What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-09-05 compared with 2024-03-07 · 161 added, 133 removed, 202 unchanged (59% of the section changed)

5 unchanged sentences

Current assets:

Cash and equivalents

Cash and cash equivalents

$ 77,040 $ 327,047

7 unchanged sentences

158,446 159,730

Right-of-use assets

Operating lease right-of-use assets

50,627 53,498

8 unchanged sentences

49,767 46,565

Operating lease obligations

Operating lease liabilities

12,821 13,079

4 unchanged sentences

21,059 23,247

Operating lease obligations

Operating lease liabilities

39,110 41,688

2 unchanged sentences

215,976 210,641

Commitments and contingencies

Shareholders' equity:

Preferred stock, $ 1 par value - 1,000,000 shares authorized:

Series C - 150,000 shares issued

Preferred stock, $ 1 par value - 1,000,000 shares authorized Series C - 150,000 shares issued

Common stock, $ .01 par value - 200,000,000 shares authorized;

101,908,458 shares issued ( 101,727,658 shares at April 29)

101,985,358 and 101,942,658 shares issued, respectively

Additional paid-in capital

2 unchanged sentences

287,709 535,077

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income

( 1,142 ) 4,911

14 unchanged sentences

Three Months Ended

Nine Months Ended

$ 329,473 $ 324,240

Cost of sales

207,041 209,759

122,432 114,481

Selling, general and administrative expenses

52,917 51,377

Operating income

69,515 63,104

Other income, net

Income before income taxes

73,862 65,167

Provision for income taxes

17,082 15,536

$ 56,780 $ 49,631

Earnings per common share:

Weighted average common shares outstanding:

93,569 93,354

93,667 93,610

See accompanying Notes to Condensed Consolidated Financial Statements.

4 unchanged sentences

Three Months Ended

Nine Months Ended

Other comprehensive income (loss), net of tax:

$ 56,780 $ 49,631

Other comprehensive loss, net of tax:

Cash flow hedges ( 6,053 ) ( 211 )

Comprehensive income

$ 50,727 $ 49,420

See accompanying Notes to Condensed Consolidated Financial Statements.

4 unchanged sentences

Three Months Ended

Nine Months Ended

January 27, 2024

January 28, 2023

January 27, 2024

January 28, 2023

July 27, 2024

July 29, 2023

Series C Preferred Stock

Beginning and end of period

Beginning of period

150 $ 150 150 $ 150

Beginning and end of period

101,942 1,019 101,727 1,017

Stock options exercised

End of Period

101,985 1,020 101,727 1,017

Additional Paid-In Capital

Beginning of period

42,588 40,393

Stock options exercised

Stock-based compensation

Stock-based compensation expense

End of period

43,092 40,561

Retained Earnings

Beginning of period

535,077 358,345

56,780 49,631

Common stock cash dividend

( 304,148 ) -

End of period

287,709 407,976

Accumulated Other Comprehensive (Loss) Income

Beginning of period

Cash flow hedges, net of tax

4,911 ( 3,185 )

Cash flow hedges

( 6,053 ) ( 211 )

End of period

( 1,142 ) ( 3,396 )

Treasury Stock - Series C Preferred

Beginning and end of period

150 ( 5,100 ) 150 ( 5,100 )

Treasury Stock - Common

Beginning and end of period

8,374 ( 19,133 ) 8,374 ( 19,133 )

Total Shareholders' Equity

$ 306,596 $ 422,075

See accompanying Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

(In thousands)

Nine Months Ended

Three Months Ended

Operating Activities:

$ 56,780 $ 49,631

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Deferred income tax provision

Loss on sale of property, plant and equipment, net

Stock-based compensation

Amortization of operating right-of-use assets

Deferred income taxes

( 312 ) 4,284

Loss on disposal of property, plant and equipment, net

Stock-based compensation expense

Non-cash operating lease expense

Changes in assets and liabilities:

Trade receivables

Operating lease right-of-use assets

( 13,192 ) ( 2,762 )

( 6,026 ) 579

Prepaid and other assets

Accounts payable

( 4,389 ) 2,217

Accrued and other liabilities

Operating lease obligation

Operating lease liabilities

( 3,520 ) ( 3,302 )

Net cash provided by operating activities

57,499 70,143

Investing Activities:

