Minimum 15 minutes delayed. Source: LSEG
News Release
CORONA, Calif., Feb 28, 2008 (BUSINESS WIRE) -- Hansen Natural Corporation (NASDAQ:HANS) today reported record sales and profits for the fourth quarter and year ended December 31, 2007.
Gross sales for the fourth quarter increased 61.5 percent to $277.3 million, from $171.7 million a year earlier. Net sales for the fourth quarter increased 63.0 percent to $246.6 million from $151.3 million a year ago.
Gross profit as a percentage of net sales for the 2007 fourth quarter decreased to 51.0 percent, from 53.1 percent in the comparable 2006 quarter.
Operating income for the fourth quarter increased 81.1 percent to $64.6 million from $35.7 million a year ago. Operating income for the fourth quarter, excluding the identified items described below, increased 49.7 percent to $63.1 million from $42.1 million a year ago. The Company reported an effective tax rate for the fourth quarter of 33.3 percent compared to 39.5 percent last year.
Net income for the 2007 fourth quarter increased 103.1 percent to $45.1 million, or $0.45 per diluted share, from $22.2 million, or $0.23 per diluted share last year.
Gross sales for the year ended December 31, 2007 increased 47.3 percent to $1,025.8 million from $696.3 million a year earlier. Net sales for the year ended December 31, 2007 increased 49.3 percent to $904.5 million from $605.8 million a year ago.
Gross profit as a percentage of net sales was 51.7 percent for 2007, compared with 52.3 percent for 2006.
Operating income for the year ended December 31, 2007 increased 45.7 percent to $231.0 million from $158.6 million a year ago. Operating income for the year ended December 31, 2007, excluding the identified items described below, increased 45.5 percent to $254.1 million from $174.6 million a year ago. The Company reported an effective tax rate for the year of 37.7 percent compared to 39.6 percent last year.
Net income for the year ended December 31, 2007 increased 52.5 percent to $149.4 million, or $1.51 per diluted share, from $97.9 million, or $0.99 per diluted share, last year.
Rodney C. Sacks, chairman and chief executive officer, said that the record revenues reflected continued strong sales of Monster Energy(R) brand energy drinks as well as the Java Monster(TM) line of non-carbonated dairy based coffee drinks (introduced in April 2007) and Monster M-80 energy (introduced in March 2007). "We are excited by the launch in December 2007 of the five new Java Monster(TM) line extensions as well as the launch of our new Monster Heavy Metal(TM) (introduced in November 2007) and Monster MIXXD(TM) (introduced in December 2007). We are extremely pleased by the reception both from the trade and consumers to our new line extensions.
"The energy category continues to show strong growth and the Monster Energy(R) brand continues to grow in excess of the overall category growth," Sacks said. Also, Mr. Sacks noted that fourth quarter sales benefited from purchases made by customers in anticipation of the price increase, effective January 1, 2008, in both the 16-ounce Monster Energy(R) and the Java Monster(TM) lines.
Certain Identified Items
In connection with the transition of certain of the Company's distribution arrangements, the Company incurred termination costs amounting to $0.2 million and $3.0 million for the three-months and $15.3 million and $12.7 million for the twelve-months ended December 31, 2007 and 2006, 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 twelve-months ended December 31, 2007 and 2006.
Non-refundable amounts totaling $21.0 million and $20.9 million were recorded by the Company related to such newly appointed Anheuser-Busch distributors for the costs of terminating its prior distributors in the twelve-months ended December 31, 2007 and 2006, respectively. Such payments and commitments have been accounted for as deferred revenue, and 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 $0.3 million for the three-months ended December 31, 2007 and 2006, respectively. Revenue recognized was $1.9 million and $0.4 million for the year ended December 31, 2007 and 2006, respectively. The anticipated Anheuser-Busch distribution transition arrangements have now largely been completed.
In connection with the Company's special investigation of stock option grants and granting practices, related litigation and other related matters, the Company incurred professional service fees of $9.8 million (net of $2.5 million insurance reimbursements) and $3.8 million for the twelve-months ended December 31, 2007, and 2006 respectively, which have also been fully expensed in the respective periods.
