10-Q
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
For the quarterly period ended January 31, 2009
Commission file number 1-14170
NATIONAL BEVERAGE CORP.
(Exact name of registrant as specified in its charter)
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Delaware
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59-2605822 |
(State of incorporation)
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(I.R.S. Employer Identification No.) |
8100 SW Tenth Street, Suite 4000, Ft. Lauderdale, FL 33324
(Address of principal executive offices including zip code)
(954) 581-0922
(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, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o
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Accelerated
filer x
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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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 6, 2009 was 46,003,374.
NATIONAL BEVERAGE CORP.
QUARTERLY REPORT ON FORM 10-Q
INDEX
2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JANUARY 31, 2009 AND MAY 3, 2008
(In thousands, except share amounts)
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(Unaudited) |
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January 31, |
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May 3, |
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2009 |
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2008 |
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Assets |
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Current assets: |
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Cash and equivalents |
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$ |
74,972 |
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$ |
51,497 |
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Marketable securities |
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3,000 |
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Trade receivables net of allowances of $349 ($266 at May 3, 2008) |
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43,632 |
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49,186 |
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Inventories |
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38,927 |
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38,754 |
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Deferred income taxes net |
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2,919 |
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2,895 |
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Prepaid and other assets |
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8,393 |
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12,009 |
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Total current assets |
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168,843 |
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157,341 |
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Property net |
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54,801 |
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57,639 |
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Goodwill |
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13,145 |
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13,145 |
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Intangible assets net |
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1,861 |
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1,899 |
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Other assets |
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8,559 |
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9,098 |
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$ |
247,209 |
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$ |
239,122 |
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Liabilities and Shareholders Equity |
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Current liabilities: |
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Accounts payable |
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$ |
39,058 |
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$ |
49,803 |
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Accrued liabilities |
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17,814 |
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17,965 |
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Income taxes payable |
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190 |
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177 |
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Total current liabilities |
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57,062 |
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67,945 |
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Deferred income taxes net |
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16,873 |
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16,624 |
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Income tax liability |
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3,541 |
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3,166 |
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Other liabilities |
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6,696 |
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6,762 |
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Shareholders equity: |
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Preferred stock, 7% cumulative, $1 par value - 1,000,000 shares
authorized; 150,000 shares issued; no shares outstanding |
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150 |
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150 |
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Common stock, $.01 par value - 75,000,000 shares authorized;
50,036,158 shares issued (49,982,838 shares at May 3, 2008) |
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500 |
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500 |
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Additional paid-in capital |
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27,032 |
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26,508 |
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Retained earnings |
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153,355 |
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135,467 |
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Treasury stock at cost: |
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Preferred stock - 150,000 shares |
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(5,100 |
) |
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(5,100 |
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Common stock - 4,032,784 shares |
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(12,900 |
) |
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(12,900 |
) |
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Total shareholders equity |
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163,037 |
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144,625 |
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$ |
247,209 |
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$ |
239,122 |
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See accompanying Notes to Condensed Consolidated Financial Statements.
3
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 31, 2009
AND JANUARY 26, 2008
(In thousands, except per share amounts)
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(Unaudited) |
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Three Months Ended |
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Nine Months Ended |
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2009 |
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2008 |
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2009 |
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2008 |
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Net sales |
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$ |
129,430 |
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$ |
123,182 |
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$ |
426,732 |
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$ |
418,474 |
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Cost of sales |
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92,308 |
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85,513 |
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301,037 |
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289,889 |
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Gross profit |
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37,122 |
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37,669 |
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125,695 |
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128,585 |
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Selling, general and administrative expenses |
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31,924 |
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32,793 |
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98,999 |
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103,223 |
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Interest expense |
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28 |
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26 |
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83 |
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77 |
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Other income net |
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662 |
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194 |
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1,425 |
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941 |
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Income before income taxes |
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5,832 |
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5,044 |
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28,038 |
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26,226 |
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Provision for income taxes |
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2,178 |
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1,790 |
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10,150 |
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9,310 |
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Net income |
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$ |
3,654 |
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$ |
3,254 |
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$ |
17,888 |
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$ |
16,916 |
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Net income per share - |
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Basic |
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$ |
.08 |
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$ |
.07 |
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$ |
.39 |
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$ |
.37 |
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Diluted |
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$ |
.08 |
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$ |
.07 |
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$ |
.39 |
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$ |
.37 |
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Average common shares outstanding - |
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Basic |
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46,003 |
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45,912 |
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45,996 |
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45,875 |
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Diluted |
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46,205 |
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46,094 |
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46,178 |
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46,107 |
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See accompanying Notes to Condensed Consolidated Financial Statements.