Additions to property, plant and equipment

Purchases of property, plant and equipment

( 3,704 ) ( 5,474 )

Proceeds from sale of property, plant and equipment

Net cash used in investing activities

( 3,703 ) ( 5,448 )

Financing Activities:

Dividends paid on common stock

( 304,148 ) -

Proceeds from stock options exercised

Repayments of Loan Facility

Net cash provided by (used in) financing activities

Net Increase in Cash and Equivalents

Cash and Equivalents - Beginning of Period

Cash and Equivalents - End of Period

Other Cash Flow Information:

Net cash used in financing activities

( 303,803 ) -

Net (Decrease) Increase in Cash and Cash Equivalents

( 250,007 ) 64,695

Cash and Cash Equivalents - Beginning of Period

327,047 158,074

Cash and Cash Equivalents - End of Period

$ 77,040 $ 222,769

Supplemental Cash Flow Information:

Interest paid

Income taxes paid

Non-Cash Activities:

Right-of-use assets obtained in exchange for lease liabilities

$ 684 $ 3,589

See accompanying Notes to Condensed Consolidated Financial Statements.

12 unchanged sentences

and its subsidiaries.

Significant intercompany transactions and accounts have been eliminated.

All significant intercompany transactions and accounts have been eliminated.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles and rules and regulations of the Securities and Exchange Commission for interim financial reporting.

2 unchanged sentences

The accounting policies used in these interim unaudited condensed consolidated financial statements are consistent with those used in the annual consolidated financial statements.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the interim unaudited condensed consolidated financial statements and accompanying notes.

2 unchanged sentences

Results for the interim periods presented are not necessarily indicative of results which might be expected for the entire fiscal year.

Inventories are stated at the lower of first -in, first -out cost or net realizable market.

Inventories at January 27, 2024 were comprised of finished goods of $ 53.1 million and raw materials of $ 35.6 million.

Fair Value of Financial Instruments

The carrying values of the Company’s financial instruments, including cash and cash equivalents, trade receivables, accounts payable and accrued liabilities, approximate fair value due to the relatively short maturity of the respective instruments.

Derivative financial instruments which are used to partially mitigate our exposure to changes in certain raw material costs are recorded at fair value.

Derivative financial instruments are not used for trading or speculative purposes.

Credit risk related to derivative financial instruments is managed by requiring high credit standards for counterparties and frequent cash settlements.

The estimated fair values of derivative financial instruments are calculated based on market rates to settle the instruments.

See Note 6 -Derivative Financial Instruments.

Inventories are stated at the lower of first -in, first -out cost or net realizable value.

Adjustments, if required, to reduce the cost of the inventory to net realizable value are made for estimated excess, obsolete or impaired balances.

Inventories at July 27, 2024 were comprised of finished goods of $ 49.0 million and raw materials of $ 41.6 million.

Inventories at April 27, 2024 were comprised of finished goods of $ 50.3 million and raw materials of $ 34.3 million.

Marketing Costs

The Company utilizes a variety of marketing programs, including cooperative advertising programs with customers, to advertise and promote its beverages 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, were $ 11.0 million and $ 10.4 million for the three months ended January 27, 2024 and January 28, 2023, respectively.

Marketing costs were $ 35.1 million and $ 31.0 million for the nine months ended January 27, 2024 and January 28, 2023, respectively.

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 were $ 17.7 million and $ 20.2 million for the three months ended January 27, 2024 and January 28, 2023, respectively.

Shipping and handling costs were $ 58.3 million and $ 65.8 million for the nine months ended January 27, 2024 and January 28, 2023, respectively.

Such costs were $ 19.5 million and $ 20.9 million for the three months ended July 27, 2024 and July 29, 2023, respectively.

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.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

Marketing Costs

The Company utilizes a variety of marketing programs, including cooperative advertising programs with customers, to advertise and promote its beverages 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, were $ 11.5 million and $ 10.8 million for the three months ended July 27, 2024 and July 29, 2023, respectively.

Earnings Per Common Share

Basic earnings per common share is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per common share is calculated in a similar manner, but includes the dilutive effect of stock options amounting to 98,000 and 256,000 shares in the three months ended July 27, 2024 and July 29, 2023, respectively.

PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consist of the following:

(In thousands)

9 unchanged sentences

$ 158,446 $ 159,730

Depreciation expense was $ 4.8 million and $ 4.5 million for the three months ended January 27, 2024 and January 28, 2023, respectively.

Depreciation expense was $ 14.0 million and $ 13.5 million for the nine months ended January 27, 2024 and January 28, 2023, respectively.

At January 27, 2024, a subsidiary of the Company maintained unsecured revolving credit facilities with banks aggregating $ 100 million (the “Credit Facilities”).

Depreciation expense was $ 5.0 million and $ 4.6 million for the three months ended July 27, 2024 and July 29, 2023, respectively.

The Company has entered into various non-cancelable operating lease agreements for certain offices, buildings and machinery and equipment which expire at various dates through May 2036.

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 costs were $ 4.1 million and $ 3.7 million for the three months ended July 27, 2024 and July 29, 2023, respectively.

As of July 27, 2024, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.69 years and 4.34 %, respectively.

As of April 27, 2024, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.80 years and 4.30 %, respectively.

Cash payments were $ 4.1 million and $ 3.7 million for operating leases for the three months ended July 27, 2024 and July 29, 2023, respectively.

The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases as of July 27, 2024:

(In thousands)

Fiscal 2025 – Remaining 3 quarters

Total minimum lease payments including interest

Amounts representing interest

Present value of minimum lease payments

Current portion of lease obligations

Non-current portion of lease obligations

At July 27, 2024, a subsidiary of the Company maintained unsecured revolving credit facilities with banks aggregating $ 100 million (the “Credit Facilities”).

The Credit Facilities expire from October 28, 2024 to May 30, 2025 and any borrowings would currently bear interest at 1.05 % above the Secured Overnight Financing Rate ( SOFR ).

There were no borrowings outstanding under the Credit Facilities at January 27, 2024 or April 29, 2023.

At January 27, 2024, $ 2.2 million of the Credit Facilities was reserved for standby letters of credit and $ 97.8 million was available for borrowings.

There were no borrowings outstanding under the Credit Facilities at July 27, 2024 or April 27, 2024.

At July 27, 2024, $ 2.2 million of the Credit Facilities was reserved for standby letters of credit and $ 97.8 million was available for borrowings.

On December 21, 2021, a subsidiary of the Company entered into an unsecured revolving term loan facility with a national bank aggregating $ 50 million (the “Loan Facility”).

There were no borrowings outstanding under the Loan Facility at January 27, 2024 or April 29, 2023.

There were no borrowings outstanding under the Loan Facility at July 27, 2024 or April 27, 2024.

The Loan Facility expires December 31, 2025 and any borrowings would bear interest at 1.05 % above the adjusted daily SOFR .

The Credit Facilities and Loan Facility require the subsidiary to maintain certain financial ratios, including debt to net worth and debt to EBITDA (as defined in the credit agreements), and contain other restrictions, none of which are expected to have a material effect on operations or financial position.

At January 27, 2024, the subsidiary was in compliance with all loan covenants.

At July 27, 2024, the subsidiary was in compliance with all loan covenants.

STOCK OPTIONS

During the nine months ended January 27, 2024 no options were granted, options to purchase 180,800 shares were exercised and options to purchase 6,400 shares were cancelled at weighted average exercise prices of $ 4.65 and $ 31.49 , respectively.

At January 27, 2024, options to purchase 334,100 shares at a weighted average exercise price of $ 24.10 per share were outstanding and stock-based awards to purchase 5,393,405 shares of common stock were available for grant.

During the three months ended July 27, 2024, no options were granted, options to purchase 42,700 shares were exercised and options to purchase 4,200 shares were cancelled at weighted average exercise prices of $ 8.07 and $ 15.71 , respectively.

At July 27, 2024, options to purchase 253,000 shares at a weighted average exercise price of $ 28.54 per share were outstanding and stock-based awards to purchase 5,397,605 shares of common stock were available for grant.

