US: National Beverage profits hit by rising costs
National Beverage Corp has seen soaring raw material costs hit its fourth quarter and full year net income, despite a rise in sales revenues.
The soft drinks group said today (18 July) that whilst its full year revenues increased 5% to US$566m, net income for the year fell to US$22.5m from $24.7m a year earlier. Fourth quarter revenues were up 9% to $147.5m, but net income for the period fell to $5.6m from $6.1m.
"While it is always difficult to report less than targeted results, the past two years have been so abnormal relative to 'runaway' energy and commodity costs that I find it prudent to break from 'normal' reporting," said chairman and CEO Nick A. Caporella. "For comparative analysis, using four of our commodity/raw materials - aluminum, glass, plastic-PET and sweetener cost increases only (no energy or fuel increases), the additional cost effect on FY2008 was in excess of $20 million.
"The above did not severely distract from our reported results due to management's diligence and our ability to pass most of these costs on to our customers and, ultimately, our consumer. But, the challenge to maintain volume while recovering these costs, is ever present, especially in the current economic climate," continued Caporella.
Caporella said that the company's sparkling waters, energy and functional beverages achieved "above normal growth" during 2008.
"The trend of our results during the fourth quarter and over the recent months of our new fiscal year are encouraging. Nonetheless, we are diligently pursuing our plan cautiously," continued Caporella.
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