4
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 2009 AND JANUARY 26, 2008
(In thousands)
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(Unaudited) |
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2009 |
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2008 |
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Operating Activities: |
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Net income |
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$ |
17,888 |
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$ |
16,916 |
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Adjustments to reconcile net income to net cash
provided by operating activities: |
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Depreciation and amortization |
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9,106 |
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8,824 |
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Deferred income tax provision (benefit) |
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225 |
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(449 |
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Loss on disposal of property, net |
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86 |
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24 |
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Stock-based compensation |
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258 |
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227 |
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Changes in assets and liabilities: |
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Trade receivables |
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5,554 |
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11,292 |
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Inventories |
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(173 |
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1,192 |
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Prepaid and other assets |
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2,678 |
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686 |
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Accounts payable |
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(10,745 |
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(24,442 |
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Accrued and other liabilities, net |
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76 |
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(2,003 |
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Net cash provided by operating activities |
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24,953 |
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12,267 |
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Investing Activities: |
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Marketable securities purchased |
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(109,450 |
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(272,395 |
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Marketable securities sold |
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112,450 |
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272,395 |
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Property additions |
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(4,897 |
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(7,001 |
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Proceeds from sale of assets |
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153 |
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8 |
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Net cash used in investing activities |
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(1,744 |
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(6,993 |
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Financing Activities: |
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Common stock cash dividend |
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(36,711 |
) |
Proceeds from stock options exercised |
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218 |
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306 |
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Stock-based tax benefits |
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48 |
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932 |
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Net cash provided by (used in) financing activities |
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266 |
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(35,473 |
) |
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Net Increase (Decrease) in Cash and Equivalents |
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23,475 |
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(30,199 |
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Cash and Equivalents Beginning of Year |
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51,497 |
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65,579 |
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Cash and Equivalents End of Period |
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$ |
74,972 |
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$ |
35,380 |
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Other Cash Flow Information: |
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Interest paid |
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$ |
83 |
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$ |
78 |
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Income taxes paid |
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6,610 |
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10,830 |
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See accompanying Notes to Condensed Consolidated Financial Statements.
5
NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2009
(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 May 3, 2008.
2. INVENTORIES
Inventories are stated at the lower of first-in, first-out cost or market. Inventories at January
31, 2009 are comprised of finished goods of $19,571,000 and raw materials of $19,356,000.
Inventories at May 3, 2008 are comprised of finished goods of $20,913,000 and raw materials of
$17,841,000.
3. PROPERTY
Property consists of the following:
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(In thousands) |
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January 31, |
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May 3, |
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2009 |
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2008 |
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Land |
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$ |
8,954 |
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$ |
8,954 |
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Buildings and improvements |
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41,919 |
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41,697 |
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Machinery and equipment |
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126,279 |
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124,797 |
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Total |
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177,152 |
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175,448 |
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Less accumulated depreciation |
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(122,351 |
) |
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(117,809 |
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Property net |
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$ |
54,801 |
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$ |
57,639 |
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6
Depreciation expense was $2,511,000 and $7,496,000 for the three-month and nine-month periods ended
January 31, 2009, respectively, and $2,461,000 and $7,281,000 for the three-month and nine-month
periods ended January 26, 2008, respectively.
