NATIONAL BEVERAGE CORP 10-Q

ex_194050.htm       Table of Contents   UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-Q   (Mark One)   ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended August 1, 2020   or   ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   Commission file number 1-14170   NATIONAL BEVERAGE CORP. (Exact name of registrant as specified in its charter)       Delaware (State or other jurisdiction of incorporation or organization) 59-2605822 (I.R.S. Employer Identification No.)       8100 SW Tenth Street, Suite 4000 , Fort Lauderdale , FL 33324 (Address of principal executive offices including zip code)   ( 954 ) 581-0922 (Registrant’s telephone number including area code)   Securities registered pursuant to Section 12(b) of the Act:   Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $.01 FIZZ The Nasdaq Stock Market LLC   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 (Exchange Act) 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 ☒ No ☐   Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒ No ☐   Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.     Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐   If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐   Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒   The number of shares of registrant’s common stock outstanding as of September 8, 2020 was 46,632,128 .       Table of Contents     NATIONAL BEVERAGE CORP.   Form 10Q – QUARTERLY REPORT For the Quarter Ended August 1, 2020       PART I - FINANCIAL INFORMATION   Item 1. Financial Statements (Unaudited) Page         Condensed Consolidated Balance Sheets as of August 1, 2020 and May 2, 2020 3         Condensed   Consolidated Statements of Income for the Three Months Ended August 1, 2020 and July 2 7, 2019 4             Condensed   Consolidated Statements of Comprehensive Income for the Three Months Ended  August 1, 2020 and July 2 7, 2019 5         Condensed   Consolidated Statements of Shareholders’ Equity for the Three Months Ended August 1, 2020 and July 2 7 , 2019 6         Condensed Consolidated Statements of Cash Flows for the Three Months Ended August 1, 2020 and July 2 7 , 2019 7         Notes to Condensed Consolidated Financial Statements   8       Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12       Item 3. Quantitative and Qualitative Disclosures About Market Risk 13       Item 4. Controls and Procedures 13       PART II - OTHER INFORMATION       Item 1A. Risk Factors 15       Item 6. Exhibits 15       Signatures 16     2 Table of Contents     PART I - FINANCIAL INFORMATION   ITEM 1.  FINANCIAL STATEMENTS NATIONAL BEVERAGE CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)       August 1,       May 2,       2020       2020   Assets                   Current assets:                   Cash and equivalents   $ 352,519       $ 304,518   Trade receivables - net     103,749         84,921   Inventories     63,075         63,482   Prepaid and other assets     7,775         7,791   Total current assets     527,118         460,712   Property, plant and equipment - net     120,550         120,627   Right-of-use assets, net     44,485         47,884   Goodwill     13,145         13,145   Intangible assets     1,615         1,615   Other assets     4,748         4,663   Total assets   $ 711,661       $ 648,646                       Liabilities and Shareholders' Equity                   Current liabilities:                   Accounts payable   $ 74,467       $ 74,369   Accrued liabilities     44,993         42,476   Operating lease liabilities     16,481         16,980   Income taxes payable     13,724         7,863   Total current liabilities     149,665         141,688   Deferred income taxes - net     16,054         14,823   Operating lease liabilities – non current     29,535         32,159   Other liabilities     7,467         7,639   Total liabilities     202,721         196,309   Shareholders' equity:                   Preferred stock, $1 par value - 1,000,000 shares authorized; Series C - 150,000 shares issued     150         150   Common stock, $.01 par value - 200,000,000 shares authorized; 50,817,184 shares issued ( 50,803,184 at May 2)     508         508   Additional paid-in capital     38,110         37,930   Retained earnings     494,566         443,402   Accumulated other comprehensive (loss)     ( 161 )       ( 5,420 ) Treasury stock - at cost:                   Series C preferred stock - 150,000 shares     ( 5,100 )       ( 5,100 ) Common stock - 4,187,056  shares     ( 19,133 )       ( 19,133 ) Total shareholders' equity     508,940         452,337   Total liabilities and shareholders' equity   $ 711,661       $ 648,646     The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.   3 Table of Contents     NATIONAL BEVERAGE CORP. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)       Three Months Ended       August 1,     July 27,       2020     2019                     Net sales   $ 293,367     $ 263,568                     Cost of sales     176,149       166,994                     Gross profit     117,218       96,574                     Selling, general and administrative expenses     50,547       51,997                     Operating income     66,671       44,577                     Other income - net     276       731                     Income before income taxes     66,947       45,308                     Provision for income taxes     15,783       10,766                     Net income   $ 51,164     $ 34,542                     Earnings per common share:                 Basic   $ 1.10     $ . 74   Diluted   $ 1.09     $ . 74                     Weighted average common shares outstanding:                 Basic     46,624       46,646   Diluted     46,754       46,880     The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.   4 Table of Contents     NATIONAL BEVERAGE CORP. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)       Three Months Ended       August 1,     July 27,       2020     2019                     Net income   $ 51,164     $ 34,542                     Other comprehensive income, net of tax:                                   Cash flow hedges     5,259       16                     Comprehensive income   $ 56,423     $ 34,558     The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.   5 Table of Contents     NATIONAL BEVERAGE CORP. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands) (Unaudited)       Three Months Ended       August 1, 2020     July 27, 2019       Shares     Amount     Shares     Amount   Series C Preferred Stock                                 Beginning and end of period     150     $ 150       150     $ 150                                     Common Stock                                 Beginning of period     50,803       508       50,678       507   Stock options exercised     14       -       -       -   End of period     50,817       508       50,678       507                                     Additional Paid-In Capital                                 Beginning of period             37,930               37,065   Stock options exercised             139               7   Stock-based compensation             41               62   End of period             38,110               37,134                                     Retained Earnings                                 Beginning of period             443,402               313,430   Net income             51,164               34,542   End of period             494,566               347,972                                     Accumulated Other Comprehensive (Loss) Income                                 Beginning of period             ( 5,420 )             ( 1,543 ) Cash flow hedges, net of tax             5,259               16   End of period             ( 161 )             ( 1,527 )                                   Treasury Stock - Series C Preferred                                 Beginning and end of period     150       ( 5,100 )     150       ( 5,100 )                                   Treasury Stock - Common                                 Beginning and end of period     4,187       ( 19,133 )     4,033       ( 12,900 )                                   Total Shareholders' Equity           $ 508,940             $ 366,236       The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.   6 Table of Contents     NATIONAL BEVERAGE CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)       Three Months Ended       August 1,     July 27,       2020     2019   Operating Activities:                 Net income   $ 51,164     $ 34,542   Adjustments to reconcile net income to net cash provided by operating activities:                 Depreciation and amortization     4,627       4,446   Deferred income tax benefit     ( 151 )     ( 428 ) Loss on disposal of property, net     2       46   Stock-based compensation     41       62   Amortization of operating right to use assets     3,399       3,435   Changes in assets and liabilities:                 Trade receivables     ( 18,828 )     38   Inventories     407       ( 2,731 ) Prepaid and other assets     ( 163 )     3,154   Accounts payable     98       ( 493 ) Accrued and other liabilities     10,933       8,540   Net cash provided by operating activities     51,529       50,611                     Investing Activities:                 Additions to property, plant and equipment     ( 3,668 )     ( 4,156 ) Proceeds from sale of property, plant and equipment     1       6   Net cash used in investing activities     ( 3,667 )     ( 4,150 )                   Financing Activities:                 Proceeds from stock options exercised     139       7   Net cash provided by financing activities     139       7                     Net Increase in Cash and Equivalents     48,001       46,468                     Cash and Equivalents - Beginning of Period     304,518       156,200                     Cash and Equivalents - End of Period   $ 352,519     $ 202,668                     Other Cash Flow Information:                 Interest paid   $ 13     $ 13   Income taxes paid   $ 1,240     $ -     The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.   