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MNST · Monster Beverage

33 filings

10-K

MNST 10-K Annual Reports

Monster Beverage - 33 annual reports

Filing record · 2016–202610-K1210-Q338-K97

2025
Monster Beverage Annual Report, Year Ended Dec 31, 2025
Monster Beverage (MNST) reported a strong fiscal 2025, with record net sales of $8.29 billion, up 10.7% year over year (about 12% on a foreign-currency-adjusted basis for gross billings). Growth was driven by the Monster Energy® Drinks segment, which accounted for 92.4% of net sales and grew 11.7%, while energy drink case volume rose 13.3% to roughly 959 million 192-ounce cases. Gross margin expanded to 55.8% from 54.0%, helped by Pricing Actions and supply chain optimization, and operating income rose 25.3% to $2.42 billion (29.2% of sales). Net income grew 26.3% to $1.91 billion, and diluted EPS reached $1.94 versus $1.49 in 2024. Management reported that its internal control over financial reporting was effective, and Ernst & Young issued an unqualified opinion. The balance sheet strengthened considerably. Cash and cash equivalents were $2.09 billion, with an additional $677 million in short-term investments and $487 million in long-term investments, and the company carries no long-term debt after repaying its $375 million term loan in April 2025. Operating cash flow was $2.10 billion. The company repurchased only about $104 million of stock during 2025, mostly shares withheld from employees, and had no open-market buybacks in the year. It still has $500 million authorized under its August 2024 program, and it does not pay dividends. Key risks remain concentrated. The Coca-Cola Company (TCCC) owns about 20.9% of the stock and is the primary distribution partner, and Coca-Cola Europacific Partners and Coca-Cola Consolidated together account for roughly a quarter of net sales. The filing flags growing regulatory pressure on energy drinks, including age restrictions, excise taxes, caffeine limits, and U.S. food-ingredient scrutiny, along with tariff exposure and reliance on third-party co-packers. Alcohol Brands declined 21.8% and posted an operating loss of $127 million, including $53.7 million in impairments, making it the main drag on the portfolio.
Feb 27, 2026
2024
Monster Beverage Annual Report, Year Ended Dec 31, 2024
Monster Beverage (MNST) delivered record 2024 net sales of $7.49 billion, up 4.9% reported and 8.4% on a foreign-currency-adjusted basis, driven by higher worldwide Monster Energy volumes and the November 2024 price increases. Energy drink case sales rose 10.1% to 846.7 million cases, though average net sales per energy drink case fell 4.4% to $8.62 on higher promotional allowances and a shift in geographic and product mix. Gross margin improved to 54.0% from 53.1%, but operating income declined 1.2% to $1.93 billion, and net income fell 7.5% to $1.51 billion (diluted EPS $1.49 vs. $1.54). The decline was driven primarily by $138.8 million of Alcohol Brands impairment charges, which includes $86.3 million of goodwill (the Alcohol Brands goodwill is now fully written off) and $40.8 million of indefinite-lived trademarks, plus $8.2 million of property impairments. Excluding these charges, the core energy business grew profitably: the Monster Energy Drinks segment's operating income rose 5.3% to $2.46 billion. Capital allocation was the dominant theme in 2024. Monster returned roughly $3.8 billion to shareholders through treasury stock purchases, including a $3.0 billion modified Dutch auction tender offer completed in June at $53.00 per share, funded with $2.25 billion of cash and $750 million of borrowings under a new $1.5 billion credit facility. Cash and cash equivalents fell to $1.53 billion from $2.30 billion, and working capital declined to $2.54 billion from $4.43 billion. Operating cash flow was strong at $1.93 billion, and management expects capital expenditures below $500 million through 2025. Roughly $500 million remained authorized under the August 2024 repurchase plan as of February 2025. Investors should weigh continued dependence on TCCC, which owns about 21% of the stock and is the primary distribution partner, along with the growing international share of sales (about 40%) and ongoing regulatory pressure on energy drinks and caffeine.
Feb 28, 2025
2023
Monster Beverage Annual Report, Year Ended Dec 31, 2023
Monster Beverage (MNST) delivered a strong 2023, with record net sales of $7.14 billion, up 13.1% year over year, and net income of $1.63 billion, up 36.9%. Growth was driven mainly by higher worldwide volume of Monster Energy drinks and the Pricing Actions taken in 2022 and 2023. Gross margin expanded to 53.1% from 50.3%, helped by price increases, lower aluminum can costs and reduced freight, and operating income rose 23.3% to $1.95 billion. Energy drink case sales grew 9.6% to 769.2 million cases, and international sales reached 38% of net sales. The balance sheet is strong. Cash and cash equivalents were $2.30 billion, with another $1.03 billion in short- and long-term investments, and working capital was $4.43 billion. Operating cash flow was $1.72 billion. The company spent $363 million to acquire Bang Energy in July 2023, which brought a Phoenix production facility and an entry into the faster-growing Bang brand, and it repurchased about $658 million of stock during the year. Management reported an effective internal control over financial reporting with no material weaknesses. Investors should weigh concentration and regulatory risk. Most revenue comes from energy drinks, TCCC is a key distribution partner and holds about 19.6% of the stock, and the company faces growing energy drink regulation such as age limits, excise taxes and caffeine caps. The Alcohol Brands segment, built on the 2022 CANarchy acquisition, is still loss-making, with $42.7 million of impairment charges in 2023 tied to craft beer and hard seltzer challenges.
Feb 29, 2024
2022
Monster Beverage Annual Report, Year Ended Dec 31, 2022
Monster Beverage's FY2022 10-K shows a company still growing strongly at the top line but with sharply compressed profitability. Net sales rose 13.9% to a record $6.31 billion, driven by higher Monster Energy brand volumes (energy drink case sales up 14.4% to 701.7 million cases) and pricing actions, with international sales reaching about 37% of the total. However, gross margin fell from 56.1% to 50.3% on freight, aluminum can, ingredient and co-packing cost inflation, and operating expenses rose 21.3%, so operating income declined 11.8% to $1.58 billion and net income fell 13.5% to $1.19 billion (diluted EPS $2.23 versus $2.57). Management said pricing actions and improved logistics began lifting margins in the second half of 2022. The balance sheet remains very strong, with $1.31 billion in cash, $1.36 billion in short-term investments and $3.76 billion of working capital, and operating cash flow was $887.7 million, down from $1.16 billion. Capital was returned through buybacks totaling $771 million in 2022, and $682.8 million of authorization remained as of March 1, 2023. The company also entered the alcohol beverage category via the $329.5 million CANarchy acquisition, which produced a $31.5 million operating loss in its partial first year. Investors should weigh the strong brand momentum and cash position against margin pressure, reliance on The Coca-Cola Company's distribution network and TCCC's roughly 19.5% stake, and the pending VPX/Bang litigation award that has not been recognized. As a note on timing, the filing was dated March 1, 2023, and the company announced a 2-for-1 stock split on February 28, 2023, which is reflected in the subsequent events note and should be considered when comparing per-share figures.