4. DEBT
A subsidiary maintains unsecured revolving credit facilities aggregating $75 million (the Credit
Facilities) with banks which expire through April 2013. The Credit Facilities bear interest at
rates based, in part, on the amount borrowed and the earnings of the subsidiary. At January 31,
2009, interest rates ranged from LIBOR plus .3% to LIBOR plus .6% or, at the subsidiarys election,
1/2% below the banks reference rate. At January 31, 2009, $2.3 million of the Credit Facilities was
used for standby letters of credit and $72.7 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 31, 2009, we were in compliance with all
loan covenants and approximately $25 million of retained earnings were restricted from
distribution.
5. STOCK-BASED COMPENSATION
During the nine months ended January 31, 2009, there were no options granted, options for 13,800
shares were cancelled, and options for 53,320 shares were exercised at a weighted average exercise
price of $4.10. At January 31, 2009, options to purchase 609,799 shares at a weighted average
exercise price of $3.96 were outstanding and stock-based awards to purchase 3,239,086 shares of
common stock were available for grant.
6. RECENTLY ADOPTED ACCOUNTING STANDARDS
In September 2006, the FASB issued SFAS 157, Fair Value Measurements (SFAS 157), which defines fair
value, establishes a framework for measuring fair value, and expands disclosures about fair value
measurements. SFAS 157 was effective at the beginning of our 2009 fiscal year for all financial
assets and liabilities and for nonfinancial assets and liabilities measured at fair value on a
recurring basis. For all other nonfinancial assets and liabilities, SFAS 157 is effective at the
beginning of our 2010 fiscal year. The adoption of SFAS 157 did not have a material impact on our
consolidated financial statements. We are currently evaluating the impact related to our
nonfinancial assets and liabilities not measured at fair value on a recurring basis.
In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS 159), which permits entities to choose to measure many financial
instruments and certain other items at fair value. SFAS 159 was effective at the beginning of our
2009 fiscal year. We did not apply the fair value option to any of our financial instruments;
therefore, SFAS 159 did not have an impact on our consolidated financial statements.
7
7. OTHER INCOME
On September 18, 2008, the Company entered into a Settlement Agreement with Broward County, a
political subdivision of the state of Florida, regarding the continued use of leased office
facilities (Leased Premises) owned by Broward County. The Settlement Agreement required the
Company to vacate the Leased Premises on or before January 31, 2009 in exchange for monetary
consideration not to exceed $1.375 million. During the third quarter of fiscal 2009, the Company
vacated the Leased Premises, received payment, and recorded a gain, net of expenses, of $.7
million, which is reported in Other income.
8
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.
We consider ourselves to be a leader in the development and sale of flavored beverage products in
the United States, offering the widest selection of flavored soft drinks, juices, sparkling waters
and energy drinks. Our flavor development spans over 100 years originating with our flagship
brands, Shasta® and Faygo®, each of which has over 50 flavor varieties. We also maintain a diverse
line of flavored beverage products 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, sparkling, and spring water products; and ÀSanté
nutritionally-enhanced waters. In addition, we produce Rip It® energy drinks, 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 certain retailers and beverage companies (allied brands).
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 distinctive 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
consists 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 several
measures to expand convenience channel distribution in recent years. These include development of
products specifically targeted to this market, such as ClearFruit, Crystal Bay, Rip It, ÀSanté and
Sundance®. Additionally, we have created proprietary and specialized packaging with distinctive
graphics for these products. 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.
9
RESULTS OF OPERATIONS
Three Months Ended January 31, 2009 (third quarter of fiscal 2009) compared to
Three Months Ended January 26, 2008 (third quarter of fiscal 2008)
Net sales for the third quarter of fiscal 2009 increased 5.1% to $129.4 million compared to $123.2
million for the third quarter of fiscal 2008. The net sales increase reflects case volume growth
of 3.7% for the Companys energy drinks, juices and waters and 9.8% for branded carbonated soft
drinks. In addition, unit pricing increased 1.2% due to product mix changes and price increases
instituted to recover higher raw material costs. This improvement was partially offset by a
decline in allied-branded volume.
Gross profit approximated 28.7% of net sales for the third quarter of fiscal 2009 compared to 30.6%
of net sales for the third quarter of fiscal 2008. The gross profit decline was due primarily to
higher raw material costs and the inclusion of a $.5 million business interruption insurance
recovery in the prior period. Cost of goods sold per unit increased approximately 4.0%.
