programs for
certain liability, medical and workers’ compensation
exposures. Other long-term liabilities include known
claims and estimated incurred but not reported claims
not otherwise covered by insurance based on actuarial
assumptions and historical claims experience. Since the
timing and amount of claim payments vary significantly,
we are not able to reasonably estimate future payments
for specific periods and therefore such payments have
not been included in the table above. Standby letters
of credit aggregating $3.4 million have been issued in
connection with our self-insurance programs. These
standby letters of credit expire through June 2021 and
are expected to be renewed.
14
NATIONAL BEVERAGE CORP.
OFF-BALANCE SHEET ARRANGEMENTS AND
ESTIMATES
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 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 actions it may
undertake in the future, they may ultimately differ from
actual results. We believe that the critical accounting
policies described in the following paragraphs comprise
the most significant estimates and assumptions
used in the preparation of our consolidated financial
statements. For these policies, we caution that future
events rarely develop exactly as estimated and the best
estimates routinely require adjustment.
Credit Risk We sell products to a variety of customers
and extend credit based on an evaluation of each
customer’s financial condition, generally without
requiring collateral. Exposure to 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 our experience with past due accounts,
collectability and our analysis of customer data.
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 value
based on the best information available. Estimated fair
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.
Income Taxes The Company’s 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 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.
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.
Revenue Recognition We recognize revenue upon
delivery to our customers, based on written sales
terms that do not allow a right of return except in rare
instances. Our products are typically sold on credit;
however smaller direct-store delivery accounts may be
sold on a cash basis. Our credit terms normally require
payment within 30 days of delivery and may allow
discounts for early payment. We estimate and reserve
for bad debt exposure based on our experience with
past due accounts, collectability and our analysis of
customer data.
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 of benefit or
expected sales. When the incentive is paid in advance,
the aggregate incentive is recorded as a prepaid and
amortized over the period of benefit. 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. Such differences are recorded once
determined and have historically not been significant.
15
NATIONAL BEVERAGE CORP.
We adopted ASU 2014-09, Revenue from Contracts
with Customers, and its amendments on April 29, 2018.
ITEM 7A.
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 all, or a portion of, the purchase prices for
certain raw materials. Additionally, we use derivative
financial instruments to partially mitigate our exposure
to changes in certain raw material costs.
Interest Rates At May 2, 2020, the Company had
no borrowings outstanding. We had no debt-related
interest rate exposure during Fiscal 2020.
FORWARD-LOOKING STATEMENTS
“plans,”
“intends,”
National Beverage Corp. and its representatives may
make written or oral statements relating to future events
or results relative to our financial, operational and
business performance, achievements, objectives and
strategies. These statements are “forward-looking”
within the meaning of the Private Securities Litigation
Reform Act of 1995 and include statements contained
in this report and other filings with the Securities
and Exchange Commission and in reports to our
stockholders. Certain statements including, without
limitation, statements containing the words “believes,”
“anticipates,”
“expects,” and
“estimates” constitute “forward-looking statements”
and involve known and unknown risk, uncertainties
and other factors that may cause the actual results,
performance or achievements of our Company to be
materially different from any future results, performance
or achievements expressed or implied by such forward-
looking statements. Such factors include, but are not
limited to, the following: general economic and business
conditions, pricing of competitive products, success of
new product and flavor introductions, fluctuations in the
costs and availability of raw materials and packaging
supplies, ability to pass along cost increases to our
customers, labor strikes or work stoppages or other
interruptions in the employment of labor, continued
retailer support for our products, changes in brand
image, consumer demand and 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, filings 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 reflect future events or
developments.
16
NATIONAL BEVERAGE CORP.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
ASSETS
Current assets:
Cash and equivalents
Trade receivables - net
Inventories
Prepaid and other assets
Total current assets
Property, plant and equipment - net
Right of use assets - net
Goodwill
Intangible assets
Other assets
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued liabilities
Operating lease liabilities
Income taxes payable
Total current liabilities
Deferred income taxes - net
Operating lease liabilities- non current
Other liabilities
Total liabilities
Shareholders' equity:
Preferred stock, $1 par value - 1,000,000 shares authorized
Series C - 150,000 shares issued
Common stock, $.01 par value - 200,000,000 shares authorized;
50,803,184 shares (2020) and 50,678,084 shares (2019) issued
Additional paid-in capital
Retained earnings
Accumulated other comprehensive (loss)
Treasury stock - at cost:
Series C preferred stock - 150,000 shares
Common stock - 4,187,056 shares (2020) and 4,032,544 shares (2019)
Total shareholders' equity
Total liabilities and shareholders' equity
See accompanying Notes to Consolidated Financial Statements.
(5,100)
(19,133)
452,337
648,646 $
$
May 2,
2020
April 27,
2019
$
304,518 $
$
$
84,921
63,482
7,791
460,712
120,627
47,884
13,145
1,615
4,663
648,646 $
74,369 $
42,476
16,980
7,863
141,688
14,823
32,159
7,639
196,309
150
508
37,930
443,402
(5,420)
156,200
84,841
70,702
9,714
321,457
111,316
-
13,145
1,615
4,660
452,193
66,202
30,433
-
402
97,037
15,987
-
7,560
120,584
150
507
37,065
313,430
(1,543)
(5,100)
(12,900)
331,609
452,193
17
NATIONAL BEVERAGE CORP. 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
Operating income
Other income, net
Income before income taxes
Provision for income taxes
Net income
Earnings per common share:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
See accompanying Notes to Consolidated Financial Statements.
Fiscal Year Ended
May 2,
2020
April 27,
2019
April 28,
2018
$ 1,000,394
$ 1,014,105
$
975,734
630,254
370,140
204,394
165,746
629,755
384,350
204,415
179,935
584,599
391,135
186,947
204,188
(3,709)
(3,942)
(1,301)
169,455
39,483
183,877
43,024
205,489
55,715
$
129,972
$
140,853
$
149,774
$
$
2.79
2.78
$
$
3.02
3.00
$
$
3.21
3.19
46,628
46,828
46,633
46,917
46,598
46,921
18
NATIONAL BEVERAGE CORP. NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Net income
Other comprehensive income, net of tax:
Cash flow hedges
Other
Total
Comprehensive income
See accompanying Notes to Consolidated Financial Statements.
Fiscal Year Ended
May 2,
2020
April 27,
2019
April 28,
2018
$
129,972
$
140,853
$
149,774
(3,673)
(204)
(3,877)
(6,318)
174
(6,144)
5,227
(22)
5,205
$
126,095
$
134,709
$
154,979
19
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
SERIES C PREFERRED STOCK
Beginning and end of year
COMMON STOCK
Beginning of year
Stock options exercised
End of year
ADDITIONAL PAID-IN CAPITAL
Beginning of year
Stock options exercised
Stock-based compensation
End of year
RETAINED EARNINGS
Beginning of year
Net income
Common stock cash dividend
End of year
ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS)
Beginning of year
Cash flow hedges
Other
End of year
TREASURY STOCK - SERIES C PREFERRED
Beginning and end of year
TREASURY STOCK - COMMON
Fiscal Year Ended
May 2, 2020
April 27, 2019
April 28, 2018
Shares
Amount
Shares
Amount
Shares
Amount
150 $
150
150 $
150
150 $
150
50,678
125
50,803
507
50,651
507
50,616
1
27
-
35
508
50,678
507
50,651
37,065
740
125
37,930
313,430
129,972
-
443,402
(1,543)
(3,673)
(204)
(5,420)
36,358
456
251
37,065
307,824
140,853
(135,247)
313,430
4,601
(6,318)
174
(1,543)
506
1
507
35,638
559
161
36,358
227,928
149,774
(69,878)
307,824
(604)
5,227
(22)
4,601
150
(5,100)
150
(5,100)
150
(5,100)
Beginning of year
4,033
(12,900)
4,033
(12,900)
4,033
(12,900)
Repurchase of common stock
154
(6,233)
End of year
4,187
(19,133)
4,033
(12,900)
4,033
(12,900)
TOTAL SHAREHOLDERS' EQUITY
$ 452,337
$ 331,609
$ 331,440
See accompanying Notes to Consolidated Financial Statements.