Mar 1, 2023
2021
Monster Beverage Annual Report, Year Ended Dec 31, 2021
Monster Beverage (MNST) closed fiscal 2021 with record net sales of $5.54 billion, up 20.5% from $4.60 billion in 2020, driven by strong worldwide volume growth of the Monster Energy brand (case sales up 21.5% to 613.4 million). Operating income rose 10.1% to $1.80 billion, but operating margin compressed to 32.4% from 35.5% as gross margin fell to 56.1% from 59.2% on higher aluminum can costs, other raw material and ingredient inflation, and freight-in costs. Net income declined 2.3% to $1.38 billion, and diluted EPS fell to $2.57 from $2.64, largely because 2020 included a one-time $165.1 million non-recurring tax benefit and 2021 income tax expense rose to a 23.5% effective rate from 13.3%. The balance sheet remains very strong, with $1.33 billion in cash, $1.75 billion in short-term investments, and working capital of $3.72 billion. Operating cash flow was $1.16 billion, down from $1.36 billion, reflecting a $278 million inventory build and a $254 million rise in receivables. No dividends are paid, and the company repurchased no shares under its program in 2021, leaving $441.5 million authorized. The company also completed its $330 million cash acquisition of CANarchy (craft beer and hard seltzer) on February 17, 2022, marking its entry into alcoholic beverages. Key risks flagged in the filing include heavy dependence on The Coca-Cola Company (TCCC, roughly 19% shareholder and primary distribution partner), near-total reliance on energy drinks, aluminum can shortages, co-packer capacity constraints, regulatory pressure on energy drink sales, taxes, and caffeine limits, and ongoing COVID-19 supply chain disruption. Management expects these cost and supply pressures to persist into 2022.
Feb 28, 2022
2020
Monster Beverage Annual Report, Year Ended Dec 31, 2020
Monster Beverage (MNST) closed fiscal 2020 with record results despite the COVID-19 pandemic. Net sales rose 9.5% to $4.60 billion, driven by a 12.5% increase in case volume to 504.8 million cases, with the Monster Energy® Drinks segment accounting for 93.6% of sales. Gross margin contracted to 59.2% from 60.0%, largely due to $15.2 million in product returns tied to a European formulation issue and a Japan labeling issue, along with inventory provisions. Operating expenses fell 2.2% as sponsorship and travel spending was curtailed during the pandemic, lifting operating margin to 35.5% from 33.4%. Net income increased 27.2% to $1.41 billion, though the effective tax rate fell to 13.3% from 21.8% because of a non-recurring $165.1 million tax benefit from an intra-entity intangible asset transfer, so underlying earnings growth is somewhat flattered by that item. The balance sheet and cash generation are strong. Operating cash flow was $1.36 billion, and cash, cash equivalents and investments totaled $2.11 billion at year-end, with no debt outstanding. The company repurchased about $596 million of stock during 2020 and had $441.5 million remaining under its March 2020 authorization as of March 1, 2021. Stockholders' equity rose to $5.16 billion. Key risks for investors include heavy dependence on TCCC (The Coca-Cola Company), which owns roughly 19% of shares and distributes most products, ongoing regulatory pressure on energy drinks globally (age limits, caffeine caps, excise taxes), aluminum can shortages, pandemic-related disruption in EMEA, and a pending derivative lawsuit concerning diversity disclosures.
Mar 1, 2021
2019
Monster Beverage Annual Report, Year Ended Dec 31, 2019
Monster Beverage Corporation (MNST) closed fiscal 2019 with record results. Net sales rose 10.3% to $4.20 billion, driven by the Monster Energy Drinks segment (92.9% of sales, up 11.6%), the launch of Reign Total Body Fuel in Q1 2019, and roughly $101.9 million from U.S. and Canadian price increases. Case sales grew 9.2% to 448.8 million cases, and average net sales per case rose 1.1% to $9.31. Gross margin slipped to 60.0% from 60.3%, mainly due to geographic and product mix, while operating expenses grew 10.3%, with payroll, professional fees, and sponsorships the main drivers. Operating income increased 9.3% to $1.40 billion, and net income increased 11.6% to $1.11 billion, or $2.03 per diluted share. Operating cash flow was $1.11 billion, and the company ended the year with $798.0 million in cash and $546.0 million in short- and long-term investments, against no funded debt. The filing also flags concentration and structural risks. The Coca-Cola Company (TCCC) owns about 19% of the stock and is the company's preferred distribution partner in the U.S. and internationally. TCCC accounted for about 2% of 2019 net sales directly, but Coca-Cola Consolidated (13%), Reyes Coca-Cola (11%), and Coca-Cola European Partners (10%) are major customers. TCCC also launched its own energy drink, Coca-Cola Energy, in Europe in 2019 and in the U.S. in 2020, after an arbitration award in its favor. Other risks include the expanding international footprint, which carries more currency and regulatory exposure; potential excise taxes and caffeine or size restrictions on energy drinks; personal injury lawsuits; trademark litigation with Vital Pharmaceuticals over the Reign name; and COVID-19 disruption to China-sourced ingredients and co-packing. The company repurchased about $707 million of stock during 2019, and about $536.6 million remained authorized at year-end under the two active programs. For investors, the central questions are how durable the growth is given the TCCC relationship and the emergence of TCCC's own energy brand, and whether margins can hold as international mix rises and input costs increase. The balance sheet is strong, and cash generation supports continued buybacks.
Feb 28, 2020
2018
Monster Beverage Annual Report, Year Ended Dec 31, 2018
Monster Beverage (MNST) closed 2018 with record results: net sales rose 13.0% to $3.81 billion, driven by a 14.1% increase in case sales to 410.9 million cases, with the Monster Energy brand (91.7% of net sales) growing to $3.49 billion. Operating income grew 7.1% to $1.28 billion, but operating margin compressed to 33.7% from 35.6% as gross margin fell to 60.3% from 63.5%, reflecting higher input costs (notably aluminum), unfavorable geographic mix from faster international growth, and the $42.2 million net sales reduction from adopting ASC 606. Net income increased 21.0% to $993.0 million and diluted EPS rose 23.8% to $1.76, helped by a lower effective tax rate of 23.2% (versus 31.7%) following U.S. tax reform. Capital returns were the dominant use of cash. Operating cash flow was $1.16 billion, and the company repurchased $1.34 billion of stock during 2018, which reduced working capital to $1.20 billion from $1.53 billion and shrank shareholders' equity to $3.61 billion. The board authorized another $500 million buyback in February 2019, bringing total available authorization to $520.6 million. Cash and short-term investments totaled roughly $958 million at year-end, with no funded debt. The key investor consideration is concentration risk. Coca-Cola Company (TCCC) owns about 19% of the stock and has two board nominees, and TCCC's distribution network is now the company's primary channel. The company also faces an AAA arbitration with TCCC over three planned Coca-Cola-branded energy products, with a decision expected in Q2 2019, and ongoing regulatory pressure on energy drinks (taxes, age limits, caffeine limits) plus personal injury lawsuits. Management's ability to sustain volume growth while defending margins and navigating TCCC relations will largely determine the next phase of performance.
