NATIONAL BEVERAGE CORP.
2022 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 April 30, 2022
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
Indicate 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. [✓]
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 $56.40 on October 31, 2021 was approximately $1.3 billion.
The number of shares of Registrant’s common stock outstanding at June 28, 2022 was 93,338,246.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement for the 2022 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.
Reserved
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
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
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
ITEM 16.
Form 10-K Summary
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 believe our portfolio satisfies the
preferences of a diverse mix of consumers including
‘crossover consumers’ – a growing group desiring
healthier alternatives 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.
Innovation Ethic – We believe that innovative 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.
Creative Dynamics – In a beverage 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 defines 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,
and 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. 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 VarietalsTM
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.
POWER+ BRANDS –
LaCroix
LaCroix® Sparkling Water, our most significant brand,
has uniquely redefined 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-merchandisers, club stores,
drug stores, mainstream supermarkets and natural
and specialty food retailers.
During the fourth quarter of fiscal year 2022, LaCroix
introduced the unique flavor of Cherry Blossom – a
botanical twist of sweet and just a ‘kiss’ of tart. The
distinctive taste and stunning packaging of Cherry
Blossom conveys the ‘Dazzling Taste of Spring!’ The
launch of Cherry Blossom featured an integrated
effort involving social and outdoor media, spot radio,
2
consumer sampling and
attractive retail in-store
displays. In June 2022,
PEOPLE Magazine recognized
LaCroix Cherry Blossom as
the winner of the Flavored
Water Category
the
PEOPLE’s Food Awards
2022. PEOPLE described
Cherry Blossom as “spring
in a can...with fruity, lightly
floral notes.”
in
Cherry Blossom joins the innovative trio of Beach
Plum, Black Razzberry and Guava São Paulo
launched in the fourth quarter of fiscal year 2021.
Beach Plum excites the imagination and inspires
dreams of summer with the delectable coolness of
the luscious fruit native to the east coast of the U.S.;
the sweet twist of Black Razzberry makes taste buds
sing with decadent, smooth and irresistible fruit flavor;
and consumers savor the sweet tropical delicacy and
vibrant essence of Guava São Paulo.
In fiscal year 2020, LaCroix launched three new
naturally-essenced flavors of LaCroix: Hi-Biscus is a
unique flavor that adds the delicate essence of the
hibiscus flower to sparkling water, the enticing savor
of LimonCello instantly transports fans to the Italian
Riviera and the refreshing taste of Pastèque captures
the lusciousness of a sweet picnic watermelon.
These innovative new varieties are part of the LaCroix
family of 31 refreshingly ‘innocent’ flavors.
LaCroix’s dynamic ‘theme’
L a C r o i x C ú r a t e ® ( ‘ C u r e
Yourself’) celebrates French
sophistication with Spanish
zest and bold flavor pairings.
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.
NATIONAL BEVERAGE CORP. Our LaCroix NiCola theme includes traditional La Cola
along with 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.
Everfresh and Mr. Pure
Everfresh® and Mr. Pure®
100% juice and juice
drinks are available in a
variety of flavors, from
such classics as Orange,
Cranberry and flavored
lemonades to exotics that
include Premium Papaya,
Pineapple Mango, Peach
Watermelon and Island
Punch. The brands’ signature package is a hot-
filled, 16 oz. glass bottle designed for single-serve
consumption.
Everfresh Premier VarietalsTM, 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,
n o n - c a r b o n a t e d w a t e r
beverage enhanced with
fruit flavors. Clear Fruit is
available in 14 delicious
flavors, including consumer
favorites Cherry Blast,
Strawberry Watermelon,
and Fruit Punch. Clear Fruit
is available in 20-ounce and
16.9-ounce bottles with
consumer-favored sports
caps.
Rip It
Rip It® Energy Fuel is “Real
Energy for Real People” with 14
unique flavors and five sugar-free
options. Building on the flavor
tradition of original Rip It, a 2 oz.
sugar-free shot version in nine
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, CitrusX,
Cherry Lime and Power.
CARBONATED SOFT DRINKS –
innovator
Shasta® has been recognized
as a bottling industry pioneer
and
for more
than 130 years. Shasta
features multiple
flavors
and has earned consumer
loyalty by delivering value
and convenience with such
unique tastes as Raspberry
Crème, Tiki Punch, and
California Dreamin’.
With more
than 115
years of brand history,
Faygo® products include
numerous unique flavors
such as Red Pop®, Moon
Mist®, and Rock’n’Rye®.
Faygo is celebrated in
the Midwest as “The
One True Pop.”
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 often
generate retailer-sponsored promotional activities and
receive media exposure through community activities
rather than costly national advertising.
3
NATIONAL BEVERAGE CORP. 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
Our philosophy emphasizes vertical integration; our
production model integrates the procurement of
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
to substantially all geographic markets in the 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.
We believe the innovative and controlled vertical
integration of our production facilities provides an
advantage over certain
of our competitors that
r e l y o n i n d e p e n d e n t
third-party bottlers to
manufacture and market
their products. Since
we control all national
production, distribution
and marketing of our
b r a n d s , w e b e l i e v e
we can more effectively
manage quality control
and consumer appeal
4
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.
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.
NATIONAL BEVERAGE CORP. to
the
facilities
Warehouse distribution system products are shipped
from our production
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 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.
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 schools and food-service locations.
take-home, convenience and
Our
food-service
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.
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. Additionally, the Company’s ‘MerchMx’
representatives work to develop a rapport with store
managers for the purpose of optimizing shelf space,
building displays, placing point-of-sale materials and
expanding distribution.
‘BrandED’ ambassadors,
SALES AND MARKETING
RAW MATERIALS
We sell and market our products through 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. We believe this focus allows
our sales group to provide high level, responsive service
and support to our customers and markets.
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
procure more competitive arrangements with our
suppliers, thereby enhancing our ability to compete as
an efficient producer of beverages.
5
NATIONAL BEVERAGE CORP. 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.
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.
