Attached files
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| 8-K - HANSEN NATURAL CORPORATION 8-K 02/25/10 - Monster Beverage Corp | form8k.htm |
CONTACTS: Rodney
C. Sacks
Chairman and Chief Executive
Officer
(951) 739-6200
Hilton
H. Schlosberg
Vice Chairman
(951) 739-6200
Roger S. Pondel / Judy Lin
Sfetcu
PondelWilkinson Inc.
(310) 279-5980
HANSEN
NATURAL REPORTS RECORD FOURTH QUARTER
AND
FULL
YEAR FINANCIAL RESULTS FOR 2009
--
Fourth Quarter Net Sales Rise 14.4% to $290.9 million --
--
Full Year Net Sales Rise 10.6% to $1.14 billion --
Corona, CA – February 25, 2010
– Hansen Natural Corporation (NASDAQ:HANS) today reported record financial
results for the three- and twelve-months ended December 31, 2009.
Gross
sales for the 2009 fourth quarter increased 13.8 percent to $329.6 million from
$289.6 million a year earlier. Net sales for the 2009 fourth quarter increased
14.4 percent to $290.9 million from net sales of $254.4 million in the same
quarter last year.
Both gross and net sales for the fourth
quarter and year ended December 31, 2009 were positively impacted by
advance purchases made by customers in the 2009 fourth quarter due to the
Company’s announcement of a new per case marketing contribution program for
Monster Energy® distributors commencing January 1, 2010, as well as to avoid
potential interruptions in product supply due to the announcement to transition
to the SAP enterprise resource planning system commencing January 2010. The
Company estimates that of our gross sales, approximately 4 percent to 6 percent
for the quarter ended December 31, 2009 and approximately 1 percent for the year
ended December 31, 2009, were attributable to such advance
purchases.
Gross profit as a percentage of net
sales was 53.4 percent for the fourth quarter ended December 31, 2009, compared
with 54.4 percent for the 2008 fourth quarter.
Operating expenses for the 2009 fourth
quarter decreased to $69.4 million from $177.6 million in the same quarter last
year. This decrease is primarily the result of $0.02 million in termination
obligations to prior distributors in the quarter ended December 31, 2009
compared to $118.2 million in the quarter ended December 31, 2008. Excluding the
termination obligations, operating expenses for the 2008 fourth quarter would
have been $59.5 million.
The comparative results for the fourth
quarter and full fiscal year of 2008 were impacted by the transition of certain
of the Company’s distribution arrangements to newly appointed distributors,
including Coca-Cola bottlers and Anheuser-Busch distributors, which occurred
primarily in the fourth quarter of 2008.
Distribution costs as a percentage of
net sales were 4.1 percent for the fourth quarter of 2009, compared with 4.9
percent in the same quarter last year.
Selling expenses as a percentage of net sales for both the 2009 and 2008 fourth
quarters were 10.4 percent.
General and administrative expenses for
the 2009 fourth quarter were $27.4 million, compared with $138.8 million for the comparable quarter in 2008, which
included $118.2 million in termination obligations to prior distributors. Excluding the termination obligations, general and
administrative expenses for the 2008 fourth quarter would have been $20.7
million. Stock based compensation (a non-cash item) was $4.3
million in the fourth quarter of 2009, compared with $4.1 million in the prior
year period.
Operating income for the 2009 fourth quarter was $85.8 million, compared to an
operating loss of $39.2 million for the 2008 fourth quarter. The operating loss
for the 2008 fourth quarter was directly impacted by the termination obligations
of $118.2 million to prior distributors. Excluding the termination obligations,
operating profit for the 2008 fourth quarter would have been $79.0
million.
Net income for the fourth quarter of
2009 was $53.4 million, or $0.57 per diluted share.
Net
sales for the Company’s DSD segment were $269.9 million for the 2009 fourth
quarter, an increase of approximately 16.4 percent from $231.9 million for the same period in
2008.
Gross
sales to customers outside the United States were $43.3 million in the 2009
fourth quarter, compared with $16.5 million in the corresponding quarter in
2008.
For the 2009 fiscal year, gross sales increased 10.7 percent to $1,309.3 million
from $1,182.9 million a year earlier. Net
sales for the year ended December 31, 2009 increased 10.6 percent to $1,143.3
million from $1,033.8 million a year ago.
Gross profit as a percentage of net
sales was 53.6 percent for the year ended December 31, 2009, compared with 52.1
percent for the 2008 year.