7 Table of Contents   NATIONAL BEVERAGE CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   National Beverage Corp. develops, produces, markets and sells a distinctive portfolio of sparkling waters, juices, energy drinks and carbonated soft drinks primarily in the United States and Canada. 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.       1. SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENT   Basis of Presentation The condensed consolidated financial statements include the accounts of National Beverage Corp. and its subsidiaries. Significant intercompany transactions and accounts have been eliminated.   The condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all information and notes presented in the annual consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10 -K for the fiscal year ended May 2, 2020. The accounting policies used in these interim condensed consolidated financial statements are consistent with those used in the annual consolidated financial statements.   The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. 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.   Reclassification Certain reclassifications have been made to prior period balances in order to conform to the current period's presentation.   Inventories Inventories are stated at the lower of first -in, first -out cost or market. Inventories at August 1, 2020 were comprised of finished goods of $ 33.9  million and raw materials of $ 29.2  million. Inventories at May 2, 2020 were comprised of finished goods of $ 39.1 million and raw materials of $ 24.4  million.   Marketing Costs The Company utilizes a variety of marketing programs, including cooperative advertising programs with customers, to advertise and promote our products to consumers.  Marketing costs are expensed when incurred, except for prepaid advertising and production costs which are expensed when the advertising takes place.  Marketing costs, which are included in selling, general and administrative expenses, totaled $ 9.9 million for the three months ended August 1, 2020 and $ 15.1 for the three months ended July 27, 2019.    Shipping and Handling Costs Shipping and handling costs are reported in selling, general and administrative expenses in the accompanying condensed consolidated statements of income.  Such costs totaled $ 19.4 million for the three months ended August 1, 2020 and $ 18.0 for the three months ended July 27, 2019.  Although our classification is consistent with many beverage companies, our gross margin may not be comparable to companies that include shipping and handling costs in cost of sales.     Summary of Significant Accounting Policies There have been no significant changes in the Company's significant accounting policies during the three months ended August 1, 2020, as compared to the significant accounting policies described in the Form 10 -K.   Recent Accounting Pronouncement On December 18, 2019, the Financial Accounting Standards Board issued Accounting Standards Update, “Simplifying the Accounting for Income Taxes” (ASU 2019 - 12 ). The new standard reduces the complexity pertaining to certain areas in accounting for income taxes. Key elements include, but are not limited to, the elimination of certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating taxes during the quarters and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and changes in tax laws or rates, as well as clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.  ASU 2019 - 12 is effective for the Company's  first quarter of fiscal year 2022.   The Company is in the process of evaluating the impact of the adoption of this new standard on its condensed consolidated financial statements.   8 Table of Contents     2. PROPERTY, PLANT AND EQUIPMENT   Property, plant and equipment consist of the following:       (In thousands)       August 1, 2020       May 2, 2020   Land   $ 9,835       $ 9,835   Buildings and improvements     60,358         59,618   Machinery and equipment     241,178         238,300   Total     311,371         307,753   Less accumulated depreciation     ( 190,821 )       ( 187,126 ) Property, plant and equipment – net   $ 120,550       $ 120,627     Depreciation expense was $ 3.7  million for the three months ended August 1, 2020 and $ 3.8 million for the three months ended July 27, 2019.       3. DEBT   At August 1, 2020, a subsidiary of the Company maintained unsecured revolving credit facilities with banks aggregating $ 100 million (the “Credit Facilities”). The Credit Facilities expire from October 3, 2020 to June 18, 2021 and any borrowings would currently bear interest at . 9 % above one -month LIBOR. There were no borrowings outstanding under the Credit Facilities at August 1, 2020 or May 2, 2020. At August 1, 2020, $ 3.4 million of the Credit Facilities was reserved for standby letters of credit and $ 96.6 million was available for borrowings.   The Credit Facilities require the subsidiary to maintain certain financial ratios, including debt to net worth and debt to EBITDA (as defined in the Credit Facilities), and contain other restrictions, none of which are expected to have a material effect on our operations or financial position. At August 1, 2020, we were in compliance with all loan covenants.       