NATIONAL BEVERAGE CORP - Quarter Report: 2007 January (Form 10-Q)
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 27, 2007
Commission file number 1-14170
![(National Beverage Logo)](https://www.sec.gov/Archives/edgar/data/0000069891/000095014407002132/g06010g06010e01.gif)
NATIONAL BEVERAGE CORP.
(Exact name of registrant as specified in its charter)
Delaware | 59-2605822 | |
(State of incorporation) | (I.R.S. Employer Identification No.) |
One North University Drive, Ft. Lauderdale, FL | 33324 | |
(Address of principal executive offices) | (Zip Code) |
(954) 581-0922
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
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 (or for
such shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer.
Large Accelerated Filer o Accelerated Filer o Non-accelerated Filer x
Large Accelerated Filer o Accelerated Filer o Non-accelerated Filer x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No x
The number of shares of registrants common stock outstanding as of March 8, 2007 was
37,917,059.
Table of Contents
NATIONAL BEVERAGE CORP.
QUARTERLY REPORT ON FORM 10-Q
INDEX
QUARTERLY REPORT ON FORM 10-Q
INDEX
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Table of Contents
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JANUARY 27, 2007 AND APRIL 29, 2006
(In thousands, except share amounts)
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JANUARY 27, 2007 AND APRIL 29, 2006
(In thousands, except share amounts)
(Unaudited) | ||||||||
January 27, | April 29, | |||||||
2007 | 2006 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and equivalents |
$ | 56,267 | $ | 42,119 | ||||
Trade receivables net of allowances of $453 ($562 at April 29, 2006) |
40,037 | 48,236 | ||||||
Inventories |
42,809 | 34,429 | ||||||
Deferred income taxes net |
1,768 | 1,940 | ||||||
Prepaid and other assets |
9,739 | 9,287 | ||||||
Total current assets |
150,620 | 136,011 | ||||||
Property net |
54,934 | 56,027 | ||||||
Goodwill |
13,145 | 13,145 | ||||||
Intangible assets net |
1,898 | 1,653 | ||||||
Other assets |
11,186 | 11,503 | ||||||
$ | 231,783 | $ | 218,339 | |||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 35,016 | $ | 38,041 | ||||
Accrued liabilities |
19,492 | 20,576 | ||||||
Income taxes payable |
2,334 | 2,369 | ||||||
Total current liabilities |
56,842 | 60,986 | ||||||
Deferred income taxes net |
15,273 | 17,783 | ||||||
Other liabilities |
8,669 | 8,710 | ||||||
Shareholders equity: |
||||||||
Preferred
stock, 7% cumulative, $1 par value 1,000,000 shares
authorized; 150,000 shares issued; no shares outstanding |
150 | 150 | ||||||
Common stock, $.01 par value 50,000,000 shares authorized;
41,772,411 shares issued (41,511,193 shares at April 29, 2006) |
418 | 415 | ||||||
Additional paid-in capital |
24,627 | 23,033 | ||||||
Retained earnings |
143,804 | 125,262 | ||||||
Treasury stock at cost: |
||||||||
Preferred stock 150,000 shares |
(5,100 | ) | (5,100 | ) | ||||
Common stock 4,032,784 shares |
(12,900 | ) | (12,900 | ) | ||||
Total shareholders equity |
150,999 | 130,860 | ||||||
$ | 231,783 | $ | 218,339 | |||||
See accompanying Notes to Condensed Consolidated Financial Statements.
