- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 COMMISSION FILE NUMBER 0-18761
HANSEN NATURAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 39-1679918
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2401 EAST KATELLA AVENUE, SUITE 650
ANAHEIM, CALIFORNIA 92806
(Address of principal executive offices) (Zip code)
(714) 634-4200
(Registrant's telephone number, including area code)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
THE REGISTRANT HAD 9,122,868 SHARES OF COMMON STOCK
OUTSTANDING AS OF AUGUST 1, 1996
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
JUNE 30, 1996
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995 3
Consolidated Statements of Operations for the three
and six months ended June 30, 1996 and 1995 5
Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Items 1-5. Not Applicable 13
Item 6. Exhibits and Reports on Form 8-K 13
Signature 13
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- -------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1996 1995
-------------- -------------
ASSETS
CURRENT ASSETS:
Cash $ 68,964 $ 87,916
Accounts receivable (net of allowance for doubtful
accounts, sales returns and cash discounts of $123,557
in 1996 and $422,831 in 1995 and promotional allowances
of $953,125 in 1996 and $782,034 in 1995) 2,501,398 1,729,155
Inventories 3,290,444 3,120,519
Prepaid expenses 324,520 487,507
------------ ------------
Total current assets 6,185,326 5,425,097
PLANT AND EQUIPMENT, net 709,905 784,884
INTANGIBLE AND OTHER ASSETS:
Trademark license and trademarks (net of accumulated
amortization of $1,943,014 in 1996 and $1,692,885 in 1995) 10,567,769 10,794,052
Notes receivable from officers 73,119 73,883
Deposits and other assets 500,220 443,503
------------ ------------
Total intangible and other assets 11,141,108 11,311,438
------------ ------------
$ 18,036,339 $ 17,521,419
------------ ------------
------------ ------------
See accompanying notes to consolidated financial statements.
-3-
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (CONTINUED)
- -------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1996 1995
-------------- -------------
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 1,035,744 $ 1,474,335
Accounts payable 3,744,349 3,382,765
Accrued liabilities 355,449 155,959
Current portion of long-term debt 9,853 30,782
------------ ------------
Total current liabilities 5,145,395 5,043,841
LONG-TERM DEBT (net of unamortized premium
of $43,214 in 1996 and $17,875 in 1995) 4,043,214 4,031,663
SHAREHOLDERS' EQUITY:
Common stock - $.005 par value; 30,000,000
shares authorized; 9,122,868 shares issued
and outstanding in 1996 and 1995 45,614 45,614
Additional paid-in capital 10,847,355 10,847,355
Accumulated deficit (2,063,396) (2,483,266)
Foreign currency translation adjustment 18,157 36,212
------------ ------------
Total shareholders' equity 8,847,730 8,445,915
------------ ------------
$ 18,036,339 $ 17,521,419
------------ ------------
------------ ------------
See accompanying notes to consolidated financial statements.
-4-
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
- -------------------------------------------------------------------------------
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
NET SALES $ 10,399,155 $ 9,559,709 $ 17,769,736 $ 14,993,406
COST OF SALES 6,252,600 6,071,183 10,860,553 9,327,944
------------ ------------ ------------ ------------
GROSS PROFIT 4,146,555 3,488,526 6,909,183 5,665,462
OPERATING EXPENSES:
Selling, general and administrative 3,514,144 3,338,405 6,004,048 5,628,996
Amortization of trademark license and trademarks 124,705 124,284 250,129 248,442
Other expenses 74,290 127,174 148,581 253,548
------------ ------------ ------------ ------------
Total operating expenses 3,713,139 3,589,863 6,402,758 6,130,986
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) 433,416 (101,337) 506,425 (465,524)
NONOPERATING EXPENSE (INCOME):
Interest and financing expense 159,363 79,770 325,122 180,493
Interest income (1,518) (5,190) (5,884) (13,539)
Other income (Note 2) (125,793) (232,683)
------------ ------------ ------------ ------------
Net nonoperating expense 32,052 74,580 86,555 166,954
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 401,364 $ (175,917) $ 419,870 $ (632,478)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
NET INCOME (LOSS) PER COMMON SHARE
Primary $ 0.043 $ (0.019) $ 0.046 $ (0.069)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Fully diluted $ 0.041 $ (0.019) $ 0.043 $ (0.069)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
NUMBER OF COMMON SHARES USED
IN PER SHARE COMPUTATIONS
Primary 9,406,004 9,122,868 9,185,944 9,122,868
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Fully diluted 9,726,478 9,122,868 9,726,478 9,122,868
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
See accompanying notes to consolidated financial statements.