COMPETITION
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 innovation, key brand recognition,
focused social media, innovative flavor variety, attractive
packaging, efficient distribution methods, and, for some
product lines, value pricing.
control
regulations,
Substantially all of the materials and ingredients we
purchase are presently available from several suppliers,
although strikes, weather conditions, utility shortages,
governmental
national
or
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
6
NATIONAL BEVERAGE CORP. TRADEMARKS
HUMAN CAPITAL
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.
GOVERNMENTAL REGULATION
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; 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 but believe its enactment
would not have a material adverse impact 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.
At April 30, 2022, we employed approximately 1,580
people, of which 368 are covered by collective
bargaining agreements. These collective bargaining
agreements generally address working conditions,
as well as wage rates and benefits, and expire over
varying terms over the next several years. We believe
these agreements can be renegotiated on terms
satisfactory to us as they expire and we believe we
maintain good relationships with our employees and
their representative organizations.
We support a culture of diversity and inclusion that
mirrors the markets we serve. We take a comprehensive
view of diversity and inclusion across different races,
ethnicities, religions and expressions of gender and
sexual identity. Approximately 58 percent and 23
percent of our employee base identify as persons of
color or female, respectively.
Our compensation programs are designed
to
ensure we attract and retain talent while maintaining
alignment with market compensation. We utilize a
mix of short-term incentive programs throughout
the organization and provide long-term incentive
programs to more senior employees generally through
stock-based compensation programs. We offer
competitive employee benefits that are effective in
attracting and retaining talent and are designed to
support the physical, mental and financial health of our
employees. Our employee benefits program includes
comprehensive health, dental, life and disability, and
profit sharing benefits.
Our operating philosophy emphasizes the health and
safety of our employees. Our operations personnel,
supplemented by risk management professionals,
review all aspects of employee tasks and work
environment to minimize risk. We strive to achieve an
injury-free work environment in our operations. Key
to these efforts are data analysis and preventative
actions. We measure and benchmark
lost-time
incident rate, a reliable indication of total recordable
injuries rate and severity, and use a risk - reduction
process that thoroughly analyzes injuries and near
misses.
7
NATIONAL BEVERAGE CORP.
the COVID-19 pandemic, we
During
took
comprehensive measures to safeguard the well-
being of our employees. These measures included
enhanced sanitation procedures, physical distancing,
and other health protocols. We continue to monitor
the pandemic and its variants to insure the health and
safety of our work force.
SUSTAINABILITY
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.
In addition, the majority of our products are delivered
through the warehouse distribution system which
provides more efficient and lower greenhouse gas
emissions than direct-store delivery competitors.
Water is critical to our business and we periodically
conduct water quality assessments on a variety of
measurements. 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.
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 as soon as reasonably
practicable after such reports are electronically filed
the Securities and Exchange Commission.
with
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.
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, results
of operations and cash flows 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 financial results.
image and consumer preferences Our
Brand
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 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.
Competition The beverage industry 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
and
distribution resources. Discounting and other actions
by our competitors could adversely affect our ability to
sustain revenues and profits.
financial, marketing
Customer relationships Our retail customer base
has been consolidating over many 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.
8
NATIONAL BEVERAGE CORP. 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 supply chain disruptions and 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 their availability
is limited, our financial results could be adversely
affected.
regulation Our business and
Governmental
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 changes in corporate tax laws as well as
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.
Sustained increases in the cost of employee
wages and benefits Our profitability is affected by the
cost of employee wages as well as medical and other
benefits provided to employees, including employees
covered under collective bargaining agreements and
multi-employer pension plans. Competition in the
labor marketplace for qualified employees has led to
increased costs, such as higher wages and benefit
costs in order to recruit and retain employees. A
prolonged labor shortage or inflation in labor costs
could adversely impact our financial results.
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
COVID-19 is uncertain and may impact our operations
by events beyond our control. Such events could
include disruptions in our manufacturing operations or
supply arrangements caused by the loss or disruption
of essential manufacturing materials, supplies
and services, transportation resources, workforce
availability, or other manufacturing and distribution
capability. Such events could adversely impact our
business and financial results.
third-party service providers
Dependence on
technology and
information
third-party service providers We use information
to
technology and
support our business processes and activities.
Continuity of business applications and services may
in the future be disrupted by events such as infection
by viruses or malware or other cybersecurity breaches
or attacks; issues with systems’ maintenance or
security; power outages; hardware or software
failures; telecommunication failures; natural disasters;
and other catastrophic occurrences. If our controls,
disaster recovery and business continuity plans or
those of our third party providers do not effectively
respond to or resolve the issues related to any such
disruptions in a timely manner, our sales, financial
condition and results of operations may be adversely
affected.
9
NATIONAL BEVERAGE CORP. ITEM 1B.
UNRESOLVED STAFF COMMENTS
ITEM 3.
LEGAL PROCEEDINGS
The Company has been named in certain legal
proceedings, including those containing derivative and
class action allegations. 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.
None.
ITEM 2.
PROPERTIES
facilities
Our principal properties include twelve production
facilities located in ten states, which aggregate
approximately two million square feet. We own
ten production
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.
in the
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.
10
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 17, 2022, there were approximately 41,400 holders of our Common Stock, the majority of which hold their
shares in the names of banks, brokers and other financial institutions.
In the last five fiscal years, the Company paid special cash dividends on Common Stock as follows:
• $ 280.0 million ($3.00 per share) on December 29, 2021;
• $ 279.9 million ($3.00 per share) on January 29, 2021;
• $ 135.2 million ($1.45 per share) on January 29, 2019; and
• $ 69.9 million ($ .75 per share) on August 4, 2017.
On February 5, 2021, the Company’s Board of Directors declared a one-for-one stock split in the form of a stock
dividend. This dividend was distributed on February 19, 2021 to shareholders of record on February 16, 2021.
Share information and earnings per share have been retroactively adjusted to reflect the stock split.
Our Board of Directors has authorized a program to repurchase 3.2 million shares of our common stock of which
approximately 1.9 million shares remain available and authorized for repurchases.
