Summary
- Strong brand loyalty with an innovative product portfolio.
- Record quarterly results with a path to further growth through product innovation.
- Substantial liquidity and capital provide additional operational flexibility.
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Innovation is not about saying yes to everything. It's about saying no to all but the most crucial features. - Steve Jobs
National Beverage Corp. (NASDAQ:FIZZ) develops, produces, and sells various beverages, spanning sparkling waters, juices, energy drinks, and carbonated soft drinks. Key brands include LaCroix, Clear Fruit, Rip It energy drinks, Everfresh, Mr. Pure 100% juice, Shasta, and Faygo. FIZZ primarily sells products in the United States and Canada.
The LaCroix product has incredible brand loyalty, primarily as it is pleasing to consumers looking for healthy beverages and uses a constant rotation of new flavors to appeal to customers looking for variety. The brand effectively leverages social media platforms and brand ambassadors to promote its products. Overall, the company believes it is agile and innovative, allowing it to quickly respond to changing consumer preferences with new products.
Record quarterly results
FIZZ reported an 11 percent increase in revenues in the most recent quarter as higher demand for take-home products drove up volumes, while the average selling price per case was unchanged. The revenues of $293 million were the highest ever figure reported for a quarter in the company's history. Gross margin rose to 40 percent from 37 percent in the prior year's quarter on lower raw material costs as gross profit of $117 million also notched a record.
Operating expenses were down slightly as a decline in marketing and selling costs was partially offset by higher shipping costs. Net income of $51 million for the quarter was almost 50 percent higher than the same quarter in the prior year. The most recent quarter ended on August 1, 2020, representing the first quarter of the company's 2021 fiscal year, and expectations are for the remaining quarters in the fiscal year to continue to report higher earnings than in the previous year shown below.
Liquidity and Capital
FIZZ's strong liquidity and capital position aid its operational flexibility. For the most recent quarter, FIZZ generated over $50 million in cash from operations, further building cash balances. The company has no long-term debt outside of minor operating leases and maintains a $100 million unsecured revolving credit facility with no current borrowings.
