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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 October 30, 2004

Commission file number 1-14170

NATIONAL BEVERAGE CORP.
(Exact name of registrant as specified in its charter)

Delaware	 	59-2605822	

 	 	

 	
(State of incorporation)	 	(I.R.S. Employer 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 (  )

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes (  )   No (X)

The number of shares of registrant’s common stock outstanding as of December 9, 2004 was 36,890,856.

1

NATIONAL BEVERAGE CORP.
QUARTERLY REPORT ON FORM 10-Q
INDEX
 	 	 	 	 	 	
 	 	Page

	 	
PART I - FINANCIAL INFORMATION	 	 	 	 	 	
Item 1. Financial Statements	 	 	 	 	 	
Condensed Consolidated Balance Sheets as of October 30, 2004 and May 1, 2004	 	 	3	 	 	
Condensed Consolidated Statements of Income for the three months and six months ended October 30, 2004 and November 1, 2003	 	 	4	 	 	
Condensed Consolidated Statements of Cash Flows for the six months ended October 30, 2004 and November 1, 2003	 	 	5	 	 	
Notes to Condensed Consolidated Financial Statements	 	 	6	 	 	
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	 	 	8	 	 	
Item 3. Quantitative and Qualitative Disclosures About Market Risk	 	 	11	 	 	
Item 4. Controls and Procedures	 	 	11	 	 	
PART II - OTHER INFORMATION	 	 	 	 	 	
Item 4. Submission of Matters to a Vote of Security Holders	 	 	12	 	 	
Item 6. Exhibits and Reports on Form 8-K	 	 	12	 	 	
 Sec 302 Chief Executive Officer Certification	
 Sec 302 Principal Financial Officer Certification	
 Sec 906 Chief Executive Officer Certification	
 Sec 906 Principal Financial Officer Certification	

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF OCTOBER 30, 2004 AND MAY 1, 2004
(In thousands, except share amounts)
 	 	 	 	 	 	 	 	 	
 	 	(Unaudited)	
 	 	October 30,	 	May 1,	
 	 	2004

	 	2004

	
Assets	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	
Cash and equivalents	 	$	47,946	 	 	$	34,365	 	
Trade receivables - net of allowances of $619 ($608 at May 1, 2004)	 	 	44,236	 	 	 	48,776	 	
Inventories	 	 	31,172	 	 	 	29,754	 	
Deferred income taxes - net	 	 	1,789	 	 	 	1,622	 	
Prepaid and other	 	 	3,836	 	 	 	6,969	 	

 	 	 	 	

 	 	
Total current assets	 	 	128,979	 	 	 	121,486	 	
Property - net	 	 	61,180	 	 	 	59,535	 	
Goodwill	 	 	13,145	 	 	 	13,145	 	
Intangible assets - net	 	 	1,917	 	 	 	1,948	 	
Other assets	 	 	3,175	 	 	 	3,777	 	

 	 	 	 	

 	 	
 	 	$	208,396	 	 	$	199,891	 	

 	 	 	 	

 	 	
Liabilities and Shareholders’ Equity	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	31,118	 	 	$	37,138	 	
Accrued liabilities	 	 	16,417	 	 	 	17,429	 	
Income taxes payable	 	 	4,503	 	 	 	1,952	 	

 	 	 	 	

 	 	
Total current liabilities	 	 	52,038	 	 	 	56,519	 	
Deferred income taxes - net	 	 	14,879	 	 	 	14,930	 	
Other liabilities	 	 	2,980	 	 	 	3,066	 	
Shareholders’ equity:	 	 	 	 	 	 	 	 	
Preferred stock, 7% cumulative, $1 par value, aggregate liquidation preference of $15,000 - 1,000,000 shares authorized; 150,000 shares issued; no shares outstanding	 	 	150	 	 	 	150	 	
Common stock, $.01 par value - authorized 50,000,000 shares; issued 40,922,640 shares (40,894,440 shares at May 1, 2004)	 	 	409	 	 	 	409	 	
Additional paid-in capital	 	 	18,793	 	 	 	18,646	 	
Retained earnings	 	 	137,147	 	 	 	124,171	 	
Treasury stock - at cost:	 	 	 	 	 	 	 	 	
Preferred stock - 150,000 shares	 	 	(5,100	)	 	 	(5,100	)	
Common stock - 4,032,784 shares	 	 	(12,900	)	 	 	(12,900	)	

 	 	 	 	

 	 	
Total shareholders’ equity	 	 	138,499	 	 	 	125,376	 	

 	 	 	 	

 	 	
 	 	$	208,396	 	 	$	199,891	 	

 	 	 	 	

 	 	
See accompanying Notes to Condensed Consolidated Financial Statements.