-5-
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
- -------------------------------------------------------------------------------
1996 1995
--------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 419,870 $ (632,478)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Amortization of trademark license and trademarks 250,129 248,442
Depreciation and other amortization 94,783 120,623
Loss on sale of equipment 4,730
Effect on cash of changes in operating assets
and liabilities:
Accounts receivable (772,243) (1,579,459)
Inventories (169,925) (1,046,522)
Prepaid expenses 162,988 107,898
Accounts payable 361,583 2,457,168
Accrued liabilities 199,490 234,688
------------- --------------
Net cash provided by (used in) operating activities 551,405 (89,640)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment (67,497) (134,125)
Proceeds from sale of plant and equipment 68,302
Increase in trademark license (23,846) (53,129)
Decrease in notes receivable from officers 764 13,132
Increase in deposits and other assets (56,717) (71,750)
------------- --------------
Net cash used in investing activities (78,994) (245,872)
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in short-term borrowings (438,591)
Principal payments on long-term debt (34,717)
------------- --------------
Net cash used in financing activities (473,308)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (18,055) (19,022)
------------- --------------
NET DECREASE IN CASH (18,952) (354,534)
CASH, beginning of period 87,916 1,091,037
------------- --------------
CASH, end of period $ 68,964 $ 736,503
------------- --------------
------------- --------------
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest $ 224,867 $ 124,998
------------- --------------
------------- --------------
Cash paid during the period for taxes $ 2,400 $ -
------------- --------------
------------- --------------
See accompanying notes to consolidated financial statements.
-6-
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
Reference is made to the Notes to Consolidated Financial Statements, in the
Company's Form 10-K for the year ended December 31, 1995, which is
incorporated by reference, for a summary of significant policies utilized
by Hansen Natural Corporation ("Hansen" or "Company") and its subsidiaries,
Hansen Beverage Company and CVI Ventures, Inc., and its two indirect
subsidiaries, Hansen Beverage Company (UK) Limited and Hansen Beverage
Company (Services) Limited. The information set forth in these interim
financial statements is unaudited and may be subject to normal year-end
adjustments. The information reflects all adjustments, which include only
normal recurring adjustments, which in the opinion of management are
necessary to make the financial statements not misleading. Results of
operations covered by this report may not necessarily be indicative of
results of operations for the full fiscal year.
2. OTHER INCOME
In connection with the acquisition of the Hansen business, the Company was
assigned a promissory note made by Hawaiian Water Partners in the original
principal amount of $310,027 plus interest thereon and certain additional
principal amounts. The note was secured by the proceeds, if any, of a
lawsuit. The collectibility of this note was dependent upon the outcome of
that lawsuit and consequently the Company fully reserved against this
asset. Following a judgment in the lawsuit, a settlement was reached among
the plaintiff, defendant and competing claimants to the proceeds from the
lawsuit. Under the terms of the settlement, the Company was to receive a
total of $616,000 plus interest. $480,000 of this amount was received at
the end of April 1996. The balance of $136,000 was paid in August 1996.
As of December 31, 1995, the Company had a reserve of $270,000 against the
note. As a result of the proceeds collected subsequent to December 31,
1995, such reserve was eliminated. The Company recorded other income of
$107,000 and $126,000 in the first and second quarters of 1996,
respectively, net of $37,000 of attorney's fees incurred in connection with
the settlement.