The following table summarizes the identified items discussed above for the three and twelve-months ended December 31, 2007 and 2006:
Three-Months Ended Twelve-Months Ended
December 31, December 31,
----------------------- -------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
(In (In (In (In
Thousands) Thousands) Thousands) Thousands)
Deferred Revenue:
Receipts from newly
appointed Anheuser-
Busch distributors $ (107) $8,525 $21,029 $20,851
=========== =========== =========== ===========
Recognized Revenue $ 526 $ 261 $ 1,916 $ 411
Operating Expenses:
Termination payments
to prior
distributors $ 244 $2,974 $15,266 $12,728
Professional fees
associated with the
review of stock
option grants and
granting practices,
related litigation
and other related
matters $(1,240)(1) $3,753 $ 9,760(1) $ 3,753
(1) net of $2.5 million insurance reimbursements
The Company will host an investor conference call on February 28, 2008 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(R) Natural Sodas and Sparkling beverages, Signature Sodas, fruit juice Smoothies, Energy drinks, 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) line of non-carbonated dairy based coffee drinks, Lost(R) Energy(TM) brand energy drinks, Joker Mad Energy(TM), Unbound Energy(R) 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 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 is 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.
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 Months and Year End December 31, 2007 and 2006
(In Thousands, Except Per Share Amounts) (Unaudited)
Three-Months Ended Twelve-Months Ended
December 31 December 31
------------------ -------------------
2007 2006 2007 2006
--------- -------- ---------- --------
GROSS SALES, net of discounts
and returns(1) $ 277,299 $171,745 $1,025,795 $696,322
LESS: PROMOTIONAL AND OTHER
ALLOWANCES(2) 30,661 20,401 121,330 90,548
--------- -------- ---------- --------
NET SALES 246,638 151,344 904,465 605,774
COST OF SALES 120,897 70,922 436,452 289,180
--------- -------- ---------- --------
GROSS PROFIT 125,741 80,422 468,013 316,594
OPERATING EXPENSES 61,169 44,765 237,027 158,015
--------- -------- ---------- --------
OPERATING INCOME 64,572 35,657 230,986 158,579
INTEREST AND OTHER INCOME, net 3,033 1,039 8,770 3,660
--------- -------- ---------- --------
INCOME BEFORE PROVISION FOR
INCOME TAXES 67,605 36,696 239,756 162,239
PROVISION FOR INCOME TAXES 22,505 14,495 90,350 64,290
--------- -------- ---------- --------
NET INCOME $ 45,100 $ 22,201 $ 149,406 $ 97,949
========= ======== ========== ========
NET INCOME PER COMMON SHARE:
Basic $ 0.49 $ 0.26 $ 1.64 $ 1.09
========= ======== ========== ========
Diluted $ 0.45 $ 0.23 $ 1.51 $ 0.99
========= ======== ========== ========
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS:
Basic 92,925 90,052 91,178 89,936
========= ======== ========== ========
Diluted 99,512 97,979 98,874 98,586
========= ======== ========== ========
(1) 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. However, gross sales is 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.
(2) 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, 2007 and 2006
(In Thousands, Except Share Amounts) (Unaudited)
----------------------------------------------------------------------
2007 2006
------------ ------------
ASSETS
--------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 12,440 $ 35,129
Short-term investments 63,125 101,667
Accounts receivable, net 81,497 54,624
Inventories 98,140 77,013
Prepaid expenses and other current assets 3,755 771
Deferred income taxes 11,192 5,953
------------ ------------
Total current assets 270,149 275,157
INVESTMENTS 227,085 -
PROPERTY AND EQUIPMENT, net 8,567 5,565
DEFERRED INCOME TAXES 14,006 5,001
INTANGIBLES, net 24,066 21,202
OTHER ASSETS 730 1,447
------------ ------------
$ 544,603 $ 308,372
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 56,766 $ 34,362
Accrued liabilities 8,916 9,465
Accrued distributor terminations 4,312 7,024
Customer deposit liabilities 103 3,324
Accrued compensation 5,827 4,378
Current portion of debt 663 299
Income taxes payable 6,294 3,991
------------ ------------
Total current liabilities 82,881 62,843
LONG-TERM DEBT, less current portion - 4
DEFERRED REVENUE 39,555 20,441
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock - $0.005 par value; 120,000,000
shares authorized;
95,848,711 shares issued and 93,191,191
outstanding as of
December 31, 2007; 92,713,212 shares issued
and 90,059,424
outstanding as of December 31, 2006 479 464
Additional paid-in capital 96,749 48,892
Retained earnings 353,648 204,242
Accumulated other comprehensive loss (47) -
Common stock in treasury, at cost; 2,657,520
and 2,654,088 shares as
of December 31, 2007 and 2006, respectively (28,662) (28,514)
------------ ------------
Total stockholders' equity 422,167 225,084
------------ ------------
$ 544,603 $ 308,372
============ ============
SOURCE: Hansen Natural Corporation
Hansen Natural Corporation Rodney C. Sacks, Chairman and Chief Executive Officer 951-739-6200 or Hilton H. Schlosberg, Vice Chairman 951-739-6200 or PondelWilkinson Inc. Roger S. Pondel / Judy Lin Sfetcu 310-279-5980
Copyright Business Wire 2008
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