Selling, general and administrative expenses were $31.9 million or 24.7% of net sales for the third
quarter of fiscal 2009 compared to $32.8 million or 26.6% of net sales for the third quarter of
fiscal 2008. The decline in expenses is due to lower distribution and marketing expenses.
Other income includes interest income of $177,000 (fiscal 2009) and $194,000 (fiscal 2008). Also,
included in other income for the third quarter of fiscal 2009 is income of $.7 million from a legal
settlement. See Note 7 of Notes to Condensed Consolidated Financial Statements.
The Companys effective rate for income taxes, based upon estimated annual income tax rates,
approximated 37.3% of income before taxes for the third quarter of fiscal 2009 and 35.5% for the
comparable period in fiscal 2008. 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 $3.7 million for the third quarter of fiscal 2009 compared to $3.3 million for the
third quarter of fiscal 2008.
Nine Months Ended January 31, 2009 (first nine months of fiscal 2009) compared to
Nine Months Ended January 26, 2008 (first nine months of fiscal 2008)
Net sales for the first nine months of fiscal 2009 increased 2.0% to $426.7 million compared to
$418.5 million for the first nine months of fiscal 2008. The net sales increase reflects case
volume growth of 3.8% for the Companys energy drinks, juices and waters and 2.2% for branded
carbonated soft drinks. In addition, unit pricing increased 3.5% due to product mix changes and
price increases instituted to recover higher raw material costs. This improvement was partially
offset by a decline in allied-branded volume.
Gross profit approximated 29.5% of net sales for the first nine months of fiscal 2009 compared to
30.7% of net sales for the first nine months of fiscal 2008. The gross profit decline is due to
higher raw material costs and the inclusion of a $1.4 million business interruption insurance
recovery in the prior period. Cost of goods sold per unit increased approximately 5.4%.
10
Selling, general and administrative expenses were $99.0 million or 23.2% of net sales for the first
nine months of fiscal 2009 compared to $103.2 million or 24.7% of net sales for the first nine
months of fiscal 2008. The decline in expenses is due to lower marketing and administrative
expenses.
Other income includes interest income of $626,000 (fiscal 2009) and $934,000 (fiscal 2008). The
decline in interest income is due to lower investment yields. Also, included in other income for
the first nine months of fiscal 2009 is income of $.7 million from a legal settlement. See Note 7
of Notes to Condensed Consolidated Financial Statements.
The Companys effective rate for income taxes, based upon estimated annual income tax rates,
approximated 36.2% of income before taxes for the first nine months of fiscal 2009 and 35.5% for
the comparable period in fiscal 2008. 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 $17.9 million for the first nine months of fiscal 2009 compared to $16.9 million for
the first nine months of fiscal 2008.
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 $75 million of which $2.3
million was used for standby letters of credit at January 31, 2009. 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 2009, $25.0 million was provided by operating activities,
$1.7 million was used in investing activities and $266,000 was provided by financing activities.
Cash provided by operating activities increased $12.7 million due primarily to an improvement in
working capital requirements. Cash used in investing activities declined $5.2 million due to an
increase in net marketable securities sold and a decline in property additions. The $35.7 million
change in cash provided by financing activities is due to the effect of the cash dividend paid last
year.
Financial Position
During the first nine months of fiscal 2009, our working capital increased $22.4 million to $111.8
million primarily due to cash provided by operating activities. Trade receivables and accounts
payable decreased due to lower volume related to seasonality. Prepaid and other assets decreased
primarily due to a decline in income tax refund receivables. The current ratio was 3.0 to 1 at
January 31, 2009 and 2.3 to 1 at May 3, 2008.
NEW ACCOUNTING STANDARDS
See Note 6 of Notes to Condensed Consolidated Financial Statements for information about recently
adopted accounting standards.