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NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 30, 2004
AND NOVEMBER 1, 2003
(In thousands, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	(Unaudited)	
 	 	Three Months Ended	 	Six Months Ended	
 	 	2004

	 	2003

	 	2004

	 	2003

	
Net sales	 	$	124,858	 	 	$	129,373	 	 	$	271,370	 	 	$	275,038	 	
Cost of sales	 	 	85,376	 	 	 	87,031	 	 	 	183,551	 	 	 	184,068	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
Gross profit	 	 	39,482	 	 	 	42,342	 	 	 	87,819	 	 	 	90,970	 	
Selling, general and administrative expenses	 	 	32,947	 	 	 	35,962	 	 	 	67,073	 	 	 	71,070	 	
Interest expense	 	 	26	 	 	 	34	 	 	 	51	 	 	 	70	 	
Other income - net	 	 	126	 	 	 	148	 	 	 	201	 	 	 	285	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
Income before income taxes	 	 	6,635	 	 	 	6,494	 	 	 	20,896	 	 	 	20,115	 	
Provision for income taxes	 	 	2,515	 	 	 	2,473	 	 	 	7,920	 	 	 	7,644	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
Net income	 	$	4,120	 	 	$	4,021	 	 	$	12,976	 	 	$	12,471	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
Net income per share -	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	.11	 	 	$	.11	 	 	$	.35	 	 	$	.34	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
Diluted	 	$	.11	 	 	$	.11	 	 	$	.34	 	 	$	.33	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
Average common shares outstanding - basic	 	 	37,574	 	 	 	36,854	 	 	 	37,567	 	 	 	36,844	 	
Dilutive stock options	 	 	666	 	 	 	1,284	 	 	 	685	 	 	 	1,294	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
Average commons shares outstanding - diluted	 	 	38,240	 	 	 	38,138	 	 	 	38,252	 	 	 	38,138	 	

 	 	 	 	

 	 	 	 	

 	 	 	 	

 	 	
See accompanying Notes to Condensed Consolidated Financial Statements.

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NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 30, 2004 AND NOVEMBER 1, 2003
(In thousands)
 	 	 	 	 	 	 	 	 	
 	 	(Unaudited)	
 	 	2004

	 	2003

	
Operating Activities:	 	 	 	 	 	 	 	 	
Net income	 	$	12,976	 	 	$	12,471	 	
Adjustments to reconcile net income to net cash provided by (used in) operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	6,183	 	 	 	5,559	 	
Deferred income tax provision (benefit)	 	 	(218	)	 	 	414	 	
Loss on sale of assets	 	 	7	 	 	 	6	 	
Changes in assets and liabilities:	 	 	 	 	 	 	 	 	
Trade receivables	 	 	4,540	 	 	 	(338	)	
Inventories	 	 	(1,418	)	 	 	(945	)	
Prepaid and other assets	 	 	2,357	 	 	 	520	 	
Accounts payable	 	 	(6,020	)	 	 	(8,480	)	
Accrued and other liabilities, net	 	 	1,542	 	 	 	(1,465	)	

 	 	 	 	

 	 	
Net cash provided by operating activities	 	 	19,949	 	 	 	7,742	 	

 	 	 	 	

 	 	
Investing Activities:	 	 	 	 	 	 	 	 	
Property additions	 	 	(6,426	)	 	 	(4,554	)	
Proceeds from sale of assets	 	 	—	 	 	 	5	 	

 	 	 	 	

 	 	
Net cash used in investing activities	 	 	(6,426	)	 	 	(4,549	)	

 	 	 	 	

 	 	
Financing Activities:	 	 	 	 	 	 	 	 	
Debt repayments	 	 	—	 	 	 	(550	)	
Purchase of common stock	 	 	—	 	 	 	(255	)	
Proceeds from stock options exercised	 	 	58	 	 	 	77	 	

 	 	 	 	

 	 	
Net cash provided by (used in) financing activities	 	 	58	 	 	 	(728	)	

 	 	 	 	

 	 	
Net Increase in Cash and Equivalents	 	 	13,581	 	 	 	2,465	 	
Cash and Equivalents - Beginning of Year	 	 	34,365	 	 	 	60,334	 	

 	 	 	 	

 	 	
Cash and Equivalents - End of Period	 	$	47,946	 	 	$	62,799	 	

 	 	 	 	

 	 	
Other Cash Flow Information:	 	 	 	 	 	 	 	 	
Interest paid	 	$	53	 	 	$	66	 	
Income taxes paid	 	 	3,313	 	 	 	5,976	 	
See accompanying Notes to Condensed Consolidated Financial Statements.

