NATIONAL BEVERAGE CORP.
2023 ANNUAL REPORT ON FORM 10K
United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
Includes portions of Part 1, Item 1 from Form 10K/A filed July 11, 2023
[✓] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended April 29, 2023
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. [✓]
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. [ ]
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). [ ]
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 $46.78
on October 28, 2022 was approximately $1.1 billion.
The number of shares of Registrant’s common stock outstanding as of June 26, 2023 was 93,353,546.
Portions of the Registrant’s Proxy Statement for the 2023 Annual Meeting of Shareholders are incorporated by reference in Part III of this report.
DOCUMENTS INCORPORATED BY REFERENCE
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
1
11
13
13
13
13
13
16
16
22
23
42
42
43
43
43
44
44
44
44
44
45
48
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
the appropriate
to market with
concept, unique flavor
trend-
creation and
forward
‘better-for-you’
ingredients continues to
be our goal. Internal
development teams are
responsible for concept
creation,
packaging
and design, which allow
for rapid ‘go to market’
timing and
reduced
development costs.
1
NATIONAL BEVERAGE CORP. Presently, our primary market focus is the United States
and Canada. Certain of our products are also distributed
on a limited basis in other countries and options to expand
distribution to other regions are being considered.
including mass-merchandisers, club stores, drug stores,
mainstream supermarkets and natural and specialty food
retailers.
National Beverage Corp. is incorporated in Delaware
and began trading as a public company on the NASDAQ
Stock Market in 1991. In this report, the terms “we,” “us,”
“our,” “Company” and “National Beverage” mean National
Beverage Corp. and its subsidiaries unless indicated
otherwise.
BRANDS
Our brands consist of beverages geared to the active and
health-conscious consumer (“Power+ Brands”) including
sparkling waters, energy drinks, and juices. Our portfolio of
Power+ Brands includes LaCroix®, LaCroix Cúrate®, and
LaCroix NiCola® sparkling water products; Clear Fruit®;
Rip It® energy drinks and shots; and Everfresh®, Everfresh
Premier Varietals™ and Mr. Pure® 100% juice and juice-
based products. Additionally, we produce and distribute
carbonated soft drinks (“CSDs”) including Shasta® and
Faygo®, iconic brands whose consumer loyalty spans more
than 130 years.
POWER+ BRANDS –
LaCroix
Continual flavor and packaging innovations for LaCroix in
recent years include 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, 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
in the PEOPLE’s Food Awards 2022. PEOPLE described
Cherry Blossom as “spring in a can…with fruity, lightly
floral notes.”
Cherry Blossom joined 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.
Other successful LaCroix additions include Hi-Biscus,
a unique flavor that adds the delicate essence of the
hibiscus flower to sparkling water; the enticing savor of
LimonCello, which instantly transports fans to the Italian
Riviera; and the refreshing taste of Pastèque, which
captures the lusciousness of a sweet picnic watermelon.
These innovative new varieties are part of the LaCroix
family of 31 refreshingly innocent flavors.
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,
2
‘theme’
LaCroix’s dynamic
Cúrate®
LaCroix
(‘Cure
Yourself’) celebrates French
sophistication with Spanish
zest and bold flavor pairings.
Packaged in sleek 12 oz. tall
cans, popular flavors include
Cerise Limón, which pairs
sweet cherry with tangy lime
infusion that
for a tasteful
NATIONAL BEVERAGE CORP. tickles the senses; Piña Fraise, an aromatic combination
of pineapple and ripe strawberries that creates a tropical
blend delight; and Múre Pepino, which combines sweet
and sour blackberry notes with crisp cucumber to create
a sensory and taste sensation.
Additional LaCroix flavors are in development that will
continue to feature unique packaging and flavor concepts
designed to capitalize on LaCroix brand loyalty and
popularity 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
that
exotics
to
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.
in
Everfresh Premier Varietals, a unique theme from
Everfresh, is positioned as a stand-alone brand for
the produce section of supermarkets.
display
Everfresh Premier Varietals is a premium line of apple
juice derived from a variety of apples specific to the taste
of the varietal, such as Granny Smith, McIntosh, Honey
Crisp, Golden Delicious, Fuji and Pink Lady.
Clear Fruit
Clear Fruit is a crisp, clear,
non-carbonated water
beverage enhanced with
fruit flavors. Clear Fruit is
available in 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 20 unique
flavors and two sugar-
free options. In addition
to all-time consumer
f a v o r i t e s , T r i b u t e ,
CitrusX, Cherry Lime
and Power, Rip
It
launched
three new
‘Re-Energizzed’ flavors
in Fiscal 2023 - YOLO, a pineapple flavor that’s savory,
sweet, and charged with tropical zest; Melon Hi, a naturally
flavored watermelon that is louder-than-life and Can’D
Man, a sweet and wild cotton candy experience. Building
on the flavor tradition of original Rip It, a 2 oz. sugar-
free shot version in six flavors is marketed in displayable
package configurations. RIP IT proudly supports military
and first responder heroes at home and abroad.
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
unique taste. In Summer
launched
2023, Shasta
three all-time consumer favorites reformulated with Zero
Sugar — Shasta Zero Sugar Tiki Punch, Zero Sugar
California Dreamin’, and Zero Sugar Mountain Rush.
With more than 115 years of brand history, Faygo products
include numerous unique flavors such as Red Pop,
Moon Mist, Cotton Candy
and Rock’n’Rye. Faygo is
celebrated in the Midwest as
the “The One True Pop.”
Many of our carbonated
soft drink brands enjoy
a regional
identification
that we believe fosters
3
NATIONAL BEVERAGE CORP. 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.