11
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. For a further list and description of various risks,
relevant factors and uncertainties that could cause future results or events to differ materially
from those expressed or implied in our forward-looking statements, see the Risk Factors and
Managements Discussion and Analysis of Financial Condition and Results of Operations sections
contained in our Annual Report on Form 10-K for the fiscal year ended May 3, 2008 and other filings
with the Securities and Exchange Commission. 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 May 3, 2008.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out an evaluation, under the
supervision and with the participation of the Companys management, including our Chief Executive
Officer and Principal Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based upon
that evaluation, the Chief Executive Officer and Principal Financial Officer concluded that our
disclosure controls and procedures were effective to ensure information required to be disclosed by
us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and
reported within the time periods specified in SEC rules and (2) accumulated and communicated to our
management, including our Chief Executive Officer and Principal Financial Officer, to allow timely
decisions regarding required disclosure.
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.
12
PART II OTHER INFORMATION
ITEM 6. EXHIBITS
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Exhibit No. |
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Description |
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10.1 |
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Amendment to the National Beverage Corp. Special Stock Option Plan |
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10.2 |
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Amendment to the National Beverage Corp. Key Employee Equity
Partnership Program |
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31.1 |
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Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 |
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31.2 |
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Certification of Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 |
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32.1 |
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Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
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32.2 |
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Certification of Principal Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 |
13
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 12, 2009
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National Beverage Corp.
(Registrant)
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By: |
/s/ Dean A. McCoy
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Dean A. McCoy |
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Senior Vice President and
Chief Accounting Officer |
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14
EX-10.1 Amendment to Special Stock Option Plan
EXHIBIT 10.1
Amendment to the
National Beverage Corp.
Special Stock Option Plan
This Amendment (the Amendment) is made this 31st day of December, 2008, by
National Beverage Corp. (the Corporation) and is effective January 1, 2005 to the extent
necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
Code) and otherwise effective December 31, 2008.
W I T N E S S E T H:
WHEREAS, the Corporation previously adopted the National Beverage Corp. Special Stock Option
Plan (the Plan);
WHEREAS, the Corporation has been administering the Plan in compliance with Section 409A of
the Code; and
WHEREAS, the Corporation now desires to amend the Plan in the manner herein provided to comply
with the requirements of Section 409A of the Code.
NOW, THEREFORE, BE IT RESOLVED that the Plan be amended as follows:
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The Plan is hereby amended by adding the following as a new Section 9: |
9. Compliance with Section 409A.
9.1 In General. The Plan is intended to comply in form and operation with the
requirements of Section 409A of the Code and the applicable regulations and other guidance
of general applicability that is issued thereunder (Section 409A). It is the intention
of the Corporation that any amounts considered deferred compensation pursuant to this Plan
shall not be included in the gross income of the participants or their beneficiaries until
such time as the deferred amounts are distributed from the Plan. At all times, this Plan
shall be interpreted and operated (i) in accordance with the requirements of Section 409A,
unless an exemption from Section 409A is available and applicable, and (ii) to maintain the
exemption from Section 409A of Awards designed to meet the short-term deferral exception
under Section 409A, and (iii) to preserve the status of deferrals made prior to the
effective date of Section 409A as exempt from Section 409A (i.e., to preserve the
grandfathered status of Awards that were vested as of, and not modified after, December 31,
2004).
Any discretionary authority with respect to an Award, which may exist under the terms
of the Award or the other terms of this Plan, shall not be applicable to an Award that is
subject to Section 409A to the extent such discretionary authority would conflict with
Section 409A. In the event that any Award shall be deemed not to comply with
Section 409A, then neither the Corporation, the Board, the Board Committee nor its or their
designees or agents, nor any of their affiliates, assigns or successors (each a protected
party) shall be liable to any participant or other person for actions, inactions,
decisions, indecisions or any other role in relation to the Plan by a protected party if
made or undertaken in good faith or in reliance on the advice of counsel (who may be
counsel for the Corporation), or made or undertaken by someone other than a protected
party.
9.2 Specified Employees. With respect to participants who are specified
employees under Section 409A, a payment due to separation from service (within the
meaning of Section 409A) may not be made before the date that is six months after the date
of separation from service (or, if earlier, the date of death of the participant), except
as may be otherwise permitted pursuant to Section 409A.
