Business Context and Reporting Period
Company: National Beverage Corp. (FIZZ)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal Year ended May 2, 2026 (52 weeks)
Business Overview: National Beverage is a vertically integrated producer of sparkling waters, juices, energy drinks, and carbonated soft drinks. Its portfolio is divided into "Power+ Brands" (LaCroix, Everfresh, Rip It, Clear Fruit) and Carbonated Soft Drinks (Shasta, Faygo). The company operates 12 production facilities across the U.S. and utilizes a hybrid distribution system.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 |
|---|---|---|
| Net Sales | $1,180.6 million | $1,201.4 million |
| Gross Profit | $437.3 million | $443.9 million |
| Gross Margin | 37.0% | 37.0% |
| Operating Income | $230.1 million | $235.5 million |
| Net Income | $183.6 million | $186.8 million |
| Diluted EPS | $1.96 | $1.99 |
| Operating Cash Flow | $181.3 million | $206.7 million |
| Cash & Equivalents (End of Period) | $349.5 million | $193.8 million |
| Debt Outstanding | $0 | $0 |
| Available Credit Facilities | $150 million | $150 million |
Material Changes vs. Prior Period
- Revenue Decline: Net sales decreased 1.7% to $1,180.6 million. This was primarily driven by one fewer selling week in Fiscal 2026 compared to Fiscal 2025 (53 weeks). Case volume declined 6.7%, partially offset by a 5.2% increase in average selling price per case.
- Profitability: Net income decreased slightly to $183.6 million. Gross margin remained stable at 37.0% despite a 5.0% increase in average cost of sales per case due to higher packaging and ingredient costs.
- Liquidity Improvement: Cash and cash equivalents increased by $155.7 million to $349.5 million. This significant increase contrasts with Fiscal 2025, which saw a cash decrease largely due to a $304.1 million special dividend paid in the prior year.
- Working Capital: Working capital increased by $191.4 million to $457.8 million, driven by higher cash balances and inventory levels. Inventory turns decreased to 8.2 times from 8.7 times.
Guidance, Outlook, and Risks
- Capital Expenditures: Management anticipates Fiscal 2027 capital expenditures to be comparable to Fiscal 2026 spending of $25.1 million, focused on capacity expansion and sustainability.
- Dividend Policy: On July 1, 2026, the Board declared a special cash dividend of $3.25 per share, payable by July 30, 2026. This mirrors a similar dividend paid in Fiscal 2025.
- Share Repurchases: The company has an authorized program to repurchase 3.2 million shares. Approximately 1.9 million shares remain available for repurchase as of the filing date.
- Risk Factors:
- Raw Materials: Exposure to commodity price volatility (aluminum, resin, corn) and supply chain disruptions.
- Competition: Intense competition from larger beverage companies with greater resources.
- Regulatory: Potential for new taxes on sweetened beverages and environmental regulations.
- Weather: Seasonal sales dependence on summer weather patterns.
Investor Verification Checklist
- Volume vs. Price Mix: Verify the sustainability of the 5.2% price increase given the 6.7% volume decline and competitive landscape.
- Inventory Levels: Assess the impact of the decrease in inventory turns (8.2x vs 8.7x) and the $10.4 million increase in inventory on future working capital needs.
- Dividend Sustainability: Confirm the company's ability to fund recurring special dividends ($3.25/share) while maintaining capital expenditure plans.
- Cost Inflation: Monitor the trajectory of packaging and ingredient costs, which rose 5.0% per case, to ensure gross margins remain stable.
- Related Party Fees: Note the $11.8 million management fee paid to Corporate Management Advisors, Inc. (owned by the CEO) and its impact on operating expenses.