-- Second Quarter
-- Second Quarter Net Income increases 6.5 percent to
-- Second Quarter Net Income per diluted share increases 9.9 percent to
COVID-19 Pandemic
The Company’s top priority continues to be the health, safety and well-being of its employees. Early in
The Company’s second quarter net and gross sales were adversely impacted by the COVID-19 pandemic, in part due to certain of the Company’s bottlers/distributors reducing their inventory levels. However, the Company experienced a sequential improvement in sales in the latter half of the quarter as certain countries and states began to gradually re-open. Since
Currently, the Company does not foresee a material impact on the ability of its co-packers to manufacture and its bottlers/distributors to distribute its products as a result of the COVID-19 pandemic. In addition, the Company is not experiencing raw material or finished product shortages in its supply chain.
As of
Second Quarter Results
Net sales for the 2020 second quarter were
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 0.8 percent to
Net sales for the Company’s Strategic Brands segment, which primarily includes the various energy drink brands acquired from The Coca-Cola Company, as well as the Company’s affordable energy brands, decreased 24.7 percent to
Net sales for the Company’s Other segment, which includes certain products of
Net sales to customers outside
Gross profit, as a percentage of net sales, for the 2020 second quarter was 60.3 percent, compared with 59.9 percent in the 2019 second quarter.
Operating expenses for the 2020 second quarter were
Distribution costs as a percentage of net sales were 3.6 percent for the 2020 second quarter, compared with 3.4 percent in the 2019 second quarter.
Selling expenses as a percentage of net sales for the 2020 second quarter were 8.8 percent, compared with 11.2 percent in the 2019 second quarter, primarily as a result of the reduction in sponsorship and endorsement costs referred to above.
General and administrative expenses for the 2020 second quarter were
Operating income for the 2020 second quarter increased to
The effective tax rate for the 2020 second quarter was 23.2 percent, compared with 23.4 percent in the 2019 second quarter.
Net income for the 2020 second quarter increased 6.5 percent to
“According to Nielsen, the energy drinks category continues to grow in many countries, including
“Now that certain countries and states are gradually reopening, our teams are working to ensure the implementation of our 2020 product innovation launches, which were disrupted due to the COVID-19 pandemic. We have a robust innovation plan for the remainder of 2020.
“Internationally during the quarter, we added various Monster Energy® brand energy drinks, and Reign Total Body Fuel® high performance energy drinks to our portfolio in a number of countries. Monster Energy® Dragon Tea was launched in
“Our thoughts and prayers are with all who have been impacted by this terrible virus and we wish them all a very speedy recovery,” Sacks added.
2020 Six-Months Results
Net sales for the six-months ended
Net changes in foreign currency exchange rates had an unfavorable impact on net and gross sales for the six-months ended
Gross profit, as a percentage of net sales, for the six-months ended
Operating expenses for the six-months ended
Operating income for the six-months ended
The effective tax rate was 23.5 percent for the six-months ended
Net income for the six-months ended
Share Repurchase Program
During the 2020 second quarter, the Company purchased approximately 0.3 million shares of its common stock at an average purchase price of
As of
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 |
Six-Months Ended |
|||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Gross sales, net of discounts and returns | $ | 1,274,277 | $ | 1,286,436 | $ | 2,510,337 | $ | 2,376,862 | ||||
| Less: Promotional and other allowances | 180,381 | 182,391 | 354,344 | 326,825 | ||||||||
| $ | 1,093,896 | $ | 1,104,045 | $ | 2,155,993 | $ | 2,050,037 | |||||
Caution Concerning Forward-Looking Statements
Certain statements made in this announcement may constitute “forward-looking statements” within the meaning of the
(tables below)