20
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
Deferred income tax provision
Loss on disposal of property, net
Stock-based compensation
Amortization of operating right of use assets
Changes in assets and liabilities:
Trade receivables
Inventories
Prepaid and other assets
Accounts payable
Accrued and other liabilities
Fiscal Year Ended
May 2,
2020
April 27,
2019
April 28,
2018
$
129,972
$
140,853
$
149,774
17,234
11
206
125
13,351
(80)
7,220
(5,633)
8,168
7,118
15,439
3,351
12
251
-
(481)
(9,782)
(2,806)
(8,651)
1,256
13,226
676
149
161
-
(13,041)
(7,565)
(5,437)
16,753
25
Net cash provided by operating activities
177,692
139,442
154,721
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
Proceeds from stock options exercised
Repurchase of common stock
Net cash used in financing activities
(23,890)
(38,333)
(31,974)
9
18
63
(23,881)
(38,315)
(31,911)
-
740
(6,233)
(5,493)
(135,247)
(69,878)
456
-
560
-
(134,791)
(69,318)
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
148,318
(33,664)
53,492
CASH AND EQUIVALENTS - BEGINNING OF YEAR
156,200
189,864
136,372
CASH AND EQUIVALENTS - END OF YEAR
OTHER CASH FLOW INFORMATION:
Interest paid
Income taxes paid
See accompanying Notes to Consolidated Financial Statements.
$
$
$
304,518
$
156,200
$
189,864
51
29,364
$
$
51
36,833
$
$
101
56,737
21
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP. AND
SUBSIDIARIES
Notes to Consolidated Financial Statements
National Beverage Corp. develops, produces, markets
and sells a distinctive portfolio of sparkling waters,
juices, energy drinks and carbonated soft drinks
primarily in the United States and Canada. Incorporated
in Delaware in 1985, National Beverage Corp. is a
holding company for various operating subsidiaries.
When used in this report, the terms “we,” “us,” “our,”
“Company” and “National Beverage” mean National
Beverage Corp. and its subsidiaries.
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation The consolidated financial
statements have been prepared in accordance with
United States generally accepted accounting principles
(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. The fiscal year ended May 2, 2020 (Fiscal
2020) consisted of 53 weeks. The fiscal year ended
April 27, 2019 (Fiscal 2019) and the fiscal year ended
April 28, 2018 (Fiscal 2018) both consisted of 52
weeks.
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 200,000 shares
in Fiscal 2020, 284,000 shares in Fiscal 2019, and
323,000 shares in Fiscal 2018.
Fair Value of Financial Instruments 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.
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 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 management believes
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.
Cash and Equivalents Cash and equivalents are
comprised of cash and highly
liquid securities
(consisting primarily of bank deposits and short-term
government money-market investments).
Derivative Financial Instruments Derivative financial
instruments are used to partially mitigate our exposure
to changes in certain raw material costs. All derivative
financial instruments are recorded at fair value in our
Consolidated Balance Sheets. Derivative financial
instruments are not used for trading or speculative
purposes. Credit risk related to derivative financial
instruments is managed by requiring high credit standards
for counterparties and frequent cash settlements.
Income Taxes The Company’s 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 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.
Insurance Programs The Company maintains self-
insured and deductible programs for certain liability,
medical and workers’ compensation exposures.
Accordingly, the Company accrues for known claims
22
NATIONAL BEVERAGE CORP.
and estimated incurred but not reported claims not
otherwise covered by insurance based on actuarial
assumptions and historical claims experience. At May
2, 2020, and April 27, 2019, other liabilities included
accruals of $5.5 million and $5.7 million, respectively,
for estimated non-current risk retention exposures, of
which $4.3 million was covered by insurance at both
dates and included as a component of non-current
other assets.
Intangible Assets Intangible Assets as of May 2,
2020 and April 27, 2019 consisted of non-amortizable
acquired trademarks.
Inventories Inventories are stated at the lower of first-
in, first-out cost or market. Adjustments, if required, to
reduce the cost of inventory to market (net realizable
value) are made for estimated excess, obsolete or
impaired balances. Inventories at May 2, 2020 were
comprised of finished goods of $39.1 million and raw
materials of $24.4 million. Inventories at April 27, 2019
were comprised of finished goods of $48.7 million and
raw materials of $22.0 million.
including
Marketing Costs The Company utilizes a variety
of marketing programs,
cooperative
advertising programs with customers, to advertise
and promote our products to consumers. Marketing
costs are expensed when incurred, except for prepaid
advertising and production costs which are expensed
when the advertising takes place. Marketing costs,
which are included in selling, general and administrative
expenses, totaled $54.8 million in Fiscal 2020, $55.3
million in Fiscal 2019 and $49.7 million in Fiscal 2018.
New Accounting Pronouncements – Adopted
In February 2016, the FASB issued ASU No. 2017-
12, “Derivatives and Hedging (Topic 815): Targeted
Improvements to Accounting for Hedging Activities,”
which expands strategies that qualify
for hedge
accounting, changes how many hedging relationships
are presented in the financial statements, and simplifies
the application of hedge accounting
in certain
situations. Effective for Fiscal 2020, the Company
adopted the amendments to Topic 815 which did not
have a material impact on the Company’s consolidated
financial statements.
Effective for Fiscal 2020, the Company adopted
Accounting Standards Update No. 2016-02, Leases
(Topic 842) using the modified retrospective transition
approach by applying the new standard to all leases
existing at the date of initial application. Results and
disclosure requirements for reporting periods beginning
after April 27, 2019 are presented under Topic 842,
while prior period amounts have not been adjusted
and continue to be reported in accordance with our
historical accounting under ASC 840, “Leases.” Topic
840.
The Company elected
the package of practical
expedients permitted under the transition guidance,
which allowed us to carryforward historical lease
classification, the assessment on whether a contract
was or contains a lease, and the initial direct costs
for any leases that existed prior to April 28, 2019.
The Company also elected to combine our lease and
non-lease components and to keep leases with an
initial term of 12 months or less off the balance sheet
and recognize the associated lease payments in the
consolidated statements of income on a straight-line
basis over the lease term.
Under Topic 842, the Company determines if an
arrangement is a lease at inception. Right of use
assets (ROU) and lease liabilities are recognized at
commencement date based on the present value of
remaining lease payments over the lease term. For this
purpose, the Company considers only payments that are
fixed and determinable at the time of commencement.
As most leases do not provide an implicit rate, the
Company’s incremental borrowing rate is used, based
on the information available at commencement date,
in determining the present value of lease payments.