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 rely on
independent third-party bottlers to manufacture and
market their products. Since we control all production,
distribution and marketing of our brands, we believe
we can more effectively manage quality control and
consumer appeal while responding quickly to changing
market conditions.
We craft a substantial portion of our flavors and
concentrates. By controlling our own
formulas
throughout our bottling network, we are able to
produce beverages in accordance with uniform
4
flavors
quality standards while
innovating
to
meet changing consumer
preferences. We believe
the combination of a
Company-owned bottling
together with
network,
for
standards
uniform
formulations
packaging,
and
service,
provides us with a strategic advantage in servicing
national retailers and mass-merchandisers. We also
maintain research and development laboratories at
multiple
laboratories continually
test products for compliance with our strict quality
control standards as well as conduct research for new
products and flavors.
locations. These
customer
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.
Warehouse distribution system products are shipped
from our production facilities to the retailer’s centralized
distribution centers and then distributed by the retailer
to each of its store
locations with other
goods. This method
allows our
retail
partners to further
their
maximize
assets by utilizing
their ability to pick-
up product at our
NATIONAL BEVERAGE CORP. 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 periodically retain agencies
to assist with social media
content creative and platform
selection for our brands.
consumer
Additionally, we maintain and
enhance
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 advertising support, ‘BrandED’
ambassadors, in-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.
RAW MATERIALS
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.
to
food-service division distributes products
Our
independent, specialized distributors who sell
to
hospitals, schools, military bases, 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.
SALES AND MARKETING
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.
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.
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.
5
NATIONAL BEVERAGE CORP. control
regulations,
Substantially all of the materials and
ingredients
we purchase are available from several suppliers,
although strikes, weather conditions, utility shortages,
national
or
governmental
emergencies, quality, price or supply fluctuations or
other events outside our control could adversely affect
the supply of specific materials. A significant portion of
our raw material purchases, including aluminum cans,
plastic bottles, high fructose corn syrup, corrugated
packaging and juice concentrates, are derived from
commodities. Therefore, pricing and availability tend
to fluctuate based upon worldwide commodity market
conditions. In certain cases, we may elect to enter into
multi-year agreements for the supply of these materials
with one or more suppliers, the terms of which may
include variable or fixed pricing, minimum purchase
quantities and/or the requirement to purchase all
supplies for specified locations. Additionally, we use
derivative financial instruments to partially mitigate our
exposure to changes in certain raw material costs.
SEASONALITY
COMPETITION
results are
Our operating
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.
and distributors of national,
regional
private
and
label products. Several
including
competitors,
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.
Competitive factors in the beverage industry include
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.
TRADEMARKS
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.
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
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,
6
NATIONAL BEVERAGE CORP. 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.
HUMAN CAPITAL
As of April 29, 2023, we employed approximately 1,593
people, of which 374 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 62 percent and 24 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.
During the COVID-19 pandemic, we took comprehensive
measures to safeguard the well-being of our employees.
These measures
sanitation
procedures, physical distancing, and other health
protocols. We continue to monitor the health and safety
of our work force.
enhanced
included
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 systems.
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.
7
NATIONAL BEVERAGE CORP. 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 with
the Securities and Exchange Commission. In addition, our
Code of Ethics is available on our website. The information
on the Company’s website is not part of this Annual
Report on Form 10-K or any other report that we file with,
or furnish to, the Securities and Exchange Commission.
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, financial position,
results of operations and cash flows.
Brand image and consumer preferences. Our beverage
portfolio is comprised of a number of unique brands with
reputations and consumer loyalty that have been built
over time. Our investments in social media and marketing
as well as our strong commitment to product quality are
intended to have a favorable impact on brand image and
consumer preferences. Unfavorable publicity, or allegations
of quality issues, even if false or unfounded, may tarnish
our reputation and brand 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 position could be adversely affected.
Discounting and other actions by our competitors could
adversely affect our ability to sustain revenues and profits.
Customer relationships. Our retail customer base
has been consolidating over 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 position.
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,
diesel fuel, carbon dioxide 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
In addition, strikes, weather conditions,
are taken.
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 position could be
adversely affected.
Governmental regulation. Our business and properties
are subject to various federal, state and local laws and
regulations, including those governing the production,
packaging, quality, labeling and 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 position.
industry
Competition. The beverage
is extremely
competitive. Our products compete with a broad range
of beverage products, most of which are manufactured
and distributed by companies with substantially
greater financial, marketing and distribution resources.
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
8
NATIONAL BEVERAGE CORP. 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.
Dependence on information technology and third-
party service providers. We use information technology
and third-party service providers to 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.
ITEM 2.
PROPERTIES
Our principal properties include twelve production
facilities located in ten states, which aggregate
approximately two million square feet. We own ten
production facilities in the following states: California
(2), Georgia, Kansas, Michigan (2), Ohio, Texas,
Utah and Washington. Two production facilities,
located in Maryland and Florida, are leased subject to
agreements that expire through 2025. We believe our
facilities are generally in good condition and sufficient
to meet our present needs.
The production of beverages is capital intensive but
is not characterized by rapid technological change.
The technological advances that have occurred
have generally been of an incremental cost-saving
nature, such as the industry’s conversion to lighter
weight containers or improved blending processes
that enhance ingredient yields. We are not aware of
any anticipated industry-wide changes in technology
that would adversely impact our current physical
production capacity or cost of production.
We own and lease trucks, vans and automobiles used
in the sale, delivery and distribution of our products.
In addition, we lease warehouse and office space,
transportation equipment, office equipment and
certain manufacturing equipment.
ITEM 3.
