Hansen Natural Corporation (Nasdaq:HANS) today reported financial
results for the second quarter ended June 30, 2011.
Gross sales for the 2011 second quarter increased 27.0 percent
to $527.5 million from $415.3 million in the same period last year.
Net sales for the three-months ended June 30, 2011 increased 26.4
percent to $462.1 million from $365.7 million a year ago.
Gross profit, as a percentage of net sales, for the 2011 second
quarter was 52.8 percent, compared with 52.9 percent for the
comparable 2010 second quarter. Operating expenses for the 2011
second quarter increased to $111.7 million from $83.7 million in
the same quarter last year.
Distribution costs as a percentage of net sales were 4.1 percent
for the 2011 second quarter, compared with 4.3 percent in the same
quarter last year.
Selling expenses as a percentage of net sales were 12.9 percent
for the 2011 second quarter, compared with 10.4 percent in the same
quarter a year ago.
General and administrative expenses for the 2011 second quarter
were $33.2 million, compared with $29.6 million for the
corresponding quarter last year. Stock-based compensation (a
non-cash item) was $4.1 million in the second quarter of 2011,
compared with $3.5 million for the same period in 2010.
Operating income for the 2011 second quarter increased 20.8
percent to $132.5 million from $109.7 million in the 2010
comparable quarter.
The effective tax rate for the 2011 second quarter was 36.5
percent compared with 42.0 percent in the same quarter last
year.
Net income for the 2011 second quarter increased 32.0 percent to
$84.2 million, compared with $63.8 million in the same quarter last
year. Net income per diluted share increased to $0.90, from $0.69
per diluted share in the 2010 comparable quarter.
Net sales for the Company's DSD segment for the 2011 second
quarter increased 27.9 percent to $436.7 million from $341.3
million for the same period in 2010.
Gross sales to customers outside the United States rose to
$102.6 million in the 2011 second quarter from $66.6 million in the
corresponding quarter in 2010.
Rodney C. Sacks, chairman and chief executive officer, noted
that despite the difficult economic environment coupled with high
gas prices, the energy drink category continues to demonstrate
solid growth with the Monster Energy® brand growing in excess of
the category. The Company continued to launch the Monster
Energy® brand in new international markets during the quarter, with
additional launches in South America, Central and Eastern Europe,
and Asia planned for the second half of the year. "Our new
non-carbonated Monster Rehab™ energy drink with electrolytes and
additional supplements, which was launched in the first quarter,
has already become one of our better selling items in the
convenience and gas channel and we are very pleased with consumer
response. We plan to introduce additional products in the
Monster Rehab™ line later this year," Sacks said.
For the first half of 2011 gross sales rose to $935.1 million
from $685.9 million for the comparable period a year
earlier. Net sales for the first six months of 2011 increased
to $818.6 million from $603.8 million in the same period in
2010. Both gross and net sales for the comparative 2010 period
were impacted by advance purchases made by customers in the 2009
fourth quarter, following the Company's announcement of a new
marketing contribution program for Monster Energy® distributors, as
well as to avoid product supply interruptions due to the Company's
planned transition to the SAP enterprise resource planning system
in January 2010. The Company previously estimated that
approximately 4 percent to 6 percent of the fiscal 2009 fourth
quarter gross sales were attributable to such advance
purchases.
Gross profit as a percentage of net sales was 52.5 percent for
the first six months of 2011, compared with 52.6 percent for the
same period in 2010.
Operating expenses for the six-months ended June 30, 2011,
increased to $208.8 million from $157.4 million in the same period
last year. Operating income was $220.9 million, compared with
$160.5 million in the first six months of 2010.
Net income for the first half of 2011 was $139.3 million, or
$1.49 per diluted share, compared with $96.4 million, or $1.04 per
diluted share, for the same period last year.
Investor Conference Call
The Company will host an investor conference call
today, August 4, 2011, 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. For those who are unable to listen to the
live broadcast, the call will be archived for approximately one
year on the website.
Hansen Natural Corporation
Based in Corona, California, Hansen Natural Corporation markets
and distributes Hansen's® natural sodas, apple juice and juice
blends, fruit juice smoothies, multi-vitamin juices, iced teas,
energy drinks, Junior Juice® beverages, Blue Sky® beverages,
Monster Energy® energy drinks, Monster Energy® Extra Strength
Nitrous Technology™ energy drinks, Java Monster® non-carbonated
coffee + energy drinks, X-Presso Monster™ non-carbonated espresso
energy drinks, Monster Rehab™ non-carbonated rehydration energy
drinks, Peace Tea® iced teas, Worx Energy™ energy shots, Vidration®
brand vitamin enhanced waters, Admiral® iced teas and Hubert's™
Lemonades. 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.
