The bubbles seem to have burst for National Beverage, maker of LaCroix soda water.
National Beverage, delightfully tickered as $FIZZ, took a 10 percent hit to its stock price on Tuesday. Why? Because a new lawsuit has emerged against the company, alleging that senior executives were preparing to declare that LaCroix soda cans are free of the toxic chemical Bisphenol A — which, the plaintiff in the lawsuit says, is misleading.
The plaintiff is a former National Beverage executive, Albert Dejewski, who also says that when he tried to raise his concerns to management, the company fired him.
Now, whistleblower complaints against large companies are not new, and for the record, National Beverage denies any wrongdoing. But the lawsuit did prompt a flurry of analyst notes about the company and its prospects, which don’t seem to rosy right now. (One analyst diplomatically called National Beverage “effectively in free fall.”)
So what do the numbers say? We pulled up the Company-in-Detail page for $FIZZ and looked.
Figure 1, below, compares National Beverage’s most recent quarterly filing to the year-ago period. Pretty much every number is moving in the wrong direction: revenue down, cost of sales up, gross profit down, SG&A expenses up, pretax income down. Heck, even the company’s provision for taxes is up. How often do you see that since Congress cut corporate taxes 18 months ago?
Then we jumped over to FIZZ’s footnote disclosures. Nothing to leave you feeling refreshed in those filings, either.
Sales by case volume were down 4.1 percent, “principally due to widespread media coverage of litigation regarding the marketing and labeling of LaCroix” — and those were prior lawsuits alleging contaminants in LaCroix, not to be confused with this whistleblower retaliation lawsuit filed this week. Costs were up due to higher fixed costs, including the price of aluminum and freight shipping.
The company’s cash position is still rising, but it rose only $19 million in the most recent quarter, compared to rising $26.2 million a year earlier. The company also reported a decrease in working capital because of a special cash dividend paid to shareholders last November that cost $135.2 million.
So perhaps surprising nobody, LaCroix’s share price has been tumbling for the better part of a year: from $124 per share last November, to $47.50 this week.
The firm’s last 10-Q was filed on March 7 — which means its next earnings report should arrive any day now. Let’s see what happens when the company cracks open that can.