Except as hereby amended, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first written
above.
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NATIONAL BEVERAGE CORP.
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By: |
/s/
George R. Bracken
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George R. Bracken |
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Senior Vice President Finance |
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EX-10.2 Amendment to the Key Employee Equity Part.
EXHIBIT 10.2
Amendment to the
National Beverage Corp.
Key Employee Equity Partnership Program
This Amendment (the Amendment) is made this 31st day of December, 2008, by
National Beverage Corp. (the Corporation) and is effective January 1, 2005 to the extent
necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
Code) and otherwise effective December 31, 2008.
W I T N E S S E T H:
WHEREAS, the Corporation previously adopted the National Beverage Corp. Key Employee Equity
Partnership Program (the Plan);
WHEREAS, the Corporation has been administering the Plan in compliance with Section 409A of
the Code; and
WHEREAS, the Corporation now desires to amend the Plan in the manner herein provided to comply
with the requirements of Section 409A of the Code.
NOW, THEREFORE, BE IT RESOLVED that the Plan be amended as follows:
1. The Plan is hereby amended by adding the attached Appendix A as a new Appendix to the Plan,
which sets forth additional provisions applicable to Options that are subject to Section 409A.
2. Section 1(b) of the Plan is amended by adding the following as a new definition:
(xxiii) Section 409A means Section 409A of the Code and the applicable regulations
and other guidance of general applicability that is issued thereunder.
3. Section 9(g) of the Plan is amended by adding the following at the end of the existing section:
Notwithstanding the above, the Committee shall not have the right to buy-out any
Option subject to Section 409A.
4. The Plan is hereby amended by adding the following as a new Section 12:
SECTION 12. COMPLIANCE WITH SECTION 409A.
(a) In General. The Plan is intended to comply in form and operation with the requirements
of Section 409A. It is the intention of the Corporation that the amounts deferred pursuant
to this Plan shall not be included in the gross income of the optionees
or their beneficiaries until such time as the deferred amounts are distributed from the
Plan. At all times, this Plan shall be interpreted and operated (i) in accordance with the
requirements of Section 409A, unless an exemption from Section 409A is available and
applicable, and (ii) to maintain the exemption from Section 409A of awards designed to meet
the short-term deferral exception under Section 409A, and (iii) to preserve the status of
deferrals made prior to the effective date of Section 409A as exempt from Section 409A
(i.e., to preserve the grandfathered status of Options that were vested as of, and not
modified after, December 31, 2004).
Any discretionary authority with respect to an Option, which may exist under the terms of
the Option or the other terms of this Plan, shall not be applicable to an Option that is
subject to Section 409A to the extent such discretionary authority would conflict with
Section 409A. In the event that any Option shall be deemed not to comply with Section 409A,
then neither the Corporation, the Board, the Committee nor its or their designees or
agents, nor any of their affiliates, assigns or successors (each a protected party) shall
be liable to any optionee or other person for actions, inactions, decisions, indecisions or
any other role in relation to the Plan by a protected party if made or undertaken in good
faith or in reliance on the advice of counsel (who may be counsel for the Corporation), or
made or undertaken by someone other than a protected party.
(b) Appendix A. Appendix A attached hereto and incorporated as a part of the Plan shall
apply to any Option that is subject to, and not exempt from, Section 409A. The terms,
conditions and provisions of Appendix A shall control and shall supersede any conflicting
provision elsewhere in the Plan with respect to any Option subject to Section 409A.
(c) Specified Employees. With respect to optionees who are specified employees under
Section 409A, a payment due to separation from service (within the meaning of Section
409A) may not be made before the date that is six months after the date of separation from
service (or, if earlier, the date of death of the optionee), except as may be otherwise
permitted pursuant to Section 409A.
Except as hereby amended, the Plan shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first written
above.
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NATIONAL BEVERAGE CORP.
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By: |
/s/ George R. Bracken
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George R. Bracken |
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Senior Vice President Finance |
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Appendix A
to the
National Beverage Corp.