Performance Graph
The following graph shows a comparison of the five-year cumulative returns of an investment of $100 cash on
April 29, 2017, assuming reinvestment of dividends, of our Common Stock with the NASDAQ Composite Index,
the S&P 500 Index and the Dow Jones US Soft Drinks Index.
among National Beverage Corp., the NASDAQ Composite Index, Dow Jones US Soft Drinks Index and S&P 500 Index
Comparison of 5-Year Cumulative Total Return
$300
$250
$200
$150
$100
$50
$0
4/29/2017
4/28/2018
4/27/2019
5/02/2020
5/01/2021
4/30/2022
National Beverage Corp
.
NASDAQ Composite - Total Return
Dow Jones US Soft Drinks Index
S&P 500 Index - Total Return
Total Returns Index For
National Beverage Corp.
4/29/2017
4/28/2018
4/27/2019
5/02/2020
5/01/2021
4/30/2022
$ 100.00
$ 102.96
$ 68.17
$ 59.37
$ 122.57
$ 118.11
NASDAQ Composite - Total Return
Dow Jones US Soft Drinks Index
S&P 500 Index - Total Return
100.00
100.00
100.00
118.98
101.08
114.20
137.41
121.63
128.28
146.95
123.23
126.04
240.30
149.98
189.28
213.67
178.96
189.68
11
NATIONAL BEVERAGE CORP.
ITEM 6.
RESERVED
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
The following Management’s Discussion and Analysis
of Operations is intended to provide information
about
the Company’s operations and business
environment and should be read in conjunction
with our Consolidated Financial Statements and the
accompanying Notes contained in Item 8 of this
report.
innovatively
National Beverage Corp.
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.
From
corporate
National Beverage Corp.,
in recent years, has
transformed to an innovative, healthier refreshment
philosophy,
company.
our
to
development of products and marketing
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!
We believe our brands are uniquely positioned in
three distinctive ways:
(1) 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.
12
(2) The retail industry is in a 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 that have earned their
respective consumer standing on their merits.
(3) 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.
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
(iii)
that appeal to multiple demographic groups;
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
NATIONAL BEVERAGE CORP. 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
found acceptable. Today, costly development projects
and seasonal weather periods plus promotional
packaging often make quarter-to-quarter comparisons
unworthy statistics that force companies to decision
making that is 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 April 30, 2022 (Fiscal 2022) and May 1, 2021
(Fiscal 2021) items and year-to-year comparisons between
Fiscal 2022 and Fiscal 2021. Discussions of fiscal year
ended May 2, 2020 (Fiscal 2020) items and year-to-year
comparisons between Fiscal 2021 and Fiscal 2020 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 May 1, 2021, which is available free of charge on
our website at www. nationalbeverage. com. Fiscal 2022
and Fiscal 2021 both consisted of 52 weeks.
Net Sales Net sales for Fiscal 2022 increased 6.1%
to $1,138 million compared to $1,072 million for Fiscal
2021. The increase in sales resulted from a 7.6%
increase in average selling price offset in part by a 1.4%
decline in case volume, primarily in carbonated soft
drinks. Power+ brands grew slightly in Fiscal 2022.
Gross Profit Gross profit for Fiscal 2022 was $417.8
million compared to $421.6 million for Fiscal 2021.
The average cost per case increased due to increases
in packaging, ingredients and freight costs, as well as
availability of raw materials and labor which impacted
manufacturing efficiency. Increased average selling
price more than offset the increased costs, resulting
in a slight increase in gross profit per case. Gross
margin was 36.7% for Fiscal 2022 compared to
39.3% in Fiscal 2021.
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 the
Consolidated Financial Statements.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were
$209.9 million for Fiscal 2022, increasing $16.2
million
from Fiscal 2021. Selling, general and
administrative expenses increased due to increased
shipping and marketing costs, partially offset by
decreased administrative costs. Increased shipping
costs are primarily the result of higher fuel costs and
reduced availability of transportation. The increase in
marketing reflects the resumption of various on-site
trade and consumer events as the country recovered
from the pandemic. As a percent of net sales, selling,
general and administrative costs increased to 18.4%
in Fiscal 2022 from 18.1% in Fiscal 2021.
Other (Expense) Income - Net Other (expense)
income, net is primarily interest expense offset in part
by interest income. In Fiscal 2022, interest expense
increased by $.2 million while interest income declined
due to reduced average investment balances.
Income Taxes Our effective tax rate was 23.6%
for Fiscal 2022 and 23.7% for Fiscal 2021. The
differences between the effective rate and the federal
statutory rate were primarily due to the effects of
state income taxes.
13
NATIONAL BEVERAGE CORP. LIQUIDITY AND FINANCIAL CONDITION
May 1, 2021. See Note 6 of Notes to the Consolidated
Financial Statements.
Liquidity and Capital Resources Our principal
source of funds is cash generated from operations.
At April 30, 2022, we had $48.1 million in cash and
cash equivalents and we maintained $150 million in
unsecured revolving credit facilities, under which $30
million in borrowings were outstanding and $2.5 million
was reserved for standby letters of credit. 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 the Consolidated
Financial Statements.
Expenditures
for property, plant and equipment
amounted to $29.0 million for Fiscal 2022 primarily for
capital projects to expand our production capacity,
enhance packaging capabilities or improve efficiencies
at our production facilities. We intend to continue
improvement
production capacity and efficiency
projects in Fiscal 2023 and expect capital expenditures
to be comparable to Fiscal 2022.
The Company paid special cash dividends of
approximately $280 million ($3.00 per share) on each
of December 29, 2021 and January 29, 2021.
Pursuant to a management agreement, we incurred a
fee to Corporate Management Advisors, Inc. (CMA) of
$11.4 million for Fiscal 2022 and $10.7 million for Fiscal
2021. Included in current liabilities were amounts due
CMA of $4.0 million at April 30, 2022 and $3.8 million at
Cash Flows During Fiscal 2022, $133.1 million was
provided by operating activities, $29 million was used
in investing activities and $249.7 million was used
in financing activities. Cash provided by operating
activities decreased $60.7 million primarily due to
increased working capital requirements as a result
of inflationary cost increases. Cash used in investing
activities increased $3.7 million due to higher capital
expenditures. Cash used in financing activities primarily
consists of the $280 million ($3.00 per share) special
cash dividend paid on December 29, 2021 offset in part
by the $30 million in net borrowings during the year.
