10-QPeriod: Q1 FY2020

Monster Beverage Corp Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 11, 2020For Securities:MNST

Summary

Monster Beverage Corp. reported strong first-quarter 2020 results, with net sales increasing by 12.3% year-over-year to $1.06 billion. This growth was primarily driven by the core Monster Energy® Drinks segment, which saw a 14.0% increase in net sales, supported by strong consumer demand and expanded distribution for both Monster Energy® and Reign Total Body Fuel® brands. Despite a 1.6% decrease in average net sales per case, largely due to unfavorable foreign currency exchange rates and increased promotional allowances, the company achieved record net sales for the quarter. The company demonstrated robust operational performance, with operating income growing 17.2% to $365.0 million, leading to a net income of $278.8 million, an increase of 6.6% compared to the prior year. Diluted EPS also saw an improvement, rising to $0.52. Monster Beverage Corp. also highlighted its strong cash flow generation, with $191.1 million in cash provided by operating activities in the first quarter. The company maintained a healthy cash position and continued its share repurchase program, underscoring its financial strength and commitment to shareholder returns.

Financial Highlights

46 data points
Beta

Revenue

$1.06B

60.0% Gross Margin

Net Income

$278.83M

26.3% Net Margin

Total Assets

$4.88B

Cash & Equivalents

$701.84M

Free Cash Flow

$180.01M

Financial Statements
Beta
Revenue$1.06B
Cost of Revenue$424.90M
Gross Profit$637.20M
Operating Expenses$272.21M
Operating Income$364.99M
Net Income$278.83M
Shares Outstanding (Basic)1.07B
Shares Outstanding (Diluted)1.08B

Key Highlights

  • 1Net sales grew 12.3% to $1.06 billion in Q1 2020, driven by strong performance in the Monster Energy® Drinks segment.
  • 2Operating income increased by 17.2% to $365.0 million, showcasing effective operational management.
  • 3Net income rose 6.6% to $278.8 million, with diluted EPS reaching $0.52.
  • 4Case sales volume increased by 14.1% to 115.6 million cases, indicating continued market penetration.
  • 5The company generated $191.1 million in cash from operating activities, demonstrating strong cash flow generation.
  • 6Significant share repurchases continued under authorized programs, returning capital to shareholders.
  • 7Despite COVID-19 impacts starting to emerge in April, the Q1 results were not materially adversely impacted.

Frequently Asked Questions

Monster Beverage Corp. reported a 12.3% increase in net sales, reaching $1.06 billion for the three months ended March 31, 2020, compared to $945.99 million in the same period of 2019. This growth was primarily driven by the Monster Energy® Drinks segment.

The company stated that the COVID-19 pandemic did not have a material adverse impact on its net and gross sales for the three-months ended March 31, 2020. However, April sales were materially adversely impacted, with a shift in consumer channel preferences noted.

Gross profit increased by 11.1% to $637.2 million. Operating income saw a substantial rise of 17.2% to $365.0 million. Net income grew by 6.6% to $278.8 million, resulting in diluted earnings per share of $0.52, up from $0.48 in the prior year's first quarter.

Monster Beverage Corp. generated $191.1 million in cash from operating activities during the first quarter of 2020, a significant increase from $123.4 million in the same period of 2019. The company maintained substantial liquidity with $701.8 million in cash and cash equivalents and $233.5 million in short-term investments as of March 31, 2020.