NATIONAL BEVERAGE CORP (FIZZ)
• Company Overview: National Beverage is a U.S.-focused, vertically integrated beverage company celebrating its 40th anniversary. Key brands include LaCroix®, Rip It®, Clear Fruit® and legacy CSDs Shasta® and Faygo®. • Differentiators: "Better-for-you" product mix, rapid product development, in-h...
National Beverage Corp. (FIZZ) 10-K Review – Fiscal Year Ended May 3, 2025
This year’s 10-K demonstrates National Beverage’s continued ability to innovate in the beverage space and deliver strong financial results. From the dominance of LaCroix sparkling water to robust cash flow generation, the Company is well-positioned as consumer preferences shift toward "better-for-you" beverages. Read on for a deep dive into the report’s most important highlights.
Warren.AI 💰 8.0 / 10
1. Business Overview (Item 1)
Corporate Profile
- Celebrating its 40th anniversary in November 2025, National Beverage Corp. is a stand-alone beverage innovator.
- Vertically integrated structure: crafts its own flavors, controls production in 12 U.S. bottling facilities and manages distribution via warehouse and direct-store delivery.
- Primary focus on the United States; limited international distribution under evaluation.
Key Differentiators
- Better-for-You Portfolio: Focused on sparkling waters, juices and energy drinks to match consumer health trends.
- Creative Innovation: Over 135 years of brand development (e.g., Shasta®, Faygo®) extended to LaCroix® and other Power+ brands.
- Marketing Ethic: Low-cost, targeted digital and in-store campaigns, shelf marketing and brand ambassadors drive consumer engagement.
- Speed to Market: In-house R&D and flavor labs enable rapid product development and reduced costs vs. larger competitors.
Brands & Products
- LaCroix® Sparkling Water: Zero-calorie, naturally essenced, leading the premium domestic sparkling water category. New flavors: Sunshine, Strawberry Peach, Blackberry Cucumber, etc.
- Power+ Brands: Clear Fruit® flavored water, Rip It® energy drinks and shots, Everfresh® and Mr. Pure® 100% juices in glass bottles.
- Carbonated Soft Drinks (CSDs): Shasta® (135th anniversary) and Faygo® (115+ years), both expanding zero-sugar offerings.
2. Risk Factors (Item 1A)
Key Risks
- Consumer Preferences: Brands rely on favorable perceptions. Quality issues or shifting tastes could impact loyalty.
- Competition: Faces large rivals (Coca-Cola, PepsiCo) with greater scale and marketing budgets.
- Raw Materials & Energy Costs: Volatility in aluminum, corn syrup, packaging and fuel costs; limited pass-through pricing power.
- Government Regulation: Potential beverage taxes, environmental rules and labeling requirements may increase costs.
- Labor & Benefits: Wage inflation, collective bargaining and health benefits could pressure margins.
- Weather & Climate: Seasonal demand swings, droughts and severe weather can affect water availability and sales volume.
- Cybersecurity: Reliance on IT systems and third-party platforms; breaches could disrupt operations or damage reputation.
Despite these challenges, management’s proactive hedging, sustainability programs and infrastructure investments help mitigate risks.
3. Financial Highlights (Items 7, 7A & 8)
Revenue & Profitability
- Net Sales: $1,201.4 million, up 0.8% vs. prior year (53 vs. 52 weeks).
- Gross Profit: $443.9 million (37.0% margin) vs. $428.5 million (36.0%).
- Operating Income: $235.5 million vs. $218.5 million.
- Net Income: $186.8 million vs. $176.7 million.
- Earnings per Share: $2.00 (basic) vs. $1.89.
Cash Flow & Liquidity
- Operating Cash Flow: $206.7 million vs. $197.9 million.
- Capital Expenditures: $36.3 million for expansion and efficiency projects.
- Cash & Equivalents: $193.8 million at year-end.
- Debt: No borrowings; $150 million available under revolving credit facilities.
Return & Capital Returns
- Special Dividend: $304.1 million ($3.25 per share) paid July 2024.
- Share Repurchases: Program authorized for 3.2 million shares; 1.9 million remain available.
Balance Sheet Strength
- Working Capital: $267.2 million; current ratio 2.9x.
- Inventory Turns: 8.7x vs. 8.6x.
- Leverage & Covenants: In compliance with credit facility covenants; $0 debt outstanding.
4. Cash Flow Hedge Program
- Engages in aluminum swap contracts to hedge container costs.
- Hedge Fair Value: $7.4 million asset; $1.0 million liability.
- Impact on AOCI: Net $5.0 million gain moved to equity; $4.5 million reclassified into cost of sales this year.
5. Sustainability & Governance
- Environmental Initiatives: U.S. production footprint lowers carbon, >80% of products in recyclable aluminum with ~71% recycled content.
- Water Conservation: Quality assessments, facility programs to reduce water and energy use.
- Cybersecurity Oversight: Board-level oversight via Audit Committee; dedicated IT leadership and external partnerships.
- Diversity & Inclusion: 59% persons of color; 25% female; competitive benefits and safety programs.
6. Outlook & Investment Considerations
Strengths
- Market leader in premium sparkling water with unmatched brand loyalty.
- Robust cash generation funds dividends, capex and share repurchases.
- Agile structure enables rapid product innovation and launch.
Challenges
- Intense competition and price pressure from major beverage companies.
- Input cost volatility and potential beverage taxes.
Investment Thesis National Beverage’s unique portfolio of healthier beverages, strong brand equity (especially LaCroix), vertically integrated cost structure and conservative balance sheet form a compelling investment case. Continued expansion of zero-sugar offerings, disciplined capital allocation and proven marketing prowess support sustainable growth.
Net Profit (FY 2025): $186.8 million Net Profit Margin: ~15.5%