Financial Position During Fiscal 2022, our working
capital declined $90.6 million to $129.2 million. The
decrease in working capital reflects lower cash and
equivalents due to the December 2021 cash dividend,
partially offset by
inventories, prepaid
increased
expenses and trade receivables. Trade receivables
increased $7.1 million or 8.3% and days sales
outstanding was 30 days at April 30, 2022 compared
to 30.1 days at May 1, 2021. Inventories increased
$31.8 million as a result of the increased cost of finished
goods and raw materials, and higher stock levels
maintained as a safeguard against possible supply
chain disruptions. Annual inventory turns decreased to
8.2 from 9.6 times. At April 30, 2022, the current ratio
was 1.9 to 1 compared to 2.5 to 1 at May 1, 2021.
CONTRACTUAL OBLIGATIONS
Contractual obligations at April 30, 2022 are payable as follows:
(In thousands)
Operating leases
Long-term debt
Purchase commitments
Total
Total
$ 33,207
30,000
23,784
$ 86,991
1 Year
or less
$ 11,315
-
19,525
$ 30,840
2 to 3
Years
$ 13,646
30,000
3,210
4 to 5
Years
$ 5,722
-
1,049
More Than
5 Years
$ 2,524
-
-
$ 46,856
$ 6,771
$ 2,524
We contribute to certain pension plans under collective bargaining agreements and to a discretionary profit sharing
plan. Annual contributions were $4.0 million for Fiscal 2022 and $3.7 million for Fiscal 2021. See Note 11 of Notes
to Consolidated Financial Statements.
14
NATIONAL BEVERAGE CORP. 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 accompanying table. Standby letters
of credit aggregating $2.5 million have been issued in
connection with our self-insurance programs. These
standby letters of credit expire through June 2023 and
are expected to be renewed.
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 AND
ESTIMATES
The preparation of financial statements in conformity
with United States generally accepted accounting
principles requires management to make estimates
and assumptions that affect the amounts reported in
the financial statements and accompanying notes.
Although these estimates are based on management’s
knowledge of current events and 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. Goodwill
and intangible assets not subject to amortization
are evaluated for impairment annually or sooner if
management believes such assets may be impaired.
An impaired asset is written down to its estimated fair
market value based on discounted future cash flows.
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.
15
NATIONAL BEVERAGE CORP. 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 any obligation to update any
such factors or to publicly announce the results of any
revisions to any forward-looking statements contained
herein to reflect future events or developments.
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 April 30, 2022, the Company had
$30 million in borrowings outstanding. Based on a 1
percentage point increase, interest rates would have
increased interest expense by $.1 million. We are also
subject to interest rate risk related to our investment
in highly liquid short duration investment securities.
These investments are managed with the guidelines of
the Company’s investment policy. Our policy requires
investments to be investment grade, with the primary
objective of minimizing the risk of principal loss. In
addition, our policy limits the amount of credit exposure
to any one issue.
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.
FORWARD-LOOKING STATEMENTS
National Beverage Corp. and its representatives may
make written or oral statements relating to future events
or results relative to our financial, operational and
business performance, achievements, objectives and
strategies. These statements are “forward-looking” within
the meaning of the Private Securities Litigation Reform
Act of 1995 and include statements contained in this
report and other filings with the Securities and Exchange
Commission and in reports to our stockholders. Certain
statements including, without limitation, statements
containing the words “believes,” “anticipates,” “intends,”
“plans,” “expects,” 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
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
Inventory
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
Short-term lease obligations
Income taxes payable
Total current liabilities
Long-term debt
Deferred income taxes - net
Operating lease liability - non current
Other liabilities
Total liabilities
Commitments and contingencies
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;
101,712,358 and 101,675,858 shares issued, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)
Treasury stock - at cost:
Series C preferred stock - 150,000 shares
Common stock - 8,374,112 shares
Total shareholders' equity
Total liabilities and shareholders' equity
The accompanying notes are an integral part of these consolidated financial statements.
April 30,
2022
May 1,
2021
$
48,050 $
193,589
93,592
103,318
29,560
274,520
144,258
29,251
13,145
1,615
$
$
5,015
467,804 $
95,299 $
39,090
10,543
387
145,319
30,000
23,823
20,703
8,521
228,366
86,442
71,480
13,431
364,942
131,027
41,676
13,145
1,615
4,832
557,237
88,754
43,551
14,800
89
147,194
-
17,294
28,837
7,915
201,240
150
150
1,017
39,405
216,181
6,918
(5,100)
(19,133)
239,438
1,016
38,375
337,672
3,017
(5,100)
(19,133)
355,997
$
467,804 $
557,237
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 (expense) 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
The accompanying notes are an integral part of these consolidated financial statements.
Fiscal Year Ended
April 30,
2022
May 1,
2021
May 2,
2020
$ 1,138,013
$ 1,072,210
$ 1,000,394
720,208
417,805
209,949
207,856
(260)
207,596
49,084
650,594
421,616
193,791
227,825
312
228,137
53,991
630,254
370,140
204,394
165,746
3,709
169,455
39,483
$
158,512
$
174,146
$
129,972
$
$
1.70
1.69
$
$
1.87
1.86
$
$
1.39
1.39
93,323
93,599
93,280
93,620
93,256
93,656
18
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Net income
Other comprehensive income (loss), net of tax:
Cash flow hedges
Other
Total
Comprehensive income
The accompanying notes are an integral part of these consolidated financial statements.
