10-KPeriod: FY2011

Monster Beverage Corp Annual Report, Year Ended Dec 31, 2011

Filed February 29, 2012For Securities:MNST

Summary

Monster Beverage Corporation (MNST) demonstrated robust growth in its 2011 fiscal year, with net sales increasing by 30.6% to $1.70 billion, driven primarily by a strong performance in its Monster Energy® brand. The company's Direct Store Delivery (DSD) segment, which comprises the majority of its business, saw significant expansion, reflecting successful market penetration both domestically and internationally. Strategic product introductions and a continued focus on brand awareness through marketing and promotional activities contributed to this growth. While the company faced increased operating expenses, its gross profit margin remained strong, leading to a 35.0% increase in net income to $286.2 million. Monster Beverage Corp. also continued to manage its capital effectively, with substantial cash reserves and ongoing share repurchase programs, positioning it for continued expansion and market leadership in the alternative beverage category.

Financial Highlights

45 data points
Beta

Revenue

$1.70B

52.5% Gross Margin

Net Income

$286.22M

16.8% Net Margin

Total Assets

$1.36B

Cash & Equivalents

$359.33M

Free Cash Flow

$308.27M

Financial Statements
Beta
Revenue$1.70B
Cost of Revenue$808.92M
Gross Profit$894.31M
Operating Expenses$437.89M
Operating Income$456.42M
Net Income$286.22M
Shares Outstanding (Basic)1.06B
Shares Outstanding (Diluted)1.12B

Key Highlights

  • 1Net sales increased by 30.6% to $1.70 billion in 2011, reaching a record high.
  • 2Monster Energy® brand sales were the primary driver of growth, accounting for $1.79 billion in gross sales and contributing significantly to the overall increase.
  • 3International gross sales grew by 58.4% to $381.0 million, indicating successful global expansion.
  • 4The DSD segment continued to dominate, representing 94.4% of consolidated net sales.
  • 5Net income rose by 35.0% to $286.2 million, demonstrating improved profitability.
  • 6The company repurchased 5.0 million shares of common stock for $176.4 million under its 2010 Repurchase Plan.
  • 7A two-for-one stock split was approved in January 2012 and effected in February 2012.

Frequently Asked Questions

The primary driver of Monster Beverage's sales growth in 2011 was the continued strong performance of its Monster Energy® brand energy drinks. Gross sales for this brand alone reached $1.79 billion, and its increase accounted for nearly all of the company's overall gross sales growth for the year.

Monster Beverage saw significant growth in its international markets during 2011. International gross sales increased by 58.4% to $381.0 million, representing 20% of total gross sales. This indicates successful expansion and increasing demand for its products outside of the United States.

Monster Beverage focuses on cost management through reducing input supply and production costs on a per-case basis, including raw material costs and co-packing fees. They also aim to decrease promotional allowances and selling, general, and administrative costs as a percentage of net sales. Efficient capital structure and working capital management are also key strategic areas.

Key risks highlighted include significant changes in government regulation (especially concerning energy drinks and sweetened beverages), intense competition within the beverage industry, evolving consumer preferences, risks associated with international operations (including currency fluctuations and economic/political instability), supply chain disruptions (raw materials and co-packing), and potential criticism or negative publicity surrounding energy drinks.