4. STOCK-BASED COMPENSATION   During the three months ended August 1, 2020, options to purchase 14,000 shares were exercised (weighted average exercise price of $ 9.95  per share). At August 1, 2020, options to purchase 173,045  shares (weighted average exercise price of $ 14.71  per share) were outstanding and stock-based awards to purchase 2,798,252 shares of common stock were available for grant.   9 Table of Contents     5. DERIVATIVE FINANCIAL INSTRUMENTS   From time to time, we enter into aluminum swap contracts to partially mitigate our exposure to changes in the cost of aluminum cans. Such financial instruments are designated and accounted for as cash flow hedges. Accordingly, gains or losses attributable to the effective portion of the cash flow hedges are reported in Accumulated Other Comprehensive Income (Loss) (“AOCI”) and reclassified into cost of sales in the period in which the hedged transaction affects earnings. The ineffective portion of the change in fair value of our cash flow hedges was immaterial. The following summarizes the gains (losses) recognized in the Condensed Consolidated Statements of Income and AOCI relative to the cash flow hedge for the three months ended August 1, 2020 and July 27, 2019:       (In thousands)       2020     2019   Recognized in AOCI:                 Gain (loss) before income taxes   $ 5,080     $ ( 1,423 ) Less income tax provision (benefit)      1,215       ( 340 ) Net     3,865       ( 1,083 ) Reclassified from AOCI to cost of sales:                 (Loss) before income taxes     ( 1,832 )     ( 1,444 ) Less income tax (benefit)      ( 438 )     ( 345 ) Net     ( 1,394 )     ( 1,099 ) Net change to AOCI   $ 5,259     $ 16     As of August 1, 2020, the notional amount of our outstanding aluminum swap contracts was $ 37.1  million and, assuming no change in commodity prices, $ 130,000  of unrealized losses before tax will be reclassified from AOCI and recognized in earnings over the next 12 months.   As of August 1, 2020, the fair value of the derivative asset was $1.0 million, which was included as a component of prepaid and other assets and the fair value of the derivative liability was $ 987,000 which was included as a component of accrued liabilities.  At May 2, 2020, the fair value of the derivative liability was $ 6.9 million, which was included as a component of accrued liabilities. Such valuation does not entail a significant amount of judgment and the inputs that are significant to the fair value measurement are Level 2 as defined by the fair value hierarchy as they are observable market based inputs or unobservable inputs that are corroborated by market data.   10 Table of Contents     6. LEASES   The Company has entered into various non-cancelable operating lease agreements for certain of our offices, buildings, machinery and equipment expiring at various dates through January 2029. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. Lease agreements generally do not contain material residual value guarantees or material restrictive covenants. Operating lease cost for the three months ended August 1, 2020 and July 27, 2019  was $ 3.4  million.  As of August 1, 2020, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.1  years and 3.38 %, respectively. As of May 2, 2020, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.3  years and 3.38 %, respectively. Cash payments were $ 3.5 million and $ 3.7 million, respectively for operating leases for the three months ended August 1, 2020 and July 27, 2019.   The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases as of August 1, 2020:       (In thousands)   Fiscal 2021 - Remaining 3 quarters   $ 10,725   Fiscal 2022     13,276   Fiscal 2023     8,975   Fiscal 2024     7,361   Fiscal 2025     4,475   Thereafter     4,101   Total minimum lease payments including interest     48,913   Less: Amounts representing interest     ( 2,897 ) Present value of minimum lease payments     46,016   Less: Current portion of lease liabilities     ( 16,481 ) Non-current portion of lease liabilities   $ 29,535       The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases as of May 2, 2020:       (In thousands)   Fiscal 2021   $ 14,206   Fiscal 2022     13,276   Fiscal 2023     8,975   Fiscal 2024     7,361   Fiscal 2025     4,475   Thereafter     4,101   Total minimum lease payments including interest     52,394   Less: Amounts representing interest     ( 3,255 ) Present value of minimum lease payments     49,139   Less: Current portion of lease liabilities     ( 16,980 ) Non-current portion of lease liabilities   $ 32,159     11 Table of Contents     ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   Overview   National Beverage Corp. innovatively refreshes America with a distinctive portfolio of sparkling waters, juices, energy drinks (Power+ Brands) and, to a lesser extent, Carbonated Soft Drinks.  We believe our creative product designs, innovative packaging and imaginative flavors, along with our corporate culture and philosophy, make National Beverage unique as a stand-alone entity in the beverage industry.    