-- Record Quarterly Net Sales exceed
-- Second Quarter Net Sales rise 12.0 percent; 13.3 percent without the adoption of ASC 606 --
-- Second Quarter Net Income increases 21.3 percent to
-- Second Quarter Net Income per diluted share increases 23.8 percent to
-- Second Quarter Distributor Termination Expenses were
-- Board Authorizes new
Second Quarter Results
Net sales for the 2018 second quarter increased 12.0 percent to
Net sales for the Company’s Monster Energy® Drinks segment, which includes the Company’s Monster Energy® drinks and Mutant® Super Soda drinks, increased 14.0 percent to
Net sales to customers outside
Gross profit, as a percentage of net sales, for the 2018 second quarter was 61.1 percent, compared with 64.3 percent in the 2017 second quarter. The decrease in gross profit as a percentage of net sales was primarily attributable to (i) an increase in promotional allowances as a percentage of gross sales; (ii) the
Operating expenses for the 2018 second quarter were
The impact to net sales, gross profit and operating expenses from the adoption of ASC 606 is included in the table below.
Distribution costs as a percentage of net sales were 3.7 percent for the 2018 second quarter, compared with 3.0 percent in the second quarter last year.
Selling expenses as a percentage of net sales for the 2018 second quarter were 11.4 percent, compared with 12.6 percent in the second quarter last year.
General and administrative expenses for the 2018 second quarter were
Operating income for the 2018 second quarter increased to
The effective tax rate for the 2018 second quarter was 24.6 percent, compared with 35.9 percent in the same period last year. The decrease in the effective tax rate was primarily due to the Tax Cuts and Jobs Act signed into law on
Net income for the 2018 second quarter increased 21.3 percent to
The following table illustrates the impact of the adoption of ASC 606 for the 2018 second quarter as described above (in thousands):
| Three-Months Ended June 30, 2018, as Reported |
Percent Change 2018 vs 2017 |
Three-Months Ended June 30, 2018, Without the Adoption of ASC 606 |
Percent Change 2018 vs 2017 |
|||||||||||
| Net Sales by Segment: | ||||||||||||||
| Monster Energy® Drinks | $ | 929,439 | 14.0 | % | $ | 934,519 | 14.6 | % | ||||||
| Strategic Brands | 79,811 | (6.8 | %) | 86,943 | 1.5 | % | ||||||||
| Other | 6,623 | 7.3 | % | 6,623 | 7.3 | % | ||||||||
| Total Net Sales | $ | 1,015,873 | 12.0 | % | $ | 1,028,085 | 13.3 | % | ||||||
| Cost of Sales | 395,615 | 22.3 | % | 395,615 | 22.3 | % | ||||||||
| Gross Profit | $ | 620,258 | 6.3 | % | $ | 632,470 | 8.4 | % | ||||||
| Gross Profit as a percentage of net sales | 61.1 | % | 61.5 | % | ||||||||||
| Operating Expenses | $ | 262,637 | 12.5 | % | $ | 274,849 | 17.7 | % | ||||||
| Average Net Sales Per Case | $ | 9.17 | (1.0 | %) | $ | 9.28 | 0.2 | % | ||||||
“We continue to progress our strategic alignment with the Coca-Cola system bottlers. We have reached agreements to transition Monster Energy® to Coca-Cola bottlers in Arkansas. In the second quarter of 2018, we transitioned parts of
“In the second quarter of 2018, we successfully launched our Monster Energy® brand with the Coca-Cola bottlers in
2018 Six-Months
Net sales for the six-months ended
Net sales for the six-months ended
Gross profit, as a percentage of net sales, for the six-months ended
Operating expenses for the six-months ended
Operating income for the six-months ended
Net income for the six-months ended
Share Repurchase Program
During the 2018 second quarter, the Company purchased approximately 10.6 million shares of its common stock at an average purchase price of
| Shares Purchased |
Avg. Purchase Price |
Amount | Authorization Remaining |
|||||||
| February 2018 Repurchase Program | 5,017,554 | $ | 49.81 | $ | 249,925 | $ | - | |||
| May 2018 Repurchase Program | 5,535,936 | $ | 54.78 | $ | 303,247 | $ | 196,670 | |||
| Total | 10,553,490 | $ | 52.42 | $ | 553,172 | |||||
As of
Investor Conference Call
The Company will host an investor conference call today,
Based in
Note Regarding Use of Non-GAAP Measures
Gross sales is used internally by management as an indicator of and to monitor operating performance, including sales performance of particular products, salesperson performance, product growth or declines and overall Company performance. The use of gross sales allows evaluation of sales performance before the effect of any promotional items, which can mask certain performance issues. We therefore believe that the disclosure of gross sales provides a useful measure of our operating performance. Gross sales is not a measure that is recognized under accounting principles generally accepted in
The following table reconciles the non-GAAP financial measure of gross sales with the most directly comparable GAAP financial measure of net sales (in thousands):
| (In thousands) | Three-Months Ended June 30, |
Six-Months Ended June 30, |
|||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
| Gross sales, net of discounts and returns |
$ | 1,191,251 | $ | 1,038,970 | $ | 2,181,890 | $ | 1,884,518 | |||||