LEGAL PROCEEDINGS
The Company has been named in certain legal
proceedings, including those containing 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 1B.
UNRESOLVED STAFF COMMENTS
None.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
9
NATIONAL BEVERAGE CORP. PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
The common stock of National Beverage Corp., par value $.01 per share, (“Common Stock”) is listed on The NASDAQ
Global Select Market under the symbol “FIZZ”.
At June 16, 2023, there were approximately 40,200 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; and
• $135.2 million ($1.45 per share) on January 29, 2019.
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 return of an investment of $100 cash on April
28, 2018, assuming reinvestment of dividends, of our Common Stock with the NASDAQ Composite Index, the Dow
Jones US Soft Drinks Index and the S&P 500 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
$250
$200
$150
$100
$50
$0
4/28/2018
4/27/2019
5/02/2020
5/01/2021
4/30/2022
4/29/2023
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.
4/28/2018
4/27/2019
5/02/2020
5/01/2021
4/30/2022
4/29/2023
$ 100.00
$ 66.22
$ 57.66
$ 119.05
$ 114.71
$ 129.34
NASDAQ Composite - Total Return
Dow Jones US Soft Drinks Index
S&P 500 Index - Total Return
100.00
100.00
100.00
115.49
120.32
112.33
123.51
121.91
110.37
201.97
148.37
165.75
179.59
177.04
166.10
179.63
191.45
170.53
10
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
refreshes
National Beverage Corp.
America with a distinctive portfolio of sparkling
waters, juices, energy drinks (Power+ Brands) and,
to a lesser extent, carbonated soft drinks. We believe
our creative product designs, innovative packaging
and imaginative flavors, along with our corporate
culture and philosophy, make National Beverage
unique as a stand-alone entity in the beverage
industry.
in
National Beverage Corp.,
recent years, has
transformed to an innovative, healthier refreshment
company. From our corporate philosophy, development
of products and marketing to manufacturing, we
are converting consumers to a ‘Better for You’
thirst quencher that compassionately cares for their
nutritional health. We are committed to our quest
to innovate for the joy, benefit and enjoyment of our
consumers’ healthier lifestyle!
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.
(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
that appeal to multiple demographic groups; (iii)
maintaining points of difference through innovative
marketing, packaging and consumer engagement
and (iv) responding faster and more creatively to
changing consumer trends than larger competitors
who are burdened by
legacy production and
distribution complexity and costs.
Presently, our primary market focus is the United
States and Canada. Certain of our products are also
distributed on a limited basis in other countries and
options to expand distribution to other regions are
being considered. To service a diverse customer
base that includes numerous national retailers, as
well as thousands of smaller “up-and-down-the-
street” accounts, we utilize a hybrid distribution
system consisting of warehouse and direct-store
delivery. The warehouse delivery system allows
our retail partners to further maximize their assets
by utilizing their ability to pick up product at our
warehouses,
their/our product
costs.
lowering
further
11
NATIONAL BEVERAGE CORP. increase in average selling price offset in part by a
4.9% decline in case volume, which impacted both
Power+ Brands and carbonated soft drinks.
Gross Profit Gross profit for Fiscal 2023 was $396.8
million compared to $417.8 million for Fiscal 2022.
The average cost per case increased 13.4% and
gross margin decreased to 33.8% from 36.7% for
Fiscal 2022. The decrease in gross margin is due to
increases in packaging, ingredients and freight costs
offset in part by increased average selling price. Gross
profit per case was flat.
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
approximately $210 million for both Fiscal 2023, and
Fiscal 2022. Marketing and shipping costs declined
and were offset by increased administrative costs.
The decline in marketing costs was primarily due to
reduced programs with retail partners. As a percent of
net sales, selling, general and administrative expenses
declined to 17.9% from 18.4% in Fiscal 2022.
Other (Expense) Income - Net Other (expense)
income, net includes interest income of $2.3 million
for Fiscal 2023 and $.1 million for Fiscal 2022. The
increase in interest income is due to increased average
invested balances and higher return on investments.
Income Taxes Our effective tax rate was 23.7% for
Fiscal 2023 and 23.6% for Fiscal 2022. The differences
between the effective rate and the federal statutory
rate of 21% were primarily due to the effects of state
income taxes.
National Beverage Corp. is incorporated in Delaware
and began trading as a public company on the
NASDAQ Stock Market in 1991. In this report, the
terms “we,” “us,” “our,” “Company” and “National
Beverage” mean National Beverage Corp. and its
subsidiaries unless indicated otherwise.
Our operating results are affected by numerous
factors, including fluctuations in the costs of raw
materials, supply chain disruptions, 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 29, 2023 (Fiscal 2023) and April 30,
2022 (Fiscal 2022) items and year-to-year comparisons
between Fiscal 2023 and Fiscal 2022. Discussions
of fiscal year ended May 1, 2021 (Fiscal 2021) items
and year-to-year comparisons between Fiscal 2022
and Fiscal 2021 can be found in “Management’s
Discussion and Analysis of Financial Condition and
Results of Operations” in Part II, Item 7 of our Annual
Report on Form 10-K for the year ended April 30,
2022, which is available free of charge on our website
at www.nationalbeverage.com.
Net Sales Net sales for Fiscal 2023 increased 3.1%
to $1,173 million compared to $1,138 million for Fiscal
2022. The increase in sales resulted from a 8.4%
12
NATIONAL BEVERAGE CORP.