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
GENERAL
Management believes that during the six months ended June 30, 1996, the
Company continued to make progress towards achieving its ultimate goal of
geographically expanding the Hansen's-Registered Trademark- brand, both
nationally and internationally.
During the six months ended June 30, 1996, the expansion of distribution of
the Company's products into new markets within the United States contributed
positively to the profitability of the Company as compared to the net loss that
was incurred by the Company from such activities during the six months ended
June 30, 1995.
During the six months ended June 30, 1996, the Company's operations in the
United Kingdom and route distribution system in Southern California incurred a
net loss of approximately $127,000 in the aggregate as compared to a net loss
from these activities of approximately $309,000 in the aggregate during the six
months ended June 30, 1995.
Net sales and profitability during the six-month period were positively
affected by sales of the Company's new Hansen's-Registered Trademark- Fruit
Juice Smoothies. Such gains were, however, partially offset by lower sales and
gross profits from soda, apple juice and iced teas, lemonades and juice
cocktails.
The Company continues to incur expenditures in connection with the
development and introduction of new products and flavors.
RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 1996 COMPARED TO
THE THREE-MONTH PERIOD ENDED JUNE 30, 1995
NET SALES. For the three-month period ended June 30, 1996, net sales
were approximately $10.4 million, an increase of $839,000 or 8.8% over the
$9.6 million net sales for the three-month period ended June 30, 1995. The
increase in net sales was primarily attributable to increased sales of
Hansen's-Registered Trademark- fruit juice Smoothies in cans, which were
introduced at the end of the first quarter of 1995 and sales of
Hansen's-Registered Trademark-fruit juice Smoothies in bottles, which were
introduced during the first quarter of 1996. The increase in net sales
of Hansen's-Registered Trademark-fruit juice Smoothies was partially offset
by a decrease in net sales of soda, apple juice and iced teas, lemonades and
juice cocktails. Net sales of Smoothies in cans for the three-month period
ended June 30, 1996 were 62.2% higher than for the three-month period ended
June 30, 1995. This increase was primarily attributable to increased sales
to club stores, retail and specialty chain stores and new distribution. Net
sales of soda for the three-month period ended June 30, 1996 were 9.3% lower
than for the three-month period ended June 30, 1995. This decrease was
primarily attributable to aggressive retail pricing and promotions of
mainstream sodas. Net sales of apple juice for the three-month period ended
June 30, 1996 were 69.7% lower than for the three-month period ended June 30,
1995. This decrease was primarily attributable to operational issues on the
part of customers in connection with the transition by the Company from glass
bottles to plastic containers to meet changing consumer preferences.
Management expects that sales of apple juice will improve after the
transition is completed. However, there can be no assurance that such
improvement will occur. Net sales of iced teas, lemonades and juice
cocktails for the three-month period ended June 30, 1996 were 28.2% lower
than for the three-month period ended June 30, 1995. This decrease was
primarily attributable to lower sales to retail and specialty chain stores
and a substantial reduction in sales to distributors and customers outside of
California. Such decrease was partially offset by increased sales to club
stores in California.
-8-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
GROSS PROFIT. Gross profit was $4.1 million for the three-month period
ended June 30, 1996, an increase of $658,000 or 18.9% over the $3.5 million
gross profit for the three-month period ended June 30, 1995. Gross profit as a
percentage of net sales increased to 39.9% for the three-month period ended June
30, 1996 from 36.5% for the three-month period ended June 30, 1995. The
increase in gross profit and gross profit as a percentage of net sales was
primarily attributable to higher average net sales prices and decreases in the
cost of aluminum cans and other raw materials.