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NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 27, 2007
AND JANUARY 28, 2006
(In thousands, except per share amounts)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 27, 2007
AND JANUARY 28, 2006
(In thousands, except per share amounts)
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net sales |
$ | 117,123 | $ | 109,587 | $ | 403,077 | $ | 383,452 | ||||||||
Cost of sales |
79,282 | 74,667 | 271,368 | 257,984 | ||||||||||||
Gross profit |
37,841 | 34,920 | 131,709 | 125,468 | ||||||||||||
Selling, general and administrative expenses |
33,537 | 31,645 | 103,970 | 99,824 | ||||||||||||
Interest expense |
27 | 27 | 78 | 77 | ||||||||||||
Other income net |
456 | 424 | 1,265 | 879 | ||||||||||||
Income before income taxes |
4,733 | 3,672 | 28,926 | 26,446 | ||||||||||||
Provision for income taxes |
1,699 | 1,375 | 10,384 | 9,892 | ||||||||||||
Net income |
$ | 3,034 | $ | 2,297 | $ | 18,542 | $ | 16,554 | ||||||||
Net income per share |
||||||||||||||||
Basic |
$ | .08 | $ | .06 | $ | .49 | $ | .44 | ||||||||
Diluted |
$ | .08 | $ | .06 | $ | .48 | $ | .43 | ||||||||
Average common shares outstanding basic |
38,143 | 37,860 | 38,128 | 37,728 | ||||||||||||
Dilutive stock options |
245 | 465 | 256 | 555 | ||||||||||||
Average common shares outstanding diluted |
38,388 | 38,325 | 38,384 | 38,283 | ||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
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NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 27, 2007 AND JANUARY 28, 2006
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 27, 2007 AND JANUARY 28, 2006
(In thousands)
(Unaudited) | ||||||||
2007 | 2006 | |||||||
Operating Activities: |
||||||||
Net income |
$ | 18,542 | $ | 16,554 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
9,168 | 10,049 | ||||||
Deferred income tax provision (benefit) |
(2,338 | ) | 454 | |||||
Loss (gain) on disposal of property, net |
(35 | ) | 354 | |||||
Stock-based compensation |
238 | 278 | ||||||
Changes in assets and liabilities: |
||||||||
Trade receivables |
8,199 | 7,919 | ||||||
Inventories |
(8,380 | ) | (3,456 | ) | ||||
Prepaid and other assets |
(3,306 | ) | (4,370 | ) | ||||
Accounts payable |
(3,025 | ) | (7,917 | ) | ||||
Accrued and other liabilities, net |
205 | 3,836 | ||||||
Net cash provided by operating activities |
19,268 | 23,701 | ||||||
Investing Activities: |
||||||||
Marketable securities purchased |
(353,175 | ) | (269,875 | ) | ||||
Marketable securities sold |
353,175 | 269,875 | ||||||
Property additions |
(6,548 | ) | (5,472 | ) | ||||
Proceeds from sale of assets |
69 | 741 | ||||||
Net cash used in investing activities |
(6,479 | ) | (4,731 | ) | ||||
Financing Activities: |
||||||||
Common stock cash dividend |
| (38,021 | ) | |||||
Proceeds from stock options exercised |
286 | 901 | ||||||
Stock-based tax benefits |
1,073 | 756 | ||||||
Net cash provided by (used in) financing activities |
1,359 | (36,364 | ) | |||||
Net Increase (Decrease) in Cash and Equivalents |
14,148 | (17,394 | ) | |||||
Cash and Equivalents Beginning of Year |
42,119 | 54,557 | ||||||
Cash and Equivalents End of Period |
$ | 56,267 | $ | 37,163 | ||||
Other Cash Flow Information: |
||||||||
Interest paid |
$ | 80 | $ | 79 | ||||
Income taxes paid |
10,320 | 6,649 |
See accompanying Notes to Condensed Consolidated Financial Statements.
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NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 27, 2007
(UNAUDITED)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 27, 2007
(UNAUDITED)
1. BASIS OF PRESENTATION
National Beverage Corp. develops, manufactures, markets and distributes a complete portfolio of
multi-flavored soft drinks, juice drinks, water and specialty beverages throughout the United
States. 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.
The accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States (GAAP) and rules
and regulations of the Securities and Exchange Commission for interim financial information. The
financial statements do not include all information and notes required by GAAP for complete
financial statements. In our opinion, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Results for the interim periods
presented are not necessarily indicative of results which might be expected for the entire fiscal
year.