LIQUIDITY AND FINANCIAL CONDITION
Liquidity and Capital Resources Our principal source
of funds is cash generated from operations. At April 29,
2023, we had $158.1 million in cash and cash equivalents
and maintained $150 million in unsecured revolving credit
facilities, under which no borrowings were outstanding
and $2.2 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 $22.0 million for Fiscal 2023 primarily for capital
projects to expand our capacity, enhance sustainability
and packaging capabilities and improve efficiencies at our
production facilities. We intend to continue capacity and
efficiency improvement projects in Fiscal 2024 and expect
capital expenditures to be comparable to Fiscal 2022.
Pursuant to a management agreement, we incurred a fee to
Corporate Management Advisors, Inc. (CMA) of $11.9 million
for Fiscal 2023 and $11.4 million for Fiscal 2022. Included
in current liabilities were amounts due CMA of $2.9 million
at April 29, 2023 and $4.0 million at April 30, 2022. See
Note 6 of Notes to the Consolidated Financial Statements.
Cash Flows During Fiscal 2023, $161.7 million was
provided by operating activities, $22.0 million was
used in investing activities and $29.7 million was used
in financing activities. Cash provided by operating
activities increased $28.5 million due to reduced net
working capital other than cash, change in deferred
taxes offset in part by lower net income. Cash used
in investing activities decreased $7.1 million due to
lower capital expenditures. Cash used in financing
activities includes a $30 million repayment of our
Loan Facility.
Financial Position During Fiscal 2023, our working
capital increased $92.9 million to $222.1 million. The
increase in working capital resulted from increased
cash and equivalents generated by operations,
increased trade receivables offset in part by lower
inventories and reduced income tax prepayments.
Trade receivables increased $11.3 million and days
sales outstanding was 33.3 days at April 29, 2023
compared to 30 days at April 30, 2022. Inventories
decreased $9.7 million as a result of the reduced
quantities of finished goods and raw materials. Annual
inventory turns decreased to 7.9 from 8.2 times. At
April 29, 2023, the current ratio was 2.5 to 1 compared
to 1.9 to 1 at April 30, 2022.
CONTRACTUAL OBLIGATIONS
Contractual obligations at April 29, 2023 are payable as follows:
(In thousands)
Operating leases
Purchase commitments
Total
Total
$ 44,674
19,535
$ 64,209
1 Year
or less
$ 12,798
19,535
$ 32,333
2 to 3
Years
$ 17,903
-
4 to 5
Years
$ 10,304
-
More Than
5 Years
$ 3,669
-
$ 17,903
$ 10,304
$ 3,669
We contribute to certain pension plans under collective
bargaining agreements and to a discretionary profit
sharing plan. Annual contributions were $3.8 million for
Fiscal 2023 and $4.0 million for Fiscal 2022. See Note 11
of Notes to Consolidated Financial Statements.
We maintain self-insured and deductible programs for
certain liability, medical and workers’ compensation
exposures. Other long-term liabilities include known
claims and estimated incurred but not reported claims
not otherwise covered by insurance based on actuarial
assumptions and historical claims experience. Since the
timing and amount of claim payments vary significantly,
we are not able to reasonably estimate future payments
for specific periods and therefore such payments have
not been included in the table above. Standby letters
of credit aggregating $2.2 million have been issued in
connection with our self-insurance programs. These
standby letters of credit expire through March 2024 and
are expected to be renewed.
13
NATIONAL BEVERAGE CORP. OFF-BALANCE SHEET ARRANGEMENTS AND
ESTIMATES
We do not have any off-balance sheet arrangements
that have, or are reasonably likely to have, a current or
future material effect on our financial condition.
CRITICAL ACCOUNTING POLICIES 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 we
believe such assets may be impaired. An impairment
loss is written down to its estimated fair market value
based on discounted future cash flows.
14
recognition
Income Taxes The Company’s effective income
tax rate is based on estimates of taxes which will
ultimately be payable. Deferred taxes are recorded
temporary differences
to
to give
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.
for certain
Insurance Programs We maintain self-insured
and deductible programs
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.
in advance,
the aggregate
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
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.
NATIONAL BEVERAGE CORP. 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 29, 2023, the Company had
no 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.
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 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.
15
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;
101,727,658 and 101,712,358 shares issued, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive (loss) income
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.
16
April 29,
2023
April 30,
2022
$
$
$
158,074 $
104,918
93,578
9,835
366,405
148,423
39,506
13,145
1,615
5,248
574,342 $
85,106 $
47,318
11,745
152
144,321
-
19,814
29,782
7,938
201,855
48,050
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
150
150
1,017
40,393
358,345
(3,185)
1,017
39,405
216,181
6,918
(5,100)
(19,133)
372,487
574,342 $
(5,100)
(19,133)
239,438
467,804
$
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 29,
2023
April 30,
2022
May 1,
2021
$ 1,172,932 $ 1,138,013 $ 1,072,210
776,143
396,789
210,105
186,684
(242)
186,442
44,278
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
$
142,164 $
158,512 $
174,146
$
$
1.52 $
1.52 $
1.70 $
1.69 $
1.87
1.86
93,347
93,608
93,323
93,599
93,280
93,620
17
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Net income
Other comprehensive income, net of tax:
Cash flow hedges
Other
Total
Comprehensive income
The accompanying notes are an integral part of these consolidated financial statements.