Feb 28, 2019
2017
Monster Beverage Annual Report, Year Ended Dec 31, 2017
Monster Beverage (MNST) closed fiscal 2017 with record results: net sales rose 10.5% to $3,369.0 million, gross profit rose 10.1% to $2,137.7 million (63.5% of sales, down slightly from 63.7%), and operating income grew 10.5% to $1,198.8 million, a 35.6% operating margin that was flat year over year. Net income increased 15.2% to $820.7 million, and diluted EPS rose 19.7% to $1.42. The growth was driven by the core Monster Energy brand, whose net sales reached $3,035.2 million (about 90% of total sales). Case volume grew 12.2% to 360.0 million cases, while average net sales per case fell 1.6% to $9.30, mainly due to geographic mix. Operating cash flow was $987.7 million, up from $701.4 million, and year-end cash, short-term investments and long-term investments totaled roughly $1.2 billion. The company remains heavily dependent on its relationship with The Coca-Cola Company (TCCC), which accounted for approximately 18% of 2017 net sales (down from 41% in 2016 as TCCC's North America refranchising shifted territories to independent bottlers) and owns roughly 18% of shares outstanding. Investors should also note the concentration of revenue in energy drinks, ongoing product-liability lawsuits, a New York Attorney General inquiry, and growing global regulation of energy drinks, including sugar and caffeine taxes and age restrictions. The 2017 results include a provisional $39.8 million charge from remeasuring deferred tax assets under the Tax Cuts and Jobs Act, and distributor termination costs of $35.4 million. Management also authorized a new $250 million share repurchase program in February 2018, bringing total repurchase capacity to $500 million. For 2018, the company is pursuing international growth through its TCCC distribution partnership, cost management, and new product introductions. Management provides no formal financial guidance, and results remain sensitive to consumer health perceptions and regulatory developments.
Mar 1, 2018
2016-A
Monster Beverage Annual Report (Amendment), Year Ended Dec 31, 2016
This filing is an amendment (10-K/A) to Monster Beverage Corporation's (MNST) 2016 Annual Report, specifically to correct a typographical error in the consent of its independent registered public accounting firm. The original filing incorrectly referenced audit reports dated February 29, 2016, when the correct date should have been March 1, 2017. This amendment ensures the accuracy of the auditor's consent and includes updated certifications as required by the Sarbanes-Oxley Act. Investors should note that this amendment does not introduce new financial information or alter the original disclosures from the March 1, 2017, filing; it solely rectifies a dating error within an exhibit and related certifications. For investors, the core financial performance and strategic information remain as presented in the original 10-K. This amendment is a procedural correction and does not reflect any changes in the company's operational results, financial condition, or future outlook as of December 31, 2016. It is important to review the original 10-K filing for substantive analysis of the company's performance during the 2016 fiscal year.
Apr 13, 2017
2016
Monster Beverage Annual Report, Year Ended Dec 31, 2016
Monster Beverage's FY2016 10-K (filed March 1, 2017) shows a year of record results: net sales rose 12.0% to $3,049.4 million, gross margin expanded to 63.7% from 60.0%, and net income grew 30.4% to $712.7 million (diluted EPS $1.19, up 25.6%). Growth was driven by the Monster Energy® brand, which contributed roughly $229 million of the sales increase, and by the Strategic Brands acquired from The Coca-Cola Company (TCCC) in the June 2015 transaction, which added $272.5 million in sales. Operating income rose 21.4% to $1,085.3 million. Comparisons with 2015 are distorted by $224 million of distributor termination costs and a $161.5 million one-time gain on the sale of non-energy brands in that year, so the 2016 operating margin of 35.6% is a cleaner read on the underlying business. The balance sheet changed substantially. The company spent about $2.25 billion repurchasing stock, including a $2.0 billion modified Dutch auction at $52.00 per share, and paid $688.5 million to acquire flavor supplier American Fruits & Flavors. Cash and investments fell from $2.94 billion to about $0.60 billion, and working capital dropped to $961.7 million. Operating cash flow remained strong at $701.4 million. A new $500 million buyback authorization was approved on February 28, 2017. The company also reports no debt beyond small capital leases. Key risks for investors are concentration and dependence on TCCC, which accounted for about 41% of 2016 net sales and owns roughly 18% of the shares, along with product-liability and state attorney general investigations, rising sugar and caffeine regulation and excise taxes, and co-packer capacity constraints for Java Monster and Muscle Monster. The San Francisco City Attorney UCL case was settled in January 2017 without a fine or admission of liability, though the company agreed to maintain certain marketing practices through December 2018.
Mar 1, 2017
2015
Monster Beverage Annual Report, Year Ended Dec 31, 2015
Monster Beverage's FY2015 10-K shows a transformative year driven by the TCCC Transaction, completed June 12, 2015. Monster received a $2.15 billion cash payment from The Coca-Cola Company, issued TCCC roughly 34.0 million shares (about 16.7% of the company post-issuance), acquired TCCC's global energy drink brands (NOS, Full Throttle, Burn, Mother, Relentless, Play, etc.), and transferred its non-energy business (Hansen's, Peace Tea, and others) to TCCC. Reported net sales rose 10.5% to a record $2,722.6 million, gross margin expanded to 60.0% from 54.4%, and net income grew 13.2% to $546.7 million, or $2.84 diluted EPS. Results were reduced by $224.0 million of distributor termination costs, which were expensed in operating expenses, while the $161.5 million gain on the sale of Monster Non-Energy and $39.8 million of accelerated deferred revenue recognition were one-time items that flattered results. The balance sheet changed dramatically. Cash and investments rose to about $2.9 billion, including $2,175.4 million in cash and cash equivalents and $760 million in short- and long-term investments, and total assets reached $5.68 billion, up from $1.94 billion. Goodwill of $1.28 billion and intangibles of $428 million now appear on the balance sheet. Operating cash flow fell sharply to $208.0 million from $585.6 million, largely because of a $314.7 million excess tax benefit and a $302.4 million deferred tax change, so investors should look past headline net income when assessing cash generation. Management signaled capital return: a $1.75 billion repurchase authorization was approved on February 24, 2016, and an acquisition of flavor supplier American Fruits & Flavors for $690 million was agreed. Key risks include heavy dependence on TCCC for distribution, since TCCC accounted for about 42% of net sales, and continued regulatory and litigation exposure. The San Francisco City Attorney unfair competition suit is set for trial in April 2017, a New York Attorney General inquiry is ongoing, and multiple personal injury and false advertising suits are pending. Energy drink category regulation, including age limits, caffeine caps and excise taxes, remains an industry-wide headwind.
Feb 29, 2016
2014-A
Monster Beverage Annual Report (Amendment), Year Ended Dec 31, 2014
Monster Beverage Corporation's 2015 10-K filing (reporting on fiscal year 2014) provides a detailed overview of the company's corporate governance, executive compensation, and related party transactions. The filing highlights the company's leadership structure, emphasizing the combined roles of Chairman and CEO, Rodney C. Sacks, and Vice Chairman and CFO, Hilton H. Schlosberg, who have extensive experience in the beverage industry and have led the company for over 25 years. The report details the composition and responsibilities of the Board of Directors and its committees, including the Audit, Compensation, and Nominating committees, all of which are comprised of independent directors. Key aspects of executive compensation are also disclosed, with a focus on aligning executive interests with those of shareholders through base salary, annual bonuses, and long-term equity incentives. The company's compensation philosophy aims to motivate, reward, and retain key talent. The filing also discloses certain related party transactions, specifically purchases from IFM Group, Inc., in which certain executives and their families hold ownership interests, with the Audit Committee overseeing these transactions.
