UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2008
Hansen Natural Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
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| 0-18761 |
39-1679918 |
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(IRS Employer Identification No.) |
550 Monica Circle Suite 201
Corona, California 92880
(Address of principal executive offices and zip code)
(951) 739 - 6200
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02 Results of Operations and Financial Condition.
On February 28, 2008, Hansen Natural Corporation (“Hansen”) issued a press release relating to its financial results for the year and fourth quarter ended December 31, 2007, a copy of which is furnished as Exhibit 99.1 hereto. The press release did not include certain financial statements, related footnotes and certain other financial information that will be filed with the Securities and Exchange Commission as part of Hansen’s Annual Report on Form 10-K.
On February 28, 2008, Hansen will conduct a conference call at 2:00 p.m. Pacific Time. The call will be open to 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.
Item 9.01 Financial Statements and Exhibits
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(c) Exhibits. |
The following exhibit is furnished herewith:
Exhibit 99.1 Press Release dated February 28, 2008.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Hansen Natural Corporation
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Date: February 28, 2008 |
/s/ Hilton H. Schlosberg |
-------------------------------
Hilton H. Schlosberg
Vice Chairman of the Board of Directors,
President and Chief Financial Officer
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CONTACTS: |
Rodney C. Sacks |
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Chairman and Chief Executive Officer |
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(951) 739-6200 |
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Hilton H. Schlosberg |
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Vice Chairman |
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(951) 739-6200 |
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Roger S. Pondel / Judy Lin Sfetcu |
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PondelWilkinson Inc. |
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(310) 279-5980 |
HANSEN NATURAL REPORTS FOURTH QUARTER AND
FULL YEAR FINANCIAL RESULTS FOR 2007
-- Record Fourth Quarter Net Sales Rise 63% to $247 million;
Net Income for the Fourth Quarter Jumps 103% to $45 million;
Gross Sales for the Year Exceed $1.0 billion --
Corona, CA – February 28, 2008 – 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.
(more)
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® brand energy drinks as well as the Java Monster™ 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™ line extensions as well as the launch of our new Monster Heavy Metal™ (introduced in November 2007) and Monster MIXXD™ (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® 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® and the Java Monster™ 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
(more)
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 $3.8 million for the twelve-months ended December 31, 2007, and 2006 respectively, which have also been fully expensed in the respective periods.
The following table summarizes the identified items discussed above for the three and twelve-months ended December 31, 2007 and 2006:
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Three-Months Ended |
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Twelve-Months Ended |
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December 31, |
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December 31, |
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2007 |
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2006 |
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2007 |
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2006 |
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(In Thousands) |
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(In Thousands) |
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(In Thousands) |
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(In Thousands) |
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Deferred Revenue: |
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Receipts from newly appointed Anheuser-Busch distributors |
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$ (107) |
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$ 8,525 |
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$ 21,029 |
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$ 20,851 |
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Recognized Revenue |
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$ 526 |
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$ 261 |
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$ 1,916 |
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$ 411 |
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Operating Expenses: |
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Termination payments to prior distributors |
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$ 244 |
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$ 2,974 |
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$ 15,266 |
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$ 12,728 |
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Professional fees associated with the review of stock option grants and granting practices, related litigation and other related matters |
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$ (1,240)¹ |
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$ 3,753 |
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$ 9,760¹ |
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$ 3,753 |
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¹net of $2.5 million insurance reimbursements |
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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.
(more)
Hansen Natural Corporation
Based in Corona, California, Hansen Natural Corporation markets and distributes Hansen’s® Natural Sodas and Sparkling beverages, Signature Sodas, fruit juice Smoothies, Energy drinks, multi-vitamin juice drinks in aseptic packaging, Junior Juice® juice, iced teas, apple juice and juice blends, Blue Sky® brand beverages, Monster Energy® brand energy drinks, Java Monster™ line of non-carbonated dairy based coffee drinks, Lost® Energy™ brand energy drinks, Joker Mad Energy™, Unbound Energy® and Ace™ Energy brand energy drinks, Rumba™ brand energy juice, and Fizzit™ 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.
# # #
(tables below)
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)
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Three-Months Ended |
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Twelve-Months Ended |
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December 31 |
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December 31 |
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2007 |
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2006 |
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2007 |
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2006 |
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GROSS SALES, net of discounts and returns* |
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$ 277,299 |
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$ 171,745 |
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$ 1,025,795 |
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$ 696,322 |
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LESS: PROMOTIONAL AND OTHER ALLOWANCES** |
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30,661 |
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20,401 |
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121,330 |
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90,548 |
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NET SALES |
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246,638 |
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151,344 |
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904,465 |
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605,774 |
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COST OF SALES |
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120,897 |
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70,922 |
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436,452 |
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289,180 |
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GROSS PROFIT |
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125,741 |
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80,422 |
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468,013 |
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316,594 |
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OPERATING EXPENSES |
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61,169 |
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44,765 |
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237,027 |
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158,015 |
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OPERATING INCOME |
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64,572 |
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35,657 |
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230,986 |
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158,579 |
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INTEREST AND OTHER INCOME, net |
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3,033 |
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1,039 |
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8,770 |
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3,660 |
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INCOME BEFORE |
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67,605 |
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36,696 |
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239,756 |
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162,239 |
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PROVISION FOR |
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22,505 |
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14,495 |
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90,350 |
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64,290 |
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NET INCOME |
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$ 45,100 |
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$ 22,201 |
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$ 149,406 |
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$ 97,949 |
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NET INCOME PER COMMON SHARE: |
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Basic |
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$ 0.49 |
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$ 0.26 |
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$ 1.64 |
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$ 1.09 |
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Diluted |
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$ 0.45 |
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$ 0.23 |
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$ 1.51 |
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$ 0.99 |
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WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: |
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Basic |
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92,925 |
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90,052 |
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91,178 |
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89,936 |
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Diluted |
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99,512 |
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97,979 |
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98,874 |
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98,586 |
* 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.
**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
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(In Thousands, Except Share Amounts) (Unaudited) |
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2007 |
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2006 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ 12,440 |
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$ 35,129 |
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Short-term investments |
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63,125 |
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101,667 |
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Accounts receivable, net |
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81,497 |
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54,624 |
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Inventories |
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98,140 |
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77,013 |
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Prepaid expenses and other current assets |
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3,755 |
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771 |
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Deferred income taxes |
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11,192 |
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5,953 |
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Total current assets |
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270,149 |
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275,157 |
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INVESTMENTS |
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227,085 |
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- |
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PROPERTY AND EQUIPMENT, net |
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8,567 |
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5,565 |
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DEFERRED INCOME TAXES |
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14,006 |
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5,001 |
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INTANGIBLES, net |
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24,066 |
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21,202 |
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OTHER ASSETS |
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730 |
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1,447 |
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$ 544,603 |
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$ 308,372 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ 56,766 |
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$ 34,362 |
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Accrued liabilities |
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8,916 |
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9,465 |
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Accrued distributor terminations |
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4,312 |
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7,024 |
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Customer deposit liabilities |
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103 |
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3,324 |
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Accrued compensation |
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5,827 |
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4,378 |
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Current portion of debt |
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663 |
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299 |
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Income taxes payable |
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6,294 |
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3,991 |
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Total current liabilities |
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82,881 |
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62,843 |
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LONG-TERM DEBT, less current portion |
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- |
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4 |
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DEFERRED REVENUE |
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39,555 |
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20,441 |
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COMMITMENTS AND CONTINGENCIES |
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STOCKHOLDERS' EQUITY: |
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Common stock - $0.005 par value; 120,000,000 shares
authorized; |
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479 |
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464 |
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Additional paid-in capital |
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96,749 |
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48,892 |
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Retained earnings |
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353,648 |
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204,242 |
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Accumulated other comprehensive loss |
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(47) |
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- |
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Common stock in treasury, at cost; 2,657,520 and
2,654,088 shares as |
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(28,662) |
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(28,514) |
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Total stockholders' equity |
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422,167 |
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225,084 |
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$ 544,603 |
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$ 308,372 |