10-QPeriod: Q2 FY2009

Monster Beverage Corp Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 10, 2009For Securities:MNST

Summary

Monster Beverage Corp. (Hansen Natural Corporation at the time) reported strong growth in its second quarter ended June 30, 2009. Net sales increased by 6.4% to $300.25 million, driven primarily by the continued success of its flagship Monster Energy® brand and the introduction of new product lines. Gross profit margin improved to 53.9% from 51.8% year-over-year, reflecting favorable raw material costs and a more favorable product mix. Diluted earnings per share also saw a healthy increase to $0.60 from $0.51 in the prior year's comparable period. The company continues to invest in marketing and sales initiatives, including sponsorships and athlete endorsements, to maintain brand awareness and drive demand. Despite facing ongoing litigation and some market risks, the company demonstrated robust operational performance and a healthy increase in profitability, indicating resilience and continued expansion within the energy drink market.

Financial Highlights

24 data points
Beta

Revenue

$300.25M

53.9% Gross Margin

Net Income

$57.29M

19.1% Net Margin

EPS (Diluted)

$0.05

Cash & Equivalents

$283.28M

Free Cash Flow

$20.41M

Financial Statements
Beta
Revenue$300.25M
Cost of Revenue$138.42M
Gross Profit$161.83M
Operating Expenses$69.05M
Operating Income$92.78M
Net Income$57.29M
EPS (Basic)$0.05
EPS (Diluted)$0.05
Shares Outstanding (Basic)1.09B
Shares Outstanding (Diluted)1.14B

Key Highlights

  • 1Net sales increased by 6.4% to $300.25 million for the three months ended June 30, 2009, compared to $282.24 million in the prior year.
  • 2Net sales for the six months ended June 30, 2009, increased by 10.1% to $544.46 million from $494.42 million in the prior year.
  • 3Gross profit margin improved to 53.9% for the quarter and 53.6% for the six months, up from 51.8% and 50.8% respectively, year-over-year.
  • 4Diluted earnings per share rose to $0.60 for the quarter and $1.04 for the six months, compared to $0.51 and $0.80 in the respective prior year periods.
  • 5Operating income increased by 18.7% year-over-year for the quarter and 31.0% for the six-month period.
  • 6The company reported $283.3 million in cash and cash equivalents and $118.2 million in short- and long-term investments as of June 30, 2009.
  • 7Several new product lines were introduced, including Monster Energy® Import and Nitrous™ Monster Energy®, contributing to sales growth.

Frequently Asked Questions

Revenue growth was primarily driven by increased sales volume of the flagship Monster Energy® brand energy drinks, bolstered by the introduction of new products like Monster Energy® Import and Nitrous™ Monster Energy®.

Profitability improved significantly. Gross profit margin increased due to favorable raw material costs and a better product mix. Operating income grew by 18.7% for the quarter and 31.0% for the six-month period, leading to a 14.0% increase in net income for the quarter and a 25.1% increase for the six-month period.

As of June 30, 2009, the company maintained a strong liquidity position with $283.3 million in cash and cash equivalents and an additional $118.2 million in short- and long-term investments.

The report mentions ongoing litigation, including securities class actions and derivative lawsuits, which are being vigorously defended. Additionally, the company noted risks associated with its auction rate securities due to failed auctions, though it does not anticipate a material impact on liquidity. The company also faces general market risks related to commodity prices and competition.