Apr 6, 2015
2014
Monster Beverage Annual Report, Year Ended Dec 31, 2014
Monster Beverage's 2014 10-K reports a record year, with net sales up 9.7% to $2,464.9 million, gross profit up 14.2% to $1,339.8 million (54.4% of net sales versus 52.2% in 2013), and operating income up 30.5% to $747.5 million. Net income rose 42.7% to $483.2 million, and diluted EPS was $2.77 versus $1.95. The Monster Energy brand drove nearly all growth, accounting for about 93% of net sales and roughly 98.5% of the increase in gross sales. Operating expenses fell 1.3% as a share-driven decline in distributor termination costs offset higher freight and sponsorship spending. Cash and investments reached about $1.19 billion, operating cash flow was $585.6 million, and the company has no debt beyond small capital leases. The filing's dominant story is the pending TCCC Transaction, expected to close in Q2 2015. Coca-Cola will take about 16.7% of the new holding company NewCo and pay a net $2.15 billion in cash (up to $625 million held in escrow pending distribution milestones). Monster will transfer its non-energy brands (Hansen's Natural Sodas, Peace Tea, Hubert's Lemonade, and juices) to Coca-Cola and receive Coca-Cola's global energy drink brands (NOS, Full Throttle, Burn, Relentless, and others). In February 2015 the company sent termination notices to most U.S. Anheuser-Busch distributors, with estimated transition costs of about $280 million, mostly recognized in Q1 2015, and about $38.2 million of deferred revenue will be recognized as the terminated distributors' rights end. Investors should weigh this transition's execution risk, roughly 64 distributors contesting the terminations, and a shift to greater dependence on Coca-Cola's distribution network. Litigation and regulatory exposure remain significant. The Anais Fournier wrongful-death suit is set for trial in August 2015, and the San Francisco City Attorney's Unfair Competition Law case is set for a bench trial in February 2016. The company is also responding to a New York Attorney General subpoena and faces false advertising class actions. Management says these matters are without merit, but no loss range can be estimated for the San Francisco matter. Concentration is high: Coca-Cola Refreshments USA accounted for about 29% of net sales.
Mar 2, 2015
2013
Monster Beverage Annual Report, Year Ended Dec 31, 2013
Monster Beverage Corporation (MNST) reported record 2013 results, with gross sales up 9.0% to $2,586.5 million and net sales up 9.0% to $2,246.4 million. Net income was essentially flat at $338.7 million (down 0.4%), and diluted EPS rose 5.2% to $1.95, helped by a 10% reduction in diluted share count from aggressive buybacks. Growth was almost entirely driven by the Monster Energy brand, which accounted for about 97% of the gross sales increase, though management noted that growth decelerated from 21.7% in 2012 to 9.0% in 2013, mainly due to softer U.S. and European energy drink demand. Gross margin improved modestly to 52.2% of net sales, but operating income grew only 4.0% as operating expenses rose 16.5%, driven by legal and regulatory costs, distributor termination payments, and sponsorships. Operating margin compressed to 25.5% from 26.7%. The balance sheet strengthened, with cash, equivalents and investments of about $623 million, working capital of $867 million, and no debt beyond small capital leases. Operating cash flow rose to $342.0 million. The company repurchased roughly $67.6 million of stock in 2013 (versus $727.7 million in 2012) and has no dividend. The principal investor concern is regulatory and litigation risk around energy drinks: a wrongful death suit, a San Francisco City Attorney Unfair Competition Law action, a state attorney general subpoena, a securities class action expected to settle largely through insurance, and proposed age restrictions, caffeine limits, excise taxes and container-size rules in multiple jurisdictions. Concentration is also notable, as Coca-Cola Refreshments USA accounted for about 29% of net sales.
Mar 3, 2014
2012
Monster Beverage Annual Report, Year Ended Dec 31, 2012
Monster Beverage Corporation (MNST, formerly Hansen Natural) reported record 2012 results, with gross sales of $2,373.5 million (up 21.7%) and net sales of $2,060.7 million (up 21.0%). Operating income rose 20.6% to $550.6 million and net income rose 18.8% to $340.0 million, or $1.86 per diluted share. The Monster Energy brand drove the growth, generating roughly 98% of the increase in gross sales. Case sales grew 23.2% to 202.9 million cases, while the average net sales per case declined 1.8% to $10.16 due to higher promotional allowances and mix. Gross margin slipped to 51.7% from 52.5%, reflecting product and geographic mix, higher promotional spend, and losses in international operations. Capital allocation was a major theme in 2012. The company repurchased about $737 million of its stock, exhausting its 2011-2012 program and most of a new $250 million November 2012 program. Cash and investments fell to roughly $341 million from about $795 million a year earlier, and working capital dropped to $546.5 million. The company also has no dividend policy and reports no funded debt beyond small capital leases. Operating cash flow declined to $287.7 million from $333.8 million, largely due to inventory and tax-related working capital changes. Investors should weigh meaningful regulatory and litigation risks. These include a state attorney general subpoena, a wrongful death lawsuit tied to Monster Energy consumption, a San Francisco false advertising inquiry, a securities class action with a class certification hearing set for April 2013, derivative suits, and proposed energy drink restrictions and taxes in several U.S. cities and foreign countries. Concentration risk is also significant: energy drinks represent about 95% of net sales, and Coca-Cola Refreshments accounts for roughly 28% of net sales.
Mar 1, 2013
2011
Monster Beverage Annual Report, Year Ended Dec 31, 2011
Monster Beverage Corporation (formerly Hansen Natural, ticker MNST as of January 9, 2012) reported record results for fiscal 2011, driven almost entirely by its Monster Energy® drinks. Gross sales rose 31.0% to $1,950.5 million and net sales rose 30.6% to $1,703.2 million, with Monster Energy® brand energy drinks accounting for about 96.7% of the gross sales increase. Operating income grew 31.2% to $456.4 million, and net income increased 35.0% to $286.2 million, or $1.53 per diluted share on a post-split basis. Gross margin was stable at 52.5% of net sales, while operating expenses grew 31.7%, mainly on sponsorships, advertising and freight. Operating cash flow was $333.8 million, and the company ended the year with $793.8 million in cash, cash equivalents and investments, plus no borrowings under its $10 million credit line. The filing also flags concentration and regulatory risk. The DSD segment, which is almost entirely energy drinks, produced 94.4% of net sales, and Coca-Cola Refreshments USA alone accounted for about 29% of net sales. Several jurisdictions are weighing energy-drink taxes or age restrictions, Mexico and Hungary have already enacted taxes, and the company relies on third-party co-packers and limited-source ingredients. Legal exposure includes securities class actions over 2006–2007 disclosures, which remain unresolved, and a Canadian consumer class action. The company also holds about $44.8 million (face value) of auction rate securities, which carry impairment and liquidity risk. A two-for-one stock split took effect February 15, 2012, and the board authorized a new $250 million repurchase program in October 2011, though no shares were bought under it in 2011. For investors, the central question is durability: whether Monster's international expansion and new product launches can sustain growth as the category matures and regulatory pressure builds, given the heavy dependence on one brand family and one distributor network.
