National Beverage (FIZZ) - 2025 Q2 - Quarterly Report

PART I Item 1. Financial Statements (Unaudited) This section presents National Beverage Corp.'s unaudited condensed consolidated financial statements, highlighting a $304.1 million special cash dividend's impact on cash and retained earnings Condensed Consolidated Balance Sheets Total assets decreased to $557.4 million, primarily due to a $214.2 million reduction in cash, with shareholders' equity also declining due to a large dividend payment Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Oct 26, 2024 | April 27, 2024 | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | $112,837 | $327,047 | ($214,210) | | Total current assets | $324,891 | $536,872 | ($211,981) | | Total Assets | $557,440 | $770,153 | ($212,713) | | Liabilities & Equity | | | | | Total liabilities | $197,296 | $210,641 | ($13,345) | | Retained earnings | $333,346 | $535,077 | ($201,731) | | Total Shareholders' Equity | $360,144 | $559,512 | ($199,368) | Condensed Consolidated Statements of Income Net sales decreased 3.0% for the quarter and 0.6% for the six months, while net income increased by 4.2% and 9.6% respectively, improving diluted EPS Three Months Ended Performance (in thousands, except per share data) | Metric | Q2 FY2025 (ended Oct 26, 2024) | Q2 FY2024 (ended Oct 28, 2023) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $291,202 | $300,074 | -3.0% | | Gross Profit | $109,351 | $107,858 | +1.4% | | Operating Income | $57,867 | $54,299 | +6.6% | | Net Income | $45,637 | $43,788 | +4.2% | | Diluted EPS | $0.49 | $0.47 | +4.3% | Six Months Ended Performance (in thousands, except per share data) | Metric | H1 FY2025 (ended Oct 26, 2024) | H1 FY2024 (ended Oct 28, 2023) | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $620,675 | $624,314 | -0.6% | | Gross Profit | $231,783 | $222,339 | +4.3% | | Operating Income | $127,382 | $117,404 | +8.5% | | Net Income | $102,417 | $93,419 | +9.6% | | Diluted EPS | $1.09 | $1.00 | +9.0% | Condensed Consolidated Statements of Shareholders' Equity Shareholders' equity significantly decreased to $360.1 million, primarily driven by a $304.1 million special cash dividend payment - A special cash dividend of $304.1 million was paid during the six-month period, significantly reducing retained earnings[15] Changes in Retained Earnings (Six Months Ended Oct 26, 2024, in thousands) | Description | Amount | | :--- | :--- | | Beginning Retained Earnings | $535,077 | | Net Income | $102,417 | | Common stock cash dividend | ($304,148) | | Ending Retained Earnings | $333,346 | Condensed Consolidated Statements of Cash Flows Cash and cash equivalents decreased by $214.2 million, primarily due to $303.7 million used in financing activities, largely from a $304.1 million special dividend Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended Oct 26, 2024 | Six Months Ended Oct 28, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $100,090 | $102,059 | | Net cash used in investing activities | ($10,609) | ($12,732) | | Net cash (used in) provided by financing activities | ($303,691) | $278 | | Net (Decrease) Increase in Cash | ($214,210) | $89,605 | - The primary use of cash in financing activities was a $304.1 million dividend payment on common stock[18] Notes to Condensed Consolidated Financial Statements Notes confirm consistent accounting policies, single segment operation, $150 million undrawn credit, and detail the $304.1 million special cash dividend paid in July 2024 - The Company operates as a single operating segment for financial reporting purposes[22] - The Company maintains unsecured revolving credit and loan facilities totaling $150 million, with no borrowings outstanding as of October 26, 2024[39][40] - On June 12, 2024, the board declared a special cash dividend of $3.25 per share, totaling $304.1 million, which was paid on July 24, 2024[46] - The company paid management fees of $6.2 million for the six months ended October 26, 2024, to CMA, a corporation owned by the Chairman and CEO[45] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 FY2025 net sales decline, improved gross margin, and a significant cash reduction from a $304.1 million special dividend, affirming sufficient liquidity Results of Operations Net sales decreased for both the quarter and six-month periods due to volume declines, but gross margin improved significantly due to lower costs and higher prices Q2 FY2025 vs Q2 FY2024 Performance | Metric | Change | | :--- | :--- | | Net Sales | -3.0% | | Case Volume | -4.6% | | Avg. Selling Price/Case | +2.2% | | Gross Margin | 37.6% (vs 35.9%) | H1 FY2025 vs H1 FY2024 Performance | Metric | Change | | :--- | :--- | | Net Sales | -0.6% | | Case Volume | -1.8% | | Avg. Selling Price/Case | +1.4% | | Gross Margin | 37.3% (vs 35.6%) | Liquidity and Financial Condition Cash decreased by $214.2 million due to a $304.1 million special dividend, impacting working capital and current ratio, though $150 million in credit facilities remain undrawn - The cash position decreased by $214.2 million in the first six months of fiscal 2025, mainly due to the $304.1 million special cash dividend paid in July 2024[65] - The company has $150 million in unsecured credit facilities with no outstanding borrowings as of October 28, 2024[64] - Working capital decreased to $196.8 million from $398.9 million, and the current ratio fell to 2.5 to 1 from 3.9 to 1, primarily due to the dividend payment[69] - Anticipated capital expenditures for fiscal 2025 are projected to be between $25 million and $30 million[67] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company states that there have been no material changes in its market risks since those disclosed in its Annual Report on Form 10-K for the fiscal year ended April 27, 2024 - There have been no material changes in market risks from those reported in the Annual Report on Form 10-K for the fiscal year ended April 27, 2024[70] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective[72] - There were no changes in internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[73] PART II - OTHER INFORMATION Item 1A. Risk Factors The company reports that there have been no material changes in its risk factors from those previously disclosed in its Annual Report on Form 10-K for the fiscal year ended April 27, 2024 - There have been no material changes in risk factors from those reported in the Annual Report on Form 10-K for the fiscal year ended April 27, 2024[77] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, which include a new credit agreement, certifications by the CEO and Principal Financial Officer as required by the Sarbanes-Oxley Act, and the financial statements formatted in iXBRL - Exhibits filed include a credit agreement dated September 10, 2024, CEO/CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, and iXBRL data files[78] Signature The report is duly signed on December 5, 2024, by George R. Bracken, the Executive Vice President – Finance and Principal Financial Officer of National Beverage Corp - The report was signed on December 5, 2024, by George R. Bracken, Executive Vice President – Finance (Principal Financial Officer)[81]