Fiscal Year Ended
April 29,
2023
April 30,
2022
May 1,
2021
$
142,164 $
158,512 $
174,146
(10,130)
27
(10,103)
3,882
19
3,901
7,930
507
8,437
$
132,061 $
162,413 $
182,583
18
NATIONAL BEVERAGE CORP. NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
SERIES C PREFERRED STOCK
Fiscal Year Ended
April 29, 2023
April 30, 2022
May 1, 2021
Shares
Amount
Shares
Amount
Shares
Amount
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
(LOSS) INCOME
Beginning of year
Cash flow hedges
Other
End of year
101,712
1,017
101,676
1,016
101,606
1,016
15
-
36
1
70
-
101,727
1,017
101,712
1,017
101,676
1,016
39,405
311
677
40,393
216,181
142,164
-
358,345
6,918
(10,130)
27
(3,185)
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
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)
8,374
(19,133)
-
-
-
-
-
-
End of year
8,374
(19,133)
8,374
(19,133)
8,374
(19,133)
TOTAL SHAREHOLDERS' EQUITY
$ 372,487
$ 239,438
$ 355,997
The accompanying notes are an integral part of these consolidated financial statements.
19
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
April 29, 2023
April 30, 2022
May 1, 2021
Fiscal Year Ended
OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
Deferred income taxes
Loss (gain) on disposal of property, net
Stock-based compensation
$
142,164
$
158,512
$
174,146
20,041
(821)
141
677
18,544
5,326
(7)
695
18,097
(132)
114
462
Amortization of operating right of use assets
13,240
13,258
13,060
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:
(11,326)
9,740
(23,495)
15,472
(10,193)
(4,256)
10,281
161,665
(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)
193,770
Additions to property, plant and equipment
(21,979)
(29,015)
(25,308)
Proceeds from sale of property, plant and equipment
27
11
(6)
Net cash used in investing activities
FINANCING ACTIVITIES:
Borrowing under loan facility
Repayments under loan facility
Dividends paid on common stock
Proceeds from stock options exercised
Net cash used in financing activities
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
CASH AND EQUIVALENTS - BEGINNING OF YEAR
CASH AND EQUIVALENTS - END OF YEAR
OTHER CASH FLOW INFORMATION:
Interest paid
Income taxes paid
(21,952)
(29,004)
(25,314)
-
(30,000)
-
311
(29,689)
110,024
48,050
158,074
315
37,831
$
$
$
50,000
(20,000)
-
-
(280,003)
(279,876)
335
(249,668)
(145,539)
193,589
48,050
371
51,958
$
$
$
491
(279,385)
(110,929)
304,518
193,589
148
63,357
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
20
NATIONAL BEVERAGE CORP.
NATIONAL BEVERAGE CORP. AND
SUBSIDIARIES
Notes to Consolidated Financial Statements
National Beverage Corp. develops, produces, markets
and sells a distinctive portfolio of sparkling waters,
juices, energy drinks and carbonated soft drinks
primarily in the United States and Canada. Incorporated
in Delaware in 1985, National Beverage Corp. is a
holding company for various operating subsidiaries.
When used in this report, the terms “we,” “us,” “our,”
“Company” and “National Beverage” mean National
Beverage Corp. and its subsidiaries.
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation The consolidated financial
statements have been prepared in accordance with
United States generally accepted accounting principles
(GAAP) and rules and regulations of the Securities and
Exchange Commission. The consolidated financial
statements include the accounts of National Beverage
Corp. and all subsidiaries. All significant intercompany
transactions and accounts have been eliminated. Our
fiscal year ends the Saturday closest to April 30 and,
as a result, an additional week is added every five or
six years. The fiscal year ended April 29, 2023 (Fiscal
2023), April 30, 2022 (Fiscal 2022) and May 1, 2021
(Fiscal 2021) all consisted of 52 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.
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
261,000 shares in Fiscal 2023, 276,000 shares in
Fiscal 2022, and 340,000 shares in Fiscal 2021.
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 29, 2023, and April 30, 2022, other liabilities
included accruals of $5.5 million and $5.9 million,
respectively, for estimated non-current risk retention
exposures, of which $4.1 million and $4.6 million,
respectively, was covered by insurance at both dates
and included as a component of non-current other
assets.
21
NATIONAL BEVERAGE CORP. Intangible Assets Intangible assets at April 29, 2023
and April 30, 2022 consisted of non-amortizable acquired
trademarks.
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 29, 2023 were comprised of finished
goods of $54.3 million and raw materials of $39.2 million.
Inventories at April 30, 2022 were comprised of finished
goods of $58.6 million and raw materials of $44.7 million.
Marketing Costs The Company utilizes a variety of
marketing programs, including cooperative advertising
programs with customers, to advertise and promote
our products to consumers. Marketing costs are
expensed when incurred, except for prepaid advertising
and production costs, which are expensed when the
advertising takes place. Marketing costs, which are
included in selling, general and administrative expenses,
totaled $44.1 million in Fiscal 2023, $47.6 million in
Fiscal 2022 and $43.4 million in Fiscal 2021.
Property, Plant and Equipment Property, plant and
equipment is recorded at cost. Additions, replacements
and betterments are capitalized, while maintenance and
repairs that do not extend the useful life of an asset are
expensed as incurred. Depreciation is recorded using the
straight-line method over estimated useful lives of 5 to 30
years for buildings and improvements and 3 to 15 years
for machinery and equipment. Leasehold improvements
are amortized using the straight-line method over the
shorter of the remaining lease term or the estimated
useful life of the improvement. When assets are retired
or otherwise disposed, the cost and accumulated
depreciation are removed from the respective accounts
and any related gain or loss is recognized.
Revenue Recognition Revenue is recognized upon
delivery to our customers, based on written sales
terms that do not allow a right of return except in rare
instances. Our products are typically sold on credit;
however smaller direct -store delivery accounts may be
sold on a cash basis. Our credit terms normally require
payment within 30 days of delivery and may allow
discounts for early payment. The Company estimates
and reserves for bad debt exposure based on our
22
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
Shipping and Handling Costs Shipping and
handling costs are reported in selling, general and
the accompanying
administrative expenses
consolidated statements of income. Such costs
aggregated $86.8 million in Fiscal 2023, $87.7 million
in Fiscal 2022 and $75.5 million in Fiscal 2021.
