<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 26, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-14170
NATIONAL BEVERAGE CORP.
(Exact name of registrant as specified in its charter)
Delaware 59-2605822
------------ ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One North University Drive, Ft. Lauderdale, FL 33324
- - ---------------------------------------------- --------
(Address of principal executive offices) (Zip Code)
(954) 581-0922
--------------
(Registrant's 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 ( )
The number of shares of Registrant's common stock outstanding as of December 5,
1996 was 18,450,408.
<PAGE> 2
NATIONAL BEVERAGE CORP.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED OCTOBER 26, 1996
INDEX
PART I - FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of October 26, 1996 and April 27, 1996...................... 3
Condensed Consolidated Statements of Income
for the three months and six months ended October 26, 1996
and October 28, 1995........................................... 4
Condensed Consolidated Statement of Shareholders' Equity
for the six months ended October 26, 1996...................... 5
Condensed Consolidated Statements of Cash Flows
for the six months ended October 26, 1996
and October 28, 1995........................................... 6
Notes to Condensed Consolidated Financial Statements........... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................. 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings...................................... 15
Item 4. Submission of Matters to a Vote of Security Holders.... 15
Item 6. Exhibits and Reports on Form 8-K....................... 15
2
<PAGE> 3
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF OCTOBER 26, 1996 AND APRIL 27, 1996
(In thousands, except share amounts)
<TABLE>
<CAPTION>
(Unaudited)
October 26, April 27,
1996 1996
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 27,171 $ 35,231
Trade receivables (net of allowance of $688 at October 26, 1996 29,387 33,726
and $694 at April 27, 1996)
Inventories 26,448 22,977
Deferred income taxes 2,617 3,630
Prepaid and other 4,214 6,056
---------- ----------
Total current assets 89,837 101,620
PROPERTY - NET 56,080 56,226
INTANGIBLE ASSETS - NET 16,353 15,207
OTHER ASSETS 3,787 4,507
---------- ----------
TOTAL $ 166,057 $ 177,560
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 25,234 $ 38,201
Accrued liabilities 16,988 17,534
Income taxes payable 2,079 1,376
Current portion of long-term debt 717 929
---------- ----------
Total current liabilities 45,018 58,040
LONG-TERM DEBT 57,191 62,568
DEFERRED INCOME TAXES 7,032 6,805
ACCRUED INSURANCE - NONCURRENT 3,168 3,095
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, 7% cumulative, $1 par value, aggregate liquidation
preference of $15,000 (Authorized 1,000,000 shares; Issued 150,000 150 150
shares; no shares outstanding)
Common stock, $.01 par value (Authorized 50,000,000 shares; Issued:
21,981,132 shares in October 1996; 12,741,488 shares in April 1996; Out-
standing: 18,450,408 shares in October 1996; 9,310,764 shares in April 1996) 220 127
Additional paid-in capital 14,904 14,873
Retained earnings 51,855 44,178
Treasury stock - at cost
Preferred stock (5,100) (5,100)
Common stock (8,381) (7,176)
---------- ----------
Total shareholders' equity 53,648 47,052
---------- ----------
TOTAL $ 166,057 $ 177,560
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 26, 1996 AND OCTOBER 28,
1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended Six Months Ended
1996 1995 1996 1995
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales $ 94,968 $ 84,564 $ 205,172 $ 186,224
Cost of Sales 67,564 63,316 145,475 139,575
-------- -------- --------- ---------
Gross Profit 27,404 21,248 59,697 46,649
Selling, General and Administrative Expenses 22,199 16,737 45,395 34,136
Interest Expense 1,268 1,304 2,716 2,603
Other Expense (Income) - Net (233) (310) (600) (663)
-------- -------- --------- ---------
Income before Income Taxes 4,170 3,517 12,186 10,573
Provision for Income Taxes 1,543 1,336 4,509 4,017
-------- -------- --------- ---------
Net Income $ 2,627 $ 2,181 $ 7,677 $ 6,556
======== ======== ========= =========
Earnings Applicable to Common Shares $ 2,627 $ 1,919 $ 7,677 $ 6,031
======== ======== ========= =========
Earnings per Common Share $ 0.14 $ 0.10 $ 0.41 $ 0.32
======== ======== ========= =========
Average Shares Outstanding 19,010 18,600 18,935 18,600