| Less: Promotional and other allowances |
175,378 | 131,902 | 315,097 | 235,304 | |||||||||
| Net Sales | $ | 1,015,873 | $ | 907,068 | $ | 1,866,793 | $ | 1,649,214 | |||||
Caution Concerning Forward-Looking Statements
Certain statements made in this announcement may constitute “forward-looking statements” within the meaning of the U.S. federal securities laws, as amended, regarding the expectations of management with respect to our future operating results and other future events including revenues and profitability. The Company 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: our ability to recognize benefits from The
(tables below)
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION FOR THE THREE- AND SIX-MONTHS ENDED JUNE 30, 2018 AND 2017 (In Thousands, Except Per Share Amounts) (Unaudited) |
|||||||||||
| Three-Months Ended | Six-Months Ended | ||||||||||
| June 30, | June 30, | ||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||
| Net sales¹ | $ | 1,015,873 | $ | 907,068 | $ | 1,866,793 | $ | 1,649,214 | |||
| Cost of sales | 395,615 | 323,571 | 731,279 | 584,843 | |||||||
| Gross profit¹ | 620,258 | 583,497 | 1,135,514 | 1,064,371 | |||||||
| Gross profit as a percentage of net sales | 61.1% | 64.3% | 60.8% | 64.5% | |||||||
| Operating expenses² | 262,637 | 233,456 | 497,979 | 450,068 | |||||||
| Operating expenses as a percentage of net sales | 25.9% | 25.7% | 26.7% | 27.3% | |||||||
| Operating income¹,² | 357,621 | 350,041 | 637,535 | 614,303 | |||||||
| Operating income as a percentage of net sales | 35.2% | 38.6% | 34.2% | 37.2) | |||||||
| Interest and other income (expense), net | 476 | (2,551) | 2,281 | (1,893) | |||||||
| Income before provision for income taxes¹,² | 358,097 | 347,490 | 639,816 | 612,410 | |||||||
| Provision for income taxes | 87,981 | 124,857 | 153,651 | 211,797 | |||||||
| Income taxes as a percentage of income before taxes | 24.6% | 35.9% | 24.0% | 34.6% | |||||||
| Net income¹,² | $ | 270,116 | $ | 222,633 | $ | 486,165 | $ | 400,613 | |||
| Net income as a percentage of net sales | 26.6% | 24.5% | 26.0% | 24.3% | |||||||
| Net income per common share: | |||||||||||
| Basic | $ | 0.48 | $ | 0.39 | $ | 0.86 | $ | 0.71 | |||
| Diluted | $ | 0.48 | $ | 0.39 | $ | 0.85 | $ | 0.69 | |||
| Weighted average number of shares of common stock and common stock equivalents: | |||||||||||
| Basic | 559,867 | 567,910 | 562,917 | 567,384 | |||||||
| Diluted | 566,352 | 578,020 | 570,231 | 577,719 | |||||||
| Case sales (in thousands) (in 192-ounce case equivalents) | 110,057 | 97,233 | 202,372 | 177,225 |
|||||||
| Average net sales per case3 | $ | 9.17 | $ | 9.27 | $ | 9.17 | $ | 9.24 | |||
¹Includes
²Includes
3Excludes Other segment net sales of
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2018 AND DECEMBER 31, 2017 (In Thousands, Except Par Value) (Unaudited) |
||||||||
| June 30, 2018 |
December 31, 2017 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 659,687 | $ | 528,622 | ||||
| Short-term investments | 211,093 | 672,933 | ||||||
| Accounts receivable, net | 592,568 | 449,476 | ||||||
| Inventories | 275,566 | 255,745 | ||||||
| Prepaid expenses and other current assets | 57,320 | 40,877 | ||||||
| Prepaid income taxes | 32,445 | 138,724 | ||||||
| Total current assets | 1,828,679 | 2,086,377 | ||||||
| INVESTMENTS | - | 2,366 | ||||||
| PROPERTY AND EQUIPMENT, net | 240,658 | 230,276 | ||||||
| DEFERRED INCOME TAXES | 85,253 | 92,333 | ||||||
| GOODWILL | 1,331,643 | 1,331,643 | ||||||
| OTHER INTANGIBLE ASSETS, net | 1,039,401 | 1,034,085 | ||||||
| OTHER ASSETS | 16,436 | 13,932 | ||||||
| Total Assets | $ | 4,542,070 | $ | 4,791,012 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 267,117 | $ | 245,910 | ||||
| Accrued liabilities | 82,191 | 87,475 | ||||||
| Accrued promotional allowances | 178,193 | 137,998 | ||||||
| Accrued distributor terminations | 488 | 91 | ||||||
| Deferred revenue | 43,888 | 43,236 | ||||||
| Accrued compensation | 26,357 | 34,996 | ||||||
| Income taxes payable | 15,978 | 10,645 | ||||||
| Total current liabilities | 614,212 | 560,351 | ||||||
| DEFERRED REVENUE | 320,259 | 334,354 | ||||||
| OTHER LIABILITIES | 2,439 | 1,095 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock - $0.005 par value; 1,250,000 shares authorized; 630,330 shares issued and 552,457 shares outstanding as of June 30, 2018; 629,255 shares issued and 566,298 shares outstanding as of December 31, 2017 |
3,152 | |
3,146 | |||||
| Additional paid-in-capital | 4,194,676 | 4,150,628 | ||||||
| Retained earnings | 3,407,806 | 2,928,226 | ||||||
| Accumulated other comprehensive loss | (25,196 | ) | (16,659 | ) | ||||
| Common stock in treasury, at cost; 77,873 and 62,957 shares as of June 30, 2018 and December 31, 2017, respectively |
(3,975,278 | ) | |
(3,170,129 |
) |
|||
| Total stockholders' equity | 3,605,160 | 3,895,212 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 4,542,070 | $ | 4,791,012 | ||||
CONTACTS:
Chairman and Chief Executive Officer
(951) 739-6200
Vice Chairman
(951) 739-6200
PondelWilkinson Inc.
(310) 279-5980
Source: Monster Beverage Corporation