-- Third Quarter Net Sales rise 11.6 percent to
-- Third Quarter Net Income increases 11.6 percent to
-- Third Quarter Net Income per diluted share increases 14.0 percent to
-- Board authorizes new
Third Quarter Results
Net sales for the 2019 third quarter increased 11.6 percent to
The comparative net and gross sales for the 2018 third quarter were positively impacted by approximately
Net changes in foreign currency exchange rates had an unfavorable impact on net and gross sales for the 2019 third quarter of
Net sales for the Company’s Monster Energy® Drinks segment, which primarily includes the Company’s Monster Energy® drinks and Reign Total Body Fuel™ high performance energy drinks, increased 13.5 percent to
Net sales for the Company’s Strategic Brands segment, which primarily includes the various energy drink brands acquired from The
Net sales for the Company’s Other segment, which includes certain products of American Fruits and Flavors sold to independent third parties (the “AFF Third-Party Products”), were
Net sales to customers outside
Gross profit, as a percentage of net sales, for the 2019 third quarter was 59.4 percent, compared with 59.8 percent in the 2018 third quarter. The decrease in gross profit as a percentage of net sales for the 2019 third quarter was primarily the result of geographical and product sales mix. Such decrease was partially offset by price increases as well as reduced input costs.
Operating expenses for the 2019 third quarter were
Distribution costs as a percentage of net sales were 3.3 percent for the 2019 third quarter, compared with 4.1 percent in the 2018 third quarter.
Selling expenses as a percentage of net sales for the 2019 third quarter were 11.1 percent, compared with 11.2 percent in the 2018 third quarter.
General and administrative expenses for the 2019 third quarter were
Operating income for the 2019 third quarter increased to
The effective tax rate for the 2019 third quarter was 25.0 percent, compared with 21.8 percent in the 2018 third quarter. The increase in the effective tax rate was primarily due to increased income taxes in certain foreign jurisdictions as well as a decrease in the equity compensation deduction.
Net income for the 2019 third quarter increased 11.6 percent to
“In the third quarter we launched or transitioned our Monster Energy® brand energy drinks to the Coca-Cola bottlers in the
“We launched a number of new Monster Energy® brand energy drinks and three new Reign Total Body Fuel™ high performance energy drinks during the third quarter and in October, in
“We also launched Predator®, our affordable energy brand in additional international markets during the third quarter, with plans for further launches of Predator® later this year and into 2020,” Sacks added.
2019 Nine-Months Results
Net sales for the nine-months ended September 30, 2019 increased 10.4 percent to
Net changes in foreign currency exchange rates had an unfavorable impact on net and gross sales for the nine-months ended September 30, 2019 of
Gross profit, as a percentage of net sales, for the nine-months ended September 30, 2019 was 59.9 percent, compared with 60.5 percent in the comparable period last year.
Operating expenses for the nine-months ended September 30, 2019 were
Operating income for the nine-months ended September 30, 2019 increased to
Net income for the nine-months ended September 30, 2019 increased 13.1 percent to
Share Repurchase Program
During the 2019 third quarter, the Company purchased approximately 4.3 million shares of its common stock at an average purchase price of
As of November 6, 2019, approximately
On
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 presentation 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):
| Three-Months Ended September 30, |
Nine-Months Ended September 30, |
|||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Gross sales, net of discounts and returns | $ | 1,318,267 | $ | 1,184,444 | $ | 3,695,128 | $ | 3,366,334 | ||||
| Less: Promotional allowances, commissions and other expenses | 184,690 | 168,284 | 511,515 | 483,381 | ||||||||
| Net Sales | $ | 1,133,577 | $ | 1,016,160 | $ | 3,183,613 | $ | 2,882,953 | ||||
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 NINE-MONTHS ENDED
(In Thousands, Except Per Share Amounts) (Unaudited)