Caution Concerning Forward-Looking
Statements
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 our future operating
results and other future events including revenues and
profitability. Management 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: the current uncertainty and volatility
in the national and global economy; changes in consumer
preferences; changes in demand due to both domestic and
international economic conditions; activities and strategies of
competitors, including the introduction of new products and
competitive pricing and/or marketing of similar products; actual
performance of the parties under the new distribution agreements;
potential disruptions arising out of the transition of certain
territories to new distributors; changes in sales levels by
existing distributors; unanticipated costs incurred in connection
with the termination of existing distribution agreements or the
transition to new distributors; changes in the price and/or
availability of raw materials; other supply issues, including the
availability of products and/or suitable production facilities;
product distribution and placement decisions by retailers; changes
in governmental regulation; the imposition of new and/or increased
excise and/or sales or other taxes on our products; criticism of
energy drinks and/or the energy drink market generally; the impact
of proposals to limit or restrict the sale of energy drinks to
minors and/or persons below a specified age and/or restrict the
venues in which energy drinks can be sold; political, legislative
or other governmental actions or events in one or more regions in
which we operate. For a more detailed discussion of these and
other risks that could affect our operating results, see 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 assumes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
(tables below)
HANSEN NATURAL
CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME AND OTHER INFORMATION |
FOR THE THREE- AND
SIX-MONTHS ENDED JUNE 30, 2011 AND 2010 |
(In
Thousands, Except Per Share Amounts) (Unaudited) |
|
|
Three-Months
Ended June 30, |
Six-Months Ended
June 30, |
|
2011 |
2010 |
2011 |
2010 |
Gross sales, net of discounts &
returns* |
$527,519 |
$415,297 |
$935,112 |
$685,864 |
Less: Promotional and other allowances** |
65,374 |
49,596 |
116,548 |
82,052 |
|
|
|
|
|
Net sales |
462,145 |
365,701 |
818,564 |
603,812 |
Cost of sales |
217,924 |
172,351 |
388,806 |
285,907 |
|
|
|
|
|
Gross profit |
244,221 |
193,350 |
429,758 |
317,905 |
Gross profit margin as a percentage of net
sales |
52.8% |
52.9% |
52.5% |
52.6% |
|
|
|
|
|
Operating expenses |
111,739 |
83,674 |
208,822 |
157,443 |
Operating expenses as a percentage of net
sales |
24.2% |
22.9% |
25.5% |
26.1% |
|
|
|
|
|
Operating income |
132,482 |
109,676 |
220,936 |
160,462 |
Operating income as a percentage of net
sales |
28.7% |
30.0% |
27.0% |
26.6% |
|
|
|
|
|
Other income: |
|
|
|
|
Interest and other income, net |
624 |
1,034 |
627 |
1,443 |
Loss on investments and put options, net |
(350) |
(713) |
(51) |
(137) |
Total other income |
274 |
321 |
576 |
1,306 |
|
|
|
|
|
Income before provision for income taxes |
132,756 |
109,997 |
221,512 |
161,768 |
|
|
|
|
|
Provision for income taxes |
48,508 |
46,159 |
82,221 |
65,367 |
|
|
|
|
|
Net income |
$84,248 |
$63,838 |
$139,291 |
$96,401 |
Net income as a percentage of net sales |
18.2% |
17.5% |
17.0% |
16.0% |
|
|
|
|
|
Net income per common share: |
|
|
|
|
Basic |
$0.95 |
$0.72 |
$1.57 |
$1.09 |
Diluted |
$0.90 |
$0.69 |
$1.49 |
$1.04 |
|
|
|
|
|
Weighted average number of shares of common
stock and common stock equivalents: |
|
|
|
|
Basic |
88,475 |
88,587 |
88,701 |
88,467 |
Diluted |
93,604 |
92,969 |
93,642 |
92,983 |
|
|
|
|
|
Case sales (in thousands) |
|
|
|
|
(in 192-ounce case
equivalents) |
44,272 |
35,861 |
78,954 |
60,066 |
Average net sales per case |
$10.44 |
$10.20 |
$10.37 |
$10.05 |
*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, 2011 AND
DECEMBER 31, 2010 |
(In
Thousands, Except Par Value) (Unaudited) |
|
|
June 30, 2011 |
December 31,
2010 |
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
$418,197 |
$354,842 |
Short-term investments |
281,218 |
244,649 |
Trade accounts receivable, net |
161,626 |
101,222 |
Distributor receivables |
673 |
413 |
Inventories |
156,778 |
153,241 |
Prepaid expenses and other current
assets |
18,623 |
17,022 |
Prepaid income taxes |
248 |
9,992 |
Deferred income taxes |
16,772 |
16,772 |
Total current assets |
1,054,135 |
898,153 |
|
|
|
INVESTMENTS |
30,202 |
44,189 |
PROPERTY AND EQUIPMENT, net |
40,931 |
34,551 |
DEFERRED INCOME TAXES |
57,545 |
58,475 |
INTANGIBLES, net |
46,677 |
43,316 |
OTHER ASSETS |
4,080 |
3,447 |
Total Assets |
$1,233,570 |
$1,082,131 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Accounts payable |
$102,263 |
$85,674 |
Accrued liabilities |
32,700 |
23,811 |
Deferred revenue |
11,050 |
10,140 |
Accrued distributor terminations |
13 |
407 |
Accrued compensation |
5,785 |
7,603 |
Current portion of debt |
1,255 |
274 |
Income taxes payable |
8,784 |
925 |
Total current
liabilities |
161,850 |
128,834 |
|
|
|
DEFERRED REVENUE |
121,376 |
124,899 |
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
Common stock - $0.005 par value; 120,000
shares authorized; 99,079 shares issued and 88,620 outstanding as
of June 30, 2011; 98,731 shares issued and 88,980 outstanding as of
December 31, 2010 |
495 |
494 |
Additional paid-in capital |
206,833 |
187,040 |
Retained earnings |
1,021,716 |
882,425 |
Accumulated other comprehensive income |
2,004 |
281 |
Common stock in treasury, at cost; 10,459
shares and 9,751 shares as of June 30, 2011 and December 31,
2010, respectively |
(280,704) |
(241,842) |
Total stockholders'
equity |
950,344 |
828,398 |
Total Liabilities and
Stockholders' Equity |
$1,233,570 |
$1,082,131 |
CONTACT: 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
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