FIZZ's Net Income Dips Despite Sales Growth, Cash Position Strengthens

TL;DR

**FIZZ's cash pile is growing, but a slight dip in net income despite higher sales means they're fighting for every penny in a tough market – stay cautious.**

AI Summary

NATIONAL BEVERAGE CORP. (FIZZ) reported a slight increase in net sales to $330.5 million for the three fiscal months ended August 2, 2025, up from $329.5 million in the prior year period. However, net income decreased to $55.8 million, down from $56.8 million in the same period last year. The company's cash and cash equivalents significantly increased to $249.8 million as of August 2, 2025, compared to $193.8 million as of May 3, 2025. Operating income saw a modest rise to $70.8 million from $69.5 million year-over-year. Key business changes include an increase in marketing costs to $13.6 million from $11.5 million, reflecting increased promotional activities. The company also recognized a net gain of $4.2 million from cash flow hedges, a significant improvement from a $6.1 million loss in the prior year, partially mitigating raw material cost exposure. Risks include potential volatility in raw material costs, specifically aluminum, despite hedging strategies. The strategic outlook focuses on managing costs and leveraging marketing to drive sales in a competitive beverage market.

Why It Matters

For investors, FIZZ's ability to grow sales slightly while net income dipped suggests margin pressures or increased operating expenses, which warrants closer scrutiny. The substantial increase in cash and cash equivalents to $249.8 million provides financial flexibility, potentially for future dividends or strategic investments, impacting shareholder returns. Employees might see continued stability given the consistent operating income, but the competitive beverage market demands ongoing innovation. Customers will likely continue to see marketing efforts for FIZZ's diverse portfolio, including sparkling waters and energy drinks, as the company increased marketing spend to $13.6 million. The broader market will observe how FIZZ navigates commodity price volatility and competitive pressures, especially with its hedging strategies for aluminum costs.

Risk Assessment

Risk Level: medium — The risk level is medium due to the slight decline in net income from $56.8 million to $55.8 million despite an increase in net sales, indicating potential margin compression or rising costs. Additionally, the company's reliance on derivative financial instruments to mitigate exposure to aluminum costs, with a notional amount of $39.1 million in outstanding swap contracts, introduces counterparty risk and the risk of ineffective hedging strategies, as evidenced by a $6.1 million loss from cash flow hedges in the prior year period.

Analyst Insight

Investors should monitor FIZZ's gross profit margins and selling, general, and administrative expenses closely in upcoming quarters to assess cost control effectiveness. The significant cash balance of $249.8 million suggests potential for shareholder returns, so investors should look for announcements regarding dividends or share buybacks.

Financial Highlights

revenue

$330.5M

operating Margin

21.4%

total Assets

$737.8M

net Income

$55.8M

eps

$0.60

gross Margin

38.0%

cash Position

$249.8M

revenue Growth

+0.3%

Key Numbers

• $330.5M — Net Sales (Increased from $329.5M in prior year period)
• $55.8M — Net Income (Decreased from $56.8M in prior year period)
• $249.8M — Cash and Cash Equivalents (Increased from $193.8M as of May 3, 2025)
• $70.8M — Operating Income (Increased from $69.5M in prior year period)
• $13.6M — Marketing Costs (Increased from $11.5M in prior year period)
• $4.2M — Net Change to AOCI from Cash Flow Hedges (Improved from a $(6.1)M loss in prior year period)
• 93,620,246 — Common Shares Outstanding (As of September 9, 2025)
• $0.60 — Diluted EPS (Decreased from $0.61 in prior year period)

Key Players & Entities

• NATIONAL BEVERAGE CORP. (company) — registrant
• FIZZ (company) — trading symbol
• Corporate Management Advisors, Inc. (company) — related party receiving management fees
• $330.5 million (dollar_amount) — net sales for three fiscal months ended August 2, 2025
• $55.8 million (dollar_amount) — net income for three fiscal months ended August 2, 2025
• $249.8 million (dollar_amount) — cash and cash equivalents as of August 2, 2025
• $13.6 million (dollar_amount) — marketing costs for three fiscal months ended August 2, 2025
• $4.2 million (dollar_amount) — net change to AOCI from cash flow hedges for three fiscal months ended August 2, 2025
• $39.1 million (dollar_amount) — notional amount of outstanding aluminum swap contracts as of August 2, 2025
• NASDAQ Global Select Market (regulator) — exchange where common stock is registered