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED OCTOBER 26, 1996
(In thousands, except share amounts)
<TABLE>
<CAPTION>
(Unaudited)
Shares Amount
---------- --------
<S> <C> <C>
PREFERRED STOCK
Beginning and end of period 150,000 $ 150
========== ========
COMMON STOCK
Beginning of period 12,741,488 $ 127
Stock options exercised 14,440 1
2 for 1 stock split 9,225,204 92
---------- --------
End of period 21,981,132 $ 220
========== ========
ADDITIONAL PAID-IN CAPITAL
Beginning of period $ 14,873
Stock options exercised 123
2 for 1 stock split (92)
--------
End of period $ 14,904
========
RETAINED EARNINGS
Beginning of period $ 44,178
Net income 7,677
--------
End of period $ 51,855
========
TREASURY STOCK-PREFERRED
Beginning and end of period 150,000 $ (5,100)
========== ========
TREASURY STOCK-COMMON
Beginning of period 3,430,724 $ (7,176)
Purchase of common stock 100,000 (1,205)
---------- --------
End of period 3,530,724 $ (8,381)
========== ========
TOTAL SHAREHOLDERS' EQUITY $ 53,648
========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 26, 1996 AND OCTOBER 28, 1995
(In thousands)
<TABLE>
<CAPTION>
(Unaudited)
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 7,677 $ 6,556
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 3,722 3,500
Deferred income tax provision (benefit) 1,240 (450)
Provision for doubtful accounts 56 9
Loss on sale of property 26 4
Changes in:
Trade receivables 4,886 6,947
Inventories (2,390) (7,883)
Prepaid and other assets (342) (450)
Accounts payable (12,930) (14,020)
Other liabilities (573) 1,446
------------ ------------
Net cash provided by (used in) operating activities 1,372 (4,341)
------------ ------------
INVESTING ACTIVITIES:
Property additions (2,892) (2,903)
Other, net 220 (568)
------------ ------------
Net cash used in investing activities (2,672) (3,471)
------------ ------------
FINANCING ACTIVITIES:
Debt borrowings 12,700 ---
Debt repayments (18,289) (101)
Preferred stock dividends paid --- (1,050)
Purchase of common stock (1,205) ---
Proceeds from stock options exercised 34 ---
------------ ------------
Net cash used in financing activities (6,760) (1,151)
------------ ------------
NET DECREASE IN CASH AND EQUIVALENTS (8,060) (8,963)
CASH AND EQUIVALENTS-BEGINNING OF YEAR 35,231 33,487
------------ ------------
CASH AND EQUIVALENTS-END OF PERIOD $ 27,171 $ 24,524
============ ============
OTHER CASH FLOW INFORMATION:
Interest paid $ 2,743 $ 2,614
Income taxes paid 2,144 3,018
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE> 7
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 26, 1996
(UNAUDITED)
- - --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
National Beverage Corp. ("NBC") and its subsidiaries (the "Company") have been
prepared in accordance with generally accepted accounting principles for
interim financial information. The financial statements do not include all
information and notes required by generally accepted accounting principles for
complete financial statements. Except for the matters disclosed, however,
there has been no material change in the information disclosed in the notes to
consolidated financial statements for the fiscal year ended April 27, 1996. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) 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. Certain prior year
amounts have been reclassified to conform to the current year presentation.
2. INVENTORIES
Inventories, which are stated at the lower of first-in, first-out cost or
market, are comprised of the following:
<TABLE>
<CAPTION>
(In thousands)
October 26, 1996 April 27, 1996
---------------- --------------
<S> <C> <C>
Finished goods $12,592 $11,225
Raw materials and packaging supplies 13,856 11,752
------- -------
Total $26,448 $22,977
======= =======
</TABLE>
7
<PAGE> 8
3. PROPERTY
Property consists of the following:
<TABLE>
<CAPTION>
(In thousands)
October 26, 1996 April 27, 1996
---------------- --------------
<S> <C> <C>
Land $ 9,959 $ 9,959
Buildings and improvements 30,654 30,654
Machinery and equipment 72,273 69,501
-------- --------
Total 112,886 110,114
Less accumulated depreciation (56,806) (53,888)
-------- --------
Property-net $ 56,080 $ 56,226
======== ========
</TABLE>
Depreciation expense was $1,519,000 and $3,034,000 for the three and six month
periods ended October 26, 1996, respectively, and $1,593,000 and $3,188,000 for
the three and six month periods ended October 28, 1995, respectively.
