What changed in this filing

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Item 1. Financial Statements

2025-03-06 compared with 2024-12-05 · 86 added, 85 removed, 294 unchanged (37% of the section changed)

48 unchanged sentences

372,989 535,077

Accumulated other comprehensive loss

Accumulated other comprehensive income

Treasury stock - at cost:

13 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Cost of sales

12 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Other comprehensive income, net of tax:

7 unchanged sentences

Three Months Ended

Six Months Ended

October 26, 2024

October 28, 2023

October 26, 2024

October 28, 2023

Nine Months Ended

January 25, 2025

January 27, 2024

January 25, 2025

January 27, 2024

Series C Preferred Stock

26 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

Operating Activities:

2 unchanged sentences

Deferred income taxes

Loss on disposal of property, plant and equipment, net

Stock-based compensation expense

52 unchanged sentences

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.

As of January 25, 2025 and April 27, 2024, cash and cash equivalents included money-market instruments of $ 77.2 million and $ 240.7 million, respectively.

These financial instruments are Level 1 as defined by the fair value hierarchy since they are based on quoted prices in active markets for identical assets and liabilities.

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

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

3 unchanged sentences

Trade Receivables, Net

The Company’s estimated allowances for credit losses as of

October 26, 2024 and

April 27, 2024 were

$ 1.0 million and

$ 0.9 million, respectively.

The Company’s estimated allowances for credit losses as of January 25, 2025 and April 27, 2024 were $ 1.3 million and $ 0.9 million, respectively.

The Company’s trade receivable, net balances as of January 27, 2024 and April 29, 2023 were $ 101.7 million and $ 104.9 million, respectively.

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 October 26, 2024 were comprised of finished goods of $ 49.0 million and raw materials of $ 42.1 million.

Inventories at January 25, 2025 were comprised of finished goods of $ 46.1 million and raw materials of $ 38.9 million.

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

1 unchanged sentence

Shipping and handling costs are reported in selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

Such costs were $ 18.4 million and $ 19.7 million for the three months ended October 26, 2024 and October 28, 2023, respectively.

Shipping and handling costs were $ 38.0 million and $ 40.6 million for the six months ended October 26, 2024 and October 28, 2023, respectively.

Such costs were $ 17.5 million and $ 17.7 million for the three months ended January 25, 2025 and January 27, 2024, respectively.

Shipping and handling costs were $ 55.5 million and $ 58.3 million for the nine months ended January 25, 2025 and January 27, 2024, 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.

2 unchanged sentences

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 $ 11.6 million and $ 13.3 million for the three months ended October 26, 2024 and October 28, 2023, respectively.

Marketing costs were $ 23.1 million and $ 24.1 million for the six months ended October 26, 2024 and October 28, 2023, respectively.

Marketing costs, which are included in selling, general and administrative expenses, were $ 10.1 million and $ 11.0 million for the three months ended January 25, 2025 and January 27, 2024, respectively.

Marketing costs were $ 33.2 million and $ 35.1 million for the nine months ended January 25, 2025 and January 27, 2024, 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 that was 73,000 and 244,000 shares in the three months ended October 26, 2024 and October 28, 2023, respectively.

The dilutive effect of stock options was 86,000 and 250,000 shares in the six months ended October 26, 2024 and October 28, 2023, respectively.

Diluted earnings per common share is calculated in a similar manner, but includes the dilutive effect of stock options that was 74,000 and 186,000 shares in the three months ended January 25, 2025 and January 27, 2024, respectively.

The dilutive effect of stock options was 82,000 and 229,000 shares in the nine months ended January 25, 2025 and January 27, 2024, respectively.

Recently Issued Accounting Pronouncements

1 unchanged sentence

Disaggregation of Income Statement Expenses,” which requires entities to disaggregate operating expenses into specific categories such as employee compensation, depreciation, and intangible asset amortization, by relevant expense caption on the statement of operations.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted on either a prospective or retrospective basis.

7 unchanged sentences

Improvements to Reportable Segment Disclosures,” which requires additional disclosure of significant segment expenses included in the reported measure of segment profit or loss and regularly provided to the Chief Operating Decision Maker.

This standard does not change how an entity identifies its operating segments or applies quantitative thresholds to determine its reportable segments The standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those 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.

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

The standard will be effective for our fiscal year ending May 3, 2025.

The Company evaluated the impact of adoption of this standards on its consolidated financial statements and does not expect a material impact upon adoption.

PROPERTY, PLANT AND EQUIPMENT, NET

11 unchanged sentences

$ 165,585 $ 159,730

Property, plant and equipment included construction-in-progress in the amounts of $ 35.5 million and $ 32.5 million as of October 26, 2024, and April 27, 2024, respectively.