The ROU asset also includes any lease payments
made prior to commencement and is recorded net
of any lease incentives received. Lease terms may
include options to extend or terminate the lease when
it is reasonably certain that the Company will exercise
such options. The Company assesses these options
using a threshold of reasonably certain, which is a high
threshold and, therefore, the majority of the Company’s
leases do not include renewal periods or purchase
options in the measurement of the right of use asset
and the associated lease liability. Lease agreements
may contain variable costs such as common area
23
NATIONAL BEVERAGE CORP.
maintenance, insurance, real estate taxes or other
costs. Variable lease costs are expensed as incurred.
Lease agreements generally do not contain residual
value guarantees or restrictive covenants.
Property, Plant and Equipment Property, plant and
equipment is recorded at cost. Additions, replacements
and betterments are capitalized, while maintenance and
repairs that do not extend the useful life of an asset are
expensed as incurred. Depreciation is recorded using
the straight-line method over estimated useful lives of
5 to 30 years for buildings and improvements and 3
to 15 years for machinery and equipment. Leasehold
improvements are amortized using the straight-line
method over the shorter of the remaining lease term
or the estimated useful life of the improvement. When
assets are retired or otherwise disposed, the cost
and accumulated depreciation are removed from the
respective accounts and any related gain or loss is
recognized.
Revenue Recognition Revenue is recognized upon
delivery to our customers, based on written sales
terms that do not allow a right of return except in rare
instances. Our products are typically sold on credit;
however smaller direct store delivery accounts may be
sold on a cash basis. Our credit terms normally require
payment within 30 days of delivery and may allow
discounts for early payment. The Company estimates
and reserves for bad debt exposure based on our
experience with past due accounts, collectability and
our analysis of customer data.
Various sales incentive arrangements are offered to
our customers that require customer performance or
achievement of certain sales volume targets. Sales
incentives are accrued over the period of benefit or
expected sales. When the incentive is paid in advance,
the aggregate incentive is recorded as a prepaid and
amortized over the period of benefit. 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. Such differences are recorded once
determined and have historically not been significant.
24
Segment Reporting The Company operates as a
single operating segment for purposes of presenting
information and evaluating performance.
financial
As such, the accompanying consolidated financial
statements present financial information in a format that
is consistent with the internal financial information used
by management. The Company does not accumulate
revenues by product classification and, therefore, it is
impractical to present such information.
in
the
accompanying
Shipping and Handling Costs Shipping and handling
costs are reported in selling, general and administrative
expenses
consolidated
statements of income. Such costs aggregated $69.8
million in Fiscal 2020, $72.4 million in Fiscal 2019 and
$63.3 million in Fiscal 2018. 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.
Trade Receivables Trade receivables are recorded
at net realizable value, which includes an estimated
allowance for doubtful accounts. The Company extends
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. The
Company continually monitors our exposure to credit
losses and maintains allowances for anticipated losses
based on our experience with past due accounts,
collectability and our analysis of customer data.
Actual future losses from uncollectible accounts could
differ from the Company’s estimate. Changes in the
allowance for doubtful accounts was as follows:
(In thousands)
Fiscal
2020
Fiscal
2019
Fiscal
2018
Balance at beginning of year
$
516 $
452 $
468
Net charge to expense
Net charge-off
893
(59)
87
(23)
34
(50)
Balance at end of year
$ 1,350 $
516 $
452
As of May 2, 2020, and April 27, 2019, the Company
had no customer that comprised more than 10% of
trade receivables. No customer accounted for more than
10% of net sales during any of the last three fiscal years.
NATIONAL BEVERAGE CORP.
in conformity with GAAP
Use of Estimates The preparation of our financial
statements
requires
management to make estimates and assumptions that
affect the amounts reported in the financial statements
and accompanying notes. Although these estimates
are based on management’s knowledge of current
events and anticipated future actions, actual results
may vary from reported amounts.
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of May 2, 2020 and
April 27, 2019 consisted of the following:
(In thousands)
Land
2020
2019
$
9,835 $
9,835
Buildings and improvements
59,618
58,291
Machinery and equipment
238,300
222,243
Total
307,753
290,369
Less accumulated depreciation
(187,126)
(179,053)
Property, plant and equipment – net $ 120,627 $ 111,316
Depreciation expense was $14.4 million for Fiscal
2020, $12.8 million for Fiscal 2019 and $11.1 million
for Fiscal 2018.
3. ACCRUED LIABILITIES
Accrued liabilities as of May 2, 2020 and April 27, 2019
consisted of the following:
(In thousands)
2020
2019
Accrued compensation
$ 11,348 $
9,506
Accrued promotions
Accrued freight
Accrued insurance
Recycling deposits
Other
Total
9,061
3,443
2,934
5,688
10,002
6,449
4,387
3,780
1,150
5,161
$ 42,476 $ 30,433
4. LEASES
The Company has entered into various non-cancelable
operating lease agreements for certain of our offices,
buildings, machinery and equipment expiring at various
dates through January 2029. The Company does not
assume renewals in our determination of the lease
term unless the renewals are deemed to be reasonably
assured at lease commencement. Lease agreements
generally do not contain material residual value
guarantees or material restrictive covenants. Operating
lease cost for Fiscal 2020 under Topic 842 was $15.1
million. The weighted-average remaining lease term
and weighted average discount rate of operating leases
was 4.3 years and 3.38%, respectively as of May 2,
2020. Net cash provided by operations was impacted
by $12.1 million for operating leases for the year ended
May 2, 2020.
The following is a summary of future minimum lease
payments and related liabilities for all non-cancelable
operating leases as of May 2, 2020:
(In thousands)
Fiscal 2021
Fiscal 2022
Fiscal 2023
Fiscal 2024
Fiscal 2025
Thereafter
Total minimum lease payments including
interest
Less: Amounts representing interest
$ 14,206
13,276
8,975
7,361
4,475
4,101
52,394
(3,255)
Present value of minimum lease payments
49,139
Less: Current portion of lease liabilities
(16,980)
Non-Current portion of operating lease
liabilities
$ 32,159
Under the prior accounting guidance of ASC 840,
operating lease expense was $18.2 million and $13.3
million for Fiscal years 2019 and 2018, respectively.
25
NATIONAL BEVERAGE CORP.
Minimum
operating leases as of April 27, 2019 were as follows:
lease payments under non-cancelable
under the program and 943,428 shares were available
for repurchase.
(In thousands)
Fiscal 2020
Fiscal 2021
Fiscal 2022
Fiscal 2023
Fiscal 2024
Thereafter
$ 16,105
12,084
9,894
7,741
4,510
1,703
Total minimum lease payments
$ 52,037
5. DEBT
At May 2, 2020, a subsidiary of the Company
maintained unsecured revolving credit facilities with
banks aggregating $100 million (the Credit Facilities).
The Credit Facilities expire from October 3, 2020 to
June 18, 2021 and any borrowings would currently bear
interest at .9% above one-month LIBOR. There were
no borrowings outstanding under the Credit Facilities
at May 2, 2020 or April 27, 2019. At May 2, 2020, $3.4
million of the Credit Facilities was reserved for standby
letters of credit and $96.6 million was available for
borrowings.
The Credit Facilities require the subsidiary to maintain
certain financial ratios, including 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 2, 2020, the Company was in
compliance with all loan covenants.
