UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  February 23, 2012

 

Monster Beverage Corporation

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

0-18761

 

39-1679918

(Commission File Number)

 

(IRS Employer Identification No.)

 

550 Monica Circle Suite 201

Corona, California 92880
(Address of principal executive offices and zip code)

 

(951) 739 - 6200
(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02 Results of Operations and Financial Condition.

 

On February 23, 2012, Monster Beverage Corporation (“Monster”) issued a press release relating to its financial results for the year and fourth quarter ended December 31, 2011, a copy of which is furnished as Exhibit 99.1 hereto. The press release did not include certain financial statements, related footnotes and certain other financial information that will be filed with the Securities and Exchange Commission as part of Monster’s Annual Report on Form 10-K.

 

On February 23, 2012, Monster will conduct a conference call at 2:00 p.m. Pacific Time. The call will be open to interested investors through a live audio web broadcast via the internet at www.monsterbevcorp.com in the “Events & Presentations” section.  For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on the website.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

The following exhibit is furnished herewith:

 

Exhibit 99.1 Press Release dated February 23, 2012.

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Monster Beverage Corporation

 

 

 

 

Date: February 23, 2012

/s/ Hilton H. Schlosberg

 

 

 

Hilton H. Schlosberg

 

Vice Chairman of the Board of Directors,

 

President and Chief Financial Officer

 

3


Exhibit 99.1

 

 

PondelWilkinson Inc.

 

 

1880 Century Park East, Suite 350

 

 

Los Angeles, CA 90067

 

 

 

Investor Relations

 

 

T

(310) 279 5980

Strategic Public Relations

 

 

F

(310) 279 5988

 

 

 

W

www.pondel.com

 

 

CONTACTS:

Rodney C. Sacks

 

 

Chairman and Chief Executive Officer

 

 

(951) 739-6200

 

 

 

NEWS

 

Hilton H. Schlosberg

RELEASE

 

Vice Chairman

 

 

(951) 739-6200

 

 

 

 

 

Roger S. Pondel / Judy Lin Sfetcu

 

 

PondelWilkinson Inc.

 

 

(310) 279-5980

 

MONSTER BEVERAGE REPORTS RECORD 2011 FOURTH QUARTER AND

FULL YEAR FINANCIAL RESULTS

 

Fourth Quarter Net Sales Rise 28.7% to $410.0 million;

Fourth Quarter Net Income Increases 31.4% to $64.5 million —

 

Corona, CA — February 23, 2012 — Monster Beverage Corporation (NASDAQ:MNST) (the “Company”) today reported record sales and profits for the three- and twelve-months ended December 31, 2011.

 

Gross sales for the 2011 fourth quarter increased 28.4 percent to $467.3 million from $364.1 million in the same period last year.  Net sales for the three-months ended December 31, 2011 increased 28.7 percent to $410.0 million from $318.7 million a year ago.

 

Gross profit, as a percentage of net sales, for the 2011 fourth quarter was 52.3 percent, compared with 51.6 percent for the comparable 2010 quarter.  Operating expenses for the 2011 fourth quarter increased to $110.8 million from $84.6 million in the same quarter last year.

 

Distribution costs as a percentage of net sales were 4.4 percent for the 2011 fourth quarter, compared with 4.2 percent in the same quarter last year.

 

Selling expenses as a percentage of net sales for the 2011 fourth quarter were 12.5 percent, compared with 12.2 percent in the same quarter a year ago.

 

General and administrative expenses as a percentage of net sales for the 2011 fourth quarter were 10.1 percent, compared with 10.2 percent for the corresponding quarter last year.  Stock-based compensation (a non-cash item) was $6.6 million in the fourth quarter of 2011, compared with $4.0 million for the fourth quarter of 2010.

 

Operating income for the 2011 fourth quarter increased 29.6 percent to $103.4 million from $79.8 million in the comparable 2010 quarter.

 

(more)

 



 

The effective tax rate for the 2011 fourth quarter was 38.3 percent, compared with 38.7 percent in the same quarter last year.

 

Net income for the 2011 fourth quarter increased 31.4 percent to $64.5 million from $49.1 million in the same quarter last year.  Net income per diluted share increased 32.6 percent to $0.35 from $0.26 per diluted share in the 2010 comparable quarter.

 

Net sales for the Company’s DSD segment for the 2011 fourth quarter increased 31.1 percent to $389.8 million from $297.5 million for the same period in 2010.

 

Gross sales to customers outside the United States rose to $88.9 million in the 2011 fourth quarter, compared with $66.4 million in the corresponding quarter in 2010.

