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News Release
CORONA, Calif., Aug 08, 2007 (BUSINESS WIRE) --
Hansen Natural Corporation (NASDAQ:HANS) today reported record financial results, including sharp increases in sales and profits, for the three and six months ended June 30, 2007.
Gross sales for the second quarter increased 54.1 percent to $280.6 million from $182.1 million a year earlier. Net sales for the second quarter increased 56.9 percent to $244.8 million from $156.0 million a year ago.
Operating income for the second quarter increased 34.3 percent to $61.4 million from $45.8 million a year ago. Net income for the second quarter increased 35.9 percent to $38.3 million, or $0.39 per diluted share, from $28.2 million, or $0.28 per diluted share, last year.
Operating income for the second quarter, excluding certain non-recurring expense items described below, increased 61.7 percent to $74.0 million from $45.8 million a year ago. Net income for the second quarter, on the same basis, increased 62.7 percent to $45.9 million, or $ 0.47 per diluted share, from $28.2 million, or $ 0.28 per diluted share, last year.
Gross sales for the six months ended June 30, 2007 increased 47.1 percent to $470.7 million from $320.0 million a year earlier. Net sales for the first half of 2007 were up 48.9 percent to $410.6 million from $275.8 million a year ago.
Operating income for the six months ended June 30, 2007 advanced 15.8 percent to $93.3 million from $80.6 million a year ago. Net income for the first half of 2007 increased 18.7 percent to $58.5 million, or $0.59 per diluted share, from $49.3 million, or $0.50 per diluted share, last year.
Operating income for the six months ended June 30, 2007, excluding certain non-recurring expense items described below, increased 47.6 percent to $118.9 million from $80.6 million a year ago. Net income for the first half of 2007 on the same basis, increased 50.0 percent to $73.9 million, or $0.75 per diluted share, from $49.3 million, or $0.50 per diluted share, last year.
Rodney C. Sacks, chairman and chief executive officer, said the record revenues reflected continued strong sales of Monster Energy(R) brand energy drinks, as well as certain new products such as Java Monster(TM) brand non-carbonated dairy based coffee drinks (introduced in April 2007) and Monster(R) M-80 energy drinks (introduced in March 2007). "The energy category continues to show strong growth over the prior year, and the Monster Energy(R) brand continues to increase market share," Sacks said.
Gross profit as a percentage of net sales for the three months ended June 30, 2007 increased to 52.4 percent, from 51.9 percent for the comparable 2006 quarter.
In connection with the transition of certain of the Company's distribution arrangements, the Company incurred termination costs amounting to $8.4 million and $14.7 million during the three- and six-months ended June 30, 2007, respectively, to certain of its prior distributors, who have been replaced by newly appointed Anheuser-Busch distributors. Such termination costs have been expensed in full and are included in operating expenses for the three- and six-months ended June 30, 2007.
The Company received from newly appointed Anheuser-Busch distributors non-refundable payments and commitments for the costs of terminating its prior distributors amounting to $6.5 million and $19.8 million in the three- and six-months ended June 30, 2007. Such payments and commitments have been accounted for as deferred revenue, which are being recognized as revenue ratably over the anticipated 20 year life of the respective Anheuser-Busch distribution agreements. Revenue recognized was $0.5 million and $0.9 million for the three- and six-months ended June 30, 2007, respectively. The anticipated Anheuser-Busch distribution transition arrangements have now largely been completed.
In connection with the review of the Company's stock option grants and granting practices and related litigation and matters, the Company incurred professional service fees of $4.2 million and $10.9 million for the three- and six-months ended June 30, 2007, respectively, which have also been fully expensed in the respective periods.
The following table summarizes the selected items discussed above for the three- and six-months ended June 30, 2007:
Three-Months Ended Six-Months Ended
June 30, 2007 June 30, 2007
------------------ ----------------
Deferred Revenue: (In Thousands) (In Thousands)
Receipts from newly appointed AB
Distributors $ 6,497 $ 19,847
================== ================
Operating Expenses:
Termination payments to prior
distributors $ 8,353 $ 14,700
Professional fees associated with
review of stock option grants
and stock option granting
practices and related litigation
and matters $ 4,221 $ 10,905
------------------ ----------------
$ 12,574 $ 25,605
Operating income, as reported $ 61,423 $ 93,332
------------------ ----------------
Operating income, excluding certain
non-recurring expense items $ 73,997 $ 118,937
================== ================
The Company will host an investor conference call on August 8, 2007 at 11:30 a.m. Pacific Time (2:30 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(R) Natural Sodas, Signature Sodas, fruit juice Smoothies, Energy drinks, Energade(R) energy sports drinks, E20 Energy Water(R), multi-vitamin juice drinks in aseptic packaging, Junior Juice(R) juice, iced teas, apple juice and juice blends, Blue Sky(R) brand beverages, Monster Energy(R) brand energy drinks, Java Monster(TM) brand non-carbonated dairy based coffee drinks, Lost(R) Energy(TM) brand energy drinks, Joker Mad Energy(TM), Unbound(R) Energy and Ace(TM) Energy brand energy drinks, Rumba(TM) brand energy juice, and Fizzit(TM) brand powdered drink mixes. For more information visit www.hansens.com and www.monsterenergy.com.