6. CAPITAL STOCK AND TRANSACTIONS
WITH RELATED PARTIES
The Board of Directors has authorized the Company
to repurchase up to 1.6 million shares of common
stock. During Fiscal 2020, the Company purchased an
aggregate 154,512 shares for a cost of $6.2 million.
As of May 2, 2020, 656,572 shares were purchased
26
The Company paid a special cash dividend on Common
Stock of $135.2 million ($2.90 per share) on January
29, 2019 and $69.9 million ($1.50 per share) on August
4, 2017. No dividends were declared or paid in Fiscal
year 2020.
The Company is a party to a management agreement
with Corporate Management Advisors, Inc. (CMA),
a corporation owned by our Chairman and Chief
Executive Officer. This agreement was originated in
1991 for the efficient use of management of two 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 agreement, CMA provides,
subject to the direction and supervision of the Board of
Directors of the Company, (i) senior corporate functions
(including supervision of the Company’s financial, legal,
executive recruitment, internal audit and information
systems departments) as well as the services of a Chief
Executive Officer and Chief Financial Officer, and (ii)
services in connection with acquisitions, dispositions
and financings by the Company, including identifying
and profiling acquisition candidates, negotiating
and structuring potential transactions and arranging
financing for any such transaction. CMA, through its
personnel, also provides, to the extent possible, the
stimulus and creativity to develop an innovative and
dynamic persona for the Company, its products and
corporate image. In order to fulfill its obligations under
the management agreement, CMA employs numerous
individuals, who, acting as a unit, provide management,
administrative and creative functions for the Company.
CMA and the Company are joint owners of a corporate
aircraft and each party agreed to pay certain expenses
associated with the use of the aircraft. During the
past three years, the Company’s operating costs have
averaged approximately $.8 million per year and lease
buy-down payments and financing costs have averaged
approximately $.8 million per year. In conjunction with an
inquiry by the Securities and Exchange Commission, the
Company is in the process of reviewing the aircraft usage
to ensure that expenses may be properly allocated.
NATIONAL BEVERAGE CORP.
This review is not expected to have a material effect
on the Company’s consolidated financial statements,
but could result in adjustments between CMA and the
Company or modify other disclosures.
that
The management agreement provides
the
Company will pay CMA an annual base fee equal to one
percent of the consolidated net sales of the Company,
and further provides that the Compensation and Stock
Option Committee and the Board of Directors may from
time to time award additional incentive compensation
to CMA or its personnel. The Board of Directors
on numerous occasions contemplated
incentive
compensation to CMA, however, since the inception of
this agreement, no incentive compensation has been
paid. We incurred management fees to CMA of $10.0
million for Fiscal 2020, $10.2 million for Fiscal 2019,
and $9.8 million for Fiscal 2018. Included in accounts
payable were amounts due CMA of $2.6 million at May
2, 2020 and $2.4 million at April 27, 2019.
7. DERIVATIVE FINANCIAL INSTRUMENTS
From time to time, the Company enters into aluminum
swap contracts to partially mitigate our exposure to
changes in the cost of aluminum cans. Such financial
instruments are designated and accounted for as cash
flow hedges. Accordingly, gains or losses attributable
to the effective portion of the cash flow hedges are
reported in Accumulated Other Comprehensive Income
(Loss) (AOCI) and reclassified into cost of sales in
the period in which the hedged transaction affects
earnings. The ineffective portion of the change in fair
value of our cash flow hedge was immaterial. The
following summarizes the gains (losses) recognized
in the Consolidated Statements of Income and AOCI
relative to the cash flow hedges for Fiscal 2020, Fiscal
2019 and Fiscal 2018:
(In thousands)
Recognized in AOCI-
Fiscal
2020
Fiscal
2019
Fiscal
2018
(Loss) gain before income
taxes
Less income tax (benefit)
provision
$ (9,613) $ (6,138) $ 9,498
(2,299)
(1,468)
3,085
Net
(7,314)
(4,670)
6,413
Reclassified from AOCI to cost
of sales-
Gain (loss) before income
taxes
Less income tax provision
(benefit)
(4,786)
2,100
2,569
(1,145)
452
1,383
Net
(3,641)
1,648
1,186
Net change to AOCI
$ (3,673) $ (6,318) $ 5,227
As of May 2, 2020, the notional amount of our
outstanding aluminum swap contracts was $49.3
million and, assuming no change in the commodity
prices, $6.7 million of unrealized loss before tax will be
reclassified from AOCI and recognized in cost of sales
over the next 12 months.
As of May 2, 2020, and April 27, 2019, the fair value of
the derivative liability was $6.9 million and $2.0 million,
respectively, which was included as a component of
accrued liabilities. Such valuation does not entail a
significant amount of judgment and the inputs that are
significant to the fair value measurement are Level 2 as
defined by the fair value hierarchy as they are observable
market based inputs or unobservable inputs that are
corroborated by market data.
8. INCOME TAXES
The provision for income taxes consisted of the
following:
(In thousands)
Current
Deferred
Total
Fiscal
2020
Fiscal
2019
Fiscal
2018
$40,647 $ 39,673 $ 55,039
(1,164)
3,351
676
$39,483 $ 43,024 $ 55,715
27
NATIONAL BEVERAGE CORP.
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 2, 2020 and
April 27, 2019 consisted of the following:
(In thousands)
Fiscal
2020
Fiscal
2019
Fiscal
2018
Beginning balance
$ 1,868 $ 1,733 $ 1,743
Increases due to current
period tax positions
Decreases due to lapse of
statute of limitations and audit
resolutions
120
139
204
(14)
(4)
(214)
Ending balance
$ 1,974 $ 1,868 $ 1,733
(In thousands)
Deferred tax assets:
2020
2019
Accrued expenses and other $
4,930 $
3,705
Inventory and amortizable
assets
565
265
Total deferred tax assets
5,495
3,970
Deferred tax liabilities:
Property
18,872
18,505
Intangibles and other
1,446
1,452
Total deferred tax liabilities
20,318
19,957
Net deferred tax liabilities
$ 14,823 $ 15,987
The reconciliation of the statutory federal income tax
rate to our effective tax rate is as follows:
Statutory federal income tax
rate
State income taxes, net of
federal benefit
Domestic manufacturing
deduction benefit
Re-measurement of deferred
taxes
Fiscal
2020
Fiscal
2019
Fiscal
2018
21.0% 21.0% 30.4%
2.9
2.9
2.4
-
-
-
-
(2.4)
(2.9)
Other differences
(.6)
(.5)
(.4)
Effective income tax rate
23.3% 23.4% 27.1%
As of May 2, 2020, the gross amount of unrecognized tax
benefits was $2.0 million and $91,000 was recognized
as tax expense in Fiscal 2020. If the Company is to
prevail on all uncertain tax positions, the net effect
would be to reduce our tax expense by approximately
$1.6 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 as follows:
Accrued interest and penalties related to unrecognized
tax benefits are recognized as a component of income
tax expense. As of May 2, 2020, unrecognized tax
benefits included accrued interest of $267,000, of
which approximately $15,000 was recognized as tax
expense in Fiscal 2020.
On December 22, 2017, the Tax Cuts and Jobs Act
(the “Tax Act”) was enacted into law. The Tax Act made
changes to the U.S. tax code, including reducing the
U.S. federal tax rate from 35% to 21% effective January
1, 2018. The phasing in of the lower corporate income
tax rate results in a blended federal statutory rate of
30.4% for our Fiscal 2018, compared with the previous
35% rate. Included in the effective tax rate for Fiscal
2018 is a one-time adjustment reducing income tax
expense to remeasure previous deferred tax liabilities
of $4.3 million.