Although our classification is consistent with many
beverage companies, our gross margin may not be
comparable to companies that include shipping and
handling costs in cost of sales.
Trade Receivables Trade receivables are recorded
at net realizable value, which includes an estimated
allowance for doubtful accounts. The Company extends
credit based on an evaluation of each customer’s
financial condition, generally without requiring collateral.
Exposure to credit losses varies by customer principally
due to the financial condition of each customer. The
Company continually monitors our exposure to credit
losses and maintains allowances for anticipated losses
based on our experience with past due accounts,
collectability and our analysis of customer data.
NATIONAL BEVERAGE CORP. Actual future losses from uncollectible accounts
could differ from the Company’s estimate. Changes
in the allowance for doubtful accounts were as
follows:
3. ACCRUED LIABILITIES
Accrued liabilities at April 29, 2023 and April 30, 2022
consisted of the following:
(In thousands)
Fiscal
2023
Fiscal
2022
Fiscal
2021
(In thousands)
2023
2022
Balance at beginning of year
$
559 $ 1,140 $ 1,350
Net charge (credit) to expense
11
(581)
(138)
Net charge-off
(47)
-
(72)
Balance at end of year
$
523 $
559 $ 1,140
At April 29, 2023 and April 30, 2022, 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.
in conformity with GAAP
Use of Estimates The preparation of our financial
statements
requires
management to make estimates and assumptions
that affect the amounts reported in the financial
statements and accompanying notes. Although these
estimates are based on management’s knowledge of
current events and anticipated future actions, actual
results may vary from reported amounts.
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at April 29, 2023 and
April 30, 2022 consisted of the following:
(In thousands)
Land
2023
2022
$
9,835 $
9,835
Buildings and improvements
70,615
65,697
Machinery and equipment
289,567
277,163
Total
370,017
352,695
Less accumulated depreciation
(221,594)
(208,437)
Property, plant and equipment - net
$ 148,423 $ 144,258
Depreciation expense was $17.7 million for Fiscal
2023, $15.8 million for Fiscal 2022 and $14.8 million
for Fiscal 2021.
Accrued compensation
$
13,036 $
12,079
Accrued promotions
15,865
10,826
Accrued freight
2,819
3,729
Accrued insurance
2,498
2,778
Recycling deposits
5,123
5,497
7,977
4,181
$
47,318 $
39,090
Other
Total
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 $14.4 million in Fiscal
2023, $14.5 million in Fiscal 2022 and $14.6 million
in Fiscal 2021. The weighted-average remaining lease
term and weighted average discount rate of operating
leases was 4.34 years and 3.30%, respectively, at
April 29, 2023 and 4.0 years and 3.08%, respectively,
at April 30, 2022. Net cash provided by operations
was impacted by $14.3 million for operating leases
for the year ended April 29, 2023, $14.7 million for the
year ended April 30, 2022, and $14.1 million for the
year ended May 1, 2021.
23
NATIONAL BEVERAGE CORP. The following is a summary of future minimum lease
payments and related liabilities for all non-cancelable
operating leases at April 29, 2023:
are expected to have a material effect on our operations
or financial position. At April 29, 2023, the Company was
in compliance with all loan covenants.
$
12,798
6. CAPITAL STOCK AND TRANSACTIONS WITH
(In thousands)
Fiscal 2024
Fiscal 2025
Fiscal 2026
Fiscal 2027
Fiscal 2028
Thereafter
Total minimum lease payments including interest
Less: Amounts representing interest
Present value of minimum lease payments
Less: Current portion of lease liabilities
9,864
8,039
7,105
3,199
3,669
44,674
(3,147)
41,527
(11,745)
Non-Current portion of operating lease liabilities
$
29,782
5. DEBT
At April 29, 2023, a subsidiary of the Company
maintained unsecured revolving credit facilities with
banks aggregating $100 million (the Credit Facilities). The
Credit Facilities expire from October 28, 2024 to May 30,
2025 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 29, 2023 or April 30, 2022. At April
29, 2023, $2.2 million of the Credit Facilities was reserved
for standby letters of credit and $97.8 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”). Since closing the Loan Facility, $50 million was
borrowed and $30 million remained outstanding at April
30, 2022. There were no borrowings outstanding under
the Loan Facility at April 29, 2023. The Loan Facility
expires December 31, 2023 and borrowings bear interest
at .95% above the adjusted daily SOFR.
The Credit Facilities and Loan Facility require the subsidiary
to maintain certain financial ratios, including debt to
net worth and debt to EBITDA (as defined in the Credit
Facilities), and contain other restrictions, none of which
24
RELATED PARTIES
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
$800 thousand per year and the Company’s lease
payments for its ownership interest have averaged
approximately $350 thousand per year.
NATIONAL BEVERAGE CORP. that
The management agreement provides
the
Company will pay CMA an annual base fee equal to one
percent of the consolidated net sales of the Company,
and further provides that the Compensation and Stock
Option Committee and the Board of Directors may from
time to time award additional incentive compensation to
CMA or its personnel. The Board of Directors on 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 $11.7 million for Fiscal
2023, $11.4 million for Fiscal 2022 and $10.7 million for
Fiscal 2021. Included in current liabilities were amounts
due CMA of $2.9 million at April 29, 2023 and $4.0
million at April 30, 2022.
prices, $4.6 million of unrealized loss before tax will be
reclassified from AOCI and recognized in earnings over
the next 12 months.
