National Beverage Corp. has reported that rises in raw material costs and discontinued lines affected Q1 results.

The company today (7 September) posted a slide in net income for the three months to the end of July, to US$7.2m from $9.7m in the corresponding period a year earlier. Sales for the period were up slightly, however, to $151.8m from $150.1m.

The company said it was "disappointed" by its results for the quarter, describing challenges such as the volatility of raw material pricing as the primary reasoning behind the slump.

National Beverage Corp. chairman and CEO Nick Caporella said: "Despite continued double-digit growth of our Rip It energy drink and solid gains from LaCroix water and our juice lines, margins were adversely affected by the unprecedented raw material cost increases of the last several quarters, some of which were up more than 20% - 40% over the same period last year. Additionally, carbonated soft drink volume for the prior year includes non-company products that we elected to discontinue later in the year."

Caporella added: "Comparisons to last year are difficult because first quarter results for FY 2007 were a record for the company, but, nevertheless, I am extremely disappointed with this year's performance."

National Beverage recently won an appeal in a lawsuit brought last year by Hansen Beverage Co. over the packaging for its energy drink.

In October, Hansen tried to sue National Beverage due to the bottle of its 'Freek' energy drink allegedly being too similar to the packaging of Hansen's 'Monster' drink.

The court recently overturned the injunction that had previously barred National Beverage from selling its energy drink.