Depreciation expense was $ 5.0 million and $ 4.7 million for the three months ended October 26, 2024 and October 28, 2023, respectively.

Depreciation expense was $ 10.0 million and $ 9.3 million for the six months ended October 26, 2024 and October 28, 2023, respectively.

Property, plant and equipment included construction-in-progress in the amounts of $ 42.0 million and $ 32.5 million as of January 25, 2025 and April 27, 2024, respectively.

Depreciation expense was $ 4.9 million and $ 4.8 million for the three months ended January 25, 2025 and January 27, 2024, respectively.

Depreciation expense was $ 15.0 million and $ 14.0 million for the nine months ended January 25, 2025 and January 27, 2024, respectively.

Depreciation expense is recorded in cost of sales and selling, general and administrative expenses.

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 has entered into various non-cancelable operating lease agreements for certain offices, buildings and machinery and equipment which expire at various dates through January 2037.

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 $ 4.0 million for the three months ended October 26, 2024 and October 28, 2023, respectively.

Operating lease costs were $ 8.3 million and $ 7.7 million for the six months ended October 26, 2024 and October 28, 2023, respectively.

As of October 26, 2024, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.57 years and 4.43 %, respectively.

Operating lease costs were $ 4.2 million and $ 4.1 million for the three months ended January 25, 2025 and January 27, 2024, respectively.

Operating lease costs were $ 12.5 million and $ 11.8 million for the nine months ended January 25, 2025 and January 27, 2024, respectively.

As of January 25, 2025, the weighted-average remaining lease term and weighted average discount rate of operating leases was 4.85 years and 4.50 %, 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 $ 4.3 million and $ 4.1 million for operating leases for the three months ended October 26, 2024 and October 28, 2023, respectively.

Cash payments were $ 8.4 million and $ 7.8 million for operating leases for the six months ended October 26, 2024 and October 28, 2023, respectively.

The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases as of October 26, 2024:

Cash payments were $ 3.9 million and $ 3.5 million for operating leases for the three months ended January 25, 2025 and January 27, 2024, respectively.

Cash payments were $ 12.3 million and $ 11.4 million for operating leases for the nine months ended January 25, 2025 and January 27, 2024, respectively.

The following is a summary of future minimum lease payments and related liabilities for all non-cancelable operating leases as of January 25, 2025:

(In thousands)

Fiscal 2025 – Remaining 2 quarters

Fiscal 2025 – Remaining quarter

Total minimum lease payments including interest

3 unchanged sentences

Non-current portion of lease obligations

At October 26, 2024, a subsidiary of the Company maintained unsecured revolving credit facilities with banks aggregating $ 100 million (the “Credit Facilities”).

At January 25, 2025, a subsidiary of the Company maintained unsecured revolving credit facilities with banks aggregating $ 100 million (the “Credit Facilities”).

The Credit Facilities expire from May 30, 2025 to September 10, 2027 and any borrowings would currently bear interest at 1.15 % above the Secured Overnight Financing Rate (“ SOFR ”).

There were no borrowings outstanding under the Credit Facilities at October 26, 2024 or April 27, 2024.

At October 26, 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 October 26, 2024 or April 27, 2024.

There were no borrowings outstanding under the Credit Facilities at January 25, 2025 or April 27, 2024.

At January 25, 2025, $ 2.2 million of the Credit Facilities was reserved for standby letters of credit and $ 97.8 million was available for borrowings.

A subsidiary of the Company also maintains 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 25, 2025 or April 27, 2024.

The Loan Facility expires December 31, 2027 and any borrowings would bear interest at 1.15 % 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 October 26, 2024, the subsidiary was in compliance with all loan covenants.

At January 25, 2025, the subsidiary was in compliance with all loan covenants.

DERIVATIVE FINANCIAL INSTRUMENTS

5 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Three Months Ended Nine Months Ended

Recognized in AOCI:

5 unchanged sentences

Reclassified from AOCI to cost of sales:

Loss before income taxes

Gain (loss) before income taxes

1,395 ( 2,126 ) 2,536 ( 9,353 )

income tax benefit

income tax provision (benefit)

330 ( 509 ) 598 ( 2,237 )

2 unchanged sentences

$ 237 $ 2,732 $ 1,832 $ 3,376

As of October 28, 2024, the notional amount of our outstanding aluminum swap contracts was $ 86.0 million and, assuming no change in commodity prices, $ 5.4 million of unrealized gain before tax will be reclassified from AOCI and recognized in earnings over the next 12 months.