 

During the 2011 fourth quarter, the Company purchased approximately 0.7 million shares of its common stock at an average purchase price of $39.78 per share pursuant to the share repurchase program previously authorized by the Board of Directors in March 2010.  These purchases exhausted the availability under the 2010 share repurchase program.

 

Rodney C. Sacks, chairman and chief executive officer, noted that the energy drink category is continuing to demonstrate solid growth.  Once again, the Monster Energy® brand grew in excess of the category and increased market share. “Our new Monster Rehab™ tea + lemonade rehydration energy drink with electrolytes, which was launched in the first quarter of 2011, continues to gain traction and has become one of our top selling Monster Energy® products.  During the fourth quarter, we launched three new product extensions in the Monster Rehab™ line,” Sacks said.  “We are continuing to expand into new international markets, with additional launches in 2012.  We commenced sales of the Monster Energy® brand in Poland earlier this month,” Sacks added.

 

For the 2011 fiscal year, gross sales increased 31.0 percent to $1.950 billion from $1.489 billion a year earlier.  Net sales for the year ended December 31, 2011 increased 30.6 percent to $1.703 billion from $1.304 billion a year ago.  Both gross and net sales for 2010 were impacted by advance purchases made by customers in the 2009 fourth quarter, following the Company’s announcement of a new marketing contribution program for Monster Energy® distributors, as well as to avoid product supply interruptions due to the Company’s planned transition to the SAP enterprise resource planning system in January 2010.  The Company previously estimated that approximately 4 percent to 6 percent of its fiscal 2009 fourth quarter gross sales were attributable to such advance purchases.

 

Gross profit as a percentage of net sales was 52.5 percent for the year ended December 31, 2011, compared with 52.2 percent a year earlier.

 

Operating expenses as a percentage of net sales for 2011 year increased to 25.7 percent or $437.9 million from 25.5 percent or $332.4 million for 2010.  Operating income for the year ended December 31, 2011 increased 31.2 percent to $456.4 million from $347.8 million a year ago.

 

Net income for the twelve months of 2011 increased by 35.0 percent to $286.2 million, or $1.53 per diluted share, compared with $212.0 million, or $1.14 per diluted share, for 2010.

 

2



 

Stock Split

 

The number of shares of common stock outstanding, common stock in treasury, additional paid in capital and earnings per share presented herein, have been adjusted to give effect to the two-for-one stock split issued on February 15, 2012.

 

Investor Conference Call

 

The Company will host an investor conference call today, February 23, 2012, 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.monsterbevcorp.com in the “Events & Presentations” section.  For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on the website.

 

Monster Beverage Corporation

 

Based in Corona, California, Monster Beverage Corporation is a marketer and distributor of energy drinks and alternative beverages. The Company markets and distributes Monster Energy® brand energy drinks, Monster Energy Extra Strength Nitrous Technology® brand energy drinks, Java Monster® brand non-carbonated coffee + energy drinks, X-Presso Monster® brand non-carbonated espresso energy drinks, M-3™ superconcentrated energy drinks, Monster Rehab™ non-carbonated rehydration energy drinks, Worx Energy® shots, and Peace Tea® iced teas, as well as Hansen’s® natural sodas, apple juice and juice blends, multi-vitamin juices, Junior Juice® beverages, Blue Sky® beverages, Hubert’s® Lemonades, Vidration® vitamin enhanced waters, and PRE® Probiotic drinks.  For more information visit www.monsterbevcorp.com.

 

#      #      #

 

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 presentation of gross sales provides a useful measure of our operating performance. Gross sales is not a measure that is recognized under generally accepted accounting principles in the United States of America (“GAAP”) and 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 practices. In addition, gross sales may not be realized in the form of cash receipts as promotional payments and allowances may be deducted from payments received from certain 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

 

3



 

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; potential distribution disruptions and/or decline in sales arising out of the termination and/or appointment of domestic and/or international 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; the imposition of new and/or increased taxes on our products; 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)

 

4



 

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION

FOR THE THREE-AND TWELVE-MONTHS ENDED DECEMBER 31, 2011 AND 2010

(In Thousands, Except Per Share Amounts) (Unaudited)

 

 

 

Three-Months Ended

 

Twelve-Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2011

 

2010

 

2011

 

2010

 

Gross sales, net of discounts and returns*

 

$

467,310

 

$

364,067

 

$

1,950,490

 

$

1,488,516

 

 

 

 

 

 

 

 

 

 

 

Less: Promotional and other allowances**

 