4. DEBT
Debt consists of the following:
<TABLE>
<CAPTION>
(In thousands)
October 26, 1996 April 27, 1996
---------------- --------------
<S> <C> <C>
9.95% Senior Notes (see below) $41,667 $41,667
Credit Facility (see below) 6,400 17,783
Term Loan Facility (see below) 8,300 2,000
Other (including capital leases) 1,541 2,047
------- -------
Total 57,908 63,497
Less current portion (717) (929)
------- -------
Long-term portion $57,191 $62,568
======= =======
</TABLE>
In 1992, a subsidiary of the Company issued 9.95% unsecured senior notes in the
original principal amount of $50 million due November 1, 2000 (the "Senior
Notes") payable in six equal annual principal installments, the first of which
was paid on November 1, 1995. Additionally, the subsidiary has a $25 million
unsecured revolving credit facility (the "Credit Facility") with a bank. The
Credit Facility expires August 31, 1998, and bears interest at 1/2% below the
bank's reference rate or 1% above LIBOR, at the subsidiary's election. In
February 1996, the subsidiary entered into a $16.6 million unsecured term loan
facility ("Term Loan Facility") with a bank expiring on October 29, 1997. The
Term Loan Facility bears interest at the bank's reference rate or 1 1/4% above
LIBOR, at the subsidiary's election.
8
<PAGE> 9
The Company intends to utilize its existing long-term credit facilities to fund
the next principal payment due on its Senior Notes.
Certain of the Company's debt agreements contain restrictions which require the
subsidiary to maintain certain financial ratios and minimum net worth, and
limit the subsidiary with respect to incurring certain additional indebtedness,
paying cash dividends and making certain loans, advances or other investments.
At October 26, 1996, net assets of the subsidiary totaling approximately $42
million were restricted from distribution and the Company was in compliance with
all loan covenants and restrictions. Such restrictions are not expected to
have a material adverse impact on the operations of the Company.
5. COMMITMENTS AND CONTINGENCIES
Albert H. Kahn v. Nick A. Caporella, et al., Civil Action No. 11890 was filed
in December 1990 by a shareholder of Burnup & Sims Inc. ("BSI"), now MasTec,
Inc., in the Court of Chancery of the State of Delaware in and for New Castle
County against NBC, the members of the Board of Directors of BSI and against
BSI. In May 1993, plaintiff amended its class action and shareholder
derivative complaint (the "Amended Complaint"). The class action claims
allege, among other things, that the Board of Directors of BSI, and NBC, as its
largest shareholder, breached their respective fiduciary duties in approving
(i) the dividend by BSI of its shares of NBC common stock (the "Distribution")
and (ii) the exchange of certain shares of BSI's common stock held by NBC for
certain indebtedness of NBC held by BSI (the "Exchange"; the Distribution and
the Exchange are hereafter referred to as the "1991 Transaction"), in allegedly
placing the interests of NBC ahead of the interests of other shareholders of
BSI. The derivative action claims allege, among other things, that the Board
of Directors of BSI breached their fiduciary duties by approving executive
officer compensation arrangements, by financing NBC's operations on a current
basis, and by permitting the interests of BSI to be subordinated to those of
NBC. In the lawsuit, plaintiff seeks to rescind the 1991 Transaction and to
recover unspecified damages. The defendants, including the Company, have moved
to dismiss the actions for failure to make a demand and state a claim upon
which relief can be granted. The motion is still pending.
In November 1993, plaintiff filed a class action and derivative complaint,
Civil Action No. 13248 (the "1993 Complaint") against the Company, BSI, the
members of the Board of Directors of BSI, and certain other defendants
(referred to as "Other Defendants"). In December 1993, plaintiff amended the
1993 Complaint (the "1993 Amended Complaint"). The 1993 Amended Complaint
alleges, among other things, that the Board of Directors of BSI, and NBC, as
BSI's largest stockholder, breached their respective fiduciary duties by
approving an agreement dated October 15, 1993, as amended, between BSI and the
Other Defendants (the "Acquisition Agreement") and the exchange of 3,153,847
shares of BSI common stock owned by the Company for certain indebtedness owed
to BSI by the Company (the "Redemption") which, according to the allegations of
the 1993 Complaint, benefits the President and Chief Executive Officer of NBC
at the expense of BSI's stockholders. On November 29, 1993, plaintiff filed a
motion for an order preliminary and permanently enjoining the transactions
under the Acquisition Agreement and the Redemption. On March 7, 1994, the
court heard oral arguments
9
<PAGE> 10
with respect to plaintiff's motion to enjoin the transactions and, on March 10,
1994, the court denied plaintiff's request for injunctive relief finding that
plaintiff had not established a likelihood of success on the merits and that,
in any event, the equities did not favor the imposition of injunctive relief.
