National Beverage Continues to Sink as SEC Questions the Company

The company that makes LaCroix sparkling water hasn’t been having a good week.

Shares of National Beverage have crumbled over 10% in the last two days as the Security Exchange Commission (SEC) has asked the company questions on its sales measurements.

The SEC asked the company to explain how “velocity per outlet” (VPO) and “velocity per capita” (VPO) work, which were the two metrics referred to by CEO Nick Caporella in back-to back press releases last year in May.

Caporella said in a May 4 press release that VPO and VPC help National Beverage create growth “never before thought possible.” The next day he also said that VPO was “flashing solid green numbers as we bring FY2017 to a close.”

The SEC asked the company to explain the company’s internal performance measures for sales, “velocity per outlet” (VPO) and “velocity per capita” (VPO).

The SEC commented, “To the extent that VPO and VPC are key performance indicators used in managing your business, please include a discussion of these measures along with comparative period amounts or explain why you do not believe this disclosure is necessary.”

Gregory Cook, the company’s chief accounting officer and controller, responded by saying the information “is as secretive as the formulas of our beverages and should not be disclosed to our competition.”

He also said, “The metrics that Mr. Caporella referenced are used to establish goals for certain customers, but are not utilized to manage the overall executional side of our business. VPO and VPC therefore are not key performance indicators that would give readers a view of the Company through the ‘eyes of management.’”

Shares dropped more than 8% on Wednesday.

Disclaimer: We have no position in National Beverage Corp. (NASDAQ: FIZZ) and have not been compensated for this article.