Operating expenses for the year ended December
31, 2009 decreased to $275.0 million from $375.2 million for
2008. The decrease in operating expenses is primarily the result of
$118.1 million in termination obligations to prior distributors for the year
ended December 31, 2008. Excluding the termination obligations,
operating expenses for the year ended December 31, 2008 would have been $257.1
million.
Operating
income for the 2009 year increased 106.2 percent to $337.3 million from $163.6
million a year ago. Operating income for the 2008 fiscal year was directly
impacted by the termination obligations of $118.1 million to prior distributors.
Excluding the termination obligations, operating income for the year ended
December 31, 2008 would have been $281.7 million.
Net
income for the twelve-months ended December 31, 2009 increased 93.2 percent to
$208.7 million, or $2.21 per diluted share.
Gross
sales to customers outside the United States were $168.0 million for the year
ended December 31, 2009, compared with $94.2 million for the year ended December
31, 2008.
During the 2009 fourth quarter the
Company repurchased 1,008,729 shares of its common stock at an average purchase
price of $34.91 per share.
Rodney C. Sacks, chairman and chief
executive officer, attributed the record revenues to sustained strong sales of
Monster Energy® drinks both in the United States and
internationally. “We are encouraged by the continued positive sales
trends reported by Nielsen, indicating that year-on-year energy drink sales in
the United States have increased in each month since September 2009,” said
Sacks. Since the transitions to certain Coca-Cola bottlers and new
Anheuser-Busch distributors in the fourth quarter of 2008, distribution levels
and market share generally for the Monster Energy® brand have
increased.
“We
are planning to introduce new products in 2010 and to continue our international
expansion into western and central Europe, the Middle East and South
America. We are also evaluating additional geographic expansion
opportunities for the Monster Energy® brand,” Sacks added.
Auction
Rate Securities
At December 31, 2009 the Company held auction rate securities with a face value
of $96.4 million. The Company determined that an impairment of $12.1
million had occurred at December 31, 2009, of which $7.7 million was deemed
temporary and $4.4 million was deemed other-than-temporary. Included
in other comprehensive loss is $4.6 million net of taxes for the twelve-months
ended December 31, 2009. Included in interest and other income, net
is $3.9 million for the twelve-months ended December 31, 2009. The
auction rate securities will continue to accrue interest at their contractual
rates until their respective auctions succeed or they are redeemed.
Investor
Conference Call
The Company will host an investor conference call on February 25, 2010 at 2:00
p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call will
be open to all interested investors through a live audio web broadcast via the
internet at www.hansens.com and
www.opencompany.info. For
those who are not able to listen to the live broadcast, the call will be
archived for approximately one year on both websites.
Hansen
Natural Corporation
Based in Corona, California, Hansen Natural Corporation markets and distributes
Hansen’s® natural sodas, sparkling beverages, apple juice and juice blends,
fruit juice smoothies, multi-vitamin juice drinks in aseptic packaging, iced
teas, energy drinks, Junior Juice® juices and water beverages, Blue Sky® brand
beverages, Monster Energy® brand energy drinks, Nitrous™ Monster Energy® brand
energy drinks, Monster Hitman™ energy shooters, Java Monster™ brand
non-carbonated coffee + energy drinks, X-Presso Monster™ brand non-carbonated
espresso energy drinks, Lost® Energy™ brand energy drinks, Rumba®, Samba and
Tango brand energy juices, Vidration™ brand vitamin enhanced waters and Peace
Tea™ iced teas. For more information visit www.hansens.com and
www.monsterenergy.com
Note
Regarding Use of Non-GAAP Measures
Gross sales,
although used internally by management as an indicator of operating performance,
should not be considered as an alternative to net sales, which is determined in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”), and should not be used alone as an indicator of operating
performance in place of net sales. Additionally, gross sales may not
be comparable to similarly titled measures used by other companies as gross
sales has been defined by our internal reporting
requirements. However, gross sales are used by management to monitor
operating performance including sales performance of particular products,
salesperson performance, product growth or declines and our overall performance.
The use of gross sales allows evaluation of sales performance before the effect
of any promotional items, which can mask certain performance issues. Management
believes the presentation of gross sales allows a more comprehensive
presentation of our operating performance. Gross sales may not be
realized in the form of cash receipts as promotional payments and allowances may
be deducted from payments received from customers.