Fiscal Year Ended
April 30,
2022
May 1,
2021
May 2,
2020
$
158,512
$
174,146
$
129,972
3,882
19
3,901
7,930
507
8,437
(3,673)
(204)
(3,877)
$
162,413
$
182,583
$
126,095
19
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
April 30, 2022
May 1, 2021
May 2, 2020
Fiscal Year Ended
(In thousands)
Shares
Amount
Shares
Amount
Shares
Amount
SERIES C PREFERRED STOCK
Beginning and end of year
150 $
150
150 $
150
150 $
150
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
101,676
1,016
101,606
1,016
101,356
1,014
36
1
70
-
250
2
101,712
1,017
101,676
1,016
101,606
1,016
38,375
335
695
39,405
337,672
158,512
(280,003)
216,181
3,017
3,882
19
6,918
37,422
491
462
38,375
443,402
174,146
(279,876)
337,672
(5,420)
7,930
507
3,017
36,557
740
125
37,422
313,430
129,972
-
443,402
(1,543)
(3,673)
(204)
(5,420)
TREASURY STOCK - SERIES C PREFERRED
Beginning and end of year
150
(5,100)
150
(5,100)
150
(5,100)
TREASURY STOCK - COMMON
Beginning and end of year
Repurchase of common stock
8,374
(19,133)
8,374
(19,133)
8,065
(12,900)
-
-
-
-
309
(6,233)
End of year
8,374
(19,133)
8,374
(19,133)
8,374
(19,133)
TOTAL SHAREHOLDERS' EQUITY
$ 239,438
$ 355,997
$ 452,337
The accompanying notes are an integral part of these consolidated financial statements.
20
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
April 30, 2022
May 1, 2021
May 2, 2020
Fiscal Year Ended
OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
Deferred income tax provision (benefit)
Loss on disposal of property, net
Stock-based compensation
$
158,512
$
174,146
$
129,972
18,544
5,326
(7)
695
18,097
17,234
(132)
114
462
11
206
125
Amortization of operating right of use assets
13,258
13,060
13,351
Changes in assets and liabilities:
Trade receivables
Inventories
Operating lease right of use assets
Prepaid and other assets
Accounts payable
Accrued and other liabilities
Operating lease liabilities
Net cash provided by operating activities
INVESTING ACTIVITIES:
(7,150)
(31,838)
(6,054)
(5,084)
6,545
(12,444)
(7,170)
133,133
(1,521)
(7,998)
(11,092)
35
14,385
(4,524)
(1,262)
(80)
7,220
(5,368)
(5,633)
8,168
19,215
(6,729)
193,770
177,692
Additions to property, plant and equipment
(29,015)
(25,308)
(23,890)
Proceeds from sale of property, plant and equipment
11
(6)
9
Net cash used in investing activities
(29,004)
(25,314)
(23,881)
FINANCING ACTIVITIES:
Borrowing under loan facility
Repayments under loan facility
Dividends paid on common stock
Proceeds from stock options exercised
Repurchase of common stock
Net cash used in financing activities
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS
CASH AND EQUIVALENTS - BEGINNING OF YEAR
CASH AND EQUIVALENTS - END OF YEAR
OTHER CASH FLOW INFORMATION:
Interest paid
Income taxes paid
50,000
(20,000)
(280,003)
335
-
(249,668)
(145,539)
193,589
48,050
371
51,958
$
$
$
-
-
(279,876)
491
-
(279,385)
(110,929)
304,518
193,589
148
63,357
$
$
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
-
-
-
740
(6,233)
(5,493)
148,318
156,200
304,518
51
29,364
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
U.S. 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 April 30, 2022
(Fiscal 2022) and fiscal year ended May 1, 2021 (Fiscal
2021) consisted of 52 weeks. The fiscal year ended
May 2, 2020 (Fiscal 2020) consisted of 53 weeks.
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 which are used to partially mitigate our
exposure to changes in certain raw material costs are
recorded at fair value. Derivative financial instruments are
not used for trading or speculative purposes. Credit risk
related to derivative financial instruments is managed by
requiring high credit standards for counterparties and
frequent cash settlements. The estimated fair values of
derivative financial instruments are calculated based on
market rates to settle the instruments.
22
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
276,000 shares in Fiscal 2022, 340,000 shares in
Fiscal 2021, and 400,000 shares in Fiscal 2020.
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.
Goodwill and
to
amortization are evaluated for impairment annually
or sooner if management believes such assets may
be impaired. An impaired asset is written down to
its estimated fair market value based on discounted
future cash flows.
intangible assets not subject
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
financial statements. Valuation
amounts
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.
the
in
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
and estimated incurred but not reported claims not
otherwise covered by insurance based on actuarial
assumptions and historical claims experience. At
April 30, 2022, and May 1, 2021, other liabilities
included accruals of $5.9 million, for estimated
non-current risk retention exposures, of which $4.6
million, was covered by insurance at both dates
and included as a component of non-current other
assets.
NATIONAL BEVERAGE CORP. Intangible Assets Intangible assets at April 30,
2022 and May 1, 2021 consisted of non-amortizable
acquired trademarks.
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.
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 April 30, 2022 were
comprised of finished goods of $58.6 million and raw
materials of $44.7 million. Inventories at May 1, 2021
were comprised of finished goods of $43.3 million and
raw materials of $28.2 million.
Marketing Costs The Company utilizes a variety
including cooperative
of marketing programs,
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 $47.6 million in Fiscal 2022, $43.4
million in Fiscal 2021 and $54.8 million in Fiscal 2020.
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
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.
Segment Reporting The Company operates as a
single operating segment for purposes of presenting
financial information and evaluating performance.
As such, the accompanying consolidated financial
statements present financial information in a format
that is consistent with the internal financial information
used by management.
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 $87.7
million in Fiscal 2022, $75.5 million in Fiscal 2021 and
$69.8 million in Fiscal 2020. 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
23
NATIONAL BEVERAGE CORP. 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 were as follows:
(In thousands)
Fiscal
2022
Fiscal
2021
Fiscal
2020
Depreciation expense was $15.8 million for Fiscal
2022, $14.8 million for Fiscal 2021 and $14.4 million
for Fiscal 2020.
3. ACCRUED LIABILITIES
Accrued liabilities at April 30, 2022 and May 1, 2021
consisted of the following:
Balance at beginning of year $ 1,140 $ 1,350 $
516
(In thousands)
2022
2021
Net (credit) charge to expense
(581)
(138)
893
Net charge-off
-
(72)
(59)
Balance at end of year
$
559 $ 1,140 $ 1,350
At April 30, 2022 and May 1, 2021, 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.