DERIVATIVE FINANCIAL INSTRUMENTS

4 unchanged sentences

The following summarizes the gains (losses) recognized in the Condensed Consolidated Statements of Income and AOCI:

(In thousands)

Three Months Ended

Nine Months Ended

July 27, 2024

July 29, 2023

Recognized in AOCI:

Gain (loss) before income taxes

Loss before income taxes

$ ( 7,198 ) $ ( 4,040 )

income tax provision (benefit)

income tax benefit

( 1,704 ) ( 966 )

1 unchanged sentence

Reclassified from AOCI to cost of sales:

Loss before income taxes

( 2,126 ) ( 2,036 ) ( 9,353 ) ( 5,750 )

income tax benefit

Gain (loss) before income taxes

732 ( 3,763 )

income tax provision (benefit)

559 ( 2,863 )

1 unchanged sentence

$ ( 6,053 ) $ ( 211 )

As of January 27, 2024, the notional amount of our outstanding aluminum swap contracts was $ 70.4 million and, assuming no change in commodity prices, $ 0.6 million of unrealized loss before tax will be reclassified from AOCI and recognized in earnings over the next 12 months.

As of January 27, 2024 and April 29, 2023 the fair value of the derivative liability, which was included in accrued liabilities, was $ 1.4 million and $ 4.6 million, respectively.

As of January 27, 2024, the fair value of the derivative asset was $ 0.8 million, which was included in prepaid and other assets and the fair value of the long-term derivative asset was $ 0.4 million, which was included in other assets.

As of July 27, 2024, the notional amount of our outstanding aluminum swap contracts was $ 102.0 million and, assuming no change in commodity prices, $ 1.7 million of unrealized loss before tax will be reclassified from AOCI and recognized in earnings over the next 12 months.

The maximum length of time for which the Company hedges its exposure to the variability of future cash flows is less than three years.

As of July 27, 2024, the fair value of the short-term derivative liability was $ 1.9 million, which was included in accrued liabilities , the fair value of the long-term derivative liability was $ 0.7 million, which was included in other liabilities, and the fair value of the derivative asset was $ 0.4 million, of which $ 0.2 million was included in prepaids and other assets and $ 0.2 million in other assets.

As of April 27, 2024, the fair value of the derivative asset, which was included in prepaid and other assets , was $ 5.7 million.

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.

The Company has entered into various non-cancelable operating lease agreements for certain offices, buildings and machinery and equipment which expire at various dates through July 2035.

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 costs were $ 4.1 million and $ 3.6 million for the three months ended January 27, 2024 and January 28, 2023, respectively.

Operating lease costs were $ 11.8 million and $ 10.7 million for the nine months ended January 27, 2024 and January 28, 2023, respectively.

As of January 27, 2024, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.95 years and 4.28 %, respectively.

As of April 29, 2023, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.34 years and 3.30 %, respectively.

Cash payments were $ 3.5 million and $ 3.7 million for operating leases for the three months ended January 27, 2024 and January 28, 2023, respectively.

Cash payments were $ 11.4 million and $ 10.8 million for the nine months ended January 27, 2024 and January 28, 2023, respectively.

The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases as of January 27, 2024:

(In thousands)

Fiscal 2024 – Remaining quarter

Total minimum lease payments including interest

amounts representing interest

Present value of minimum lease payments

current portion of lease obligations

Non-current portion of lease obligations

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2023 - 07, Segment Reporting (Topic 280 ), to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This standard does not change how an entity identifies its operating segments or applies the quantitative thresholds to determine its reportable segments.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and does not expect a material impact upon adoption.

CASH DIVIDEND

On June 12, 2024, the Company's board of directors declared a special cash dividend of $ 3.25 per share payable to shareholders of record on June 24, 2024.

The special cash dividend of $ 304.1 million was paid on July 24, 2024.

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

2 unchanged sentences

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.

Traditional and typical are not a part of an innovator’s vocabulary.

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.

5 unchanged sentences

Additionally, we produce and distribute carbonated soft drinks including Shasta® and Faygo®, iconic brands whose consumer loyalty spans more than 135 years.

(ii) emphasizing unique flavor development and variety throughout our brands that appeal to multiple demographic groups;

Presently, our primary market focus is the United States and Canada.

2 unchanged sentences

The warehouse delivery system allows our retail partners to further maximize their assets by utilizing their ability to pick up beverages at our warehouses, further lowering their/our costs.

Our operating results are affected by numerous factors, including fluctuations in the costs of raw materials, holiday and seasonal programming, changes in consumer purchasing habits and weather conditions.