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NATIONAL BEVERAGE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 30, 2004
(UNAUDITED)

1. BASIS OF PRESENTATION

National Beverage Corp. develops, manufactures, markets and distributes a complete portfolio of quality non-alcoholic beverage products 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 Company’s Annual Report on Form 10-K for the fiscal year ended May 1, 2004.

2. STOCK-BASED COMPENSATION

As provided by SFAS 123 as amended, we use the intrinsic value method to account for stock based compensation awarded to employees, which generally does not recognize any compensation expense with respect to such awards unless the exercise price of options granted is less than the market price on the date of grant. Had the fair value method been used, net income and basic and diluted earnings per share for the three-month and six-month periods ended October 30, 2004 and November 1, 2003 would have been reduced on a pro forma basis by less than $100,000 and $.01 per share for each period.

During the six months ended October 30, 2004, options for 13,750 shares were granted at a weighted average exercise price of $4.59 and options for 28,200 shares were exercised at a weighted average exercise price of $2.05. At October 30, 2004, options to purchase 1,013,858 shares at a weighted average exercise price of $2.85 were outstanding and stock-based awards to purchase 2,949,622 shares of common stock were available for grant.

3. INVENTORIES

Inventories are stated at the lower of first-in, first-out cost or market. Inventories at October 30, 2004 are comprised of finished goods of $17,484,000 and raw materials of $13,688,000. Inventories at May 1, 2004 are comprised of finished goods of $16,349,000 and raw materials of $13,405,000.

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4. PROPERTY

Property consists of the following:
 	 	 	 	 	 	 	 	 	
 	 	(In thousands)	
 	 	October 30,	 	May 1,	
 	 	2004

	 	2004

	
Land	 	$	10,187	 	 	$	10,187	 	
Buildings and improvements	 	 	38,194	 	 	 	37,693	 	
Machinery and equipment	 	 	114,885	 	 	 	108,989	 	

 	 	 	 	

 	 	
Total	 	 	163,266	 	 	 	156,869	 	
Less accumulated depreciation	 	 	(102,086	)	 	 	(97,334	)	

 	 	 	 	

 	 	
Property – net	 	$	61,180	 	 	$	59,535	 	

 	 	 	 	

 	 	
Depreciation expense was $2,386,000 and $4,774,000 for the three-month and six-month periods ended October 30, 2004, respectively, and $2,140,000 and $4,265,000 for the three-month and six-month periods ended November 1, 2003, respectively.

5. DEBT

A subsidiary maintains unsecured revolving credit facilities aggregating $45 million (the “Credit Facilities”) with banks. The Credit Facilities expire through February 1, 2006 and bear interest at ½% below the banks’ reference rate or 1% above LIBOR, at the subsidiary’s election. At October 30, 2004, there was no outstanding debt under the Credit Facilities and approximately $42 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 loan covenants and financial ratios include: fixed charge coverage, consolidated net worth ratio and limitations on incurrence of debt. At October 30, 2004, we were in compliance with all loan covenants and financial ratios and retained earnings of approximately $25 million were restricted from distribution.

6. COMMON STOCK

In January 1998, the Board of Directors authorized the purchase of up to 800,000 shares of National Beverage common stock. There were no shares purchased during the six months ended October 30, 2004 and aggregate shares purchased since January 1998 was 502,060. Such shares are classified as treasury stock.

On March 22, 2004, the Company distributed a 100% stock dividend to shareholders of record on March 8, 2004. Average shares outstanding and per share data presented in these financial statements have been adjusted retroactively for the effects of the stock dividend.

7. CHANGES IN ACCOUNTING STANDARDS

Management has reviewed the current changes in accounting standards and does not expect any of these changes to have a material impact on our financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

National Beverage Corp. develops, manufactures, markets and distributes a complete portfolio of quality non-alcoholic beverage products 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.

Our lines of multi-flavored soft drinks, including those of our flagship brands, Shasta® and Faygo®, emphasize distinctive flavor variety. In addition, we offer an assortment of premium beverages 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 and spring water products. We also produce specialty products, including Rip It™, an energy drink geared toward young consumers, Ohana® fruit-flavored drinks and St. Nick’s® holiday soft drinks. Substantially all of our brands are produced in 14 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 retail grocery chains, warehouse clubs, mass-merchandisers and wholesalers (“allied brands”) as well as soft drinks for other beverage companies.