TOTAL OPERATING EXPENSES. Total operating expenses were $3.7 million for
the three-month period ended June 30, 1996, an increase of $123,000 or 3.4% over
total operating expenses of $3.6 million for the three-month period ended June
30, 1995. However, total operating expenses as a percentage of net sales
decreased to 35.7% for the three-month period ended June 30, 1996 from 37.6% for
the three-month period ended June 30, 1995. The increase in total operating
expenses was primarily attributable to increased selling, general and
administrative expenses but was partially offset by a decrease in other
expenses. The decrease in total operating expenses as a percentage of net sales
was primarily attributable to the increase in net sales and the comparatively
smaller increase in operating expenses from the comparable period in 1995.
Selling, general and administrative expenses were $3.5 million for the
three-month period ended June 30, 1996, an increase of $176,000 or 5.3% over
selling, general and administrative expenses of $3.3 million for the three-month
period ended June 30, 1995. However, selling, general and administrative
expenses as a percentage of net sales decreased to 33.8% for the three-month
period ended June 30, 1996 from 34.9% for the three-month period ended June 30,
1995.
Other expenses were $74,000 for the three-month period ended June 30, 1996,
a decrease of $53,000 or 41.6% below other expenses of $127,000 for the three-
month period ended June 30, 1995. This decrease was primarily attributable to
the expiration of certain consulting agreements which were entered into in
connection with the purchase of the Hansen Business and the merger between the
Company, CVI Ventures, Inc. and Continental Ventures, Inc.
OPERATING INCOME (LOSS). Operating income was $433,000 for the three-month
period ended June 30, 1996 compared to an operating loss of $101,000 for the
three-month period ended June 30, 1995. The $535,000 increase in operating
income was attributable to a $658,000 increase in gross profit which was
partially offset by an increase of $123,000 in operating expenses.
NET NONOPERATING EXPENSE. Net nonoperating expense of $32,000 for the
three-month period ended June 30, 1996 was $42,000 lower than for the three-
month period ended June 30, 1995. Net nonoperating expense consists of interest
and financing expense, interest and other income. Interest and financing
expense for the three-month period ended June 30, 1996 was $159,000 compared to
$80,000 for the three-month period ended June 30, 1995. The increase in
interest and financing expense was attributable to expenses incurred in
connection with a line of credit that was obtained by the Company during the
third quarter of 1995 and additional interest expense in connection with that
line. Interest income for the three-month period ended June 30, 1996 was $2,000
compared to $5,000 for the three-month period ended June 30, 1995. In 1996,
other income of $126,000 represents the net recovery under the Hawaiian Water
Partners note described in Note 2 to the Company's financial statements for the
period ended June 30, 1996.
-9-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
NET INCOME (LOSS). Net income was $401,000 for the three-month period
ended June 30, 1996 compared to a net loss of $176,000 for the three-month
period ended June 30, 1995. The $577,000 increase in net income for this period
consists of an increase in operating income of $535,000 and a decrease of
$42,000 in net nonoperating expense.
RESULTS OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 COMPARED TO
THE SIX-MONTH PERIOD ENDED JUNE 30, 1995
NET SALES. For the six-month period ended June 30, 1996, net sales were
approximately $17.8 million, an increase of $2.8 million or 18.5% over the
$15.0 million net sales for the six-month period ended June 30, 1995. The
increase in net sales was primarily attributable to increased sales of
Hansen's-Registered Trademark- fruit juice Smoothies in cans, which were
introduced at the end of the first quarter of 1995 and sales of
Hansen's-Registered Trademark- fruit juice Smoothies in bottles, which were
introduced during the first quarter of 1996. The increase in net sales of
Hansen's-Registered Trademark- fruit juice Smoothies was partially offset by
a decrease in net sales of soda, apple juice and iced teas, lemonades and
juice cocktails. Net sales of Smoothies in cans for the six-month period
ended June 30, 1996 were 212.6% higher than for the six-month period ended
June 30, 1995. This increase was primarily attributable to increased sales
to club stores, retail and specialty chain stores and new distribution. Net
sales of soda for the six-month period ended June 30, 1996 were 15.1% lower
than for the six-month period ended June 30, 1995. This decrease was
primarily attributable to aggressive retail pricing and promotions of
mainstream sodas. Net sales of apple juice for the six-month period ended
June 30, 1996 were 23.3% lower than for the six-month period ended June 30,
1995. This decrease was primarily attributable to operational issues on the
part of customers in connection with the transition by the Company from glass
bottles to plastic containers to meet changing consumer preferences.