FAQ

Risk Factors

• Raw Material Cost Volatility [medium — financial]: The company faces potential volatility in raw material costs, particularly aluminum, which is a key component for beverage cans. Despite employing cash flow hedges, which improved from a $6.1 million loss to a $4.2 million gain in the reported period, significant price fluctuations could still impact profitability.
• Competitive Beverage Market [medium — market]: National Beverage operates in a highly competitive beverage market. The company's strategy focuses on leveraging marketing and product innovation to drive sales, but increased marketing costs to $13.6 million from $11.5 million indicate the need for sustained investment to maintain market share against larger competitors.
• Supply Chain Disruptions [low — operational]: The company's operating results are affected by factors including supply chain disruptions. While not detailed with specific impacts in this filing, such disruptions can affect the availability and cost of raw materials and finished goods, potentially impacting sales and profitability.

Industry Context

National Beverage Corp. operates in the dynamic beverage industry, focusing on healthier alternatives like sparkling waters and juices, alongside traditional carbonated soft drinks. The market is characterized by a shift in consumer preferences towards healthier options and unique flavor profiles. The company competes with larger, established players by emphasizing innovation, creative marketing, and faster response to trends.

Regulatory Implications

The company's operations are subject to standard food and beverage industry regulations concerning product safety, labeling, and marketing. While no specific new regulatory risks are highlighted in this filing, ongoing compliance with these regulations is essential for continued market access and consumer trust.

What Investors Should Do

1. Monitor raw material costs, especially aluminum, and the effectiveness of hedging strategies.
2. Evaluate the impact of increased marketing spend on sales growth and market share.
3. Assess the company's ability to sustain net income growth despite flat revenue.

Glossary

Cash flow hedges

Financial instruments used to manage the risk of fluctuations in cash flows related to future transactions, such as the purchase of raw materials. Gains or losses on these hedges are recognized in earnings. (The company recognized a net gain of $4.2 million from cash flow hedges in the period, an improvement from a $6.1 million loss, indicating effective management of raw material cost exposure.)

Accumulated other comprehensive income

A component of shareholders' equity that includes unrealized gains and losses on certain investments and foreign currency transactions, as well as the effective portion of gains and losses on cash flow hedges. (This account increased to $9.8 million from $5.6 million, largely due to the positive impact of cash flow hedges.)

Operating lease right-of-use assets

Assets recognized under accounting standards for leases, representing the right to use an underlying asset for the lease term. (These assets decreased slightly from $70.3 million to $68.1 million, reflecting ongoing lease payments.)

Year-Over-Year Comparison

Compared to the prior year period, National Beverage Corp. reported a slight increase in net sales to $330.5 million, up from $329.5 million. However, net income experienced a modest decline to $55.8 million from $56.8 million, and diluted EPS decreased to $0.60 from $0.61. Operating income saw a slight improvement to $70.8 million from $69.5 million, supported by a significant positive swing in cash flow hedge results, which moved from a $6.1 million loss to a $4.2 million gain.

Key Financial Figures

• $1.0 million — first quarter of fiscal 2026 increased $1.0 million to $330.5 million compared to $329.5 mi
• $330.5 million — f fiscal 2026 increased $1.0 million to $330.5 million compared to $329.5 million for the firs
• $329.5 million — 0 million to $330.5 million compared to $329.5 million for the first quarter of fiscal 2025. T
• $125.5 million — rst quarter of fiscal 2026 increased to $125.5 million compared to $122.4 million for the firs
• $122.4 million — increased to $125.5 million compared to $122.4 million for the first quarter of fiscal 2025. T