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 new 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 aggressive 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 as well as food brokers and wholesalers. The convenience channel is composed 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 specific measures to expand distribution in this channel. These include development of products specifically targeted to this market, such as ClearFruit, Everfresh, Mr. Pure, Crystal Bay, and Rip It. Additionally, we have created proprietary and specialized packaging for these products with distinctive graphics. 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.

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RESULTS OF OPERATIONS

Three Months Ended October 30, 2004 (second quarter of fiscal 2005) compared to Three Months Ended November 1, 2003 (second quarter of fiscal 2004)

Net sales for the three months ended October 30, 2004 decreased 3.5% to $124.9 million compared to the second quarter of fiscal 2004. We continue to emphasize our strategy of expanding our branded portfolio of beverage products to higher margin channels of distribution. While our branded case sales increased during the period, our net sales decline is attributable to a reduction in our allied branded business and the generally soft retail environment.

Gross profit approximated 31.6% of net sales for the second quarter of fiscal 2005 and 32.7% of net sales for the second quarter of fiscal 2004. This decline was due to the effect of the sales decrease and an increase in raw material costs. Cost of goods sold per unit increased approximately 1%, primarily driven by increases in aluminum, fuel and resin.

Selling, general and administrative expenses were $32.9 million or 26.4% of net sales for the second quarter of fiscal 2005, compared to $36.0 million or 27.8% of net sales for last year. The decline was due to a reduction in selling costs of $936,000 related to decreased volume and lower marketing costs of $1.5 million.

Interest expense declined during the second quarter of fiscal 2005 compared to the prior year due to reductions in average debt outstanding. Other income, which is comprised primarily of interest income, decreased due to a decline in average investments outstanding as a result of the $38.4 million cash dividend paid on April 30, 2004.

The Company’s effective rate for income taxes, based upon estimated annual income tax rates, approximated 37.9% of income before taxes for the second quarter of fiscal 2005 and 38.1% for fiscal 2004. 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 $4,120,000 for the second quarter of fiscal 2005, compared to $4,021,000 for the second quarter of fiscal 2004.

Six Months Ended October 30, 2004 (first six months of fiscal 2005) compared to Six Months Ended November 1, 2003 (first six months of fiscal 2004)

Net sales for the six months ended October 30, 2004 decreased 1.3% to $271.4 million compared to the first six months of fiscal 2004. Included in net sales for the first six months of fiscal 2005 and the quarter ended July 31, 2004 is $1.8 million received from a customer relative to recovery of pricing and promotional allowances due under a contractual settlement for previously shipped product. The decline for the six month period was primarily due to a decrease in allied branded business, partially offset by an increase in branded case sales.

Gross profit approximated 32.4% of net sales for the first six months of fiscal 2005 and 33.1% of net sales for the first six months of fiscal 2004. This decline was due to the effect of the sales decrease and an increase in raw material costs, partially offset by the $1.8 million customer payment

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noted above. Cost of goods sold per unit increased 2.4%, primarily driven by increases in aluminum, fuel and resin.

Selling, general and administrative expenses were $67.1 million or 24.7% of net sales for the first six months of fiscal 2005, compared to $71.1 million or 25.8% of net sales for last year. The decline was due to a reduction in selling costs of $1.4 million related to decreased volume and lower marketing costs of $2.0 million.

Interest expense declined during the first six months of fiscal 2005 compared to the prior year due to reductions in average debt outstanding. Other income, which is comprised primarily of interest income, decreased due to a decline in average investments outstanding as a result of the $38.4 million cash dividend paid on April 30, 2004.

The Company’s effective rate for income taxes, based upon estimated annual income tax rates, approximated 37.9% of income before taxes for the first six months of fiscal 2005 and 38.0% for fiscal 2004. 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 $12,976,000 for the first six months of fiscal 2005, compared to $12,471,000 for the first six months of fiscal 2004.

LIQUIDITY AND FINANCIAL CONDITION

Capital Resources

Our current sources of capital consist of cash flow from operations and borrowings under existing credit facilities. We maintain unsecured revolving credit facilities aggregating $45 million of which approximately $42 million was available for future borrowings at October 30, 2004. We believe that existing capital resources are sufficient to meet our capital requirements and those of the parent company for the foreseeable future.

Cash Flows

During the first six months of fiscal 2005, we generated cash of $19.9 million from operating activities, which was partially offset by $6.4 million expended for investing activities. Cash provided by operating activities increased $12.2 million primarily due to an increase in earnings and a decrease in working capital requirements. Cash used in investing activities increased $1.9 million due to an increase in property additions.