Caution
Concerning Forward-Looking Statements
Certain statements made in this
announcement may constitute “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, regarding the expectations of
management with respect to our future operating results and other future events
including revenues and profitability. Management cautions that these
statements are based on management’s current knowledge and expectations and are
subject to certain risks and uncertainties, many of which are outside of the
control of the Company, that could cause actual results and events to differ
materially from the statements made herein. Such risks and
uncertainties include, but are not limited to, the following: the current
uncertainty and volatility in the national and global economy; changes in
consumer preferences; changes in demand due to both domestic and international
economic conditions; activities and strategies of competitors, including the
introduction of new products and competitive pricing and/or marketing of similar
products; actual performance of the parties under the new distribution
agreements; potential disruptions arising out of the transition of certain
territories to new distributors; changes in sales levels by existing
distributors; unanticipated costs incurred in connection with the termination of
existing distribution agreements or the transition to new distributors; changes
in the price and/or availability of raw materials; other supply issues,
including the availability of products and/or suitable production facilities;
product distribution and placement decisions by retailers; changes in
governmental regulation; political, legislative or other governmental actions or
events in one or more regions in which we operate. For a more
detailed discussion of these and other risks that could affect our operating
results, see the Company’s reports filed with the Securities and Exchange
Commission. The Company’s actual results could differ materially from those
contained in the forward-looking statements. The Company assumes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
# # #
(tables
below)
HANSEN
NATURAL CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION
FOR
THE THREE-AND TWELVE-MONTHS ENDED DECEMBER 31, 2009 AND 2008
(In
Thousands, Except Per Share Amounts) (Unaudited)
|
Three-Months
Ended
December
31,
|
Twelve-Months
Ended
December
31,
|
||||||||
|
2009
|
2008
|
2009
|
2008
|
||||||
|
Gross
sales, net of
discounts
& returns*
|
$ 329,603
|
$ 289,593
|
$ 1,309,335
|
$ 1,182,876
|
|||||
|
Less: Promotional
and
other
allowances**
|
38,689
|
35,220
|
166,036
|
149,096
|
|||||
|
Net
sales¹
|
290,914
|
254,373
|
1,143,299
|
1,033,780
|
|||||
|
Cost
of sales
|
135,638
|
115,948
|
530,983
|
494,986
|
|||||
|
Gross
profit¹
|
155,276
|
138,425
|
612,316
|
538,794
|
|||||
|
Gross
profit margin as a
percentage
of net sales
|
53.4%
|
54.4%
|
53.6%
|
52.1%
|
|||||
|
Operating expenses 2
|
69,442
|
177,643
|
275,007
|
375,203
|
|||||
|
Operating
expenses as a
percentage
of net sales
|
23.9%
|
69.8%
|
24.1%
|
36.3%
|
|||||
|
Operating income (loss)
1,2
|
85,834
|
(39,218)
|
337,309
|
163,591
|
|||||
|
Operating
income (loss) as a percentage of net sales
|
29.5%
|
(15.4%)
|
29.5%
|
15.8%
|
|||||
|
Other
income (expense):
|
|||||||||
|
Interest
and other income, net
|
667
|
1,907
|
2,273
|
10,413
|
|||||
|
Other-than-temporary
impairment
of
investments
|
-
|
(527)
|
(3,887)
|
(527)
|
|||||
|
Total
other income (expense)
|
667
|
1,380
|
(1,614)
|
9,886
|
|||||
|
Income
(loss) before provision for
income
taxes
|
86,501
|
(37,838)
|
335,695
|
173,477
|
|||||
|
Provision
(benefit) for income taxes
|
33,144
|
(14,390)
|
126,979
|
65,445
|
|||||
|
Net
income (loss)
|
$ 53,357
|
$ (23,448)
|
$ 208,716
|
$ 108,032
|
|||||
|
Net
income (loss) as a percentage of net sales
|
18.3%
|
(9.2%)
|
18.3%
|
10.5%
|
|||||
|
Net
income (loss) per common share:
|
|||||||||
|
Basic
|
$0.60
|
($0.25)
|
$2.32
|
$1.17
|
|||||
|
Diluted
|
$0.57
|
($0.25)
|
$2.21
|
$1.11
|
|||||
|
Weighted
average number of
shares
of common stock and
common
stock equivalents:
|
|||||||||
|
Basic
|
88,744
|
91,518
|
89,967
|
92,515
|
|||||
|
Diluted
|
93,398
|
91,518
|
94,643
|
97,530
|
|||||
|
Case
sales (in thousands) (in 192-ounce case equivalents)
|
27,461
|
23,650
|
109,985
|
102,659
|
|||||
|
Average
net sales price per case
|
$ 10.59
|
$ 10.76
|
$ 10.40
|
$ 10.07
|
|||||
¹Includes
$2.3 million and $12.8 million for the three-months ended December 31, 2009 and
2008, respectively, related to the recognition of deferred revenue. Includes
$8.2 million and $14.3 million for the years ended December 31, 2009 and 2008,
respectively, related to the recognition of deferred revenue.