Our operating results are affected by numerous factors, including fluctuations in the costs of raw materials, supply chain disruptions, 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.

RESULTS OF OPERATIONS

Three Months Ended January 27, 2024 (third quarter of fiscal 2024) compared to

Three Months Ended January 28, 2023 (third quarter of fiscal 2023)

Net sales for the third quarter of fiscal 2024 increased $1.6 million to $270.1 million from $268.5 million for the third quarter of fiscal 2023.

The increase in sales resulted primarily from a 0.9% increase in average selling price per case, partially offset by a 0.7% decline in case volume.

The volume decline primarily impacted Power+ Brands, partially offset by an increase in carbonated soft drink brands.

Gross profit for the third quarter of fiscal 2024 increased to $97.0 million from $94.9 million for the third quarter of fiscal 2023.

The increase in gross profit was primarily due to the increased average selling price per case.

The cost of sales per case was flat and gross margin increased to 35.9% from 35.4% for the third quarter of fiscal 2023.

Selling, general and administrative expenses for the third quarter of fiscal 2024 decreased $1.6 million to $48.9 million from $50.5 million for the third quarter of fiscal 2023.

The decrease was primarily due to a decrease in shipping and administrative costs, partially offset by an increase in selling and marketing costs.

As a percentage of net sales, selling, general and administrative expenses decreased to 18.1% for the third quarter of fiscal 2024 from 18.8% for the third quarter of fiscal 2023.

Other income – net includes interest income of $1.8 million for the third quarter of fiscal 2024 and $0.4 million for the third quarter of fiscal 2023.

The increase in interest income is due to increased average invested balances and higher yields.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 21.1% for the third quarter of fiscal 2024 and 23.5% for the third quarter of fiscal 2023.

The difference between the effective rate and the federal statutory rate of 21% was primarily due to the effects of state income taxes offset by excess tax benefits realized from stock options exercised.

Nine Months Ended January 27, 2024 (first nine months of fiscal 2024) compared to

Nine Months Ended January 28, 2023 (first nine months of fiscal 2023)

Net sales for the first nine months of fiscal 2024 increased $8.2 million to $894.4 million from $886.2 million for the first nine months of fiscal 2023.

The increase in sales resulted primarily from a 2.6% increase in average selling price per case, partially offset by a 2.1% decline in case volume.

The volume decline primarily impacted Power+ Brands, partially offset by an increase in carbonated soft drink brands.

Gross profit for the first nine months of fiscal 2024 increased to $319.4 million from $294.3 million for the first nine months of fiscal 2023.

The increase in gross profit was due to the increased average selling price per case and a decline in packaging and ingredient costs.

The cost of sales per case decreased 1.3% and gross margin increased to 35.7% from 33.2% for the first nine months of fiscal 2023.

Selling, general and administrative expenses for the first nine months of fiscal 2024 decreased $2.7 million to $153.8 million from $156.5 million for the first nine months of fiscal 2023.

The decrease was primarily due to a decrease in shipping and administrative costs, partially offset by an increase in selling and marketing costs.

As a percentage of net sales, selling, general and administrative expenses decreased to 17.2% from 17.7% for the first nine months of fiscal 2023.

Other income – net includes interest income of $5.8 million for the first nine months of fiscal 2024 and $0.5 million for the first nine months of fiscal 2023.

The increase in interest income is due to increased average invested balances and higher yields.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 22.8% for the first nine months of fiscal 2024 and 23.5% for the first nine months of fiscal 2023.

The difference between the effective rate and the federal statutory rate of 21% was primarily due to the effects of state income taxes.

Three Months Ended July 27, 2024 (first quarter of fiscal 2025) compared to

Three Months Ended July 29, 2023 (first quarter of fiscal 2024)

Net sales for the first quarter of fiscal 2025 increased 1.6% to $329.5 million compared to $324.2 million for the first quarter of fiscal 2024.

The increase in sales resulted primarily from a 0.7% increase in case volume and a 0.7% increase in average selling price per case.

The increase in case volume primarily impacted carbonated soft drink brands, partially offset by a slight decrease in Power+ Brands.

Gross profit for the first quarter of fiscal 2025 increased to $122.4 million compared to $114.5 million for the first quarter of fiscal 2024.

The increase in gross profit was primarily due to a decline in packaging costs, the increase in average selling price per case and the increase in case volume.