The Company believes that the allegations in the complaint, the Amended
Complaint, the 1993 Complaint and the 1993 Amended Complaint are without merit,
and intends to vigorously defend these actions.
The Company is a defendant in various other lawsuits arising in the ordinary
course of business.
In the opinion of management, after taking into account provisions recorded for
legal claims and related costs, the ultimate disposition of the foregoing
lawsuits will not have a material adverse effect on the Company's consolidated
financial position or result of operations.
In the ordinary course of its business, the Company enters into commitments for
the supply of certain raw materials, none of which are material to the
Company's financial position.
6. CAPITAL STOCK
In June 1996, the Company purchased 100,000 shares of common stock on the open
market. Such shares have been classified as held in treasury.
On October 25, 1996, the Company paid a 2 for 1 stock split effected as a 100%
stock dividend to its shareholders of record on September 9, 1996. Average
shares outstanding, stock option data, and per share data presented in these
financial statements have been adjusted for the effects of the dividend.
During the six months ended October 26, 1996, the Company granted options to
purchase 192,700 shares of common stock at an exercise price of $5 per share
(market value at the date of grant) and there were 28,880 option shares
exercised at an exercise price ranging from $.63 to $2.10 per share. At
October 26, 1996, options to purchase 1,129,720 shares at a weighted average
exercise price of $2.38 (ranging from $.13 to $5.00 per share) were
outstanding and 449,600 stock-based awards were available for future grant.
7. ACQUISITIONS
In October 1996, the Company concluded its acquisition of substantially all of
the assets of a company which developed and marketed LaCroix (r) water and
Cascadia (r) branded products. The acquisition of such assets has been
accounted for using the purchase method of accounting and, accordingly, the
purchase price has been preliminarily allocated to the assets acquired based
upon their estimated fair values at the date of acquisition. Operating results
of the acquired business, which have been included in the consolidated statement
of income from the date of acquisition, do not materially impact results for
the periods presented. Pro forma effects of the acquisition are not material to
the Company's financial position or results of operations.
10
<PAGE> 11
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
National Beverage Corp. ("NBC") and its subsidiaries (the "Company") produce,
manufacture, market and distribute its full line of branded cola and
multi-flavored soft drinks, juice products, and bottled water under the brand
names Shasta (r), Faygo (r), Everfresh (r), Big Shot (r), nuAnce (r), Body
Works (r), a Sante (r), Spree (r), Creepy Coolers (tm), and St. Nick's (tm).
Substantially all of NBC's brands are produced in its fourteen manufacturing
facilities which are strategically located throughout the continental United
States. NBC also develops and produces branded soft drinks for retail grocery
chains, warehouse clubs, mass merchandisers and wholesalers ("allied brands")
as well as soft drinks for other beverage companies.
The Company intends to further its growth by increasing its brand awareness
through greater retailer sponsorship and entering into strategic alliances with
national and regional retailers to supply both Company branded and allied
branded soft drinks ("strategic alliances"). The Company believes that the
strength of its regional brands and its manufacturing facilities position the
Company as one of the leading single-source suppliers for both value-priced,
flavored soft-drinks, such as Shasta (r) and Faygo (r), as well as allied
branded soft drinks in multiple flavors and packaging throughout the United
States. The Company also plans to grow its revenues and brands by acquiring
other regional beverage businesses that meet its strategic and financial
objectives.
Industry soft drink sales are seasonal with the highest volume typically
realized during the summer months. Additionally, the Company's 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.
RESULTS OF OPERATIONS
Three Months Ended October 26, 1996 (second quarter of fiscal year 1997)
compared to Three Months Ended October 28, 1995 (second quarter of fiscal year
1996)
Net sales for the quarter ended October 26, 1996 increased 12% to $95 million
from $84.6 million for the second quarter of the prior year. This increase is
principally due to higher unit selling prices attributable to reduced
promotional price discounting, increased unit volume of the Company's brands,
and increased sales of materials to bottling customers and others. Unit volume
also reflects increases due to the acquisition of Everfresh Beverages in the
fourth quarter of fiscal 1996 and the Company's strategic alliance programs
net of reduced sales of lower priced, non-branded products.