At April 29, 2023, the fair value of the derivative liability
was $4.6 million, which was included in accrued
liabilities. At April 30, 2022, the fair value of the
derivative asset was $8.8 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.
8.
INCOME TAXES
The provision for income taxes consisted of the following:
(In thousands)
Current
Deferred
Total
Fiscal
2023
Fiscal
2022
Fiscal
2021
$ 48,287 $ 42,555 $ 51,520
(4,009)
6,529
2,471
$ 44,278 $ 49,084 $ 53,991
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 at April 29, 2023 and April 30,
2022 consisted of the following:
7. DERIVATIVE FINANCIAL INSTRUMENTS
From time to time, the Company enters into aluminum
swap contracts to partially mitigate our exposure to
changes in the cost of aluminum cans. Such financial
instruments are designated and accounted for as cash
flow hedges. Accordingly, gains or losses 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 gains (losses) recognized in
the consolidated statements of income and AOCI:
Fiscal
2023
Fiscal
2022
Fiscal
2021
$ (21,100) $ 15,105 $ 12,973
(5,047)
3,613
3,103
(In thousands)
Recognized in AOCI-
Gain (loss) before
income taxes
Less income tax
provision (benefit)
Net
Reclassified from AOCI to
cost of sales-
Gain (loss) before
income taxes
Less income tax provi-
sion (benefit)
(16,053)
11,492
9,870
(In thousands)
2023
2022
Deferred tax assets:
(7,785)
10,001
2,550
Inventory and amortizable assets
(1,862)
2,391
610
Total deferred tax assets
545
5,216
325
3,631
Accrued expenses and other
$
4,671 $
3,306
Net
(5,923)
7,610
1,940
Deferred tax liabilities:
Net change to AOCI
$ (10,130) $
3,882 $
7,930
At April 29, 2023, the notional amount of our
outstanding aluminum swap contracts was $60.9
million and, assuming no change in the commodity
Property
Intangibles and other
23,715
23,863
1,315
3,591
Total deferred tax liabilities
25,030
27,454
Net deferred tax liabilities
$
19,814 $
23,823
25
NATIONAL BEVERAGE CORP.
The reconciliation of the statutory federal income tax
rate to our effective tax rate is as follows:
Fiscal
2023
Fiscal
2022
Fiscal
2021
Statutory federal income tax rate
21.0% 21.0% 21.0%
State income taxes, net of federal
benefit
2.9
2.9
Other differences
(.2)
(.3)
2.9
(.2)
Effective income tax rate
23.7% 23.6% 23.7%
At April 29, 2023, the gross amount of unrecognized
tax benefits was $2.1 million and $6 thousand was
recognized as tax expense in Fiscal 2023. If the
Company were to prevail on all uncertain tax positions,
the net effect would be to reduce our tax expense
by approximately $1.7 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:
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 2017 are subject to examination. Generally, the
income tax returns for the various state jurisdictions
are subject to examination for years ending after
Fiscal 2016.
9. LEGAL PROCEEDINGS
in certain
The Company has been named
legal
proceedings, including those containing 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
2023
Fiscal
2022
Fiscal
2021
10. STOCK-BASED COMPENSATION
Beginning balance
$ 2,079 $ 2,055 $ 1,974
Increases due to current
period tax positions
Decreases due to lapse of
statute of limitations and
audit resolutions
75
114
150
(58)
(90)
(69)
Ending balance
$ 2,096 $ 2,079 $ 2,055
Accrued interest and penalties related to unrecognized
tax benefits are recognized as a component of income
tax expense. At April 29, 2023, unrecognized tax
benefits included accrued interest of $249 thousand
of which approximately $1 thousand was recognized
as tax expense in Fiscal 2023.
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. The Company adjusts these
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.
26
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
granted in Fiscal 2023. 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 .82% 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 2023:
Options outstanding,
beginning of year
Granted
Exercised
Cancelled
Number
of Shares
Price (a)
536,600
$ 18.97
-
-
(15,300)
20.35
-
-
Options outstanding, end of year
521,300
Options exercisable, end of year
336,520
18.13
11.90
(a) Weighted average exercise price.
Stock-based compensation expense was $677,000 for
Fiscal 2023, $695,000 for Fiscal 2022 and $462,000
for Fiscal 2021.
The total intrinsic value for stock options exercised was
$360,000 for Fiscal 2023, $1.4 million for Fiscal 2022
and $1.9 million for Fiscal 2021. Net cash proceeds
from the exercise of stock options were $311,000 for
Fiscal 2023, $335,000 for Fiscal 2022 and $491,000
for Fiscal 2021. Stock based income tax benefits
aggregated $67,000 for Fiscal 2023, $283,000 for
Fiscal 2022 and $382,000 for Fiscal 2021.
At April 29, 2023, unrecognized compensation expense
related to the unvested portion of stock options was
$2.3 million, which is expected to be recognized over
a remaining weighted average period of 5.4 years. The
weighted average remaining contractual term and the
aggregate intrinsic value for options outstanding at April
29, 2023 was 3.1 years and $16.0 million, respectively.
The weighted average remaining contractual term and
the aggregate intrinsic value for options exercisable
at April 30, 2022 was 4.2 years and $10.8 million,
respectively.
27
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 $3.8
million for Fiscal 2023, $4.0 million for Fiscal 2022 and $3.7 million for Fiscal 2021.
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 2023 and Fiscal 2022
is for the plans’ years ending December 31, 2021 and 2020, respectively.