As of January 25, 2025, the notional amount of our outstanding aluminum swap contracts was $ 73.0 million and, assuming no change in commodity prices, $ 6.7 million of unrealized gain 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 October 28, 2024, the fair value of the derivative asset was $ 7.8 million, of which $ 5.4 million was included in prepaid and other assets and $ 2.4 million in other assets.

The Company is not subject to any legally enforceable master netting arrangements and does not offset fair value amounts recognized for derivative instruments.

As of January 25, 2025, the fair value of the derivative asset was $ 8.2 million, of which $ 6.8 million was included in prepaid and other assets and $ 1.4 million in other assets.

The fair value of the derivative liability was $ 0.1 million which was included in accrued liabilities .

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

4 unchanged sentences

The management agreement provides that the Company will pay CMA an annual base fee equal to one percent of the consolidated net sales of the Company.

Management fees to CMA were $ 2.9 million and $ 3.0 million for the three months ended October 26, 2024 and October 28, 2023, respectively.

Management fees to CMA were $ 6.2 million and $ 6.3 million for the six months ended October 26, 2024 and October 28, 2023, respectively.

At October 26, 2024 and April 27, 2024, current liabilities included amounts due to CMA of $ 1.8 million and $ 3.0 million, respectively.

Management fees to CMA were $ 2.7 million for each of the three months ended January 25, 2025 and January 27, 2024.

Management fees to CMA were $ 8.9 million and $ 9.0 million for the nine months ended January 25, 2025 and January 27, 2024, respectively.

At January 25, 2025 and April 27, 2024, current liabilities included amounts due to CMA of $ 1.6 million and $ 3.0 million, respectively.

CASH DIVIDEND

22 unchanged sentences

RESULTS OF OPERATIONS

Three Months Ended October 26, 2024 (second quarter of fiscal 2025) compared to

Three Months Ended October 28, 2023 (second quarter of fiscal 2024)

Net sales for the second quarter of fiscal 2025 decreased 3.0% to $291.2 million compared to $300.1 million for the second quarter of fiscal 2024.

Three Months Ended January 25, 2025 (third quarter of fiscal 2025) compared to

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

Net sales for the third quarter of fiscal 2025 decreased 1.1% to $267.1 million from $270.1 million for the third quarter of fiscal 2024.

The decrease in sales resulted primarily from a 3.4% decrease in case volume, partially offset by a 2.2% increase in average selling price per case.

The decrease in case volume impacted both Power + Brands and carbonated soft drink brands.

Gross profit for the second quarter of fiscal 2025 increased to $109.4 million compared to $107.9 million for the second quarter of fiscal 2024.

The increase in gross profit was primarily due to a decline in certain packaging costs and an increase in average selling price per case, partially offset by the decrease in case volume.

The average cost of sales per case decreased 0.3% and gross margin increased to 37.6% compared to 35.9% for the second quarter of fiscal 2024.

Selling, general and administrative expenses for the second quarter of fiscal 2025 decreased $2.1 million to $51.5 million from $53.6 million for the second quarter of fiscal 2024.

The decrease was primarily due to a decrease in marketing and shipping and handling costs.

As a percentage of net sales, selling, general and administrative expenses decreased to 17.7% for the second quarter of fiscal 2025 compared to 17.8% for the second quarter of fiscal 2024.

Other income, net includes interest income of $1.7 million for the second quarter of fiscal 2025 and $2.2 million for the second quarter of fiscal 2024.

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

Gross profit for the third quarter of fiscal 2025 increased to $99.0 million from $97.0 million for the third quarter of fiscal 2024.

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

The average cost of sales per case remained constant and gross margin increased to 37.1% from 35.9% for the third quarter of fiscal 2024.

Selling, general and administrative expenses for the third quarter of fiscal 2025 decreased $0.5 million to $48.4 million from $48.9 million for the second quarter of fiscal 2024.

The decrease was primarily due to a decrease in marketing and selling costs.

As a percentage of net sales, selling, general and administrative expenses remained constant at 18.1% for the third quarter of fiscal 2025 and fiscal 2024, respectively.

Other income, net includes interest income of $1.4 million for the third quarter of fiscal 2025 and $1.8 million for the third quarter of fiscal 2024.

The decrease in interest income is due primarily to lower average invested balances.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.4% for the second quarter of fiscal 2025 and 23.2% for the second quarter of fiscal 2024.

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.7% for the third quarter of fiscal 2025 and 21.0% for the third 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.

Six Months Ended October 26, 2024 (first six months of fiscal 2025) compared to

Six Months Ended October 28, 2023 (first six months of fiscal 2024)

Net sales for the first six months of fiscal 2025 decreased 0.6% to $620.7 million from $624.3 million for the first six months of fiscal 2024.