Annual income tax returns are filed in the United States
and in various state and local jurisdictions. A number
of years may elapse before an uncertain tax position,
for which the Company has unrecognized tax benefits,
are resolved. While it is often difficult to predict the final
outcome or the timing of resolution of any particular
uncertain tax position, the Company believes that
unrecognized tax benefits reflect the most probable
outcome. The Company adjusts 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 2016
are subject to examination. Generally, the income tax
returns for the various state jurisdictions are subject to
examination for fiscal years ending after fiscal 2013.
28
NATIONAL BEVERAGE CORP.
9. LEGAL PROCEEDINGS
ingredients and
The Company has been named in certain legal
proceedings, including those containing derivative
and class action allegations. One complaint alleges
the Company’s LaCroix branded products contain
synthetic
therefore violate state
consumer protection statutes and other laws. A similar
consumer complaint was voluntarily dismissed during
Fiscal 2020 along with a full written retraction of all
claims by the plaintiff and counsel. The Company is
vigorously defending all legal proceedings and believes
litigation will not have a material adverse effect on the
Company’s financial position, cash flows or results of
operations.
10. STOCK-BASED COMPENSATION
Our stock-based compensation program is a broad-
based program designed to attract and retain personnel
while also aligning participants’ interests with the
interests of the shareholders.
The 1991 Omnibus Incentive Plan (the Omnibus 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 designed to provide an
incentive to officers 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 National Beverage. The number of shares or
options which may be issued under stock-based awards
to an individual is limited to 1,680,000 during any year.
Awards may be granted for no cash consideration or
such minimal cash consideration as may be required by
law. Options generally have an exercise price equal to
the fair market value of our common stock on the date
of grant, vest over a five-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 determined by the
Board of Directors. The vesting schedule and exercise
price of these options are tied to the recipient’s ownership
level of common stock and the terms generally allow for
the reduction in exercise price upon each vesting period.
Also, the Board of Directors authorized the issuance of
options to purchase up to 50,000 shares of common
stock to be issued at the direction of the Chairman.
The Key Employee Equity Partnership Program (KEEP
Program) provides for the granting of stock options
to purchase up to 240,000 shares of common stock
to key employees, consultants, directors and officers.
Participants who purchase shares of stock in the open
market receive grants of stock options equal to 50%
of the number of shares purchased, up to a maximum
of 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.
Stock options are accounted for under the fair value
method of accounting using a Black-Scholes valuation
model to estimate the stock option fair value at date of
grant. The fair value of stock options is amortized to
expense over the vesting period. Stock options for 9,000
shares were granted in Fiscal 2019 and 500 shares in
Fiscal 2018. No stock options were issued during Fiscal
2020. The weighted average Black-Scholes fair value
assumptions for stock options granted are as follows:
weighted average expected life of 8.0 years for Fiscal
2019 and 8.0 years for Fiscal 2018; weighted average
expected volatility of 21.7% for Fiscal 2019 and 23.8%
for Fiscal 2018; weighted average risk free interest rates
of 2.6% for Fiscal 2019 and 2.4% for Fiscal 2018; and
expected dividend yield of 1.6% for Fiscal 2019 and
1.6% for Fiscal 2018. The expected life of stock options
was estimated based on historical experience. The
expected volatility was estimated based on historical
stock prices for a period consistent with the expected
life of stock options. The risk free interest rate was
based on the U.S. Treasury constant maturity interest
rate whose term is consistent with the expected life of
stock options. There were no forfeitures estimated in
Fiscal 2019 and Fiscal 2018.
29
NATIONAL BEVERAGE CORP.
the exercise of stock options were $740,000 for Fiscal
2020, $456,000 for Fiscal 2019, $560,000 for Fiscal
2018. Stock based income tax benefits aggregated
$974,000 for Fiscal 2020, $443,000 for Fiscal 2019,
and $886,000 for Fiscal 2018. The weighted average
fair value for stock options granted was $63.71 for
Fiscal 2020.
As of May 2, 2020, unrecognized compensation
expense related to the unvested portion of stock
options was $465,000, which is expected to be
recognized over a weighted average period of 4.5
years. The weighted average remaining contractual
term and the aggregate intrinsic value for options
outstanding as of May 2, 2020 was 3.7 years and $7.0
million, respectively. The weighted average remaining
contractual term and the aggregate intrinsic value for
options exercisable as of April 27, 2019 was 3.3 years
and $14.9 million, respectively.
The following is a summary of stock option activity for
Fiscal 2020:
Number
of Shares
Price(a)
Options outstanding, beginning of
year
322,445
$ 11.14
Granted
Exercised
Cancelled
Options outstanding, end of year
Options exercisable, end of year
(a) Weighted average exercise price.
-
(125,100)
(2,800)
194,545
183,145
-
5.92
17.59
14.01
13.00
Stock-based compensation expense was $126,000 for
Fiscal 2020, $251,000 for Fiscal 2019, and $161,000
for Fiscal 2018. The total fair value of shares vested
was $768,000 for Fiscal 2020, $127,000 for Fiscal
2019, and $140,000 for Fiscal 2018.
The total intrinsic value for stock options exercised was
$4.9 million for Fiscal 2020, $2.2 million for Fiscal 2019,
$3.0 million for Fiscal 2018. Net cash proceeds from
11. PENSION PLANS
The Company contributes to certain pension plans under collective bargaining agreements and to a discretionary
profit sharing plan. Annual contributions (including contributions to multi-employer plans reflected below) were
$3.6 million for Fiscal 2020, $3.8 million for Fiscal 2019, and $3.4 million for Fiscal 2018.
The Company participates in three multi-employer defined benefit 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.
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”) and the zone
status under the Pension Protection Act (“PPA”). The most recent PPA zone status available in Fiscal 2020 and
Fiscal 2019 is for the plans’ years ending December 31, 2018 and 2017, respectively.
Pension Fund
Central States, Southeast and Southwest
Areas Pension Plan (EIN no. 36-6044243) (the CSSS Fund)
PPA Zone Status
Fiscal
2020
Fiscal
2019
FIP/RP
Status
Surcharge
Imposed
Red
Red
Implemented
Yes
Western Conference of Teamsters Pension
Trust Fund (EIN no. 91-6145047) (the WCT Fund)
Green
Green
Not
applicable
No
30
NATIONAL BEVERAGE CORP.
For the plan years ended December 31, 2018 and December 31, 2017, the Company was not listed in the Form
5500 Annual Returns as providing more than 5% of the total contributions for the above plans. The collective
bargaining agreements for employees in the CSSS Fund and the WCT Fund expire on October 18, 2021 and
May 14, 2021, respectively.
The Company’s contributions for all multi-employer pension plans for the last three fiscal years are as follow:
(In thousands)
Pension Fund
CSSS Fund
WCT Fund
Other multi-employer pension funds
Total
Fiscal
2020
Fiscal
2019
Fiscal
2018
$
1,424
$
1,465
$
1,370
799
185
769
222
619
228
$
2,408
$
2,456
$
2,217
12. COMMITMENTS AND CONTINGENCIES
The Company enters into various agreements with suppliers for the purchase of raw materials, the terms of which
may include variable or fixed pricing and minimum purchase quantities. As of May 2, 2020 the Company had
purchase commitments for raw materials of $22.6 million through 2023.