These interim financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the
fiscal year ended April 29, 2006.
Reclassifications have been made to prior year amounts to conform to the current year presentation.
2. STOCK-BASED COMPENSATION
In the fourth quarter of fiscal 2006, the Company adopted SFAS No. 123R Stock-Based Compensation
pursuant to the modified prospective application and, accordingly, prior period amounts have not
been restated. Stock-based compensation expense was recorded based on the fair value method for
all awards granted on or after the date of adoption and for the portion of previously granted
awards that remained unvested at the date of adoption.
Prior to the fourth quarter of fiscal 2006, the Company applied the provisions of APB No. 25,
Accounting for Stock Issued to Employees, as permitted under SFAS No. 148, Accounting for
Stock-Based Compensation Transition and Disclosure an amendment of FASB Statement No. 123.
Under APB 25, stock-based compensation expense was generally not recognized unless the exercise
price of options granted was less than the market price on the date of grant.
Had compensation cost for options granted to employees been recorded based on the fair value method
under SFAS No. 123, Accounting for Stock-Based Compensation prior to the adoption date, net
income and earnings per share for the three months and nine months ended January 28, 2006 would
have been impacted on a pro forma basis by less than $200,000 and $.01 per share.
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During the nine months ended January 27, 2007, options for 1,280 shares were granted at a weighted
average exercise price of $8.39 and options for 90,800 shares were exercised at a weighted average
exercise price of $3.14. At January 27, 2007, options to purchase 707,856 shares at a weighted
average exercise price of $5.17 were outstanding and stock-based awards to purchase 2,683,472
shares of common stock were available for grant.
3. INVENTORIES
Inventories are stated at the lower of first-in, first-out cost or market. Inventories at January
27, 2007 are comprised of finished goods of $23,246,000 and raw materials of $19,563,000.
Inventories at April 29, 2006 are comprised of finished goods of $18,997,000 and raw materials of
$15,432,000.
4. PROPERTY
Property consists of the following:
(In thousands) | ||||||||
January 27, | April 29, | |||||||
2007 | 2006 | |||||||
Land |
$ | 8,915 | $ | 8,915 | ||||
Buildings and improvements |
38,320 | 38,101 | ||||||
Machinery and equipment |
120,958 | 115,379 | ||||||
Total |
168,193 | 162,395 | ||||||
Less accumulated depreciation |
(113,259 | ) | (106,368 | ) | ||||
Property net |
$ | 54,934 | $ | 56,027 | ||||
Depreciation expense was $2,510,000 and $7,607,000 for the three-month and nine-month periods ended
January 27, 2007, respectively, and $2,630,000 and $7,743,000 for the three-month and nine-month
periods ended January 28, 2006, respectively.
5. DEBT
A subsidiary maintains unsecured revolving credit facilities aggregating $45 million (the Credit
Facilities) with banks. The Credit Facilities expire through May 1, 2008 and bear interest at 1/2%
below the banks reference rate or .6% above LIBOR, at the subsidiarys election. At January 27,
2007, there was no debt outstanding under the Credit Facilities and approximately $42 million was
available for future borrowings.
The Credit Facilities require the subsidiary to maintain certain financial ratios and contain other
restrictions, none of which are expected to have a material impact on our operations or financial
position. Significant financial ratios and restrictions include: fixed charge coverage; net worth
ratio; and limitations on incurrence of debt. At January 27, 2007, we were in compliance with all
loan covenants and approximately $25 million of retained earnings were restricted from
distribution.
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6. COMMON STOCK
In January 1998, the Board of Directors authorized the purchase of up to 800,000 shares of National
Beverage common stock. There were no shares purchased during the nine months ended January 27,
2007. Aggregate shares purchased since January 1998 were 502,060 and are classified as treasury
stock.
7. FRUCTOSE SETTLEMENT
In June 2005, we received a partial payment of $7.7 million from the settlement of our claim in a
class action lawsuit known as In re: High Fructose Corn Syrup Antitrust Litigation Master File No.