Management expects that sales of apple juice will improve after the
transition is completed. However, there can be no assurance that such
improvement will occur. Net sales of iced teas, lemonades and juice cocktails
for the six-month period ended June 30, 1996 were 22.6% lower than for the
six-month period ended June 30, 1995. This decrease was primarily
attributable to lower sales to retail and specialty chain stores and a
substantial reduction in sales to distributors and customers outside of
California. Such decrease was partially offset by increased sales to club
stores in California.
GROSS PROFIT. Gross profit was $6.9 million for the six-month period ended
June 30, 1996, an increase of $1.2 million or 22.0% over the $5.7 million gross
profit for the six-month period ended June 30, 1995. Gross profit as a
percentage of net sales increased to 38.9% for the six-month period ended June
30, 1996 from 37.8% for the six-month period ended June 30, 1995. The increase
in gross profit and gross profit as a percentage of net sales was primarily
attributable to higher average net sales prices and decreases in the cost of
aluminum cans and other raw materials.
TOTAL OPERATING EXPENSES. Total operating expenses were $6.4 million for
the six-month period ended June 30, 1996, an increase of $272,000 or 4.4% over
total operating expenses of $6.1 million for the six-month period ended June 30,
1995. However, total operating expenses as a percentage of net sales decreased
to 36.0% for the six-month period ended June 30, 1996 compared to 40.9% for the
six-month period ended June 30, 1995. The increase in total operating expenses
was primarily attributable to increased selling, general and administrative
expenses but was partially offset by a decrease in other expenses. The decrease
in total operating expenses as a percentage of net sales was primarily
attributable to the increase in net sales and the comparatively smaller increase
in operating expenses from the comparable period in 1995.
-10-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
Selling, general and administrative expenses were $6.0 million for the six-
month period ended June 30, 1996, an increase of $375,000 or 6.7% over selling,
general and administrative expenses of $5.6 million for the six-month period
ended June 30, 1995. However, selling, general and administrative expenses as a
percentage of net sales decreased to 33.8% for the six-month period ended June
30, 1996 from 37.5% for the six-month period ended June 30, 1995.
Other expenses were $149,000 for the six-month period ended June 30, 1996,
a decrease of $105,000 or 41.4% below other expenses of $254,000 for the six-
month period ended June 30, 1995. This decrease was primarily attributable to
the expiration of certain consulting agreements which were entered into in
connection with the purchase of the Hansen Business and the merger between the
Company, CVI Ventures, Inc. and Continental Ventures, Inc.
OPERATING INCOME (LOSS). Operating income was $506,000 for the six-month
period ended June 30, 1996 compared to an operating loss of $466,000 for the
six-month period ended June 30, 1995. The $972,000 increase in operating income
was attributable to a $1.2 million increase in gross profit which was partially
offset by an increase of $272,000 in operating expenses.
NET NONOPERATING EXPENSE. Net nonoperating expense of $87,000 for the six-
month period ended June 30, 1996 was $80,000 lower than for the six-month period
ended June 30, 1995. Net nonoperating expense consists of interest and
financing expense, interest and other income. Interest and financing expense
for the six-month period ended June 30, 1996 was $325,000 compared to $180,000
for the six-month period ended June 30, 1995. The increase in interest and
financing expense was attributable to expenses incurred in connection with a
line of credit that was obtained by the Company during the third quarter of 1995
and additional interest expense in connection with that line. Interest income
for the six-month period ended June 30, 1996 was $6,000 compared to $14,000 for
the six-month period ended June 30, 1995. In 1996, other income of $233,000
represents the net recovery under the Hawaiian Water Partners note described in
Note 2 to the Company's financial statements for the period ended June 30, 1996.