Pension Fund
Central States, Southeast and Southwest
Areas Pension Plan (EIN no. 36-6044243) (the “CSSS Fund”)
PPA Zone Status
Fiscal
2023
Red
Fiscal
2022
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, 2021 and December 31, 2020, 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
2023
Fiscal
2022
Fiscal
2021
$
$
1,601
768
197
2,566
$
$
1,462
817
181
2,460
$
$
1,469
746
166
2,381
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. At April 29, 2023, the Company had
purchase commitments for raw materials of $14.0 million through 2024.
At April 29, 2023, the Company had purchase commitments for plant and equipment of $5.5 million anticipated
to be completed in Fiscal 2024.
28
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. and subsidiaries (the
Company) as of April 29, 2023 and April 30, 2022, 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 29, 2023, and the related
notes (collectively, the financial statements). We also have audited the Company’s internal control over financial reporting
as of April 29, 2023, 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 29, 2023 and April 30, 2022, and the results of its operations and its cash flows for each of the three
years in the period ended April 29, 2023, 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 29, 2023, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission in 2013.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s financial statements and an opinion on the company’s internal control over financial reporting based on
our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits
also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
Critical audit matters 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. We determined that
there are no critical audit matters.
/s/ RSM US LLP
We have served as the Company’s auditor since 2006.
Fort Lauderdale, Florida
June 28, 2023
29
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.
independent
RSM US LLP, an
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 29, 2023 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
At 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
at April 29, 2023.
30
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” in the Company’s 2023 Proxy
Statement and is incorporated herein by reference.
The following table sets forth certain information with
respect to the officers of the Registrant at April 29, 2023:
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 2023 Proxy
Statement and is incorporated herein by reference.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Name
Age Position with Company
Nick A. Caporella (1)
87 Chairman of the Board and
Chief Executive Officer
The information required by Item 12 will be included
under the captions “Security Ownership” and “Equity
Compensation Plan Information” in the Company’s 2023
Proxy Statement and is incorporated herein by reference.
Joseph G. Caporella (2)
62
President
George R. Bracken (3)
78
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.
Officers are normally appointed each year at the first
meeting of the Board of Directors after the annual meeting
of shareholders and may be removed at any time by the
Board of Directors.
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 2023 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 2023 Proxy Statement and is incorporated
herein by reference.
31
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
Page
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.
23
24
25
26
27
28
40
NA
32
NATIONAL BEVERAGE CORP.
EXHIBIT INDEX
Exhibit
No. Description
3.1 Restated Certificate of Incorporation (1)
3.2 Amended and Restated By-Laws (2)
3.3 Certificate of Designation of the Special Series D Preferred Stock of the Company (3)
4
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities
Exchange Act of 1934 (14)
10.1 Management Agreement between the Company and Corporate Management Advisors, Inc. (4)
10.2 National Beverage Corp. Investment and Profit Sharing Plan (5) *
10.3 National Beverage Corp. 1991 Omnibus Incentive Plan (4) *
10.4 National Beverage Corp. 1991 Stock Purchase Plan (4)*
10.5 Amendment No. 1 to the National Beverage Corp. Omnibus Incentive Plan (6) *
10.6 National Beverage Corp. Special Stock Option Plan (7) *
10.7 Amendment No. 2 to the National Beverage Corp. Omnibus Incentive Plan (8) *
10.8 National Beverage Corp. Key Employee Equity Partnership Program (8) *
10.9 Second Amended and Restated Credit Agreement, dated June 30, 2008, between NewBevCo, Inc.
and lender therein (9)
10.10 Amendment to National Beverage Corp. Special Stock Option Plan (10) *
10.11 Amendment to National Beverage Corp. Key Employee Equity Partnership Program (10)*
10.12 Amended and Restated Credit Agreement dated January 5, 2022 between NewBevCo and lender
therein (11)
10.13 Loan Agreement dated December 21, 2021 between NewBevCo, Inc. and lender therein (12)
10.14 Second Amended and Restated Credit Agreement between NewBevCo, Inc. and lender therein (13)
21
Subsidiaries of Registrant (15)
23
Consent of Independent Registered Public Accounting Firm (15)
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (15)
31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (14)
33
NATIONAL BEVERAGE CORP.
Exhibit
No. Description
32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (15)
101 The following financial information from National Beverage Corp.’s Annual Report on Form 10-K for
the fiscal year ended April 29, 2023 is formatted in 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)
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 Annual Report on Form 10-K for the fiscal year
ended April 28, 2018 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 October 29, 2022 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
(15)
Filed herewith.
34
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 28, 2023
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 28, 2023.
/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
35
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.
36
Delaware
Delaware
Michigan
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%
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 28, 2023, relating to the consolidated financial statements and the
effectiveness of internal control over financial reporting of National Beverage Corp. appearing in this Annual Report
on Form 10-K of National Beverage Corp. for the year ended April 29, 2023.
/s/ RSM US LLP
Fort Lauderdale, Florida
June 28, 2023
37
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 28, 2023
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
38
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 28, 2023
/s/ George R. Bracken
George R. Bracken
Executive Vice President - Finance
(Principal Financial Officer)
39
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 29, 2023 (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 28, 2023
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
40
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 29, 2023 (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 28, 2023
/s/ George R. Bracken
George R. Bracken
Executive Vice President – Finance
(Principal Financial Officer)
41
NATIONAL BEVERAGE CORP.
2023 ANNUAL REPORT CORPORATE DATA
SUBSIDIARY
MANAGEMENT
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
Dejan Trpevski
Executive Vice President
Faygo Beverages
Samuel F. Guerra
Vice President
Shasta West
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 6, 2023 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 Investor Services
150 Royall Street
Canton, MA 02021
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