| Three-Months Ended | Nine-Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net sales¹ | $ | 1,133,577 | $ | 1,016,160 | $ | 3,183,613 | $ | 2,882,953 | |||||||
| Cost of sales | 460,575 | 408,501 | 1,275,796 | 1,139,780 | |||||||||||
| Gross profit¹ | 673,002 | 607,659 | 1,907,817 | 1,743,173 | |||||||||||
| Gross profit as a percentage of net sales | 59.4% | 59.8% | 59.9% | 60.5% | |||||||||||
| Operating expenses² | 277,559 | 268,086 | 821,923 | 766,065 | |||||||||||
| Operating expenses as a percentage of net sales | 24.5% | 26.4% | 25.8% | 26.6% | |||||||||||
| Operating income¹,² | 395,443 | 339,573 | 1,085,894 | 977,108 | |||||||||||
| Operating income as a percentage of net sales | 34.9% | 33.4% | 34.1% | 33.9% | |||||||||||
| Interest and other income, net | 3,121 | 2,988 | 8,835 | 5,269 | |||||||||||
| Income before provision for income taxes¹,² | 398,564 | 342,561 | 1,094,729 | 982,377 | |||||||||||
| Provision for income taxes | 99,641 | 74,828 | 241,848 | 228,480 | |||||||||||
| Income taxes as a percentage of income before taxes | 25.0% | 21.8% | 22.1% | 23.3% | |||||||||||
| Net income¹,² | $ | 298,923 | $ | 267,733 | $ | 852,881 | $ | 753,897 | |||||||
| Net income as a percentage of net sales | 26.4% | 26.3% | 26.8% | 26.2% | |||||||||||
| Net income per common share: | |||||||||||||||
| Basic | $ | 0.55 | $ | 0.48 | $ | 1.57 | $ | 1.35 | |||||||
| Diluted | $ | 0.55 | $ | 0.48 | $ | 1.56 | $ | 1.33 | |||||||
| Weighted average number of shares of common stock and common stock equivalents: | |||||||||||||||
| Basic | 544,469 | 552,694 | 543,804 | 559,472 | |||||||||||
| Diluted | 548,422 | 559,955 | 548,387 | 566,791 | |||||||||||
| Case sales (in thousands) (in 192-ounce case equivalents) | 121,854 | 111,038 | 342,734 | 313,410 | |||||||||||
| Average net sales per case3 | $ | 9.25 | $ | 9.09 | $ | 9.24 | $ | 9.14 | |||||||
¹Includes
² Includes no amounts for the three-months ended
3Excludes Other segment net sales of
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF
(In Thousands, Except Par Value) (Unaudited)
| September 30, 2019 |
December 31, 2018 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 717,617 | $ | 637,513 | ||||
| Short-term investments | 587,356 | 320,650 | ||||||
| Accounts receivable, net | 647,983 | 484,562 | ||||||
| Inventories | 317,745 | 277,705 | ||||||
| Prepaid expenses and other current assets | 58,390 | 44,909 | ||||||
| Prepaid income taxes | 31,669 | 38,831 | ||||||
| Total current assets | 2,360,760 | 1,804,170 | ||||||
| INVESTMENTS | 14,370 | - | ||||||
| PROPERTY AND EQUIPMENT, net | 251,760 | 243,051 | ||||||
| DEFERRED INCOME TAXES | 85,148 | 85,687 | ||||||
| GOODWILL | 1,331,643 | 1,331,643 | ||||||
| OTHER INTANGIBLE ASSETS, net | 1,047,473 | 1,045,878 | ||||||
| OTHER ASSETS | 46,212 | 16,462 | ||||||
| Total Assets | $ | 5,137,366 | $ | 4,526,891 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 304,773 | $ | 248,760 | ||||
| Accrued liabilities | 112,318 | 112,507 | ||||||
| Accrued promotional allowances | 197,239 | 145,741 | ||||||
| Deferred revenue | 43,805 | 44,045 | ||||||
| Accrued compensation | 35,747 | 39,903 | ||||||
| Income taxes payable | 20,334 | 10,189 | ||||||
| Total current liabilities | 714,216 | 601,145 | ||||||
| DEFERRED REVENUE | 292,101 | 312,224 | ||||||
| OTHER LIABILITIES | 23,071 | 2,621 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock - $0.005 par value; 1,250,000 shares authorized; 636,235 shares issued and 540,591 shares outstanding as of September 30, 2019; 630,970 shares issued and 543,676 shares outstanding as of December 31, 2018 |
3,181 | |
3,155 | |||||
| Additional paid-in capital | 4,370,280 | 4,238,170 | ||||||
| Retained earnings | 4,767,526 | 3,914,645 | ||||||
| Accumulated other comprehensive loss | (43,083 | ) | (32,864 | ) | ||||
| Common stock in treasury, at cost; 95,644 and 87,294 shares as of September 30, 2019 and December 31, 2018, respectively |
(4,989,926 | ) | (4,512,205 | ) | ||||
| Total stockholders' equity | 4,107,978 | 3,610,901 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 5,137,366 | $ | 4,526,891 | ||||
| CONTACTS: | Rodney C. Sacks | ||
| Chairman and Chief Executive Officer | |||
| (951) 739-6200 | |||
| Hilton H. Schlosberg | |||
| Vice Chairman | |||
| (951) 739-6200 | |||
| Roger S. Pondel / Judy Lin Sfetcu | |||
| PondelWilkinson Inc. | |||
| (310) 279-5980 | |||
Source: Monster Beverage Corporation