Financial Position

During the first six months of fiscal 2005, our working capital increased $12.0 million to $76.9 million primarily due to cash generated from operations. Trade receivables and accounts payable decreased due to lower sales volume related to seasonality. Prepaid and other decreased due to changes in income tax refunds receivable. At October 30, 2004, the current ratio was 2.5 to 1 compared to 2.1 to 1 at May 1, 2004.

Liquidity

We continually evaluate capital projects designed to expand capacity and improve efficiency at our manufacturing facilities. During the latter part of fiscal 2004, management initiated capital

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expenditure programs intended to improve plant efficiency and, as a result, the Company expects that fiscal 2005 capital expenditures will be higher than fiscal 2004.

ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.

We offer various sales incentive arrangements to our customers, which require customer performance or achievement of certain volume targets. These incentives are accrued based on expected amounts to be paid. The recognition of expense for these incentives involves the use of judgment related to performance and volume estimates, which estimates are made based on historical experience and other factors. Actual expenses may vary from reported amounts.

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. 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 Company’s Annual Report on Form 10-K for the fiscal year ended May 1, 2004.

ITEM 4. CONTROLS AND PROCEDURES

As of October 30, 2004, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Principal Financial Officer (“PFO”). Based on that evaluation, our CEO and PFO concluded that our disclosure controls and procedures as of October 30, 2004 were effective in timely alerting them to material information required to be included in this report. There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that

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has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the company’s Annual Meeting of Shareholders held October 1, 2004, Mr. S. Lee Kling and Mr. Joseph P. Klock, Jr. were re-elected to the Board of Directors for a three-year term. Of the 36,432,064 shares voted, 35,621,714 shares were voted for the election of Mr. S. Lee Kling (810,350 shares were withheld) and 35,556,466 shares were voted for the election of Mr. Joseph P. Klock, Jr. (875,598 shares were withheld). In addition, the proposal to amend the Company’s Special Stock Option Plan to increase by 500,000 shares the number of shares issuable thereunder was approved as follows: 33,168,241 shares voted for; 1,733,151 shares voted against; and 14,866 shares abstained.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits:
 	 	 	 	 	
 	 	Exhibit 31.1	 	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 	 	 	 	 	
 	 	Exhibit 31.2	 	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 	 	 	 	 	
 	 	Exhibit 32.1	 	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	
 	 	 	 	 	
 	 	Exhibit 32.2	 	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	
     (b) Reports on Form 8-K:

On September 15, 2004, the Company filed a Form 8-K Current Report regarding a press release issued September 14, 2004, announcing the Company’s financial results for the first quarter ended July 31, 2004.

12

Table of Contents
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 14, 2004
 	 	 	 	 	 	 	
 	 	National Beverage Corp.	
 	 	(Registrant)	
 	 	 	 	 	 	 	
 	 	By:	 	/s/ Dean A. McCoy	 	 	

	 	 	
 	 	 	 	Dean A. McCoy	 	 	
 	 	 	 	Senior Vice President and	 	 	
 	 	 	 	Chief Accounting Officer	 	 	
13

 

EXHIBIT 31.1

CERTIFICATION

I, Nick A. Caporella, certify that:
1.	 	I have reviewed this quarterly report on Form 10-Q of National Beverage Corp.;	 	
 	
2.	 	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;	 	 	
 	
3.	 	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;	 	 	
 	
4.	 	The registrant’s 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)) for the registrant and have:	 	 	

a)	 	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;	 	 	
 	
b)	 	Evaluated the effectiveness of the registrant’s 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	 	 	
 	
c)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	 	 	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.	 	 	
Date: December 14, 2004

/s/ Nick A. Caporella
Nick A. Caporella
Chairman of the Board and
Chief Executive Officer

 

EXHIBIT 31.2

CERTIFICATION

I, George R. Bracken, certify that:
1.	 	I have reviewed this quarterly report on Form 10-Q of National Beverage Corp.;	 	
 	
2.	 	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;	 	 	
 	
3.	 	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;	 	 	
 	
4.	 	The registrant’s 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)) for the registrant and have:	 	 	

a.	 	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;	 	 	
 	
b.	 	Evaluated the effectiveness of the registrant’s 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	 	 	
 	
c.	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	 	 	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.	 	 	
Date: December 14, 2004

/s/ George R. Bracken
George R. Bracken
Senior Vice President – Finance
(Principal Financial Officer)

 

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 October 30, 2004 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: December 14, 2004

/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.

 

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 October 30, 2004 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: December 14, 2004

/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.