NET INCOME (LOSS). Net income was $420,000 for the six-month period ended
June 30, 1996 compared to a net loss of $632,000 for the six-month period ended
June 30, 1995. The $1.1 million increase in net income for this period consists
of an increase in operating income of $972,000 and a decrease of $80,000 in net
nonoperating expense.
-11-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company had working capital of $1,039,931 compared
to $381,256 as of December 31, 1995.
During the third quarter of 1995, the Company obtained a revolving line of
credit of up to $3 million in aggregate at any time outstanding. The
utilization of this line of credit by the Company is dependant upon certain
levels of eligible accounts receivable and inventory from time to time. The
line of credit is secured by substantially all of the Company's assets,
including accounts receivable, inventory, trademarks, trademark licenses and
certain equipment. As of June 30, 1996, $1,035,744 was outstanding under the
line of credit. The maturity date of the line of credit is August 31, 1996.
The line of credit is subject to automatic renewal on the maturity date for a
period of one year unless terminated by either party. Management expects the
line of credit to be renewed, although there can be no assurance that this will
occur. In this regard, an agreement in principle has been reached on the terms
of renewal of the line of credit but such renewal is subject to the
finalization and execution of a formal written agreement.
During the first and second quarters of 1996, the Company utilized a
portion of its line of credit, together with its own funds and the net recovery
under the Hawaiian Water Partners note, for working capital and to finance its
expansion and development plans. Purchases of inventory and support of accounts
receivable, as well as the Company's expansion and development plans, have been,
and for the foreseeable future, are expected to remain the Company's principal
recurring use of funds. The Company's other use of funds in the future will be
the repayment of principal and interest on the line of credit and the Company's
long-term debt, as well as obligations under certain consulting agreements
entered into in connection with the acquisition of the Hansen Business.
Management believes that cash available from operations, current cash
resources and its line of credit will be sufficient for its working capital
needs over the next twelve months.
Although the Company has no current plans to incur any material capital
expenditures, management, from time to time, considers the acquisition of
capital equipment, businesses compatible with the image of the Hansen's-
Registered Trademark- brand and the introduction of new product lines. The
Company may require additional capital resources in the event of any such
transaction, depending upon the cash requirements relating thereto.
INFLATION
The Company does not believe that inflation had a significant impact on the
Company's results of operations for the periods presented.
-12-
PART II - OTHER INFORMATION
Items 1 - 5. Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Exhibit Index.
(b) Reports on Form 8-K - None
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, thereunto duly authorized.
HANSEN NATURAL CORPORATION
Registrant
Date: August 2, 1996
By: RODNEY C. SACKS
-----------------------------------
Rodney C. Sacks
Chairman of the Board
and Chief Executive Officer;
Principal Financial Officer
-13-
INDEX TO EXHIBITS
The following designated exhibits, as indicated below, are either
filed herewith or have heretofore been filed with the Securities and Exchange
Commission under the Securities Act of 1933 or the Securities Exchange Act of
1934 as indicated by footnote.
EXHIBIT NO. DOCUMENT DESCRIPTION PAGE
- ----------- -------------------- ----
Exhibit 27 Financial Data Schedule 15
-14-
5
0000865752
HANSEN NATURAL CORPORATION
6-MOS
DEC-31-1995
JAN-01-1996
JUN-30-1996
68,694
0
3,578,080
1,076,682
3,290,444
6,185,326
1,079,251
369,346
18,036,339
5,145,395
0
0
0
45,614
8,802,116
18,036,339
17,769,736
17,775,620
10,860,553
6,402,758
(232,683)
0
325,122
419,870
0
419,870
0
0
0
419,870
.046
.043