Nine Months Ended January 25, 2025 (first nine months of fiscal 2025) compared to

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

Net sales for the first nine months of fiscal 2025 decreased 0.7% to $887.7 million from $894.4 million for the first nine months of fiscal 2024.

The decrease in sales resulted primarily from a 2.3% decrease in case volume, partially offset by a 1.7% increase in average selling price per case.

The decrease in case volume impacted both Power+ Brands and carbonated soft drink brands.

Gross profit for the first six months of fiscal 2025 increased to $231.8 million from $222.3 million for the first six months of fiscal 2024.

The increase in gross profit was primarily due to a decline in certain packaging costs and an increase in average selling price per case, partially offset by the decrease in case volume.

The average cost of sales per case decreased 1.2% and gross margin increased to 37.3% compared to 35.6% for the first six months of fiscal 2024.

Selling, general and administrative expenses for the first six months of fiscal 2025 decreased $0.5 million to $104.4 million from $104.9 million for the first six months of fiscal 2024.

Gross profit for the first nine months of fiscal 2025 increased to $330.7 million from $319.4 million for the first nine months of fiscal 2024.

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

The average cost of sales per case decreased 0.9% and gross margin increased to 37.3% from 35.7% for the first nine months of fiscal 2024.

Selling, general and administrative expenses for the first nine months of fiscal 2025 decreased $1.0 million to $152.8 million from $153.8 million for the first nine months of fiscal 2024.

The decrease was primarily due to a decrease in marketing and shipping and handling costs.

As a percentage of net sales, selling, general and administrative expenses remained at 16.8% for both of the first six months of fiscal 2025 and fiscal 2024.

Other income, net includes interest income of $6.0 million for the first six months of fiscal 2025 and $4.0 million for the first six months of fiscal 2024.

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 23.3% for the first six months of fiscal 2025 and 23.5% for the first six months of fiscal 2024.

As a percentage of net sales, selling, general and administrative expenses remained constant at 17.2% for the first nine months of fiscal 2025 and fiscal 2024.

Other income, net includes interest income of $7.4 million for the first nine months of fiscal 2025 and $5.8 million for the first nine months of fiscal 2024.

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

The Company’s effective income tax rate, based upon estimated annual income tax rates, was 23.4% for the first nine months of fiscal 2025 and 22.8% for the first nine months 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.

2 unchanged sentences

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

At October 28, 2024, we maintained unsecured credit facilities totaling $150 million, under which no borrowings were outstanding and $2.2 million was reserved for standby letters of credit.

At January 25, 2025, we maintained unsecured credit facilities 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 decreased $214.2 million for the first six months of fiscal 2025 compared to an increase of $89.6 million for the first six months 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 six months of fiscal 2025 was $100.1 million compared to $102.1 million for the first six months of fiscal 2024.

For the first six months 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 net income.

Net cash used in investing activities for the first six months of fiscal 2025 reflects capital expenditures of $10.6 million, compared to capital expenditures of $12.8 million for the first six months of fiscal 2024.

The Company’s cash position decreased $177.8 million for the first nine months of fiscal 2025 compared to an increase of $118.9 million for the first nine months 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 nine months of fiscal 2025 was $146.6 million compared to $137.5 million for the first nine months of fiscal 2024.

For the first nine months of fiscal 2025, cash flow provided by operating activities increased primarily due to an increase in net income, partially offset by increases in working capital excluding cash.

Net cash used in investing activities for the first nine months of fiscal 2025 reflects capital expenditures of $20.8 million, compared to capital expenditures of $19.5 million for the first nine months 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 six months of fiscal 2025 reflects the payment of a special dividend of $304.1 million.

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

No dividends were paid during the first nine months of fiscal 2024.

Financial Position

At October 26, 2024, working capital decreased to $196.8 million from $398.9 million at April 27, 2024.

The current ratio was 2.5 to 1 at October 26, 2024 compared to 3.9 to 1 at April 27, 2024.

At January 25, 2025, working capital decreased to $233.0 million from $398.9 million at April 27, 2024.

The current ratio was 2.9 to 1 at January 25, 2025 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 decreased $11.9 million and days sales outstanding decreased to 31.0 from 31.5 days.

Inventories increased $6.4 million and inventory turns declined to 8.2 times from 8.6 times.

Inventories increased $0.4 and inventory turns remained constant at 8.6 times.

Subsequent to January 25, 2025, the Company renewed two leases and entered into a new lease which will result in an increase in the operating lease right-of-use assets and associated operating lease liabilities of approximately $18 million.

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