Feb 29, 2012
2010
Monster Beverage Annual Report, Year Ended Dec 31, 2010
This is the fiscal 2010 Form 10-K of Hansen Natural Corporation, the name Monster Beverage Corp (MNST) used before its 2012 rename, filed March 1, 2011. Hansen reported record results driven by its Monster Energy franchise. Gross sales rose 13.7% to $1,488.5 million and net sales rose 14.1% to $1,303.9 million. Case sales grew 17.3% to 129.0 million cases, but the average net price per case fell 2.8% to $10.11 on a shift toward lower-priced products and geographic mix. Operating income grew only 3.1% to $347.8 million because operating expenses rose 20.9%, driven by payroll, professional fees, SAP implementation, sponsorships and freight. Operating margin fell to 26.7% from 29.5%, and gross margin slipped to 52.2% from 53.6%. Net income rose 1.6% to $212.0 million, and diluted EPS was $2.28 versus $2.21. The DSD segment, which is primarily energy drinks, generated 93.0% of net sales. Balance sheet strength is a clear positive. Cash and equivalents were $354.8 million and short- and long-term investments were $288.8 million, for total liquidity of about $643.7 million. Working capital rose to $769.3 million, operating cash flow was $229.0 million, and the company has no debt beyond small capital leases and an undrawn $10 million credit line. Hansen bought back $23.5 million of stock in 2010 and had $176.4 million remaining under its authorization. It pays no dividends. Risks include roughly $79.6 million (face value) of auction rate securities still illiquid, with a $54.2 million put option exercisable from March 2011. Other risks include customer concentration (Coca-Cola Enterprises, now part of TCCC's bottler network, was about 28% of net sales), heavy reliance on energy drinks and on third-party co-packers, and rising input costs for aluminum, PET, sugar and juice concentrates. Litigation is the main overhang. The filing describes a securities class action and a shareholder derivative suit, both alleging misleading statements and channel stuffing, with hearings on motions to dismiss set for April 14, 2011. Other cases include a certified California class action over Blue Sky labeling, a Canadian class action seeking roughly CDN$25 million including punitive damages, and an FINRA arbitration against Oppenheimer over auction rate securities. Management calls all of these meritless. Insiders Rodney Sacks and Hilton Schlosberg together hold about 20% of shares, giving them significant voting control. International sales were 16% of gross sales, with Europe, Australia and Brazil operations still loss-making (a $9.2 million operating loss in 2010).
Mar 1, 2011
2009
Monster Beverage Annual Report, Year Ended Dec 31, 2009
This FY2009 Form 10-K is from Hansen Natural Corporation (Nasdaq: HANS), which was later renamed Monster Beverage Corporation (MNST). Hansen reported record 2009 results, with gross sales of $1,309.3 million (up 10.7%) and net sales of $1,143.3 million (up 10.6%). Growth was driven mainly by volume in Monster Energy drinks, which make up the bulk of the Direct Store Delivery (DSD) segment (91.9% of net sales). Gross margin improved to 53.6% from 52.1%, helped by lower apple juice concentrate and packaging costs. Operating expenses fell 26.7% to $275.0 million, mostly because distributor termination costs dropped by $116.2 million after the heavy 2008 restructuring. As a result, operating income rose 106% to $337.3 million (29.5% of net sales), and net income rose 93% to $208.7 million, or $2.21 per diluted share versus $1.11 in 2008. Some of the Q4 2009 sales strength came from advance customer purchases ahead of a 2010 marketing program and the SAP system transition, which the company estimates added about 1% to 2009 sales. The balance sheet remains strong, with $328.3 million in cash and equivalents and $99.3 million in short- and long-term investments. Operating cash flow fell to $156.2 million from $199.5 million, mainly because of distributor receivable and termination-liability swings. The company repurchased $86.2 million of stock in 2009 and has $10.2 million left under its $200 million authorization. It carries essentially no debt. Auction rate securities remain a risk: the company holds $96.4 million face value (fair value $84.3 million) after a $12.1 million impairment, and the auction failures limit near-term liquidity for those holdings. Key risks include concentration: Coca-Cola Enterprises accounted for about 27% of net sales and Wal-Mart about 9%. The company also faces a securities class action and a shareholder derivative suit over statements about the Anheuser-Busch distribution relationship and 2007 sales, both of which the company is contesting. It is also defending a Canadian consumer class action seeking roughly CDN$25 million, and the 2008 TCCC and CCE distribution realignment continues to shape the distribution network. Management describes the financial position as sound and expects capital expenditures below $20 million through 2010.
Mar 1, 2010
2008
Monster Beverage Annual Report, Year Ended Dec 31, 2008
Hansen Natural Corporation (the filing's registrant name; the ticker was HANS in 2009, and the company later became Monster Beverage Corp, MNST) reported record FY2008 results on the top line but a sharp profit decline. Net sales rose 14.3% to $1,033.8 million and gross sales rose 15.3% to $1,182.9 million, driven by Monster Energy and Java Monster. Net income fell 27.7% to $108.0 million, and diluted EPS dropped to $1.11 from $1.51. Operating income fell 29.2% to $163.6 million, and operating margin compressed from 25.5% to 15.8%. The decline was driven mainly by $118.1 million of one-time distributor termination costs as the company moved its energy drink distribution to Coca-Cola Company bottlers and Anheuser-Busch distributors. The company recorded $113.0 million of new deferred revenue tied to these agreements, recognized over roughly 20 years, which will support future reported revenue. Q4 2008 was a net loss of $23.4 million. The balance sheet remains strong, with $256.8 million in cash, $118.7 million in short- and long-term investments, and $374.0 million of working capital. However, $112.5 million face value of auction rate securities is impaired: $14.9 million was written down, and the securities are largely illiquid. Operating cash flow rose to $199.5 million. The company repurchased $103.5 million of stock in 2008 under a $200 million authorization. Concentration risk is high: energy drinks made up 90.7% of net sales, Dr. Pepper Snapple (a terminated distributor) accounted for 13% of 2008 sales, and Wal-Mart accounted for 11%. The company also faces securities class actions, a shareholder derivative suit tied to the 2007 class period, a $5.0 million-plus distributor arbitration claim, and insurance litigation. For investors, the central question is whether the 2008 distributor restructuring produces durable, higher-margin distribution through large bottlers, and whether Monster's momentum in energy drinks can offset the litigation, auction rate securities exposure, and dependence on a single product category.