The cost of sales per case decreased 1.9% and gross margin increased to 37.2% compared to 35.3% for the first quarter of fiscal 2024.

Selling, general and administrative expenses for the first quarter of fiscal 2025 increased $1.5 million to $52.9 million from $51.4 million for the first quarter of fiscal 2024.

The increase was primarily due to an increase in administrative and marketing costs, partially offset by a decrease in shipping costs.

As a percentage of net sales, selling, general and administrative expenses increased to 16.1% for the first quarter of fiscal 2025 compared to 15.8% for the first quarter of fiscal 2024.

Other income, net includes interest income of $4.3 million for the first quarter of fiscal 2025 and $1.8 million for the first quarter of fiscal 2024.

The increase in interest income is due primarily to increased average invested balances.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.1% for the first quarter of fiscal 2025 and 23.8% for the first quarter of fiscal 2024.

The difference between the effective rate and the federal statutory rate of 21% was primarily due to the effects of state income taxes, partially offset by excess tax benefits realized from stock options exercised.

LIQUIDITY AND FINANCIAL CONDITION

Liquidity and Capital Resources

Our principal source of funds is cash generated from operations.

At January 27, 2024, we maintained unsecured revolving credit facilities totaling $150 million, under which no borrowings were outstanding and $2.2 million was reserved for standby letters of credit.

Our principal sources of liquidity are our existing cash and cash-equivalents, cash generated from operations and borrowing capacity.

At July 27, 2024, we maintained unsecured revolving Credit Facilities and Loan Facility totaling $150 million, under which no borrowings were outstanding and $2.2 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.

The Company’s cash position increased $118.9 million for the first nine months of fiscal 2024 compared to an increase of $70.3 million for the first nine months of fiscal 2023.

Net cash provided by operating activities for the first nine months of fiscal 2024 was $137.5 million compared to $112.3 million for the nine months of fiscal 2023.

For the first nine months of fiscal 2024, cash flow provided by operating activities was principally provided by net income of $133.0 million, depreciation and amortization of $15.1 million, and amortization of operating lease right-of-use assets of $10.5 million, partially offset by changes in working capital and other accounts.

Net cash used in investing activities for the first nine months of fiscal 2024 reflects capital expenditures of $19.5 million, compared to capital expenditures of $12.3 million for the first nine months of fiscal 2023.

The Company’s cash position decreased $250.0 million for the first quarter of fiscal 2025 compared to an increase of $64.7 million for the first quarter of fiscal 2024 primarily due to the special cash dividend of $304.1 million paid on July 24, 2024.

Net cash provided by operating activities for the first quarter of fiscal 2025 was $57.5 million compared to $70.1 million for the first quarter of fiscal 2024.

For the first quarter of fiscal 2025, cash flow provided by operating activities decreased primarily due to increases in working capital excluding cash, partially offset by an increase in operating income and interest income.

Net cash used in investing activities for the first quarter of fiscal 2025 reflects capital expenditures of $3.7 million, compared to capital expenditures of $5.5 million for the first quarter of fiscal 2024.

Certain production capacity and efficiency improvement projects are in progress and we anticipate fiscal 2025 capital expenditures will be in the range of $25 to $30 million.

Net cash used in financing activities for the first quarter of fiscal 2025 reflects the payments of a special dividend of $304.1 million.

Financial Position

At January 27, 2024, working capital increased to $356.0 million from $222.1 million at April 29, 2023.

The current ratio was 3.7 to 1 at January 27, 2024 compared to 2.5 to 1 at April 29, 2023.

Trade receivables - net decreased $3.2 million and days sales outstanding increased to 34.3 from 33.3 days.

Inventories decreased $4.9 million and inventory turns improved to 8.3 times from 7.9 times.

At July 27, 2024, working capital decreased to $145.7 million from $398.9 million at April 27, 2024.

The current ratio was 2.0 to 1 at July 27, 2024 compared to 3.9 to 1 at April 27, 2024.

The decrease in working capital and current ratio was due primarily to the payment of the $304.1 million cash dividend.

Trade receivables increased $13.2 million and days sales outstanding increased to 32.0 from 31.5 days.

Inventories increased $6.0 million and inventory turns declined to 8.3 times from 8.6 times.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements