-- Second Quarter Net Sales rise 8.7 percent to
-- Second Quarter Net Income increases 8.3 percent to
-- Second Quarter Net Income per diluted share increases 11.9 percent to
Second Quarter Results
Net sales for the 2019 second quarter increased 8.7 percent to
Net sales for the Company’s Monster Energy® Drinks segment, which primarily includes the Company’s Monster Energy® drinks and Reign Total Body FuelTM high performance energy drinks, increased 9.6 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 second quarter was 59.9 percent, compared with 61.1 percent in the 2018 second quarter. For the 2019 second quarter, gross profit as a percentage of net sales was positively affected by increased sales prices of our products sold in
Operating expenses for the 2019 second quarter were
Distribution costs as a percentage of net sales were 3.4 percent for the 2019 second quarter, compared with 3.7 percent in the 2018 second quarter.
Selling expenses as a percentage of net sales for the 2019 second quarter were 11.2 percent, compared with 11.4 percent in the 2018 second quarter.
General and administrative expenses for the 2019 second quarter were
Operating income for the 2019 second quarter increased to
The effective tax rate for the 2019 second quarter was 23.4 percent, compared with 24.6 percent in the 2018 second quarter. The decrease in the effective tax rate was primarily due to the increase in profits earned by certain foreign subsidiaries in lower tax jurisdictions than the United States.
Net income for the 2019 second quarter increased 8.3 percent to
“Our Monster Energy® brand energy drinks were launched in a number of new countries during the quarter in the
“Later this year we are planning to introduce a number of new Monster Energy® brand energy drinks in
“We also launched Predator®, our affordable energy brand in a number of additional international markets during the second quarter, with plans for further launches of Predator® later this year,” Sacks added.
2019 Six-Months Results
Net sales for the six-months ended June 30, 2019 increased 9.8 percent to
Net changes in foreign currency exchange rates had an unfavorable impact on net and gross sales for the six-months ended June 30, 2019 of
Gross profit, as a percentage of net sales, for the six-months ended June 30, 2019 was 60.2 percent, compared with 60.8 percent in the comparable period last year.
Operating expenses for the six-months ended June 30, 2019 were
Operating income for the six-months ended June 30, 2019 increased to
Net income for the six-months ended June 30, 2019 increased 13.9 percent to
Share Repurchase Program
No shares of the Company’s common stock were repurchased during the 2019 second quarter. 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 June 30, |
Six-Months Ended June 30, |
|||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Gross sales, net of discounts and returns | $ | 1,286,436 | $ | 1,191,251 | $ | 2,376,862 | $ | 2,181,890 | ||||
| Less: Promotional and other allowances | 182,391 | 175,378 | 326,825 | 315,097 | ||||||||
| Net Sales | $ | 1,104,045 | $ | 1,015,873 | $ | 2,050,037 | $ | 1,866,793 | ||||
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
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION | |||||||||||||||
| FOR THE THREE- AND SIX-MONTHS ENDED JUNE 30, 2019 AND 2018 | |||||||||||||||
| (In Thousands, Except Per Share Amounts) (Unaudited) | |||||||||||||||
| Three-Months Ended | Six-Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net sales¹ | $ | 1,104,045 | $ | 1,015,873 | $ | 2,050,037 | $ | 1,866,793 | |||||||
| Cost of sales | 442,762 | 395,615 | 815,221 | 731,279 | |||||||||||
| Gross profit¹ | 661,283 | 620,258 | 1,234,816 | 1,135,514 | |||||||||||
| Gross profit as a percentage of net sales | 59.9 | % | 61.1 | % | 60.2 | % | 60.8 | % | |||||||
| Operating expenses² | 282,293 | 262,637 | 544,364 | 497,979 | |||||||||||
| Operating expenses as a percentage of net sales |
25.6 | % | 25.9 | % | 26.6 | % | 26.7 | % | |||||||
| Operating income¹,² | 378,990 | 357,621 | 690,452 | 637,535 | |||||||||||
| Operating income as a percentage of net sales |
34.3 | % | 35.2 | % | 33.7 | % | 34.2 | % | |||||||
| Interest and other income, net | 2,973 | 476 | 5,714 | 2,281 | |||||||||||
| Income before provision for income taxes¹,² |
381,963 | 358,097 | 696,166 | 639,816 | |||||||||||
| Provision for income taxes | 89,490 | 87,981 | 142,208 | 153,651 | |||||||||||
| Income taxes as a percentage of income before taxes |
23.4 | % | 24.6 | % | 20.4 | % | 24.0 | % | |||||||
| Net income¹,² | $ | 292,473 | $ | 270,116 | $ | 553,958 | $ | 486,165 | |||||||
| Net income as a percentage of net sales | 26.5 | % | 26.6 | % | 27.0 | % | 26.0 | % | |||||||
| Net income per common share: | |||||||||||||||
| Basic | $ | 0.54 | $ | 0.48 | $ | 1.02 | $ | 0.86 | |||||||
| Diluted | $ | 0.53 | $ | 0.48 | $ | 1.01 | $ | 0.85 | |||||||
| Weighted average number of shares of common stock and common stock equivalents: | |||||||||||||||
| Basic | 544,156 | 559,867 | 543,466 | 562,917 | |||||||||||
| Diluted | 548,218 | 566,352 | 548,299 | 570,231 | |||||||||||
| Case sales (in thousands) (in 192-ounce case equivalents) |
119,595 | 110,057 | 220,879 | 202,372 | |||||||||||
| Average net sales per case3 | $ | 9.18 | $ | 9.17 | $ | 9.23 | $ | 9.17 | |||||||
1Includes
2Includes
3Excludes Other segment net sales of
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| AS OF JUNE 30, 2019 AND DECEMBER 31, 2018 | ||||||||
| (In Thousands, Except Par Value) (Unaudited) | ||||||||
| June 30, 2019 |
December 31, 2018 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 888,247 | $ | 637,513 | ||||
| Short-term investments | 357,988 | 320,650 | ||||||
| Accounts receivable, net | 688,197 | 484,562 | ||||||
| Inventories | 299,529 | 277,705 | ||||||
| Prepaid expenses and other current assets | 58,477 | 44,909 | ||||||
| Prepaid income taxes | 34,330 | 38,831 | ||||||
| Total current assets | 2,326,768 | 1,804,170 | ||||||
| INVESTMENTS | 7,006 | - | ||||||
| PROPERTY AND EQUIPMENT, net | 240,165 | 243,051 | ||||||
| DEFERRED INCOME TAXES | 85,148 | 85,687 | ||||||
| GOODWILL | 1,331,643 | 1,331,643 | ||||||
| OTHER INTANGIBLE ASSETS, net | 1,045,810 | 1,045,878 | ||||||
| OTHER ASSETS | 47,792 | 16,462 | ||||||
| Total Assets | $ | 5,084,332 | $ | 4,526,891 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 292,627 | $ | 248,760 | ||||
| Accrued liabilities | 124,659 | 112,507 | ||||||
| Accrued promotional allowances | 199,324 | 145,741 | ||||||
| Accrued distributor terminations | 427 | - | ||||||
| Deferred revenue | 43,839 | 44,045 | ||||||
| Accrued compensation | 29,445 | 39,903 | ||||||
| Income taxes payable | 15,179 | 10,189 | ||||||
| Total current liabilities | 705,500 | 601,145 | ||||||
| DEFERRED REVENUE | 298,375 | 312,224 | ||||||
| OTHER LIABILITIES | 22,871 | 2,621 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock - $0.005 par value; 1,250,000 shares authorized; 636,129 shares issued and 544,825 shares outstanding as of June 30, 2019; 630,970 shares issued and 543,676 shares outstanding as of December 31, 2018 |
3,180 | |
3,155 | |||||
| Additional paid-in capital | 4,350,177 | 4,238,170 | ||||||
| Retained earnings | 4,468,603 | 3,914,645 | ||||||
| Accumulated other comprehensive loss | (28,756 | ) | (32,864 | ) | ||||
| Common stock in treasury, at cost; 91,304 and 87,294 shares as of June 30, 2019 and December 31, 2018, respectively |
(4,735,618 | ) | |
(4,512,205 |
) |
|||
| Total stockholders' equity | 4,057,586 | 3,610,901 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 5,084,332 | $ | 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