Mar 2, 2009
2007
Monster Beverage Annual Report, Year Ended Dec 31, 2007
Hansen Natural Corporation (the registrant that later became Monster Beverage Corp., trading as MNST) reported a strong fiscal 2007. Net sales rose 49.3% to $904.5 million, and net income increased 52.5% to $149.4 million, or $1.51 per diluted share, versus $0.99 in 2006. Growth was driven almost entirely by Monster Energy® drinks, which fueled the Direct Store Delivery (DSD) segment. DSD accounted for $809.8 million, or about 89.5%, of net sales, while case volume grew 35.3% to 98.5 million cases. Gross margin slipped modestly to 51.7% from 52.3%, reflecting a richer mix of lower-margin packages and higher raw material, packaging, and freight costs. Operating margin fell to 25.5% from 26.2%, although operating income still grew 45.7% to $231.0 million. The balance sheet strengthened considerably. Cash and investments totaled roughly $302.6 million, including $12.4 million in cash, $63.1 million in short-term investments, and $227.1 million in long-term auction rate securities. Stockholders' equity more than doubled to $422.2 million, and operating cash flow rose to $135.5 million from $76.4 million. The company carries no meaningful debt and pays no dividends. Management flagged several risks: a 7% to 8% pull-forward of fourth-quarter sales ahead of a January 1, 2008 price increase, which could weigh on near-term sales; auction rate security failures in February 2008; and rising input costs for PET bottles, aluminum, sweeteners, and apple juice concentrate. The company also carries significant legal and governance overhang. Securities class action claims were dismissed with prejudice in October 2007, but a derivative settlement tied to historical stock option dating is pending court approval, with a hearing set for May 5, 2008. Professional fees related to the option review totaled $9.8 million net of insurance reimbursements. Because of late filings in 2006 and early 2007, the company cannot use Form S-3 until about July 2008, which limits its capital-raising flexibility. Concentration is also notable: Cadbury Schweppes Bottling Group accounted for about 16% of net sales and Wal-Mart about 12%. Co-packing arrangements are largely month-to-month, and sucralose comes from a single supplier.
Feb 29, 2008
2006
Monster Beverage Annual Report, Year Ended Dec 31, 2006
This Form 10-K from Hansen Natural Corporation (ticker HANS, later renamed Monster Beverage Corporation, MNST) covers fiscal 2006 and was filed late, on June 5-6, 2007, because of an internal review of historical stock option grant practices. Results were strong. Net sales rose 73.6% to $605.8 million, driven mainly by the Monster Energy brand within the Direct Store Delivery (DSD) segment, which made up 85% of net sales. Gross margin held at 52.3%, operating income grew 53% to $158.6 million, and net income rose 56% to $97.9 million, or $0.99 per diluted share. Operating cash flow was $76.4 million, and the company ended the year with $136.8 million in cash and short-term investments, no outstanding borrowings, and working capital of $212.3 million. The main investor concerns are governance and legal, not operations. The company faces securities class actions, shareholder derivative suits, and an SEC informal inquiry tied to stock option dating. It also received several Nasdaq staff determinations for late filings, and it will be ineligible to use Form S-3 for one year, which limits its ability to raise capital quickly. Business risks include heavy dependence on energy drinks and on Monster Energy in particular, customer concentration (Cadbury Schweppes Bottling Group 19% and Wal-Mart 12% of net sales), reliance on third-party co-packers, and rising costs for aluminum cans, PET bottles, sweeteners, and juice concentrates that management expects to pressure 2007 gross margins. The company also changed its distribution model. Anheuser-Busch distributors paid $20.9 million to cover termination of prior distributors, recorded as deferred revenue and recognized over a 20-year term. Management expenses that were also high in 2006: distributor termination costs of $12.7 million, a $27.7 million share repurchase, and $8.3 million of stock-based compensation under SFAS 123R. Overall, the filing shows a fast-growing, highly profitable beverage company whose near-term risk depends on resolving its legal and filing issues.
Jun 6, 2007
2005
Monster Beverage Annual Report, Year Ended Dec 31, 2005
Hansen Natural Corporation (NASDAQ: HANS; the filing predates the company's later rename to Monster Beverage and its MNST ticker) reported record fiscal 2005 results driven by its Monster Energy and Lost energy drinks. Net sales rose 93.5% to $348.9 million from $180.3 million, and gross profit rose 118.7% to $182.5 million, lifting gross margin to 52.3% from 46.3%. Operating income grew to $103.4 million from $33.9 million, and net income reached $62.8 million, or $2.59 per diluted share, versus $20.4 million, or $0.86, in 2004. The energy drink (DSD) segment accounted for 77.4% of net sales, so results depend heavily on one product category and a few brands. The balance sheet strengthened considerably. Cash and cash equivalents reached $61.7 million, working capital was $107.1 million, and the company had no borrowings under its $7.8 million Comerica credit line. Operating cash flow was $54.6 million. Stockholders' equity rose to $125.5 million from $58.6 million. The company has never paid cash dividends and does not plan to. Management expects input cost pressure (PET, aluminum, high fructose corn syrup, juice concentrates, freight) to weigh on gross margins in 2006, and it flagged sucralose supply limits and co-packer capacity constraints as operational risks. Key risks include dependence on the energy drink category and Monster Energy, a single customer representing about 18% of sales, reliance on outsourced bottlers and co-packers, and concentrated insider ownership (Rodney Sacks and Hilton Schlosberg together may be deemed to control about 21.2% and 20.9%, respectively, of shares outstanding). Management also expects the adoption of SFAS 123(R) in 2006 to have a material effect on reported earnings. The Flathead Lake Monster trademark dispute was settled in December 2005 on terms the company considers favorable, while a separate Barrington Capital motion to add the company as a judgment debtor is being vigorously opposed.
Mar 15, 2006
2004-A
Monster Beverage Annual Report (Amendment), Year Ended Dec 31, 2004
This filing is an amendment (10-K/A) to Hansen Natural Corporation's (now Monster Beverage Corp.) 2004 annual report, filed on June 21, 2005. The amendment addresses a minor, inadvertent error in Section 4 of the Sarbanes-Oxley certifications (Exhibits 31.1 and 31.2) related to the fiscal year ended December 31, 2004. No financial statements or other substantive disclosures from the original 10-K filing are being updated or re-filed with this amendment. Investors should refer to the original 10-K filed on March 16, 2005, for the company's financial performance and detailed business information for 2004.
Jun 22, 2005
2004
Monster Beverage Annual Report, Year Ended Dec 31, 2004
This 10-K, signed March 15, 2005 and filed for fiscal 2004, is from Hansen Natural Corporation (NASDAQ SmallCap: HANS), which later became Monster Beverage Corp (MNST). The company reported a breakout year. Net sales rose 63.4% to $180.3 million, gross profit rose 90.7% to $83.5 million, and gross margin expanded to 46.3% from 39.7%. Operating income reached $33.9 million (18.8% of net sales) versus $9.8 million in 2003, and net income climbed to $20.4 million, or $1.73 per diluted share, from $5.9 million, or $0.55. Growth was driven mainly by the Monster Energy drink (launched April 2002) and the Lost energy drink (launched early 2004), along with apple juice, private label, and Energade sales. Sales outside California rose to 56% of the total, and sales to full-service distributors made up 52% of revenue. The balance sheet strengthened considerably. Cash rose to $21.0 million from $1.1 million, working capital reached $41.6 million, shareholders' equity was $58.6 million, and operating cash flow was $20.1 million. Debt is minimal, with total long-term obligations of about $0.58 million including current maturities, and the company had no borrowings under its $6.0 million Comerica revolving line at year-end. The Comerica facility was increased to $7.8 million in March 2005. The company paid no dividends and reinvested cash in sales and marketing, which grew about 75% in 2004. Key risks include dependence on a few co-packers and single-source suppliers, rising aluminum can and PET bottle costs that pressure gross margins, a sucralose supply cap in 2005 that management is addressing through reformulation, and concentration in the energy drink category, which faces many competitors. The company disclosed a Barrington Capital/Sandburg Financial motion seeking to add Hansen as a judgment debtor on a 1996 default judgment against an unrelated company, which management called without merit. Insiders Rodney Sacks and Hilton Schlosberg control about 44% of shares through direct holdings and Brandon Limited Partnerships, so governance is concentrated.