95-1477 in the United States District Court for the Central District of Illinois. The lawsuit
related to purchases of high fructose corn syrup made by the Company and others. The settlement
amount was allocated to each class action recipient based on the proportion of its purchases to
total purchases by all class action recipients. The amount received, less offsets and expenses of
$.5 million, was recorded as a reduction in cost of sales in the first quarter ended July 30, 2005.
In November 2005, the Company received $1.2 million, representing the final payment due under the
settlement. Such amount was recorded in the third quarter ended January 28, 2006 as a reduction in
cost of sales.
8. CHANGES IN ACCOUNTING STANDARDS
In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48).
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprises
financial statements. This Interpretation prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or
expected to be taken in the tax return. This Interpretation is effective for fiscal years beginning
after December 15, 2006. We are currently evaluating the impact FIN 48 may have on our consolidated
financial statements.
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
National Beverage Corp. develops, manufactures, markets and distributes a complete portfolio of
quality beverage products throughout the United States. Incorporated in Delaware in 1985, National
Beverage Corp. is a holding company for various operating subsidiaries. In this report, the terms
we, us, our, Company and National Beverage mean National Beverage Corp. and its
subsidiaries.
Our lines of multi-flavored soft drinks, including those of our flagship brands, Shasta® and
Faygo®, emphasize distinctive flavor variety. In addition, we offer an assortment of premium
beverages geared to the health-conscious consumer, including Everfresh®, Home Juice®, and Mr. Pure®
100% juice and juice-based products; and LaCroix®, Mt. Shasta, Crystal Bay® and ClearFruit®
flavored and spring water products. We also produce energy drinks and powdered beverage products,
including Rip It®, an energy drink in liquid and powdered form geared toward young consumers and
PowerBlast Energy Fuel, a powdered nutritional beverage product for on-the-go consumers. Other
products include Ohana® fruit-flavored drinks and St. Nicks® holiday soft drinks. Substantially
all of our brands are produced in thirteen manufacturing facilities that are strategically located
in major metropolitan markets throughout the continental United States. To a lesser extent, we
develop and produce soft drinks for retail grocery chains, warehouse clubs, mass-merchandisers and
wholesalers (allied brands) as well as soft drinks for other beverage companies.
Our strategy emphasizes the growth of our products by offering a branded beverage portfolio of
proprietary flavors; by supporting the franchise value of regional brands and expanding those
brands with modern packaging and broader demographic emphasis; by developing and acquiring
innovative products tailored toward healthy lifestyles; and by appealing to the quality-price
expectations of the family consumer. We believe that the regional share dynamics of our brands
perpetuate consumer loyalty within local regional markets, resulting in more retailer sponsored
promotional activities.
Over the last several years, we have focused on increasing penetration of our brands in the
convenience channel through Company-owned and independent distributors. The convenience channel is
composed 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 undertaken specific
measures to expand distribution in this channel. These include development of products specifically
targeted to this market, such as ClearFruit, Everfresh, Mr. Pure, Crystal Bay, Rip It and
PowerBlast. Additionally, we have created proprietary and specialized packaging for these products
with distinctive graphics. We intend to continue our focus on enhancing growth in the convenience
channel through both specialized packaging and innovative product development.
Beverage industry sales are seasonal with the highest volume typically realized during the summer
months. Additionally, our operating results are subject to numerous factors, including
fluctuations in the costs of raw materials, changes in consumer preference for beverage products
and competitive pricing in the marketplace.
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RESULTS OF OPERATIONS
Three Months Ended January 27, 2007 (third quarter of fiscal 2007) compared to
Three Months Ended January 28, 2006 (third quarter of fiscal 2006)
Three Months Ended January 28, 2006 (third quarter of fiscal 2006)
Led by higher sales of Rip It, the case volume of the Companys energy drinks, juices and waters
increased by 17.3%. This increase was partially offset by a 10.4% volume decline in traditional
carbonated soft drinks, mainly due to a 42.0% decline in lower-margin allied brands. As a result of
this shift in product mix and certain pricing increases, the net selling price per unit increased
13.7%.
