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News Release
Aug 5, 2010 (GlobeNewswire via COMTEX News Network) --
Second Quarter Net Sales Rise 21.8% to $365.7 million;
Operating Income Increases 18.2% to $109.7 million
CORONA, Calif., Aug. 5, 2010 (GLOBE NEWSWIRE) -- Hansen Natural Corporation (Nasdaq:HANS) today reported record sales and profits for the three-months ended June 30, 2010.
Gross sales for the 2010 second quarter increased 20.1 percent to $415.3 million from $345.8 million in the same period last year. Net sales for the three-months ended June 30, 2010 increased 21.8 percent to $365.7 million from $300.2 million a year ago.
Gross profit, as a percentage of net sales, for the 2010 second quarter was 52.9 percent, compared with 53.9 percent for the comparable 2009 second quarter. Operating expenses for the 2010 second quarter increased to $83.7 million from $69.0 million in the same quarter last year.
Distribution costs as a percentage of net sales were 4.3 percent for the 2010 second quarter, compared with 4.2 percent in the same quarter last year.
Selling expenses as a percentage of net sales were 10.4 percent for the 2010 second quarter, compared with 11.2 percent in the same quarter a year ago.
General and administrative expenses for the 2010 second quarter were $29.6 million, compared with $22.9 million for the corresponding quarter last year. Stock-based compensation (a non-cash item) was $3.5 million in the second quarter of 2010, compared with $3.7 million for the same period in 2009.
Operating income for the 2010 second quarter increased 18.2 percent to $109.7 million from $92.8 million in the 2009 comparable quarter.
The effective tax rate for the 2010 second quarter was 42.0 percent compared with 38.5 percent in the same quarter last year. The increased rate was primarily the result of a non-cash charge to establish a full valuation allowance against a deferred tax asset related to a foreign subsidiary, and its related impact on the Company's overall tax rate.
Net income for the 2010 second quarter increased 11.4 percent to $63.8 million, compared with $57.3 million in the same quarter last year. Net income per diluted share increased 14.2 percent to $0.69, from $0.60 per diluted share in the 2009 comparable quarter.
Net sales for the Company's DSD segment for the 2010 second quarter increased 24.8 percent to $341.3 million from $273.5 million for the same period in 2009. Net sales for the Company's warehouse segment were $24.4 million for the three-months ended June 30, 2010, compared with $26.8 million for the same period in 2009.
Gross sales to customers outside the United States rose to $66.6 million in the 2010 second quarter, from $39.4 million in the corresponding quarter in 2009.
Rodney C. Sacks, chairman and chief executive officer, attributed the record revenues to continued strong sales of Monster Energy(R) drinks. The Monster Energy(R) brand continues to gain market share, with sales increasing in excess of category growth. "We remain encouraged with the performance of the Monster Energy(R) brand, both in the United States and internationally," said Sacks.
"During the second quarter we launched the Monster Energy(R) brand in Slovakia, Czech Republic and Norway. We are currently in the process of launching the brand in Germany, the United Arab Emirates, Lebanon and Jordan, with additional introductions anticipated for later in 2010. We have introduced and are also planning to introduce additional new products this year both domestically and internationally," Sacks added.
For the first half of 2010 gross sales rose to $685.9 million from $624.7 million for the comparable period a year earlier. Net sales for the first six months of 2010 increased to $603.8 million from $544.5 million in the same period last year. Both gross and net sales for the 2010 first quarter were impacted by advance purchases made by customers in the fiscal 2009 fourth quarter due to the Company's announcement of a new per case marketing contribution program for Monster Energy(R) distributors commencing January 1, 2010, as well as to avoid potential interruptions in product supply due to the announcement of the transition to the SAP enterprise resource planning system commencing January 1, 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 52.6 percent for the first six months of 2010, compared with 53.6 percent for the same period in 2009.
Operating expenses for the six-months ended June 30, 2010, increased to $157.4 million from $133.4 million in the same period last year. Operating income was $160.5 million, compared with $158.6 million in the first six months of 2009.
Net income for the first half of 2010 was $96.4 million, or $1.04 per diluted share, compared with $98.9 million, or $1.04 per diluted share, for the same period last year.
Auction Rate Securities
In March 2010, the Company entered into an agreement relating to $54.2 million in par value auction rate securities, which enables the Company to sell such securities (the "Put Option") in semi-annual or annual installments beginning March 22, 2011 with full sale rights available on or after March 22, 2013. Such auction rate securities, which have been reclassified from available-for-sale to trading securities, will continue to accrue interest until redeemed through the Put Option, or as determined by the auction process or by the terms outlined in their respective prospectuses in the event of auction failure.
At June 30, 2010 the Company held auction rate securities with a face value of $87.3 million ($92.7 million at March 31, 2010) and the Put Option with a fair market value of $4.1 million ($5.1 million at March 31, 2010). The Company determined that an impairment related to its auction rate securities of $6.5 million existed at June 30, 2010, of which $2.4 million was deemed temporary and $4.1 million was deemed other-than- temporary. As a result, a loss of $1.4 million, net of taxes is included as a component of accumulated other comprehensive loss as of June 30, 2010, and we recorded a net non-cash charge to earnings of $0.7 million in respect of our auction rate securities for the second quarter of 2010. The auction rate securities will continue to accrue interest at their contractual rates until their respective auctions succeed or they are redeemed.