Our strategy seeks the profitable growth of our products by (i) developing healthier beverages in response to the global shift in consumer buying habits and tailoring our beverage portfolio to the preferences of a diverse mix of ‘crossover consumers’ – a growing group desiring a healthier alternative to artificially sweetened and high-caloric beverages; (ii) emphasizing unique flavor development and variety throughout our brands that appeal to multiple demographic groups; (iii) maintaining points of difference through innovative marketing, packaging and consumer engagement and (iv) responding faster and more creatively to changing consumer trends than larger competitors who are burdened by legacy production and distribution complexity and costs.    The majority of our brands are geared to the active and health-conscious consumer including sparkling waters, energy drinks, and juices. Our portfolio of Power+ Brands includes LaCroix®, LaCroix Cúrate®, and LaCroix NiCola® sparkling water products; Clear Fruit® non-carbonated water beverages enhanced with fruit flavor; Rip It® energy drinks and shots; and Everfresh®, Everfresh Premier Varietals™ and Mr. Pure® 100% juice and juice-based products. Additionally, we produce and distribute carbonated soft drinks including Shasta® and Faygo®, iconic brands whose consumer loyalty spans more than 130 years.   Presently, our primary market focus is the United States and Canada.  Certain of our products are also distributed on a limited basis in other countries and options to expand distribution to other regions are being considered.  To service a diverse customer base that includes numerous national retailers, as well as thousands of smaller “up-and-down-the-street” accounts, we utilize a hybrid distribution system consisting of warehouse and direct-store delivery. The warehouse delivery system allows our retail partners to further maximize their assets by utilizing their ability to pick up product at our warehouses, further lowering their/our product costs.     Our operating results are affected by numerous factors, including fluctuations in the costs of raw materials, holiday and seasonal programming and weather conditions. Beverage sales are seasonal with higher sales volume realized during the summer months when outdoor activities are more prevalent.   Our highly innovative business, where new beverages are developed and produced for selective holidays and ceremonial dates, should not be analyzed on the common three-month (quarterly) periods, traditionally found acceptable. Today, costly development projects and seasonal weather periods, plus promotional packaging, can distort quarter-to-quarter statistics and result in decision making that is not truly beneficial for investors and shareholders alike.    Traditional and typical are not a part of an innovator's vocabulary.    RESULTS OF OPERATIONS   Three Months Ended August 1, 2020 (first quarter of fiscal 202 1 ) compared to Three Months Ended July 27, 2019 (first quarter of fiscal 2020)   Net sales for the first quarter of fiscal 2021 increased 11.3% to $293.4 million from $263.6 million for the first quarter of fiscal 2020. The increase in sales resulted primarily from a 12.3% increase in case volume. The volume increase includes a 15.7% increase of our Power+ Brands, and 5.1% growth in Carbonated Soft Drinks. The increase in Power+ Brands volume is primarily attributable to increased consumer demand in the take-home channel.  Average selling price per case was flat.      Gross profit for the first quarter of fiscal 2021 increased to $117.2 million from $96.6 million for the first quarter of fiscal 2020. The increase in gross profit is due to increased volume and reduced raw material costs. The cost of sales per case decreased 5.2% and gross margin increased to 40.0% from 36.6% for the first quarter of fiscal 2020.      Selling, general and administrative expenses for the first quarter of fiscal 2021 decreased $1.5 million to $50.5 million from $52.0 million for the first quarter of fiscal 2020. The decrease was primarily due to reduced marketing and selling costs partially offset by increased shipping costs.  As a percent of net sales, selling, general and administrative expenses decreased to 17.2% from 19.7% for the first quarter of fiscal 2020.   Other income includes interest income of $276,000 for the first quarter of fiscal 2021 and $731,000 for the first quarter of fiscal 2020. The decrease in interest income is due to lower return on investments.    The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.6% for the first quarter of fiscal 2021 and 23.8% for the first quarter of fiscal 2020. The difference between the effective rate and the federal statutory rate of 21% was primarily due to the effects of state income taxes.   12 Table of Contents   LIQUIDITY AND FINANCIAL CONDITION   Liquidity and Capital Resources Our principal source of funds is cash generated from operations. At August 1, 2020, we maintained $100 million unsecured revolving credit facilities, under which no borrowings were outstanding and $3.4 million was reserved for standby letters of credit. We believe existing capital resources will be sufficient to meet our liquidity and capital requirements for the next twelve months.   