Gross profit approximated 32.3% of net sales for the third quarter of fiscal 2007 compared to 30.8%
of net sales for the third quarter of fiscal 2006, excluding the effect of a $1.2 million fructose
settlement received last year. The improvement in gross margin was due to the effects of the
pricing improvements mentioned above partially offset by higher manufacturing and raw material
costs. Excluding the fructose settlement, cost of goods sold per unit increased 11.1% over the
comparable period last year. See Note 7 of Notes to Condensed Consolidated Financial Statements.
Selling, general and administrative expenses were $33.5 million or 28.6% of net sales for the third
quarter of fiscal 2007 compared to $31.6 million or 28.9% of net sales for last year. The increase
in expenses relates to marketing endorsement activities and new product development and
introductions associated with energy drinks and nutritional products, as well as an increase in
cooperative advertising.
Other income includes interest income of $460,000 (fiscal 2007) and $484,000 (fiscal 2006). The
decline in interest income is due to lower average invested balances related to the $38 million
cash dividend paid in the third quarter of fiscal 2006. Also, other income in the third quarter of
fiscal 2006 includes a loss of $67,000 on the disposal of property.
The Companys effective rate for income taxes, based upon estimated annual income tax rates,
approximated 35.9% of income before taxes for the third quarter of fiscal 2007 and 37.4% for the
comparable period in fiscal 2006. The difference between the effective rate and the federal
statutory rate of 35% was primarily due to the effects of state income taxes, nondeductible
expenses and nontaxable interest income.
Net income was $3.0 million for the third quarter of fiscal 2007 compared to $2.3 million for the
third quarter of fiscal 2006.
Nine Months Ended January 27, 2007 (first nine months of fiscal 2007) compared to
Nine Months Ended January 28, 2006 (first nine months of fiscal 2006)
Nine Months Ended January 28, 2006 (first nine months of fiscal 2006)
In the first nine months of fiscal 2006, the Company received a net fructose settlement of $8.4
million, which was recorded as a reduction in cost of goods sold. Net income for the first nine
months of fiscal 2006 included an after tax gain of $5.2 million related to the fructose
settlement. See Note 7 of Notes to Condensed Consolidated Financial Statements.
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The case volume of the Companys energy drinks, juices and waters increased by 13.2% primarily due
to higher sales of Rip It. This increase was partially offset by a 6.3% volume decrease in
traditional carbonated soft drinks, mainly due to an 18.6% decline in lower-margin allied brands. As a
result of this shift in product mix and certain pricing increases, the net selling price per unit
increased 8.9%.
Gross profit approximated 32.7% of net sales for the first nine months of fiscal 2007 compared to
30.5% of net sales for the first nine months of fiscal 2006, excluding the effect of the $8.4
million fructose settlement received last year. The improvement in gross margin was due to the
effects of the pricing improvements mentioned above partially offset by higher manufacturing and
raw material costs. Excluding the fructose settlement, cost of goods sold per unit increased 5.5%
over the comparable period last year.
Selling, general and administrative expenses were $104.0 million or 25.8% of net sales for the
first nine months of fiscal 2007 compared to $99.8 million or 26.0% of net sales for last year.
The increase in expenses relates to marketing endorsement activities and new product development
and introductions associated with energy drinks and nutritional products, as well as an increase in
cooperative advertising.
Other income includes interest income of $1,229,000 (fiscal 2007) and $1,181,000 (fiscal 2006). The
increase in interest income is due to higher investment yields. Also, other income in the first
nine months of fiscal 2006 includes a loss of $354,000 on the disposal of property.
The Companys effective rate for income taxes, based upon estimated annual income tax rates,
approximated 35.9% of income before taxes for the first nine months of fiscal 2007 and 37.4% for
the comparable period in fiscal 2006. The difference between the effective rate and the federal
statutory rate of 35% was primarily due to the effects of state income taxes, nondeductible
expenses and nontaxable interest income.