As of May 2, 2020, the Company had purchase commitments for plant and equipment of $5.1 million anticipated
to be completed in the 2021 fiscal year.
13. QUARTERLY FINANCIAL DATA (UNAUDITED)
(In thousands, except per share amounts)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
$ 263,568
$ 251,611
$ 222,814
$ 262,401
96,574
34,542
92,814
32,654
82,095
26,563
Earnings per common share – basic
Earnings per common share – diluted
$
$
.74
.74
$
$
.70
.70
$
$
.57
.57
$
$
$ 292,590
$ 260,709
$ 220,892
$ 239,914
115,694
48,830
103,524
41,077
80,554
24,811
Earnings per common share – basic
Earnings per common share – diluted
$
$
1.05
1.04
$
$
.88
.88
$
$
.53
.53
$
$
FISCAL 2020
Net sales
Gross profit
Net income
FISCAL 2019
Net sales
Gross profit
Net income
98,657
36,213
.78
.77
84,578
26,135
.56
.56
31
NATIONAL BEVERAGE CORP.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of National Beverage Corp.
Opinions on the Financial Statements and Internal
Control over Financial Reporting
We have audited the accompanying consolidated
balance sheets of National Beverage Corp.
(the
Company) as of May 2, 2020 and April 27, 2019,
and the related consolidated statements of income,
comprehensive income, shareholders’ equity and cash
flows for each of the three years in the period ended May
2, 2020, and the related notes (collectively, the financial
statements). We also have audited the Company’s
internal control over financial reporting as of May 2,
2020, based on criteria established in Internal Control
— Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission
in 2013.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial
position of the Company as of May 2, 2020 and April
27, 2019, and the results of its operations and its cash
flows for each of the years in the three-year period
ended May 2, 2020, in conformity with accounting
principles generally accepted in the United States of
America. Also in our opinion, the Company maintained,
in all material respects, effective internal control over
financial reporting as of May 2, 2020, based on criteria
established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations
of the Treadway Commission in 2013.
Basis for Opinions
The Company’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 the Company’s
financial statements and an opinion on the company’s
internal control over financial reporting based on our
audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent
with respect to the Company in accordance with U.S.
federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that
we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are
free of material misstatement, whether due to error or
fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the financial statements included performing
procedures to assess the risks of material misstatement
of the financial statements, whether due to error or
fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included
evaluating the accounting principles used and significant
estimates made by management, as well as evaluating
the overall presentation of the financial statements. 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.
Definition and Limitations of Internal Control over
Financial Reporting
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
in accordance with generally accepted
purposes
accounting principles. A company’s internal control
over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of
32
NATIONAL BEVERAGE CORP.
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.
using a variety of actuarial estimation techniques that
are dependent upon assumptions and expectations
about future events, many of which are difficult to
quantify. As of May 2, 2020 and April 27, 2019, other
liabilities included accruals of $5.5 million and $5.7
million, respectively, for estimated non-current risk
retention exposures, of which $4.3 million was covered
by insurance at both dates.
We identified the evaluation of the Company’s self-
insurance accruals as a critical audit matter due to
the significant judgments made by management in
estimating the workers’ compensation liability. Auditing
management’s judgments used in estimating the value
of the workers’ compensation liability involved a high
degree of auditor judgment and increased audit effort,
including the use of our actuarial specialist.
Our audit procedures related to the Company’s self-
insurance accrual assessment included the following,
among others:
Critical Audit Matters
The critical audit matters communicated below are
matters arising from the current period audit of the
financial statements that were communicated or required
to be communicated to the audit committee and that:
(1) relate to accounts or disclosures that are material to
the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter
in any way our opinion on the financial statements,
taken as a whole, and we are not, by communicating
the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts
or disclosures to which they relate.
Self-Insurance Accruals
As described in Note 1 to the consolidated financial
statements,
the Company maintains self-insured
and deductible programs for workers’ compensation
exposures. The Company accrues for known claims
and estimated incurred but not reported claims not
otherwise covered by insurance based on actuarial
assumptions and historical claims experience. While a
third party actuary is employed to advise the Company,
estimating workers’ compensation exposure
is
inherently uncertain, as estimates are generally derived
to
related
• We obtained an understanding of the relevant
the Company’s workers’
controls
compensation liability, and tested such controls
for design and operating effectiveness, including
controls related to management’s review of the
significant assumptions .
• We tested the underlying data, including historical
claims and payroll data, which served as the basis
for the assumptions used by the third party actuary
in the actuarial analysis, to test that the inputs to the
actuarial estimates were accurate and complete.
• We compared payments made in the current year
for prior year claims to prior year recorded reserves.
• With the assistance of our actuarial specialist, we
evaluated the propriety of the reserving techniques
utilized for the workers’ compensation exposures.
/s/ RSM US LLP
We have served as the Company’s auditor since 2006.
Fort Lauderdale, Florida
July 1, 2020
33
NATIONAL BEVERAGE CORP.
that
there are
recognizes
Management
inherent
limitations in the effectiveness of any internal control
over financial reporting, including the possibility of
human error and the circumvention or overriding of
internal control. Accordingly, even effective internal
control over financial reporting can provide only
reasonable assurance with
to financial
statement preparation. Further, because of changes
in conditions, the effectiveness of internal control may
vary over time.
respect
independent registered public
RSM US LLP, an
accounting firm, has audited the consolidated financial
statements included in this Annual Report on Form
10-K and, as part of their audit, has issued their report,
included herein, on the effectiveness of our internal
control over financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over
financial reporting during the quarter ended May 2,
2020 that have materially affected, or are reasonably
likely to materially affect, our internal control over
financial reporting.
ITEM 9B.
OTHER INFORMATION
Not applicable.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this Annual
Report on Form 10-K, we carried out an evaluation,
under the supervision and with the participation of
the Company’s management, including our Chief
Executive Officer and Principal Financial Officer, of
the effectiveness of the design and operation of our
“disclosure controls and procedures” (as defined in
Rule 13a-15(e) of the Securities Exchange Act of 1934,
as amended (the Exchange Act)). Based upon that
evaluation, the Chief Executive Officer and Principal
Financial Officer concluded that our disclosure controls
and procedures were effective to ensure information
required to be disclosed by us in reports we file or submit
under the Exchange Act is (1) recorded, processed,
summarized and reported within the time periods
specified in SEC rules and forms and (2) accumulated
and communicated to our management, including our
Chief Executive Officer and Principal Financial Officer,
to allow timely decisions regarding required disclosure.
Report on Internal Control over Financial Reporting
Our management is responsible for establishing and
maintaining adequate internal control over financial
reporting, as such term is defined in Rule 13a-15(f) of
the Exchange Act. Under the supervision and with the
participation of our management, including our Chief
Executive Officer and Principal Financial Officer, we
conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the
framework in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations
of the Treadway Commission in 2013. Based on that
that our
evaluation, our management concluded
internal control over financial reporting was effective as
of May 2, 2020.
34
NATIONAL BEVERAGE CORP.
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE COMPENSATION
The information required by Item 10 will be included
under the captions “Election of Directors”, “Information
as to Nominees and Other Directors”, “Information
Regarding Meetings and Committees of the Board”
and “Section 16(a) Beneficial Ownership Reporting
Compliance” in the Company’s 2020 Proxy Statement
and is incorporated herein by reference.