Key Employee Equity Partnership Program
1. Application of this Appendix. This Appendix A applies to any Option granted under the
Plan that is subject to Section 409A. It does not apply to any Option that was fully vested as of
December 31, 2004 with an exercise price that was fixed and not subject to further decrease as of
December 31, 2004. Any capitalized term used in this Appendix A shall have the same definition as
set forth in the Plan, unless separately defined in this Appendix A.
2. Vesting and Exercise.
(a) General. Each Option shall vest as provided below and as otherwise provided in
the Plan and any underlying agreements; however, each Option shall be exercisable only as provided
in subsections (b) through (g) below.
(b) Death. If the optionees employment or other service with the Corporation and any
Subsidiaries and Affiliates terminates by reason of the optionees death, the optionees
beneficiary or estate may exercise any vested Options only during the calendar year following the
year of the optionees death. Any unvested Options shall expire on the date of the optionees
death. Any unexercised vested Options shall expire on the last day of the calendar year following
the year of the optionees death.
(c) Disability. If the Committee determines that the optionee is disabled as
defined in Code Section 409A(a)(2)(C), the optionees vested Options may be exercised only during
the calendar year following the year in which the optionee becomes disabled. Any unvested
Options shall expire on the date of the optionees termination of employment or other service due
to being disabled. Any unexercised vested Options shall expire on the last day of the calendar
year following the year in which the optionee become disabled.
(d) Termination for Cause. If the optionees employment or other service with the
Corporation and any Subsidiaries and Affiliates terminates for Cause, all unexercised Options will
expire and be forfeited on the date of optionees termination of employment or other service
regardless of whether such termination occurs during the In-Service Exercise Year elected by the
optionee.
(e) Termination for Retirement. If the optionees employment or other service with
the Corporation and any Subsidiaries and Affiliates terminates due to the optionees Retirement
(which, for purposes of Options subject to this Appendix A, shall mean retirement from active
employment or other service (including service as a Consultant) with the Corporation and any
Subsidiary or Affiliate on or after the age of 65) and the optionee is not a specified
employee (which, for purposes of this Appendix A shall have the same meaning as defined in Code
Section 409A(a)(2)(B)(i)), the optionees vested Options shall be exercisable beginning on the date
of the optionees termination of employment and ending on the earlier of (A) the date six months
later,
or (B) the December 31st coincident with or next following the optionees termination of
employment, with any unexercised vested Options expiring at the end of such period.
If the optionees employment or other service with the Corporation and any Subsidiaries and
Affiliates terminates due to the optionees Retirement and the optionee is a specified
employee, the exercise period shall be delayed for six months and, thus, the optionees vested
Options shall be exercisable beginning on the day following the date six months after the
optionees termination of employment or other service and ending on the earlier of (A) the date six
months later, or (B) the December 31st coincident with or next following such
commencement date, with any unexercised vested Options expiring at the end of such period. Any
unvested Options shall expire on the date of the optionees termination of employment for
Retirement regardless of whether the optionee is or is not a specified employee.
(f) Other Termination of Employment. If the optionee is not a
specified employee and the optionees employment or other service with the Corporation and any
Subsidiaries and Affiliates terminates other than (i) for Cause, (ii) upon Retirement, (iii)
following the optionee becoming disabled, or (iv) due to death, the optionees vested Options
shall be exercisable beginning on the date of the optionees termination of employment or other
service and ending on the earlier of (A) the date three months later, or (B) the December
31st coincident with or next following the optionees termination of employment, with
any unexercised vested Options expiring at the end of such period.
If the optionee is a specified employee and the optionees employment or other
service with the Corporation and any Subsidiaries and Affiliates terminates other than (i) for
Cause, (ii) upon Retirement, (iii) following the optionee becoming disabled, or (iv) due to
death, the exercise period shall be delayed for six months and, thus, the optionees vested Options
shall be exercisable beginning on the day following the date six months after the optionees
termination of employment and ending on the earlier of (A) the date three months later, or (B) the
December 31st coincident with or next following such commencement date, with any
unexercised vested Options expiring at the end of such period. Any unvested Options shall expire
on the date of the optionees termination of employment regardless of whether the optionee is or is
not a specified employee.