Investor Conference Call
The Company will host an investor conference call today, August 5, 2010, 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 unable 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, sparkling beverages, apple juice and juice blends, fruit juice smoothies, multi-vitamin juice drinks in aseptic packaging, iced teas, energy drinks, Junior Juice(R) juices and water beverages, Blue Sky(R) brand beverages, Monster Energy(R) brand energy drinks, Nitrous(TM) Monster Energy(R) brand energy drinks, Monster Hitman(TM) energy shooters, Java Monster(TM) brand non-carbonated coffee + energy drinks, X-Presso Monster(TM) brand non-carbonated espresso energy drinks, Peace Tea(TM) iced teas, Lost(R) Energy(TM) brand energy drinks, Rumba(R), Samba and Tango brand energy juices, Vidration(TM) brand vitamin enhanced waters and Admiral(TM) iced teas. For more information visit www.hansens.com and www.monsterenergy.com.
Note Regarding Use of Non-GAAP Measures
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 are 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.
HANSEN NATURAL CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION
FOR THE THREE- AND SIX-MONTHS ENDED JUNE 30, 2010
AND 2009
(In Thousands, Except Per Share Amounts) (Unaudited)
-------------------------------------------------------------------------------------------------
Three-Months Ended Six-Months Ended
June 30, June 30,
--------------------------- -------------------------
2010 2009 2010 2009
------------ ---------- ---------- ----------
Gross sales, net of discounts &
returns* $ 415,297 $ 345,830 $ 685,864 $ 624,684
Less: Promotional and other
allowances** 49,596 45,580 82,052 80,228
------------ ---------- ---------- ----------
Net sales 365,701 300,250 603,812 544,456
Cost of sales 172,351 138,421 285,907 252,448
------------ ---------- ---------- ----------
Gross profit 193,350 161,829 317,905 292,008
Gross profit margin as a percentage
of net sales 52.9% 53.9% 52.6% 53.6%
Operating expenses 83,674 69,046 157,443 133,448
Operating expenses as a percentage
of net sales 22.9% 23.0% 26.1% 24.5%
------------ ---------- ---------- ----------
Operating income 109,676 92,783 160,462 158,560
Operating income as a percentage of
net sales 30.0% 30.9% 26.6% 29.1%
Other income (expense):
Interest and other income, net 1,034 401 1,443 1,418
Loss on investments and put option,
net
(713) -- (137) (3,539)
------------ ---------- ---------- ----------
Total other income (expense) 321 401 1,306 (2,121)
------------ ---------- ---------- ----------
Income before provision for income
taxes 109,997 93,184 161,768 156,439
Provision for income taxes 46,159 35,895 65,367 57,584
------------ ---------- ---------- ----------
Net income $ 63,838 $ 57,289 $ 96,401 $ 98,855
============ ========== ========== ==========
Net income as a percentage of net
sales 17.5% 19.1% 16.0% 18.2%
Net income per common share:
Basic $ 0.72 $ 0.63 $ 1.09 $ 1.09
Diluted $ 0.69 $ 0.60 $ 1.04 $ 1.04
Weighted average number of shares
of common stock
and common stock equivalents:
Basic 88,587 90,604 88,467 90,519
Diluted 92,969 95,282 92,983 95,285
Case sales (in thousands)
(in 192-ounce case equivalents) 35,861 29,256 60,066 52,724
Average net sales price per case $ 10.20 $ 10.26 $ 10.05 $ 10.33
*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 are 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.
** 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, 2010 AND DECEMBER 31, 2009
(In Thousands, Except Par Value) (Unaudited)
-----------------------------------------------------------------
June 30, December 31,
2010 2009
---------- -----------------
ASSETS
----------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 409,911 $ 328,349
Short-term investments 61,662 18,487
Trade accounts receivable,
net 127,564 104,206
Distributor receivables 3,916 4,699
Inventories 139,233 108,143
Prepaid expenses and other
current assets 16,577 11,270
Deferred income taxes 10,350 10,350
---------- -----------------
Total current assets 769,213 585,504
INVESTMENTS 59,484 80,836
PROPERTY AND EQUIPMENT, net 32,038 33,314
DEFERRED INCOME TAXES 61,065 65,678
INTANGIBLES, net 39,752 33,512
OTHER ASSETS 3,343 1,226
---------- -----------------
Total Assets $ 964,895 $ 800,070
========== =================
LIABILITIES AND
STOCKHOLDERS' EQUITY
----------------------------
CURRENT LIABILITIES:
Accounts payable $ 87,504 $ 48,863
Accrued liabilities 34,003 14,174
Deferred revenue 9,452 9,125
Accrued distributor
terminations 2,553 2,977
Accrued compensation 5,978 7,623
Current portion of debt 135 206
Income taxes payable 19,293 761
---------- -----------------
Total current liabilities 158,918 83,729
DEFERRED REVENUE 127,513 131,388
STOCKHOLDERS' EQUITY:
Common stock -- $0.005 par
value; 120,000 shares
authorized;
97,917 shares issued and
88,166 outstanding as of June
30, 2010;
97,285 shares issued and
88,159 outstanding as of
December 31, 2009 490 486
Additional paid-in capital 157,204 137,040
Retained earnings 766,797 670,396
Accumulated other
comprehensive loss (4,185) (4,667)
Common stock in treasury, at
cost; 9,751 shares as of
June 30, 2010 and 9,126 shares
as of December 31, 2009 (241,842) (218,302)
---------- -----------------
Total stockholders' equity 678,464 584,953
---------- -----------------
Total Liabilities and
Stockholders' Equity $ 964,895 $ 800,070
========== =================
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Hansen Natural Corporation
CONTACT: Hansen Natural Corporation Rodney C. Sacks, Chairman and Chief Executive Officer (951) 739-6200 Hilton H. Schlosberg, Vice Chairman (951) 739-6200 PondelWilkinson Inc. Roger S. Pondel Judy Lin Sfetcu (310) 279-5980
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