Mar 16, 2005
2003
Monster Beverage Annual Report, Year Ended Dec 31, 2003
Hansen Natural Corporation (NASDAQ Small-Cap: HANS; now Monster Beverage) reported record 2003 results driven by its Monster Energy drink, launched in April 2002. Gross sales rose 19.9% to $138.5 million and net sales rose 19.9% to $110.4 million. Gross margin improved to 39.7% from 36.1%, and operating income nearly doubled to $9.8 million from $5.3 million. Net income reached $5.9 million, or $0.55 per diluted share, versus $3.0 million ($0.29) in 2002. Part of the margin gain came from a higher mix of higher-margin products, though promotional payments and allowances rose. The balance sheet strengthened: shareholders' equity grew to $35.0 million, long-term debt fell to $0.4 million from $3.6 million, and the Comerica revolving line had no drawn balance at year-end. Operating cash flow was $5.5 million. Inventory rose to $17.6 million from $11.6 million, which absorbed cash and is a watch item. The company also plans to expand its national sales force in 2004, has won a lower-margin California WIC apple juice contract (which a competitor is protesting), and launched the Lost energy drink in early 2004. Key risks include heavy dependence on energy drinks and on Costco (about 15% of 2003 sales), co-packer concentration, rising glass, plastic and aluminum costs, and pending litigation with The Coca-Cola Company over the Monster trademark and with Skyy Spirits over Blue Sky. Management and directors control roughly 44% of shares, and the company has never paid dividends.
Mar 30, 2004
2002
Monster Beverage Annual Report, Year Ended Dec 31, 2002
This is Hansen Natural Corporation's (NASDAQ SmallCap: HANS) 10-K for fiscal 2002, filed March 31, 2003. The company was later renamed Monster Beverage Corporation, so the filing refers to Hansen, not Monster. Hansen markets alternative beverages, including natural sodas, energy drinks, juices, and Blue Sky and Junior Juice brands, through third-party co-packers. Gross sales rose 15.8% to $115.5 million and net sales rose 14.1% to $92.0 million, driven mainly by the Monster energy drink, launched in April 2002, along with Natural Sodas, E2O Energy Water, Energade, and apple juice. Gross margin was stable at 36.1%, but operating expenses grew 19.9% as selling expenses rose 29.9%, so operating income fell slightly to $5.3 million from $5.6 million. Net income was essentially flat at $3.0 million, or $0.29 per diluted share. The company's balance sheet is modest. Total assets were about $40.5 million, shareholders' equity was $28.4 million, and debt was $3.8 million, mostly a Comerica revolving line of credit. Operating cash flow fell to $2.7 million from $5.2 million because receivables grew. Working capital improved to $15.0 million. Two risks stand out for investors: customer concentration, since Costco accounted for about 18% of sales, and a shift in how promotional spending is reported. Under EITF 01-9, adopted in 2002, roughly $14.8 million of promotional payments were reclassified from SG&A to a reduction of net sales. Prior-year figures were restated, so year-over-year comparisons are on a consistent basis. Insiders, led by CEO Rodney Sacks and director Hilton Schlosberg, control about 42% of shares. The company has a small public float, with nonaffiliate market value of about $23 million, and it has never paid dividends.
Mar 31, 2003
2001
Monster Beverage Annual Report, Year Ended Dec 31, 2001
This 10-K covers fiscal 2001 for Hansen Natural Corporation (NASDAQ SmallCap: HANS), a Corona, California alternative-beverage company that later became Monster Beverage Corporation (MNST). Net sales rose 15.7% to a record $92.3 million, driven by natural sodas, Blue Sky natural sodas, apple juice, Junior Juice (acquired May 2001), and new Energade and E2O Energy Water launches. Unit case volume grew about 28% to 15.1 million cases. Profitability weakened, however. Gross margin fell to 44.2% from 46.5% on an unfavorable product and customer mix, operating expenses rose 16.9% (mainly selling, general and administrative costs), operating income fell to $5.6 million from $6.9 million, and net income declined to $3.0 million, or $0.29 diluted EPS, from $3.9 million, or $0.38. The balance sheet is modest and manageable. Total assets were $38.6 million, shareholders' equity was $25.3 million, and total debt was $6.2 million, mostly a $5.0 million Comerica revolving line of credit. Working capital was $13.0 million, and operating cash flow improved to $5.2 million as receivables were collected. Management notes that one customer accounted for 18% of 2001 sales, and that the Medicine Man premium tea line and the Healthy Start/Silver Foxes juice lines were disappointing and are being reevaluated or discontinued. Insiders, led by CEO Rodney Sacks and CFO Hilton Schlosberg, control about 44% of shares, and the company has never paid dividends. Investors should watch two accounting changes. EITF 01-9 will reclassify certain promotional allowances from SG&A as a reduction of net sales beginning in Q1 2002, which will lower reported revenue and may not affect profit. SFAS 142 will eliminate trademark amortization, which should lift reported earnings going forward. Risks include reliance on co-packers with limited capacity for newer products, a single-source energy can supplier, the high concentration of sales in California, and ongoing litigation with Sobe.
Mar 29, 2002
2000
Monster Beverage Annual Report, Year Ended Dec 31, 2000
This filing is Hansen Natural Corporation's (NASDAQ Small-Cap: HANS, later MNST) Form 10-K for fiscal 2000, filed March 30, 2001. The company reported record net sales of $79.7 million, up 10.3% from $72.3 million in 1999, driven primarily by its 8.2-ounce functional energy drinks in slim cans, new children's multi-vitamin juice drinks, and the Blue Sky natural soda business acquired in September 2000. Gross margin was essentially flat at 46.5% versus 46.4%, but operating expenses rose 16.0% (selling, general and administrative expenses up 17.7%), compressing operating income to $6.9 million from $7.5 million. Net income fell 12.6% to $3.9 million, and diluted EPS declined to $0.38 from $0.43. The balance sheet changed meaningfully. Total assets rose to $38.7 million from $28.7 million, largely due to the $6.5 million Blue Sky acquisition and trademark additions, and long-term debt jumped to $9.7 million from $0.9 million as the company drew $9.2 million on its Comerica revolving line of credit. Cash fell to just $131,000. Shareholders' equity grew to $22.1 million. Operating cash flow was negative at $1.1 million, reflecting heavier receivables and inventory build, which is a notable concern for investors even as earnings were positive. Investors should weigh the growth in the core functional drinks business against several risks disclosed in the filing: heavy customer concentration (one customer accounted for 23% of 2000 sales), dependence on single-source components such as the cans for functional drinks, weak early results from the Healthy Start/Silver Foxes juice line and single-serve juices that management is reevaluating, a pending $2.8 million counterclaim from Sammy Sosa, and a patent-infringement suit against South Beach Beverage (SoBe). Insiders, led by Rodney Sacks and Hilton Schlosberg, control roughly 44% of the stock, and the company is very small, with 107 employees and a market value of nonaffiliate shares of about $20.7 million.