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION
FOR THE THREE- AND SIX-MONTHS ENDED
(In Thousands, Except Per Share Amounts) (Unaudited)
| Three-Months Ended | Six-Months Ended | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net sales¹ | $ | 1,093,896 | $ | 1,104,045 | $ | 2,155,993 | $ | 2,050,037 | |||||||
| Cost of sales | 434,427 | 442,762 | 859,329 | 815,221 | |||||||||||
| Gross profit¹ | 659,469 | 661,283 | 1,296,664 | 1,234,816 | |||||||||||
| Gross profit as a percentage of net sales | 60.3 | % | 59.9 | % | 60.1 | % | 60.2 | % | |||||||
| Operating expenses² | 252,205 | 282,293 | 524,412 | 544,364 | |||||||||||
| Operating expenses as a percentage of net sales | 23.1 | % | 25.6 | % | 24.3 | % | 26.6 | % | |||||||
| Operating income¹,² | 407,264 | 378,990 | 772,252 | 690,452 | |||||||||||
| Operating income as a percentage of net sales | 37.2 | % | 34.3 | % | 35.8 | % | 33.7 | % | |||||||
| Interest and other (expense) income, net | (1,796 | ) | 2,973 | (923 | ) | 5,714 | |||||||||
| Income before provision for income taxes¹,² | 405,468 | 381,963 | 771,329 | 696,166 | |||||||||||
| Provision for income taxes | 94,099 | 89,490 | 181,125 | 142,208 | |||||||||||
| Income taxes as a percentage of income before taxes | 23.2 | % | 23.4 | % | 23.5 | % | 20.4 | % | |||||||
| Net income¹,² | $ | 311,369 | $ | 292,473 | $ | 590,204 | $ | 553,958 | |||||||
| Net income as a percentage of net sales | 28.5 | % | 26.5 | % | 27.4 | % | 27.0 | % | |||||||
| Net income per common share: | |||||||||||||||
| Basic | $ | 0.59 | $ | 0.54 | $ | 1.11 | $ | 1.02 | |||||||
| Diluted | $ | 0.59 | $ | 0.53 | $ | 1.10 | $ | 1.01 | |||||||
| Weighted average number of shares of common stock and common stock equivalents: | |||||||||||||||
| Basic | 526,911 | 544,156 | 531,486 | 543,466 | |||||||||||
| Diluted | 531,191 | 548,218 | 535,897 | 548,299 | |||||||||||
| Case sales (in thousands) (in 192-ounce case equivalents) | 116,960 | 119,595 | 232,559 | 220,879 | |||||||||||
| Average net sales per case3 | $ | 9.30 | $ | 9.18 | $ | 9.22 | $ | 9.23 | |||||||
¹Includes
²Includes
3Excludes Other segment net sales of
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF
(In Thousands, Except Par Value) (Unaudited)
2020 |
2019 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 921,326 | $ | 797,957 | ||||
| Short-term investments | 250,753 | 533,063 | ||||||
| Accounts receivable, net | 760,433 | 540,330 | ||||||
| Inventories | 340,536 | 360,731 | ||||||
| Prepaid expenses and other current assets | 78,425 | 54,868 | ||||||
| Prepaid income taxes | 19,977 | 29,360 | ||||||
| Total current assets | 2,371,450 | 2,316,309 | ||||||
| INVESTMENTS | 2,077 | 12,905 | ||||||
| PROPERTY AND EQUIPMENT, net | 301,946 | 298,640 | ||||||
| DEFERRED INCOME TAXES | 84,777 | 84,777 | ||||||
| 1,331,643 | 1,331,643 | |||||||
| OTHER INTANGIBLE ASSETS, net | 1,055,544 | 1,052,105 | ||||||
| OTHER ASSETS | 46,376 | 53,973 | ||||||
| Total Assets | $ | 5,193,813 | $ | 5,150,352 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 261,969 | $ | 274,045 | ||||
| Accrued liabilities | 142,848 | 114,075 | ||||||
| Accrued promotional allowances | 167,011 | 166,761 | ||||||
| Deferred revenue | 44,894 | 44,237 | ||||||
| Accrued compensation | 35,646 | 47,262 | ||||||
| Income taxes payable | 22,497 | 14,717 | ||||||
| Total current liabilities | 674,865 | 661,097 | ||||||
| DEFERRED REVENUE | 272,926 | 287,469 | ||||||
| OTHER LIABILITIES | 24,482 | 30,505 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock - 637,924 shares issued and 527,361 shares outstanding as of 636,460 shares issued and 536,698 shares outstanding as of |
3,190 | 3,182 | ||||||
| Additional paid-in capital | 4,474,379 | 4,397,511 | ||||||
| Retained earnings | 5,612,684 | 5,022,480 | ||||||
| Accumulated other comprehensive loss | (53,438 | ) | (32,387 | ) | ||||
| Common stock in treasury, at cost; 110,563 and 99,762 shares as of |
(5,815,275 | ) | (5,219,505 | ) | ||||
| Total stockholders' equity | 4,221,540 | 4,171,281 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 5,193,813 | $ | 5,150,352 | ||||
CONTACTS:
Chairman and Chief Executive Officer
(951) 739-6200
Vice Chairman
(951) 739-6200
(310) 279-5980
Source: Monster Beverage Corporation