Other
Total
Accrued compensation
$
12,079 $
11,826
Accrued promotions
10,826
13,361
Accrued freight
Accrued insurance
Recycling deposits
3,729
2,778
5,497
4,181
3,653
2,519
7,522
4,670
$
39,090 $
43,551
in conformity with GAAP
Use of Estimates The preparation of our financial
requires
statements
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 at April 30, 2022 and
May 1, 2021 consisted of the following:
(In thousands)
Land
2022
2021
$
9,835 $
9,835
Buildings and improvements
65,697
62,346
Machinery and equipment
277,163
257,119
Total
352,695
329,300
Less accumulated depreciation
(208,437)
(198,273)
Property, plant and equipment - net $ 144,258 $ 131,027
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 was $14.5 million in Fiscal
2022 and $13.1 million in Fiscal 2021. The weighted-
average remaining lease term and weighted average
discount rate of operating leases was 4.0 years and
3.08%, respectively as of April 30, 2022 and 3.06
years and 3.38%, respectively as of May 1, 2021.
Net cash provided by operations was impacted by
$6.0 million for operating leases for the year ended
April 30, 2022 and $11.1 million for the year ended
May 1, 2021.
The following is a summary of future minimum
lease payments and related liabilities for all non-
cancelable operating leases as of April 30, 2022:
24
NATIONAL BEVERAGE CORP. 6. CAPITAL STOCK AND TRANSACTIONS WITH
$
11,315
RELATED PARTIES
(In thousands)
Fiscal 2023
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Thereafter
Total minimum lease payments including interest
Less: Amounts representing interest
Present value of minimum lease payments
Less: Current portion of lease liabilities
8,300
5,346
3,397
2,325
2,524
33,207
(1,961)
31,246
(10,543)
Non-Current portion of operating lease liabilities $
20,703
5. DEBT
At April 30, 2022, a subsidiary of the Company
maintained unsecured revolving credit facilities with
banks aggregating $100 million (the Credit Facilities).
The Credit Facilities expire from April 30, 2023 to
October 28, 2024 and any borrowings would currently
bear interest at 1.05% above the Secured Overnight
Financing Rate (SOFR). There were no borrowings
outstanding under the Credit Facilities at April 30, 2022
or May 1, 2021. At April 30, 2022, $2.5 million of the
Credit Facilities was reserved for standby letters of
credit and $97.5 million was available for borrowings.
On December 21, 2021, a subsidiary of the Company
entered into an unsecured revolving term loan facility
with a national bank aggregating $50 million (the “Loan
Facility”). The Loan Facility expires December 31, 2023
and borrowings bear interest at .95% above the
adjusted daily SOFR. Since closing the Loan Facility,
$50 million was borrowed and $30 million remains
outstanding at April 30, 2022. At April 30, 2022, the
interest rate was 1.35%.
financial
to maintain certain
The Credit Facilities and Loan Facility require the
subsidiary
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 April 30, 2022, the Company was in compliance
with all loan covenants.
The Company paid a special cash dividend on Common
Stock of approximately $280 million on each of December
29, 2021 and January 29, 2021 at $3.00 per share.
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 pursuant to a joint ownership agreement,
each party agreed to pay certain expenses associated
with the use of the aircraft. During the past three years,
the joint operating costs have averaged approximately
$970 thousand per year and the Company’s lease
payments for its ownership interest have averaged
approximately $550 thousand per year.
The management agreement provides that 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
25
NATIONAL BEVERAGE CORP. 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 various
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 $11.4 million for Fiscal
2022, $10.7 million for Fiscal 2021 and $10.0 million for
Fiscal 2020. Included in current liabilities were amounts
due CMA of $4.0 million at April 30, 2022 and $3.8 million
at May 1, 2021.
As of April 30, 2022, the fair value of the derivative asset
was $8.8 million, which was included in prepaid and
other assets. As of May 1, 2021, the fair value of the
derivative asset was $3.6 million, which was included in
prepaid and other assets. 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.
7. DERIVATIVE FINANCIAL INSTRUMENTS
8.
INCOME TAXES
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 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 following
summarizes
the
consolidated statements of income and AOCI:
(losses) recognized
the gains
in
(In thousands)
Recognized in AOCI-
Gain (loss) before
income taxes
Less income tax
provision (benefit)
Fiscal
2022
Fiscal
2021
Fiscal
2020
$ 15,105 $ 12,973 $ (9,613)
3,613
3,103
(2,299)
Net
11,492
9,870
(7,314)
Reclassified from AOCI
to cost of sales-
Gain (loss) before
income taxes
Less income tax
provision (benefit)
10,001
2,550
(4,786)
2,391
610
(1,145)
Net
7,610
1,940
(3,641)
Net change to AOCI
$ 3,882 $ 7,930 $ (3,673)
The provision for income taxes consisted of the following:
(In thousands)
Current
Deferred
Total
Fiscal
2022
Fiscal
2021
Fiscal
2020
$ 42,555 $ 51,520 $ 40,647
6,529
2,471
(1,164)
$ 49,084 $ 53,991 $ 39,483
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 April 30, 2022 and May 1, 2021
consisted of the following:
(In thousands)
Deferred tax assets:
2022
2021
Accrued expenses and other
$
3,306 $
3,347
Inventory and amortizable assets
325
544
Total deferred tax assets
3,631
3,891
Deferred tax liabilities:
As of April 30, 2022, the notional amount of our
outstanding aluminum swap contracts was $57.7 million
and, assuming no change in the commodity prices, $8.7
million of unrealized gain before tax will be reclassified
from AOCI and recognized as a reduction of cost of
sales over the next 12 months.
Property
23,863
18,814
Intangibles and other
3,591
2,371
Total deferred tax liabilities
27,454
21,185
Net deferred tax liabilities
$ 23,823 $
17,294
26
NATIONAL BEVERAGE CORP.
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
Other differences
Fiscal
2022
Fiscal
2021
Fiscal
2020
21.0% 21.0% 21.0%
2.9
(.3)
2.9
(.2)
2.9
(.6)
Effective income tax rate
23.6% 23.7% 23.3%
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 years subsequent to Fiscal 2016 are subject to
examination. Generally, the income tax returns for the
various state jurisdictions are subject to examination for
years ending after Fiscal 2015.