11
<PAGE> 12
Gross profit increased to 28.9% of net sales for the second quarter of fiscal
1997 from 25.1% of net sales for the second quarter of fiscal 1996. This
increase is due to decreases in certain packaging costs and higher margins
attained on the Company's juice products as well as the higher unit pricing
noted above. The Company believes that inflationary trends do not have a
significant impact on operating results since fluctuations in raw material
costs are typically influenced more by commodity market conditions than
inflation. Although there can be no assurances as to future predictability,
the Company does not expect any significant increases in raw material costs in
fiscal 1997 and has generally been successful in passing through cost increases
to maintain profit margins.
Selling, general and administrative expenses approximated 23.4% and 19.8% of
net sales for the second quarter of fiscal 1997 and 1996, respectively.
Increased marketing and advertising costs relative to the Company's contractual
commitments with its strategic alliance partners, expanded in-store and other
promotional programs, increased shipping expenses, and increased administrative
costs relative to acquired companies accounted for this change.
Interest expense decreased slightly during the second quarter as compared to
the prior year due to a decline in the principal amount due on the Company's
Senior Notes. See Note 4 of Notes to Condensed Consolidated Financial
Statements.
The effective rate for income taxes, based upon estimated annual income tax
rates, approximated 37% and 38% of income before taxes for the three months
ended October 26, 1996 and October 28, 1995, respectively. The difference
between the effective rate and the federal statutory rate of 35% includes
amortization of non-deductible goodwill and other intangibles, state income
taxes and other non-deductible expenses.
Net income increased 20% to $2.6 million or $.14 per share for the three months
ended October 26, 1996 from $2.2 million or $.10 per share for the three months
ended October 28, 1995. Earnings applicable to common shares increased to
$2.6 million for the quarter ended October 26, 1996 from $1.9 million for the
comparable quarter in the prior year. The second quarter of fiscal 1996
includes dividends of approximately $ .3 million relative to the Company's
preferred stock, which was repurchased in the fourth quarter of fiscal 1996.
Six Months Ended October 26, 1996 (first six months of fiscal year 1997)
compared to Six Months Ended October 28, 1995 (first six months of fiscal year
1996)
Net sales for the six months ended October 26, 1996 increased approximately 10%
when compared to the six months ended October 28, 1995. This increase is
principally due to the acquisition of Everfresh Beverages in the fourth quarter
of fiscal 1996 and the higher unit selling prices and increased unit volume of
branded cases noted above, net of reduced sales of lower priced, non-branded
products.
12
<PAGE> 13
Gross profit increased to 29.1% of net sales for the six months ended October
26, 1996 from 25.0% of net sales for the six months ended October 28, 1995 due
to decreases in certain packaging costs, higher margins attained on the
Company's juice products and the effect of increased case volume and related
efficiencies.
An increase in selling, general and administrative expenses to 22.1% of net
sales for the six months ended October 26, 1996 from 18.3% of net sales for
the six months ended October 28, 1995 is primarily due to increased
advertising, marketing and promotional activities, increased shipping costs,
and increased administrative costs relative to acquired companies.
The effective tax rate for federal and state income taxes for the first six
months of fiscal years 1997 and 1996 approximated 37% and 38%, respectively,
and are based upon estimated annual effective income tax rates.
Net income increased 17% to $7.7 million or $.41 per share for the six months
ended October 26, 1996 from $6.6 million or $.32 per share for the six months
ended October 28, 1995. Earnings applicable to common shares increased to
$7.7 million for the six months ended October 26, 1996 from $6.0 million for
the comparable quarter in the prior year. The six month period of fiscal 1996
includes dividends of approximately $ .5 million relative to the Company's
preferred stock, which was repurchased in the fourth quarter of fiscal 1996
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
October 26, 1996 compared to April 27, 1996
The Company's cash position decreased approximately $8.1 million during the six
months ended October 26, 1996 due primarily to reduced borrowing under the
Company's bank credit lines and typical seasonal increases in working capital,
partially offset by cash generated by operations for the period. Cash provided
by operating activities of $1.4 million was comprised of net income of $7.7
million plus non-cash charges of $5.0 million less cash used for other
working capital requirements based upon seasonal business requirements of
$11.3 million. Cash of $2.7 million was used in investing activities,
principally for capital expenditures. Cash of $6.8 million was used in
financing activities, principally for net debt repayments of $5.6 million and
the Company's $1.2 million repurchase of its common stock. The Company's
ratio of current assets to current liabilities approximated 2.0 to 1 and
1.8 to 1 at October 26, 1996 and April 27, 1996, respectively, and working
capital increased to $44.8 million from $43.6 million for those same periods.