57,353

 

45,402

 

247,260

 

184,574

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

409,957

 

318,665

 

1,703,230

 

1,303,942

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

195,713

 

154,255

 

808,921

 

623,702

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

214,244

 

164,410

 

894,309

 

680,240

 

Gross profit margin as a percentage of net sales

 

52.3

%

51.6

%

52.5

%

52.2

%

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

110,847

 

84,613

 

437,886

 

332,426

 

Operating expenses as a percentage of net sales

 

27.0

%

26.6

%

25.7

%

25.5

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

103,397

 

79,797

 

456,423

 

347,814

 

Operating income as a percentage of net sales

 

25.2

%

25.0

%

26.8

%

26.7

%

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

1,055

 

262

 

1,619

 

2,246

 

Gain (loss) on investment and put option, net

 

78

 

106

 

(772

)

(758

)

Total other income

 

1,133

 

368

 

847

 

1,488

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

104,530

 

80,165

 

457,270

 

349,302

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

39,994

 

31,033

 

171,051

 

137,273

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

64,536

 

$

49,132

 

$

286,219

 

$

212,029

 

Net income as a percentage of net sales

 

15.7

%

15.4

%

16.8

%

16.3

%

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.37

 

$

0.28

 

$

1.62

 

$

1.20

 

Diluted

 

$

0.35

 

$

0.26

 

$

1.53

 

$

1.14

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock and common stock equivalents:

 

 

 

 

 

 

 

 

 

Basic

 

174,124

 

177,500

 

176,212

 

177,028

 

Diluted

 

184,926

 

186,644

 

186,674

 

186,042

 

 

 

 

 

 

 

 

 

 

 

Case sales (in thousands) (in 192-ounce case equivalents)

 

39,431

 

31,109

 

164,661

 

129,031

 

Average net sales price per case

 

$

10.40

 

$

10.24

 

$

10.34

 

$

10.11

 

 


* 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 presentation of gross sales provides a useful measure of our operating performance. Gross sales is not a measure that is recognized under generally accepted accounting principles in the United States of America (“GAAP”) and 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 practices. In addition, gross sales may not be realized in the form of cash receipts as promotional payments and allowances may be deducted from payments received from certain 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.

 



 

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2011 AND DECEMBER 31, 2010

(In Thousands, Except Par Value) (Unaudited)

 

 

 

December 31,
2011

 

December 31,
2010

 

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

359,331

 

$

354,842

 

Short-term investments

 

411,282

 

244,649

 

Trade accounts receivable, net

 

218,072

 

166,041

 

Distributor receivables

 

669

 

413

 

Inventories

 

155,613

 

153,241

 

Prepaid expenses and other current assets

 

20,912

 

17,022

 

Prepaid income taxes

 

370

 

9,992

 

Deferred income taxes

 

16,428

 

16,772

 

Total current assets

 

1,182,677

 

962,972

 

 

 

 

 

 

 

INVESTMENTS

 

23,194

 

44,189

 

PROPERTY AND EQUIPMENT, net

 

45,151

 

34,551

 

DEFERRED INCOME TAXES

 

58,576

 

58,475

 

INTANGIBLES, net

 

48,396

 

43,316

 

OTHER ASSETS

 

4,405

 

3,447

 

Total Assets

 

$

1,362,399

 

$

1,146,950

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

 

$

113,446

 

$

90,314

 

Accrued liabilities

 

31,966

 

23,065

 

Accrued promotional allowances

 

87,746

 

61,606

 

Deferred revenue

 

11,583

 

10,140

 

Accrued compensation

 

10,353

 

7,603

 

Income taxes payable

 

10,996

 

925

 

Total current liabilities

 

266,090

 

193,653

 

 

 

 

 

 

 

DEFERRED REVENUE

 

117,151

 

124,899

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

Common stock - $0.005 par value; 480,000 shares authorized; 198,729 shares issued and 174,277 outstanding as of December 31, 2011; 197,462 shares issued and 177,960 outstanding as of December 31, 2010

 

994

 

988

 

Additional paid-in capital

 

229,301

 

186,546

 

Retained earnings

 

1,168,644

 

882,425

 

Accumulated other comprehensive (loss) income

 

(1,547

)

281

 

Common stock in treasury, at cost; 24,452 shares and 19,502 shares as of December 31, 2011 and December 31, 2010, respectively

 

(418,234

)

(241,842

)

Total stockholders’ equity

 

979,158

 

828,398

 

Total Liabilities and Stockholders’ Equity

 

$

1,362,399

 

$

1,146,950