As of April 30, 2022, the gross amount of unrecognized
tax benefits was $2.1 million and $8 thousand was
recognized as tax expense in Fiscal 2022. If the Company
is to prevail on all uncertain tax positions, the net effect
would be to reduce our tax expense by approximately
$1.9 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:
9. LEGAL PROCEEDINGS
The Company has been named in certain legal
proceedings, including those containing derivative and
class action allegations. 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.
(In thousands)
Fiscal
2022
Fiscal
2021
Fiscal
2020
10. STOCK-BASED COMPENSATION
Beginning balance
$ 2,055 $ 1,974 $ 1,868
Increases due to current
period tax positions
Decreases due to lapse of
statute of limitations and
audit resolutions
114
150
120
(90)
(69)
(14)
Ending balance
$ 2,079 $ 2,055 $ 1,974
Accrued interest and penalties related to unrecognized
tax benefits are recognized as a component of income
tax expense. As of April 30, 2022, unrecognized tax
benefits included accrued interest of $248 thousand of
which approximately $10 thousand was recognized as
tax expense in Fiscal 2022.
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 positions, the Company
believes that unrecognized tax benefits reflect the
most probable outcome.
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 9,600,000 shares of
common stock, (ii) stock appreciation rights, dividend
equivalents, other stock-based awards in amounts up to
9,600,000 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 3,360,000 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.
27
NATIONAL BEVERAGE CORP.
The Special Stock Option Plan provides for the
issuance of stock options to purchase up to an
aggregate of 3,600,000 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 100,000 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 480,000 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 12,000 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 30,000 shares were granted in Fiscal 2022 and
266,500 shares in Fiscal 2021. No stock options were
issued in Fiscal 2020. The weighted average Black-
Scholes fair value assumptions for stock options
granted were as follows: weighted average expected
life of 6.5 years for Fiscal 2022 and 7.2 years for
Fiscal 2021; weighted average expected volatility of
20.74% for Fiscal 2022 and 19.36% for Fiscal 2021;
weighted average risk free interest rates of 1.22% for
Fiscal 2022 and 3.85% for Fiscal 2021; and expected
dividend yield of 2.48% for Fiscal 2022 and 1.3%
for Fiscal 2021. 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.
The following is a summary of stock option activity for
Fiscal 2022:
Options outstanding, beginning
of year
Granted
Exercised
Cancelled
Number
of Shares
Price (a)
561,100
$ 17.74
30,000
44.73
(36,500)
9.19
(18,000)
33.01
Options outstanding, end of year
536,600
18.97
Options exercisable, end of year
303,740
4.46
(a) Weighted average exercise price.
Stock-based compensation expense was $695,000 for
Fiscal 2022, $462,000 for Fiscal 2021 and $126,000
for Fiscal 2020.
The total intrinsic value for stock options exercised was
$1.4 million for Fiscal 2022, $1.9 million for Fiscal 2021
and $4.9 million for Fiscal 2020. Net cash proceeds
from the exercise of stock options were $335,000 for
Fiscal 2022, $491,000 for Fiscal 2021 and $740,000
for Fiscal 2020. Stock based income tax benefits
aggregated $283,000 for Fiscal 2022, $382,000
for Fiscal 2021, and $974,000 for Fiscal 2020. The
weighted average fair value for stock options granted
was $44.73 for Fiscal 2022.
As of April 30, 2022, unrecognized compensation
expense related to the unvested portion of stock
options was $3.0 million, which is expected to be
remaining weighted average
recognized over a
period of 6.2 years. The weighted average remaining
contractual term and the aggregate intrinsic value for
options outstanding as of April 30, 2022 was 4.2 years
and $10.8 million, respectively. The weighted average
remaining contractual term and the aggregate intrinsic
value for options exercisable as of May 1, 2021 was
4.9 years and $16.9 million, respectively.
28
NATIONAL BEVERAGE CORP.
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
$4.0 million for Fiscal 2022, $3.7 million for Fiscal 2021 and $3.6 million for Fiscal 2020.
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 2022 and
Fiscal 2021 is for the plans’ years ending December 31, 2020 and 2019, respectively.
Pension Fund
Central States, Southeast and Southwest
Areas Pension Plan (EIN no. 36-6044243) (the “CSSS Fund”)
PPA Zone Status
Fiscal
2022
Red
Fiscal
2021
FIP/RP
Status
Surcharge
Imposed
Red
Implemented
Yes
Western Conference of Teamsters Pension
Trust Fund (EIN no. 91-6145047) (the “WCT Fund”)
Green
Green
Not
applicable
No
For the plan years ended December 31, 2020 and December 31, 2019, 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, 2026 and May
14, 2024, 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
2022
Fiscal
2021
Fiscal
2020
$
$
1,462
817
181
2,460
$
$
1,469
746
166
2,381
$
$
1,424
799
185
2,408
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 April 30, 2022, the Company had
purchase commitments for raw materials of $19.7 million through 2025.
As of April 30, 2022, the Company had purchase commitments for plant and equipment of $4.1 million anticipated
to be completed in Fiscal 2024.
29
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 April 30, 2022, and May 1, 2021,
and the related consolidated statements of income,
comprehensive income, shareholders’ equity and cash
flows for each of the three years in the period ended
April 30, 2022, and the related notes (collectively,
the financial statements). We also have audited the
Company’s internal control over financial reporting
as of April 30, 2022, 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 April 30, 2022 and May
1, 2021, and the results of its operations and its cash
flows for each of the years in the three-year period
ended April 30, 2022, 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 April 30, 2022, based on criteria
established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations
of the Treadway Commission in 2013.
is
responsible
Basis for Opinions
The Company’s management
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.
the financial statements
included
Our audits of
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
purposes
in accordance with generally accepted
accounting principles. A company’s internal control
over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets
30
NATIONAL BEVERAGE CORP. 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.
about future events, many of which are difficult to
quantify. As of April 30, 2022 and May 1, 2021, other
liabilities included accruals of $5.9 million and $5.9
million, respectively, for estimated non-current risk
retention exposures, of which $4.6 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,
is
estimating workers’ compensation exposure
inherently uncertain, as estimates are generally derived
using a variety of actuarial estimation techniques that
are dependent upon assumptions and expectations
to
• We obtained an understanding of the relevant
controls related
the Company’s workers’
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
June 29, 2022
31
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
respect to financial statement preparation. Further,
because of changes in conditions, the effectiveness of
internal control may vary over time.