The Company believes that its cash and equivalents, together with funds
generated from operations and borrowing capabilities, will be sufficient to
meet its operating cash requirements in the foreseeable future. Although the
Company is evaluating various capital projects to expand capacity at certain
manufacturing facilities, the Company currently has no material commitments for
capital expenditures requiring cash outlays.
13
<PAGE> 14
At October 26, 1996, the Company had outstanding long-term debt of $57.2
million. See Note 4 of Notes to Condensed Consolidated Financial Statements.
Certain debt agreements contain restrictions which require a subsidiary to
maintain certain financial ratios and minimum net worth, and limit the
subsidiary with respect to incurring certain additional indebtedness, paying
cash dividends and making certain loans, advances or other investments. At
October 26, 1996, net assets of the subsidiary of approximately $42 million
were restricted from distribution. Cash balances of the Registrant, when
combined with funds available from its subsidiary, provide sufficient
liquidity to allow the Registrant to meet its current and expected cash
obligations. The Company was in compliance with all loan covenants and
restrictions at October 26, 1996. Such restrictions are not expected to have a
material adverse impact on the operations of the Company.
FORWARD LOOKING STATEMENTS
Certain statements in this Quarterly Report of Form 10-Q (this "Form 10-Q"),
including statements under "Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations," 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 express or implied by such forward-looking
statements. Such factors include, but are not limited to, the following:
general economic and business conditions; competition; success of the Company's
strategic alliance objective; fluctuations in the costs of raw materials;
continued retailer support of the Company's brands; changes in consumer
preferences; changes in business strategy or development plans; government
regulations; regional weather conditions; and other factors referenced in this
Form 10-Q. The Company will not undertake and specifically declines any
obligation to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
14
<PAGE> 15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 5 of Notes to Condensed Consolidated Financial Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders held on October 25, 1996, Nick
A. Caporella was elected to the Board of Directors for a three-year term;
8,875,680 votes were cast for his election and 11,990 votes were withheld.
In addition, the Company's restated Certificate of Incorporation was amended to
increase the number of authorized shares of common stock that the Company may
issue from 20,000,000 to 50,000,000 pursuant to written consents of
shareholders dated October 10, 1996. Under Delaware law, the amendment became
effective upon receipt of consents approving the amendment representing a
majority of the outstanding shares of common stock of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: 27 Financial Data Schedule (For SEC Use Only)
(b) Reports on Form 8-K: None
15
<PAGE> 16
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: December 10, 1996
NATIONAL BEVERAGE CORP.
(Registrant)
By: \s\ Dean A. McCoy
------------------------
Dean A. McCoy
Vice President - Controller
(On behalf of the Registrant and
as Principal Accounting Officer)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF THE FILER FOR THE PERIOD ENDED OCTOBER 26,
1996 INCLUDED IN ITS QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
OCTOBER 26, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-03-1997
<PERIOD-END> OCT-26-1996
<CASH> 27,171
<SECURITIES> 0
<RECEIVABLES> 30,075
<ALLOWANCES> 688
<INVENTORY> 26,448
<CURRENT-ASSETS> 89,837
<PP&E> 112,886
<DEPRECIATION> 56,806
<TOTAL-ASSETS> 166,057
<CURRENT-LIABILITIES> 45,018
<BONDS> 57,191
0
150
<COMMON> 220
<OTHER-SE> 53,278
<TOTAL-LIABILITY-AND-EQUITY> 166,057
<SALES> 205,172
<TOTAL-REVENUES> 205,172
<CGS> 145,475
<TOTAL-COSTS> 145,475
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,716
<INCOME-PRETAX> 12,186
<INCOME-TAX> 4,509
<INCOME-CONTINUING> 7,677
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,677
<EPS-PRIMARY> .41
<EPS-DILUTED> 0
</TABLE>