Mar 30, 2001
1999
Monster Beverage Annual Report, Year Ended Dec 31, 1999
This fiscal 1999 Form 10-K is filed by Hansen Natural Corporation (Nasdaq Small-Cap: HANS), not Monster Beverage Corp as the request states. Hansen is the predecessor company that later became Monster Beverage, and the filing describes its Hansen's-brand 'alternative' beverage business, including natural sodas, juices, and functional energy drinks. The company reported 1999 net sales of $72.3 million, up 34.2% from $53.9 million, with net income of $4.5 million (diluted EPS $0.43, up from $0.34). Growth was driven by the 8.2-ounce slim-can functional drinks, the new Signature Soda line, Healthy Start juices, and children's multi-vitamin drinks. Profitability was mixed. Gross margin fell to 46.4% from 49.3% because of a shift in product mix, and selling, general and administrative expenses rose 25.3% on higher freight, advertising, and promotion spending. Operating income still grew to $7.5 million from $6.0 million. Working capital improved to $9.0 million, but cash fell to $2.0 million as inventory (up to $9.9 million) and receivables (up to $3.8 million) absorbed cash. Operating cash flow was $1.3 million, well below 1998's $4.4 million, and total assets were $28.7 million with equity of $18.6 million. Investors should weigh several risks. One customer accounted for about 25% of 1999 sales, and a co-packer that makes the 8.2-ounce functional drinks and 11.5-ounce Smoothies has had production difficulties, with only one U.S. can manufacturer for slim cans. The Comerica revolving line expires May 1, 2000, and insiders (Sacks and Schlosberg) control about 44% of the shares. The company began a 1,000,000-share buyback in March 2000 and does not pay dividends.
Mar 30, 2000
1998
Monster Beverage Annual Report, Year Ended Dec 31, 1998
This is the fiscal 1998 Form 10-K of Hansen Natural Corporation (Nasdaq Small-Cap: HANS), filed March 31, 1999. Hansen later became Monster Beverage Corp (MNST); the filing itself does not use the Monster name, so this analysis covers the company as it was in 1998. Hansen markets 'alternative' beverages under the Hansen's Natural brand, led by its carbonated 'functional' energy drinks in 8.2-ounce slim cans, along with natural sodas, juices, and Smoothies. Results improved sharply in 1998. Net sales rose 25.1% to $53.9 million, gross margin expanded from 41.4% to 49.3% on product mix and cost reductions, operating income nearly tripled to $6.0 million, and net income reached $3.6 million ($0.34 diluted EPS) versus $1.3 million ($0.13) in 1997. Operating cash flow was $4.4 million, cash ended at $3.8 million, and shareholders' equity grew to $13.9 million. Investors should weigh that growth against concentration and governance risks. One customer accounted for 27% of 1998 sales, and management warned that some functional-drink sales came from distributor opening orders that may not recur. Selling expenses rose 34% as the company pushed into new markets, and sales outside California grew to 34% of the total. The company is small (68 employees, roughly $22 million in total assets), has never paid a dividend, and is controlled by its two co-founders, Rodney Sacks and Hilton Schlosberg, who together beneficially own about 79% of the shares. Debt is modest: long-term debt is $3.4 million under a Comerica term loan, with $2.1 million due in 1999, and the revolving credit line was undrawn at year-end.
Mar 31, 1999
1997
Monster Beverage Annual Report, Year Ended Dec 31, 1997
Hansen Natural Corporation, a Corona, California-based holding company whose operating business is conducted through Hansen Beverage Company, reported net sales of $43.06 million for fiscal 1997, up 21.1% from $35.57 million in 1996. Gross profit rose to $17.83 million, with gross margin improving to 41.4% from 39.1%, driven by product mix shifts toward fruit juice Smoothies and the new energy drink launched in April 1997, along with raw material cost reductions. Net income was $1.25 million, or $0.13 per diluted share, compared with $357,166 in 1996, and the company remains focused on expanding distribution outside California, where sales were $11.2 million, or 23.6% of total sales. The balance sheet strengthened over the year. Shareholders' equity reached $9.96 million, working capital was $2.49 million versus a deficit of $2.71 million a year earlier, and the $4 million ERLY note was retired in November 1997 using a term loan from Comerica Bank-California. Long-term debt stood at $3.41 million at year-end, and operating cash flow improved to $1.32 million. Two customers accounted for 29% and 11% of 1997 sales, a concentration the filing identifies as a material risk. The company also curtailed its United Kingdom operations and is deregistering that subsidiary. The company has never paid dividends and does not expect to. Its common stock trades on the Nasdaq Small-Cap Market under the symbol HANS, and insiders Rodney Sacks and Hilton Schlosberg together control a large share of the voting stock. Management also noted an unresolved appeal in the ERLY litigation and a reserve taken against barter advertising credits.
Mar 31, 1998
1996
Monster Beverage Annual Report, Year Ended Dec 31, 1996
Hansen Natural Corporation, a Delaware holding company based in Anaheim, California, reported net sales of $35.6 million for fiscal 1996, up 4.6% from $34.0 million in 1995, and net income of $357,000 ($0.04 per share), compared with a net loss of $1.35 million in 1995. Gross profit rose to $13.9 million, or 39.1% of net sales, from 35.7% a year earlier, driven by lower aluminum can and raw material costs and a shift toward fruit juice Smoothies. Soda sales fell 12.2% and ready-to-drink iced tea, lemonade and juice cocktail sales fell about 27%. Operations are concentrated in California, where retail chain, specialty and club stores account for approximately 77.8% of sales, and three customers accounted for 26.1%, 12.7% and 8.4% of 1996 sales. The balance sheet shows total assets of $16.1 million and shareholders' equity of $8.8 million at December 31, 1996. The most significant near-term issue is a $4.0 million note payable to ERLY Industries due July 27, 1997, which was reclassified to current liabilities and produced a working capital deficit of $2,707,471. Management says it expects to refinance the note, citing a signed financing proposal from a bank, but states there can be no assurance of completion or acceptable terms. Management also believes existing cash, operations and its $3 million revolving line of credit will meet working capital needs through December 31, 1997, subject to refinancing the ERLY note. The company has not paid dividends since inception. Its Hansen's trademark is licensed from a trust, and the filing discloses an ongoing lawsuit against ERLY Industries seeking damages, with the damages phase continued to later in 1997. The company had 43 employees as of March 3, 1997.
Mar 31, 1997