RSM US LLP, an
independent registered public
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
internal control
over financial reporting during the quarter ended
April 30, 2022 that have materially affected, or are
reasonably likely to materially affect, our internal control
over financial reporting.
in our
ITEM 9B.
OTHER INFORMATION
Not applicable.
ITEM 9C.
DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS
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
evaluation, our management concluded that our internal
control over financial reporting was effective as of
April 30, 2022.
32
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 “Reporting Compliance”
the Company’s
2022 Proxy Statement and is incorporated herein by
reference.
in
The following table sets forth certain information with
respect to the officers of the Registrant at April 30, 2022:
Name
Age Position with Company
Nick A. Caporella (1)
86 Chairman of the Board and
Chief Executive Officer
Joseph G. Caporella (2) 61
President
George R. Bracken (3)
77
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.
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 11 will be included
under the captions “Executive Compensation and Other
Information” and “Compensation Committee Interlocks
and Insider Participation” in the Company’s 2022 Proxy
Statement and is incorporated herein by reference.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by Item 12 will be included
under the captions “Security Ownership” and “Equity
Compensation Plan Information” in the Company’s
2022 Proxy Statement and is incorporated herein by
reference.
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 2022 Proxy Statement and is incorporated
herein by reference.
ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by Item 14 will be included
under the caption “Independent Auditors” in the
Company’s 2022 Proxy Statement and is incorporated
herein by reference.
33
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.
ITEM 16.
FORM 10-K SUMMARY
None.
Page
17
18
19
20
21
22
30
NA
34
NATIONAL BEVERAGE CORP.
EXHIBIT INDEX
Exhibit
No.
Description
3.1
3.2
3.3
4
Restated Certificate of Incorporation (1)
Amended and Restated By-Laws (2)
Certificate of Designation of the Special Series D Preferred Stock of the Company (3)
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange
Act of 1934 (17)
10.1 Management Agreement between the Company and Corporate Management Advisors, Inc. (4) *
10.2
10.3
National Beverage Corp. Investment and Profit Sharing Plan (5) *
National Beverage Corp. 1991 Omnibus Incentive Plan (4) *
10.4
National Beverage Corp. 1991 Stock Purchase Plan (4) *
10.5
10.6
10.7
10.8
10.9
Amendment No. 1 to the National Beverage Corp. Omnibus Incentive Plan (6) *
National Beverage Corp. Special Stock Option Plan (7) *
Amendment No. 2 to the National Beverage Corp. Omnibus Incentive Plan (8) *
National Beverage Corp. Key Employee Equity Partnership Program (8) *
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 Second Amendment to Second Amended and Restated Credit Agreement, dated July 7, 2015,
between NewBevCo, Inc. and lender therein (13)
10.14 Third Amendment to Second Amended and Restated Credit Agreement, dated June 29, 2017,
between NewBevCo, Inc. and lender therein (13)
10.15 Amended and Restated Credit Agreement, dated January 5, 2022 between NewBevco, Inc. and
lender therein (15)
10.16 Credit Facility Amended Agreement dated October 28, 2020 between NewBevCo, Inc. and lender
therein (16)
10.17 Fourth Amendment to Second Amended Credit Agreement dated October 30, 2020 between
NewBevCo, Inc and lender therein (16)
Subsidiaries of Registrant (18)
Consent of Independent Registered Public Accounting Firm (18)
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18)
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18)
21
23
31.1
31.2
35
NATIONAL BEVERAGE CORP. Exhibit
No.
Description
32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18)
101
The following financial information from National Beverage Corp.’s Annual Report on Form 10-K for the
fiscal year ended May 1, 2021 is formatted in Inline XBRL (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)
*
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
Indicates management contract or compensatory plan or arrangement.
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 Quarterly Report on Form 10-Q for the fiscal
period ended January 29, 2022 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 30, 2021 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 2, 2020 and is incorporated herein by reference.
(18)
Filed herewith.
36
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: June 29, 2022
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 June 29, 2022.
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
/s/ Joseph G. Caporella
Joseph G. Caporella
President and Director
/s/ George R. Bracken
George R. Bracken
Executive Vice President – Finance
(Principal Financial Officer)
/s/ Cecil D. Conlee
Cecil D. Conlee
Director
/s/ Samuel C. Hathorn, Jr.
Samuel C. Hathorn, Jr.
Director
/s/ Stanley M. Sheridan
Stanley M. Sheridan
Director
37
NATIONAL BEVERAGE CORP.
Exhibit 21
SIGNIFICANT SUBSIDIARIES OF REGISTRANT
Name of
Subsidiary
Jurisdiction of
Incorporation
Percentage of
Voting Stock Owned
BevCo Sales, Inc.
Delaware
Beverage Corporation International, Inc.
Delaware
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
38
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%
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 June 29, 2022, 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 April 30, 2022.
/s/ RSM US LLP
Fort Lauderdale, Florida
June 29, 2022
39
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: June 29, 2022
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
40
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: June 29, 2022
/s/ George R. Bracken
George R. Bracken
Executive Vice President - Finance
(Principal Financial Officer)
41
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 April 30, 2022 (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: June 29, 2022
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
42
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 April 30, 20220 (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: June 29, 2022
/s/ George R. Bracken
George R. Bracken
Executive Vice President – Finance
(Principal Financial Officer)
43
NATIONAL BEVERAGE CORP.
2022 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
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 7, 2022 at
2:00 p.m. local time at
The Conrad Fort Lauderdale
551 N Fort Lauderdale
Beach Boulevard
Fort Lauderdale, FL 33304
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
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 President and
Chief Executive Officer
Trendmaker Homes, Inc.
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
Iris V. Jackson
Director-Financial Reporting
Julio C. Marrero
Director-IT
Michael M. King
Special Corporate Counsel
8100 Southwest Tenth Street, Fort Lauderdale, Florida 33324
954.581.0922 • www.nationalbeverage.com