Why was this 8-K/A filed?

To correct a clerical error in the three-month gross profit figure for Q4 2023 in the February 28, 2024 press release. The corrected press release is furnished as Exhibit 99.1. The amendment does not change the company's other reported results.

What drove the improvement in gross margin?

Management attributed the increase in gross profit as a percentage of net sales, from 51.8% to 54.2% in Q4, mainly to pricing actions in certain markets, lower freight-in costs and lower input costs. The Bang inventory step-up reduced gross profit by about $5.0 million in the quarter.

What were the Alcohol Brands impairment charges?

Operating expenses in Q4 2023 included $39.9 million of impairment charges on non-amortizing intangibles and property and equipment acquired in the CANarchy transaction. The charges were tied to continuing challenges in the craft beer and hard seltzer categories.

Will the full financial statements be available soon?

Not in this filing. The press release did not include certain financial statements, related footnotes and other financial information. These will be filed with the SEC as part of the company's Form 10-K for 2023.

How much capital does Monster have available for shareholder returns?

As of February 27, 2024, about $642.4 million remained available under previously authorized repurchase programs. The company also held about $3.25 billion in cash and short-term investments at year-end 2023.

MNST 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K/A filed February 29, 2024. Cited figures are marked; the original filing is the authoritative source.

Monster Beverage (MNST) furnished its Q4 and full-year 2023 results in a February 28, 2024 press release.

This 8-K/A was filed on February 29, 2024 solely to correct a clerical error in the three-month gross profit figure for Q4 2023; the corrected press release is attached as Exhibit 99.1. The corrected statement shows Q4 2023 gross profit of $938.4 million^a (54.2% of net sales), up from 51.8% a year earlier. The amendment does not change the company's headline results.

Q4 net sales rose 14.4% to a record $1.73 billion^b, or 16.1% on a foreign-currency-adjusted basis, and full-year net sales rose 13.1% to $7.14 billion. Profitability was mixed. Q4 net income rose 21.6% to $367.0 million, and diluted EPS rose 22.3% to $0.35.

Q4 results absorbed $39.9 million^c of impairment charges on the Alcohol Brands segment, reflecting continued weakness in craft beer and hard seltzer, plus a roughly $5.0 million drag from the Bang inventory step-up. Excluding these items, Q4 net income would have been $401.5 million, or $0.38 per diluted share. Full-year net income grew 36.9% to $1.63 billion, and diluted EPS reached $1.54.

Management attributed margin gains to pricing actions, lower freight-in costs and lower input costs. The balance sheet is strong, with $3.25 billion^d in cash and short-term investments against no disclosed debt on the face of the statements. Stockholders' equity was $8.23 billion.

The company repurchased about 0.8 million shares in Q4 for $43.2 million, and $642.4 million remained under existing buyback authorizations as of February 27, 2024. Investors should note that the full financial statements and footnotes were not included in the press release and will come with the Form 10-K.

02—Key points

Key Highlights

Corrected Q4 2023 gross profit is $938.4 million, or 54.2% of net sales, up from 51.8% in Q4 2022; excluding the Bang inventory step-up, the margin was 54.5%.
Record Q4 net sales of $1.73 billion rose 14.4% (16.1% currency-adjusted); full-year net sales reached $7.14 billion, up 13.1%.
Q4 net income rose 21.6% to $367.0 million ($0.35 diluted EPS); excluding $39.9 million in Alcohol Brands impairment charges and the Bang step-up, net income was $401.5 million ($0.38 EPS).
Full-year 2023 net income rose 36.9% to $1.63 billion, with diluted EPS of $1.54 versus $1.12 in 2022.
Alcohol Brands segment impairments of $39.9 million reflect ongoing weakness in craft beer and seltzer categories.
Balance sheet shows $3.25 billion in cash and short-term investments and $8.23 billion in stockholders' equity.
Share repurchases totaled $43.2 million in Q4 (about 0.8 million shares at $54.57), with $642.4 million of authorization remaining.

03—Questions

Frequently Asked Questions

Why was this 8-K/A filed?
To correct a clerical error in the three-month gross profit figure for Q4 2023 in the February 28, 2024 press release. The corrected press release is furnished as Exhibit 99.1. The amendment does not change the company's other reported results.
What drove the improvement in gross margin?
Management attributed the increase in gross profit as a percentage of net sales, from 51.8% to 54.2% in Q4, mainly to pricing actions in certain markets, lower freight-in costs and lower input costs. The Bang inventory step-up reduced gross profit by about $5.0 million in the quarter.
What were the Alcohol Brands impairment charges?
Operating expenses in Q4 2023 included $39.9 million of impairment charges on non-amortizing intangibles and property and equipment acquired in the CANarchy transaction. The charges were tied to continuing challenges in the craft beer and hard seltzer categories.
Will the full financial statements be available soon?
Not in this filing. The press release did not include certain financial statements, related footnotes and other financial information. These will be filed with the SEC as part of the company's Form 10-K for 2023.
How much capital does Monster have available for shareholder returns?
As of February 27, 2024, about $642.4 million remained available under previously authorized repurchase programs. The company also held about $3.25 billion in cash and short-term investments at year-end 2023.

04—Continue

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