Cash Flows The Company’s cash position increased $48.0 million for the first quarter of fiscal 2021, which compares to an increase of $46.5 million for the first quarter of fiscal 2020.   Net cash provided by operating activities for the first quarter of fiscal 2021 amounted to $51.5 million compared to $50.6 million for the first quarter of fiscal 2020. For the first quarter of fiscal 2021, cash flow was principally provided by net income of $51.1 million, an increase in accrued and other liabilities of $10.9 million and depreciation and amortization aggregating $4.6 million, offset in part by sales volume and other related increases in trade receivables.    Net cash used in investing activities for the first quarter of fiscal 2021 reflects capital expenditures of $3.7 million, compared to capital expenditures of $4.2 million for the first quarter of fiscal 2020. We intend to continue production capacity and efficiency improvement projects in fiscal 2021, and expect capital expenditures to be comparable to fiscal 2020 levels.    Financial Position At August 1, 2020, our working capital increased to $377.5 million from $319.0 million at May 2, 2020. The current ratio was 3.5 to 1 at August 1, 2020 compared to 3.3 to 1 at May 2, 2020.  The $58.5 million increase in working capital was due to higher cash and trade receivables, partially offset by higher accrued liabilities, and income taxes payable. Trade receivables increased $18.8 million during the first quarter of 2020 due to increased sales and days sales outstanding remained unchanged at 32.2 days.  Inventories decreased slightly during the first quarter of 2020 and inventory turns remained unchanged at 9.4 times.    ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   There have been no material changes in market risks from those reported in our Annual Report on Form 10-K for the fiscal year ended May 2, 2020.   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 Company’s 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 Securities Exchange Act of 1934). 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 forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.   13 Table of Contents   There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   FORWARD-LOOKING STATEMENTS   National Beverage Corp. and its representatives may make written or oral statements relating to future events or results relative to our financial, operational and business performance, achievements, objectives and strategies.  These statements are “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995 and include statements contained in this report and other filings with the Securities and Exchange Commission and in reports to our stockholders. Certain statements including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “plans,” “expects,” and “estimates” constitute “forward-looking statements” and involve known and unknown risk, uncertainties and other factors that may cause the actual results, performance or achievements of our 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 of new product and flavor introductions, fluctuations in the costs and availability of raw materials and packaging supplies, ability to pass along cost increases to our customers, labor strikes or work stoppages or other interruptions in the employment of labor, continued retailer support for our products, changes in brand image, consumer demand and preferences and our success in creating products geared toward consumers’ tastes, success in implementing business strategies, changes in business strategy or development plans, government regulations, taxes or fees imposed on the sale of our products, unfavorable weather conditions and other factors referenced in this report, filings with the Securities and Exchange Commission and other reports to our stockholders.  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.   14 Table of Contents   PART II - OTHER INFORMATION   ITEM 1A. RISK FACTORS   There have been no material changes in risk factors from those reported in our Annual Report on Form 10-K for the fiscal year ended May 2, 2020.   ITEM 6. EXHIBITS   Exhibit No. Description              31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002          31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002          32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002          32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002          101 The following financial information from National Beverage Corp. Quarterly Report on Form 10-Q for the quarterly period ended August 1, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) the Notes to Consolidated Financial Statements.          104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   15 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: September 10, 2020     National Beverage Corp.     (Registrant)             By: /s/ George R. Bracken       George R. Bracken       Executive Vice President – Finance (Principal Financial Officer)              16