²Includes
$0.02 million and $118.2 million for the three-months ended December 31, 2009
and 2008, respectively, related to expenditures attributable to the costs
associated with terminating existing distributors. Includes $1.9 million and
$118.1 million for the years ended December 31, 2009 and 2008, respectively,
related to expenditures attributable to the costs associated with terminating
existing distributors.
*Gross
sales, although used internally by management as an indicator of operating
performance, should not be considered as an alternative to net sales, which is
determined in accordance with accounting principles generally accepted in the
United States of America (“GAAP”), and should not be used alone as an indicator
of operating performance in place of net sales. Additionally, gross
sales may not be comparable to similarly titled measures used by other companies
as gross sales has been defined by our internal reporting requirements. However,
gross sales are used by management to monitor operating performance including
sales performance of particular products, salesperson performance, product
growth or declines and our overall performance. The use of gross sales allows
evaluation of sales performance before the effect of any promotional items,
which can mask certain performance issues. Management believes the presentation
of gross sales allows a more comprehensive presentation of our operating
performance. Gross sales may not be realized in the form of cash receipts as
promotional payments and allowances may be deducted from payments received from
customers.
**
Although the expenditures described in this line item are determined in
accordance with GAAP and meet GAAP requirements, the disclosure thereof does not
conform with GAAP presentation requirements. Additionally, the presentation of
promotional and other allowances may not be comparable to similar items
presented by other companies. The presentation of promotional and other
allowances facilitates an evaluation of the impact thereof on the determination
of net sales and illustrates the spending levels incurred to secure such sales.
Promotional and other allowances constitute a material portion of our marketing
activities.
HANSEN
NATURAL CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
AS
OF DECEMBER 31, 2009 AND DECEMBER 31, 2008
(In Thousands, Except Par
Value) (Unaudited)
|
2009
|
2008
|
|||
|
ASSETS
|
||||
|
CURRENT
ASSETS:
|
||||
|
Cash
and cash equivalents
|
$ 328,349
|
$ 256,801
|
||
|
Short-term
investments
|
18,487
|
29,145
|
||
|
Trade
accounts receivable, net
|
104,206
|
45,233
|
||
|
Distributor
receivables
|
4,699
|
90,722
|
||
|
Inventories
|
108,143
|
116,326
|
||
|
Prepaid
expenses and other current assets
|
11,270
|
8,379
|
||
|
Prepaid
income taxes
|
-
|
4,977
|
||
|
Deferred
income taxes
|
10,350
|
9,741
|
||
|
Total
current assets
|
585,504
|
561,324
|
||
|
INVESTMENTS
|
80,836
|
89,567
|
||
|
PROPERTY
AND EQUIPMENT, net
|
33,314
|
14,389
|
||
|
DEFERRED
INCOME TAXES
|
65,678
|
65,748
|
||
|
INTANGIBLES,
net
|
33,512
|
28,365
|
||
|
OTHER
ASSETS
|
1,226
|
2,444
|
||
|
$ 800,070
|
$ 761,837
|
|||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||
|
CURRENT
LIABILITIES:
|
||||
|
Accounts
payable
|
$ 48,863
|
$ 64,787
|
||
|
Accrued
liabilities
|
23,299
|
12,524
|
||
|
Accrued
distributor terminations
|
2,977
|
102,282
|
||
|
Accrued
compensation
|
7,623
|
6,782
|
||
|
Current
portion of debt
|
206
|
959
|
||
|
Income
taxes payable
|
761
|
-
|
||
|
Total
current liabilities
|
83,729
|
187,334
|
||
|
DEFERRED
REVENUE
|
131,388
|
138,187
|
||
|
COMMITMENTS
AND CONTINGENCIES
|
||||
|
STOCKHOLDERS'
EQUITY:
|
||||
|
Common
stock - $0.005 par value; 120,000 shares authorized;
97,285
shares issued and 88,159 outstanding as of December 31, 2009;
96,851
shares issued and 90,328 outstanding as of December 31,
2008
|
486
|
484
|
||
|
Additional
paid-in capital
|
137,040
|
117,106
|
||
|
Retained
earnings
|
670,396
|
461,680
|
||
|
Accumulated
other comprehensive loss
|
(4,667)
|
(10,825)
|
||
|
Common
stock in treasury, at cost; 9,126 and 6,523 shares
as
of December 31, 2009 and 2008, respectively
|
(218,302)
|
(132,129)
|
||
|
Total
stockholders' equity
|
584,953
|
436,316
|
||
|
$ 800,070
|
$ 761,837
|
|||