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 generally accepted accounting principles in the United States ("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 the Company's internal reporting requirements.
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 revenues and profitability. Management cautions that these statements are qualified by their terms or important factors, 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, including, but not limited to, the following: changes in consumer preferences; changes in demand that are weather related, particularly in areas outside of California; competitive pricing and/or marketing pressures; activities and strategies of competitors; changes in the price and/or availability of raw materials for the Company's products; the availability of production and/or suitable facilities; the marketing efforts of the distributors of the Company's products, most of which distribute products that are competitive with the products of the Company; the introduction of new products, as well as unilateral decisions that may be made by grocery and/or convenience chain stores, specialty chain stores, club stores and other customers to discontinue carrying all or any of the Company's products that they are carrying at any time; and other risks detailed from time to time in 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 assures no obligation to update any forward-looking statements.
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE-AND SIX-MONTHS ENDED JUNE 30, 2007 AND 2006
(In thousands, except per share data) (Unaudited)
----------------------------------------------------------------------
Three-Months Ended Six-Months Ended
June 30 June 30
------------------ -----------------
2007 2006 2007 2006
--------- -------- -------- --------
GROSS SALES, net of discounts and
returns(a) $280,582 $182,126 $470,651 $319,950
LESS: PROMOTIONAL AND OTHER
ALLOWANCES(b) 35,819 26,089 60,036 44,167
--------- -------- -------- --------
NET SALES 244,763 156,037 410,615 275,783
COST OF SALES 116,510 75,047 196,726 131,795
--------- -------- -------- --------
GROSS PROFIT 128,253 80,990 213,889 143,988
OPERATING EXPENSES 66,830 35,238 120,557 63,407
--------- -------- -------- --------
OPERATING INCOME 61,423 45,752 93,332 80,581
INTEREST INCOME, net 1,752 872 3,278 1,574
--------- -------- -------- --------
INCOME BEFORE PROVISION FOR
INCOME TAXES 63,175 46,624 96,610 82,155
PROVISION FOR INCOME TAXES 24,864 18,424 38,101 32,864
--------- -------- -------- --------
NET INCOME $ 38,311 $ 28,200 $ 58,509 $ 49,291
========= ======== ======== ========
NET INCOME PER COMMON SHARE:
Basic $ 0.43 $ 0.31 $ 0.65 $ 0.55
========= ======== ======== ========
Diluted $ 0.39 $ 0.28 $ 0.59 $ 0.50
========= ======== ======== ========
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK AND COMMON STOCK
EQUIVALENTS:
Basic 90,118 89,912 90,089 89,523
========= ======== ======== ========
Diluted 98,455 99,289 98,388 98,815
========= ======== ======== ========
(a) 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
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
(b) 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 JUNE 30, 2007 AND DECEMBER 31, 2006 (In thousands, except share
data) (Unaudited)
----------------------------------------------------------------------
June 30, December 31,
2007 2006
-------- ------------
ASSETS
------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $55,482 $35,129
Short-term investments 142,613 101,667
Accounts receivable, net 111,928 54,624
Inventories 87,498 77,013
Prepaid expenses and other current assets 6,382 771
Deferred income tax asset 5,170 5,953
-------- ------------
Total current assets 409,073 275,157
PROPERTY AND EQUIPMENT, net 6,778 5,565
DEFERRED INCOME TAXES 13,813 5,001
INTANGIBLES, net 23,555 21,202
OTHER ASSETS 1,280 1,447
-------- ------------
$454,499 $308,372
======== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------
CURRENT LIABILITIES:
Accounts payable $91,822 $34,362
Accrued liabilities 8,097 9,465
Accrued distributor terminations 7,931 7,024
Customer deposit liabilities 1,123 3,324
Accrued compensation 3,682 4,378
Current portion of long-term debt 590 299
Income taxes payable 903 3,991
-------- ------------
Total current liabilities 114,148 62,843
LONG-TERM DEBT, less current portion - 4
DEFERRED REVENUE 39,352 20,441
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock - $0.005 par value; 120,000,000
shares authorized; 93,652,862 shares issued and
90,995,800 outstanding as of June 30, 2007;
92,713,212 shares issued and 90,059,124
outstanding as of December 31, 2006 468 464
Additional paid-in capital 66,422 48,892
Retained earnings 262,751 204,242
Common stock in treasury, at cost; 2,657,062
shares as of June 30, 2007 and 2,654,088 shares
as of December 31, 2006 (28,642) (28,514)
-------- ------------
Total stockholders' equity 300,999 225,084
-------- ------------
$454,499 $308,372
======== ============
SOURCE: Hansen Natural Corporation
Hansen Natural Corporation Rodney C. Sacks, 951-739-6200 Chairman and Chief Executive Officer or Hilton H. Schlosberg, 951-739-6200 Vice Chairman or PondelWilkinson Inc. Roger S. Pondel / Judy Lin Sfetcu, 310-279-5980
Copyright Business Wire 2007
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