The information required by Item 11 will be included
under the captions “Executive Compensation and Other
Information” and “Compensation Committee Interlocks
and Insider Participation” in the Company’s 2020 Proxy
Statement and is incorporated herein by reference.
The following table sets forth certain information with
respect to the officers of the Registrant as of May 2,
2020:
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Name
Age Position with Company
Nick A. Caporella(1)
84 Chairman of the Board and
Chief Executive Officer
Joseph G. Caporella(2)
59
President
The information required by Item 12 will be included
under the captions “Security Ownership” and “Equity
Compensation Plan Information” in the Company’s
2020 Proxy Statement and is incorporated herein by
reference.
George R. Bracken(3)
75
Executive Vice President –
Finance
(1) Mr. Nick A. Caporella has served as Chairman of the
Board, Chief Executive Officer and Director since the
Company’s inception in 1985. Also, he serves as Chairman
of the Nominating Committee. Since 1992, Mr. Caporella’s
services have been provided to the Company by Corporate
Management Advisors, Inc., a company he owns.
(2) Mr. Joseph G. Caporella has served as President since
September 2002 and, prior to that, as Executive Vice
President and Secretary since January 1991. Also, he
has served as a Director since January 1987. Joseph G.
Caporella is the son of Nick A. Caporella.
(3) Mr. George R. Bracken has served as Executive Vice
President - Finance since July 2012. Previously, he served as
Senior Vice President – Finance from October 2000 to July
2012 and Vice President and Treasurer from October 1996
to October 2000. Since 1992, Mr. Bracken’s services have
been provided to the Company by Corporate Management
Advisors, Inc.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTION, AND DIRECTOR
INDEPENDENCE
The information required by Item 13 will be included
under the captions “Certain Relationships and Related
Party Transactions” and
“Information Regarding
Meetings and Committees of the Board” in the
Company’s 2020 Proxy Statement and is incorporated
herein by reference.
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
All officers serve until their successors are chosen and
may be removed at any time by the Board of Directors.
Officers are normally appointed each year at the first
meeting of the Board of Directors after the annual
meeting of shareholders.
The information required by Item 14 will be included
under the caption “Independent Auditors” in the
Company’s 2020 Proxy Statement and is incorporated
herein by reference.
35
NATIONAL BEVERAGE CORP.
PART IV
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
The following documents are filed as part of this report:
1.
Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
2.
3.
Financial Statement Schedules
Exhibits
See Exhibit Index which follows.
Page
17
17
18
19
20
21
22
32
NA
36
NATIONAL BEVERAGE CORP.
EXHIBIT INDEX
Exhibit
No. Description
3.1 Restated Certificate of Incorporation(1)
3.2 Amended and Restated By-Laws(2)
3.3 Certificate of Designation of the Special Series D Preferred Stock of the Company(3)
4
Description of the Registrant’s Securities Registered Pursuant to Section 12
of the Securities Exchange Act of 1934(16)
10.1 Management Agreement between the Company and Corporate Management Advisors, Inc.(4)*
10.2 National Beverage Corp. Investment and Profit Sharing Plan(5)*
10.3 National Beverage Corp. 1991 Omnibus Incentive Plan(4)*
10.4 National Beverage Corp. 1991 Stock Purchase Plan(4)*
10.5 Amendment No. 1 to the National Beverage Corp. Omnibus Incentive Plan(6)*
10.6 National Beverage Corp. Special Stock Option Plan(7)*
10.7 Amendment No. 2 to the National Beverage Corp. Omnibus Incentive Plan(8)*
10.8 National Beverage Corp. Key Employee Equity Partnership Program(8)*
10.9 Second Amended and Restated Credit Agreement, dated June 30, 2008, between
NewBevCo, Inc. and lender therein(9)
10.10 Amendment to National Beverage Corp. Special Stock Option Plan(10)*
10.11 Amendment to National Beverage Corp. Key Employee Equity Partnership Program(10)*
10.12 First Amendment to Second Amended and Restated Credit Agreement,
dated January 16, 2013, between NewBevCo, Inc. and lender therein(11)
10.13 Credit Agreement, dated June 18, 2015, between NewBevCo, Inc. and lender therein(12)
10.14 Second Amendment to Second Amended and Restated Credit Agreement,
dated July 7, 2015, between NewBevCo, Inc. and lender therein(12)
10.15 Third Amendment to Second Amended and Restated Credit Agreement,
dated June 29, 2017, between NewBevCo, Inc. and lender therein(13)
10.16 Amended and Restated Credit Agreement dated October 4, 2017 between
NewBevCo. and lender therein(14)
10.17 Credit Facility Renewal Agreement, dated April 26, 2018 between NewBevCo and lender therein(15)
37
NATIONAL BEVERAGE CORP. Exhibit
No. Description
21
Subsidiaries of Registrant(16)
23
Consent of Independent Registered Public Accounting Firm(16)
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(16)
31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(16)
32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(16)
32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(16)
101
The following financial information from National Beverage Corp.’s Annual Report on Form 10-K for the
fiscal year ended May 2, 2020 is formatted in iXBRL (Inline eXtensible Business Reporting Language):
(i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements
of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated
Statements of Cash Flows; and (vi) the Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Indicates management contract or compensatory plan or arrangement.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Previously filed with the Securities and Exchange Commission as an exhibit to Schedule 14C Information Statement dated June 26, 2018
and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Form 8-K Current Report dated July 23, 2018 and is
incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Form 8-K Current Report dated January 31, 2013 and is
incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Amendment No. 1 to Form S-1 Registration Statement
(File No. 33-38986) on July 26, 1991 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to the Form S-1 Registration Statement (File No. 33-38986)
on February 19, 1991 and is incorporated herein by reference
Previously filed with the Securities and Exchange Commission as an exhibit to Annual Report on Form 10-K for the fiscal year ended April
27, 1996 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Registration Statement on Form S-8 (File No. 33-95308)
on August 1, 1995 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Annual Report on Form 10-K for the fiscal year ended May
3, 1997 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Quarterly Report on Form 10-Q for the fiscal period ended
January 29, 2011 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Quarterly Report on Form 10-Q for the fiscal period ended
January 31, 2009 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Quarterly Report on Form 10-Q for the fiscal period ended
January 26, 2013 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Quarterly Report on Form 10-Q for the fiscal period ended
August 1, 2015 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Annual Report on Form 10-K for the fiscal year ended April
29, 2017 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Quarterly Report on Form 10-Q for the fiscal period ended
October 28, 2017 and is incorporated herein by reference.
Previously filed with the Securities and Exchange Commission as an exhibit to Annual Report on Form 10-K for the fiscal year ended April
28, 2018 and is incorporated herein by reference.
(16)
Filed herewith
38
NATIONAL BEVERAGE CORP. SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NATIONAL BEVERAGE CORP.
By: /s/ George R. Bracken
George R. Bracken
Executive Vice President – Finance
(Principal Financial Officer)
Date: July 1, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities indicated on July 1, 2020.
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
/s/ Cecil D. Conlee
Cecil D. Conlee
Director
/s/ Joseph G. Caporella
Joseph G. Caporella
President and Director
/s/ Samuel C. Hathorn, Jr.
Samuel C. Hathorn, Jr.