(g) Change in Control. If the Corporation incurs a Change in Control, which
constitutes a change in the ownership or effective control of the Corporation or a change in the
ownership of a substantial portion of the assets of the Corporation within the meaning of Section
409A and Treas. Reg. Section 1.409A-3(i)(5), all of the optionees Options shall vest and shall be
exercisable immediately prior to the Change in Control and, to the extent not cancelled in
connection with such Change in Control, the Options shall remain exercisable until the last day of
the calendar year in which the Change in Control occurs, with any unexercised vested Options
expiring at the end of such period.
(h) In-Service Exercise Year. To the extent permitted by Section 409A, the Committee
may permit the optionee to elect a calendar year in which the optionee can exercise an Option while
he or she is still employed. Such calendar year is referred to as an In-Service Exercise Year.
Any such election must be made during the time period permitted by the
Committee in accordance with Section 409As requirements for deferral elections. If no In-Service
Exercise Year is selected by the optionee, the In-Service Exercise Year will be the calendar year
in which the term of the Option expires and the optionee will be entitled to exercise such Option
in the portion of the In-Service Exercise Year prior to the Options expiration date.
If the optionees employment or other service with the Corporation and any Subsidiaries and
Affiliates terminates during the In-Service Exercise Year elected for an Option and a shorter
exercise period would apply as described in subsection 2(e) or 2(f) above, the optionee may
exercise that Option at any time during the In-Service Exercise Year to the extent the Option is
vested. Any unexercised vested Options shall expire and be forfeited to the extent not exercised
during the In-Service Exercise Year selected for such Options. If any of the optionees Options
are not vested at any time during the In-Service Exercise Year selected for such Options, such
Options shall only be exercisable once they become vested and for the remainder of the calendar
year in which they vest (subject to any shorter period that may result from a termination of
employment).
(i) Meaning of Termination of Employment. An optionee will be deemed to have a
termination of employment or service for purposes of this Section 2 of Appendix A only upon a
separation from service within the meaning of Code Section 409A(a)(2)(A)(i).
EX-31.1 Section 302 Certification of CEO
EXHIBIT 31.1
CERTIFICATION
I, Nick A. Caporella, certify that:
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I have reviewed this quarterly report on Form 10-Q of National Beverage Corp.; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
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3. |
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Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
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4. |
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The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
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Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
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Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
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Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosures
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and |
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Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
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The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
function): |
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All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
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Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
Date: March 12, 2009
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
EX-31.2 Section 302 Certification of CFO
EXHIBIT 31.2
CERTIFICATION
I, George R. Bracken, certify that:
1. |
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I have reviewed this quarterly report on Form 10-Q of National Beverage Corp.; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
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3. |
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Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
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4. |
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The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
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a. |
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Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
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b. |
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Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c. |
|
Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosures
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and |
|
|
d. |
|
Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
5. |
|
The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of registrants board of directors (or persons performing the equivalent
function): |
|
a. |
|
All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
|
|
b. |
|
Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
Date: March 12, 2009
/s/ George R. Bracken
George R. Bracken
Senior Vice President Finance
(Principal Financial Officer)
EX-32.1 Section 906 Certification of CEO
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of National Beverage Corp. (the Company) on Form 10-Q
for the period ended January 31, 2009 as filed with the Securities and Exchange Commission on the
date hereof (the Report), I, Nick A. Caporella, Chairman of the Board and Chief Executive Officer
of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of
the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
Date: March 12, 2009
/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not
being filed as part of the Report or as a separate disclosure document.
EX-32.2 Section 906 Certification of CFO
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of National Beverage Corp. (the Company) on Form 10-Q
for the period ended January 31, 2009 as filed with the Securities and Exchange Commission on the
date hereof (the Report), I, George R. Bracken, Senior Vice President Finance of the Company,
certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the
financial condition and result of operations of the Company.
Date: March 12, 2009
/s/ George R. Bracken
George R. Bracken
Senior Vice President Finance
(Principal Financial Officer)
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not
being filed as part of the Report or as a separate disclosure document.