Filing Documents

• fizz20250802_10q.htm (10-Q) — 482KB
• ex_859299.htm (EX-31.1) — 15KB
• ex_859298.htm (EX-31.2) — 15KB
• ex_859297.htm (EX-32.1) — 4KB
• ex_859296.htm (EX-32.2) — 4KB
• 0001437749-25-028856.txt ( ) — 2760KB
• fizz-20250802.xsd (EX-101.SCH) — 23KB
• fizz-20250802_cal.xml (EX-101.CAL) — 38KB
• fizz-20250802_def.xml (EX-101.DEF) — 175KB
• fizz-20250802_lab.xml (EX-101.LAB) — 184KB
• fizz-20250802_pre.xml (EX-101.PRE) — 199KB
• fizz20250802_10q_htm.xml (XML) — 230KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Page Condensed Consolidated Balance Sheets as of August 2, 2025 and May 3, 2025 3 Condensed Consolidated Statements of Income for the Three Fiscal Months Ended August 2, 2025 and July 27, 2024 4 Condensed Consolidated Statements of Comprehensive Income for the Three Fiscal Months Ended August 2, 2025 and July 27, 2024 5 Condensed Consolidated Statements of Shareholders' Equity for the Three Fiscal Months Ended August 2, 2025 and July 27, 2024 6 Condensed Consolidated Statements of Cash Flows for the Three Fiscal Months Ended August 2, 2025 and July 27, 2024 7 Notes to Condensed Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 15

Controls and Procedures

Item 4. Controls and Procedures 15

- OTHER INFORMATION

PART II - OTHER INFORMATION

Risk Factors

Item 1A. Risk Factors 17

Other Information

Item 5. Other Information 17

Exhibits

Item 6. Exhibits 17 Signature 18 2 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS NATIONAL BEVERAGE CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share data) August 2, May 3, 2025 2025 Assets Current assets: Cash and cash equivalents $ 249,831 $ 193,835 Trade receivables, net 106,504 104,157 Inventories 93,916 85,109 Prepaid and other assets 25,875 23,827 Total current assets 476,126 406,928 Property, plant and equipment, net 173,398 175,586 Operating lease right-of-use assets, net 68,130 70,286 Goodwill 13,145 13,145 Intangible assets 1,615 1,615 Other assets 5,346 5,300 Total assets $ 737,760 $ 672,860 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 78,671 $ 82,448 Accrued liabilities 39,907 43,521 Operating lease liabilities 15,009 14,533 Income taxes payable 13,292 - Total current liabilities 146,879 140,502 Deferred income taxes, net 24,012 23,010 Operating lease liabilities 54,895 57,591 Other liabilities 7,841 7,758 Total liabilities 233,627 228,861 Commitments and contingencies Shareholders' equity: Preferred stock, $ 1 par value - 1,000,000 shares authorized Series C - 150,000 shares issued 150 150 Common stock, $ .01 par value - 200,000,000 shares authorized; 101,994,358 and 101,994,358 shares issued, respectively 1,020 1,020 Additional paid-in capital 43,843 43,708 Retained earnings 473,510 417,750 Accumulated other comprehensive income 9,843 5,604 Treasury stock - at cost: Series C preferred stock - 150,000 shares ( 5,100 ) ( 5,100 ) Common stock - 8,374,112 shares ( 19,133 ) ( 19,133 ) Total shareholders' equity 504,133 443,999 Total liabilities and shareholders' equity $ 737,760 $ 672,860 See accompanying Notes to Condensed Consolidated Financial Statements. 3 Table of Contents NATIONAL BEVERAGE CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share amounts)

MANAGEMENT ' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT ' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW National Beverage Corp. innovatively refreshes 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. The majority of our brands are geared to the active and health-conscious consumer including sparkling waters, energy drinks and juices. Our portfolio of Power+ Brands includes LaCroix sparkling water; Clear Fruit non-carbonated water beverages enhanced with fruit flavor; 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 including Shasta and Faygo, iconic brands whose consumer loyalty spans more than 135 years. 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. Certain of our beverages are also distributed on a limited basis in other countries and options to expand distribut

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