Director
/s/ George R. Bracken
George R. Bracken
Executive Vice President – Finance
(Principal Financial Officer)
/s/ Stanley M. Sheridan
Stanley M. Sheridan
Director
39
NATIONAL BEVERAGE CORP.
Exhibit 4
DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF
THE SECURITIES EXCHANGE ACT OF 1934
Authorized Capital Stock
National Beverage Corp. is authorized to issue 201 million shares, consisting of 200 million shares of common
stock, par value $.01 per share and 1 million shares of preferred stock, par value $1.00.
National Beverage Corp. common stock is registered under Section 12 of the Exchange Act.
Common Stock
Holders of National Beverage Corp. common stock are entitled to one vote for each share held of record on
all matters submitted to a vote of shareholders. Upon satisfaction of National Beverage Corp.’s obligations to
preferred stockholders, holders of National Beverage Corp.’s common stock may receive dividends when declared
by the National Beverage Corp. board of directors. If National Beverage Corp. liquidates, dissolves, or winds-
down its business, holders of National Beverage Corp. common stock will share equally in the assets remaining
after National Beverage Corp. pays all of its creditors and satisfies all of its obligations to preferred stockholders.
Holders of National Beverage Corp’s common stock have no conversion, preemptive, subscription or redemption
rights. National Beverage Corp.’s common stock is traded on the NASDAQ Global Select Market under the symbol
“FIZZ”. The registrar and transfer agent for the common stock is Computershare Shareowners Services.
Some provisions of Delaware law and our Certificate of Incorporation and By-Laws could make the following
more difficult: acquisition of us by means of tender offer; acquisition of control of us by means of proxy contest or
otherwise removal of our incumbent officers and directors. These provisions are designed to discourage coercive
takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons
seeking to acquire control of us to first negotiate with our board of directors.
Preferred Stock
The National Beverage Corp. board of directors can, without approval of stockholders, issue one or more series
of preferred stock. The board can determine the number of shares in each series and the rights, preferences and
limitations of each series, including dividend rights, voting rights, conversion rights, redemption rights and any
liquidation preferences and the terms and conditions of the issuer.
National Beverage Corp. does not have any outstanding preferred stock.
40
NATIONAL BEVERAGE CORP.
Effects of Delaware Law, Our Certificate of Incorporation and By-laws
Some provisions of Delaware law and our Certificate of Incorporation and By-Laws could make the following
more difficult: acquisition of us by means of tender offer; acquisition of control of us by means of proxy contest or
otherwise removal of our incumbent officers and directors. These provisions are designed to discourage coercive
takeover practices and inadequate takeover bids.
Our certificate of incorporation and by-laws contain the following provisions:
• Our board of directors is divided into three classes serving staggered three-year terms, with one class
elected each year at our annual meeting of shareholders;
• Advance notice procedures for stockholders desiring to nominate candidates for election as directors or to
bring matters before an annual meeting of stockholders;
• Our board of directors can, without approval of stockholders, issue one or more series of preferred stock
as discussed above.
41
NATIONAL BEVERAGE CORP.
Exhibit 21
SIGNIFICANT SUBSIDIARIES OF REGISTRANT
Jurisdiction of Incorporation
Percentage of
Voting Stock Owned
Delaware
Delaware
Delaware
Delaware
Michigan
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Name of Subsidiary
BevCo Sales, Inc.
Beverage Corporation International, Inc.
Big Shot Beverages, Inc.
Everfresh Beverages, Inc.
Faygo Beverages, Inc.
LaCroix Beverages, Inc.
National Beverage Vending Company
National Retail Brands, Inc.
NewBevCo, Inc.
PACO, Inc.
Shasta Beverages, Inc.
Shasta Beverages International, Inc.
Shasta Sales, Inc.
Shasta Sweetener Corp.
Shasta West, Inc.
Sundance Beverage Company
42
NATIONAL BEVERAGE CORP.
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement No. 333-97415 on Form S-8 of
National Beverage Corp. of our report dated July 1, 2020, relating to the consolidated financial statements and the
effectiveness of internal control over financial reporting of National Beverage Corp., which appears in this Annual
Report on Form 10-K of National Beverage Corp. for the year ended May 2, 2020.
/s/ RSM US LLP
Fort Lauderdale, Florida
July 1, 2020
43
NATIONAL BEVERAGE CORP.
Exhibit 31.1
CERTIFICATION
I, Nick A. Caporella, certify that:
1.
I have reviewed this annual report on Form 10-K of National Beverage Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, 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;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: July 1, 2020
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
44
NATIONAL BEVERAGE CORP.
Exhibit 31.2
CERTIFICATION
I, George R. Bracken, certify that:
1.
I have reviewed this annual report on Form 10-K of National Beverage Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, 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;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: July 1, 2020
/s/ George R. Bracken
George R. Bracken
Executive Vice President - Finance
(Principal Financial Officer)
45
NATIONAL BEVERAGE CORP.
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of National Beverage Corp. (the “Company”) on Form 10-K for the period
ended May 2, 2020 (the “Report”), I, Nick A. Caporella, Chairman of the Board and Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Date: July 1, 2020
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
46
NATIONAL BEVERAGE CORP.
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of National Beverage Corp. (the “Company”) on Form 10-K for the period
ended May 2, 2020 (the “Report”), I, George R. Bracken, Executive Vice President - Finance of the Company,
certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
result of operations of the Company.
Date: July 1, 2020
/s/ George R. Bracken
George R. Bracken
Executive Vice President – Finance
(Principal Financial Officer)
47
NATIONAL BEVERAGE CORP.
2020 ANNUAL REPORT CORPORATE DATA
SUBSIDIARY
MANAGEMENT
Alan A. Chittaro
President
Faygo Beverages
Michael J. Bahr
Executive Vice President
Shasta West
James C.T. Bolton
Executive Vice President
PACO
Alan D. Domzalski
Executive Vice President
Sundance Beverages
James H. Erwin III
Executive Vice President
LaCroix Beverages
Stephen E. Flis
Executive Vice President
Shasta Sweetener
Arthur D. Hanrehan
Executive Vice President
National BevPak
James M. Jones
Executive Vice President
Foodservice Division
Tammera K. Atkins
Vice President
Rip It Energy Fuel
John F. Hlebica
Vice President
International Division
SUBSIDIARIES
BevCo Sales, Inc.
Beverage Corporation Intl., Inc.
Big Shot Beverages, Inc.
Everfresh Beverages, Inc.
Faygo Beverages, Inc.
LaCroix Beverages, 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 2, 2020 at
2:00 p.m. local time at the
Renaissance Fort Lauderdale-
Plantation Hotel,
1230 South Pine Island Road,
Plantation, Florida 33324.
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
DIRECTORS
Nick A. Caporella
Chairman of the Board &
Chief Executive Officer
National Beverage Corp.
Joseph G. Caporella
President
National Beverage Corp.
Cecil D. Conlee*
Founder & Chairman
The Conlee Company
Samuel C. Hathorn, Jr.*
Retired Chief Executive Officer
Trendmaker Development Co.
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
Brent R. Bott
Executive Director-
Consumer Marketing
Gregory J. Kwederis
Executive Director-
Beverage Analyst
Dominic H. Angelina
Director-Internal Audit
Richard S. Berkes
Director-Risk Management
Glenn G. Bryan
Director-Tax
Michael M. King
Special Corporate Counsel
8100 Southwest Tenth Street, Fort Lauderdale, Florida 33324
954.581.0922
www.nationalbeverage.com