Net income was $18.5 million for the first nine months of fiscal 2007 compared to $16.6 million for
the first nine months of fiscal 2006.
LIQUIDITY AND FINANCIAL CONDITION
Liquidity and Capital Resources
Our current sources of capital are cash flows from operations and borrowings under existing credit facilities. We maintain unsecured revolving credit facilities aggregating $45 million of which $3 million was used for standby letters of credit at January 27, 2007. There was no debt outstanding under the credit facilities. We believe that our capital resources are sufficient to fund our capital expenditures, dividends and working capital requirements for the foreseeable future.
Our current sources of capital are cash flows from operations and borrowings under existing credit facilities. We maintain unsecured revolving credit facilities aggregating $45 million of which $3 million was used for standby letters of credit at January 27, 2007. There was no debt outstanding under the credit facilities. We believe that our capital resources are sufficient to fund our capital expenditures, dividends and working capital requirements for the foreseeable future.
Cash Flows
During the first nine months of fiscal 2007, $19.3 million was provided from operating activities and $1.4 million was provided from financing activities, which was partially offset by $6.5 million used for investing activities. Cash provided by operating activities decreased $4.4 million primarily due to an increase in working capital requirements. Cash used in investing activities increased $1.7 million due to an increase in net property additions.
During the first nine months of fiscal 2007, $19.3 million was provided from operating activities and $1.4 million was provided from financing activities, which was partially offset by $6.5 million used for investing activities. Cash provided by operating activities decreased $4.4 million primarily due to an increase in working capital requirements. Cash used in investing activities increased $1.7 million due to an increase in net property additions.
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Financial Position
During the first nine months of fiscal 2007, our working capital increased $18.8 million to $93.8 million primarily due to operating activities. Trade receivables decreased $8.2 million due to lower sales related to seasonality. Inventory increased $8.4 million due to the effect of new products and raw material cost increases. Accounts payable decreased $3.0 million due to seasonality. At January 27, 2007, the current ratio was 2.6 to 1 compared to 2.2 to 1 at April 29, 2006.
During the first nine months of fiscal 2007, our working capital increased $18.8 million to $93.8 million primarily due to operating activities. Trade receivables decreased $8.2 million due to lower sales related to seasonality. Inventory increased $8.4 million due to the effect of new products and raw material cost increases. Accounts payable decreased $3.0 million due to seasonality. At January 27, 2007, the current ratio was 2.6 to 1 compared to 2.2 to 1 at April 29, 2006.
FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q (this Form 10-Q) constitute
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, but are not limited to, the following:
general economic and business conditions; pricing of competitive products; success in acquiring
other beverage businesses; success of new product and flavor introductions; fluctuations in the
costs of raw materials; our ability to increase prices; continued retailer support for our
products; changes in consumer preferences; success of implementing business strategies; changes in
business strategy or development plans; government regulations; regional weather conditions; and
other factors referenced in this Form 10-Q. We disclaim an obligation to update any such factors
or to publicly announce the results of any revisions to any forward-looking statements contained
herein to reflect future events or developments.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There are no material changes to the disclosures made on this matter in the Companys Annual Report
on Form 10-K for the fiscal year ended April 29, 2006.
ITEM 4. CONTROLS AND PROCEDURES
National Beverages Chief Executive Officer and Principal Financial Officer have concluded that our
disclosure controls and procedures are effective, based on their evaluation of these controls and
procedures as of January 27, 2007. There has been no change in our internal control over financial
reporting that occurred during our most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 6. EXHIBITS
Exhibit No. | Description | |||
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 |
|||
31.2 | Certification of Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 |
|||
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
|||
32.2 | Certification of Principal Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 |
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SIGNATURE
Pursuant to the requirements 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.
Date: March 13, 2007
National Beverage Corp. (Registrant) |
||||
By: | /s/ Dean A. McCoy | |||
Dean A. McCoy | ||||
Senior Vice President and Chief Accounting Officer |
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