-- First Quarter Net Sales rise 11.2 percent to
-- First Quarter Net Income increases 21.0 percent to
-- First Quarter Net Income per diluted share increases 26.7 percent to
-- First Quarter Distributor Termination Expenses were
First Quarter Results
Net sales for the 2019 first quarter increased 11.2 percent to
Net sales for the Company’s Monster Energy® Drinks segment, which primarily includes the Company’s Monster Energy® drinks and Reign Total Body FuelTM high performance energy drinks, increased 11.5 percent to
Net sales for the Company’s Strategic Brands segment, which primarily includes the various energy drink brands acquired from The
Net sales for the Company’s Other segment, which includes certain products of American Fruits and Flavors sold to independent third parties (the “AFF Third-Party Products”), were
Net sales to customers outside
Gross profit, as a percentage of net sales, for both the 2019 and 2018 first quarters was 60.6 percent. For the 2019 first quarter, gross profit as a percentage of net sales was positively affected by increased sales prices of our products sold in
Operating expenses for the 2019 first quarter were
Distribution costs as a percentage of net sales were 3.8 percent for the 2019 first quarter, compared with 3.9 percent in the 2018 first quarter.
Selling expenses as a percentage of net sales for the 2019 first quarter were 11.0 percent, compared with 11.5 percent in the 2018 first quarter.
General and administrative expenses for the 2019 first quarter were
Operating income for the 2019 first quarter increased to
The effective tax rate for the 2019 first quarter was 16.8 percent, compared with 23.3 percent in the 2018 first quarter. The decrease in the effective tax rate was primarily due to an increase in the deductions for equity compensation as well as the increase in profits earned by certain foreign subsidiaries in lower tax jurisdictions than the United States.
Net income for the 2019 first quarter increased 21.0 percent to
“Our strategic alignment with the Coca-Cola system bottlers in
“In the United States, we successfully launched Monster Energy Ultra Paradise®, our Monster Dragon TeaTM line, and our Reign Total Body Fuel™ line of high performance energy drinks, as well as expanded our launch of Java Monster® Swiss Chocolate during the quarter, and launched a number of additional Monster Energy® and Strategic Brands energy drinks in a number of our existing international geographies.
“Predator®, our strategically preferred affordable energy brand, will be launched in a number of additional markets internationally during 2019,” Sacks added.
Share Repurchase Program
During the 2019 first quarter, the Company purchased approximately 2.6 million shares of its common stock at an average purchase price of
As of
Investor Conference Call
The Company will host an investor conference call today,
Based in
Note Regarding Use of Non-GAAP Measures
Gross sales is used internally by management as an indicator of and to monitor operating performance, including sales performance of particular products, salesperson performance, product growth or declines and overall Company performance. The use of gross sales allows evaluation of sales performance before the effect of any promotional items, which can mask certain performance issues. We therefore believe that the presentation of gross sales provides a useful measure of our operating performance. Gross sales is not a measure that is recognized under accounting principles generally accepted in
The following table reconciles the non-GAAP financial measure of gross sales with the most directly comparable GAAP financial measure of net sales (in thousands):
| Three-Months Ended March 31, |
||||||
| 2019 | 2018 | |||||
| Gross sales, net of discounts and returns | $ | 1,090,426 | $ | 990,639 | ||
| Less: Promotional and other allowances | 144,435 | 139,718 | ||||
| Net Sales | $ | 945,991 | $ | 850,921 | ||
Caution Concerning Forward-Looking Statements
Certain statements made in this announcement may constitute “forward-looking statements” within the meaning of the U.S. federal securities laws, as amended, regarding the expectations of management with respect to our future operating results and other future events including revenues and profitability. The Company cautions that these statements are based on management’s current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside of the control of the Company, that could cause actual results and events to differ materially from the statements made herein. Such risks and uncertainties include, but are not limited to, the following: our ability to recognize benefits from The
(tables below)
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION | ||||||||
| FOR THE THREE-MONTHS ENDED MARCH 31, 2019 AND 2018 | ||||||||
| (In Thousands, Except Per Share Amounts) (Unaudited) |
||||||||
| Three-Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Net sales¹ | $ | 945,991 | $ | 850,921 | ||||
| Cost of sales | 372,459 | 335,664 | ||||||
| Gross profit¹ | 573,532 | 515,257 | ||||||
| Gross profit as a percentage of net sales | 60.6 | % | 60.6 | % | ||||
| Operating expenses² | 262,071 | 235,342 | ||||||
| Operating expenses as a percentage of net sales | 27.7 | % | 27.7 | % | ||||
| Operating income¹,² | 311,461 | 279,915 | ||||||
| Operating income as a percentage of net sales | 32.9 | % | 32.9 | % | ||||
| Interest and other income, net | 2,742 | 1,805 | ||||||
| Income before provision for income taxes¹,² | 314,203 | 281,720 | ||||||
| Provision for income taxes | 52,718 | 65,670 | ||||||
| Income taxes as a percentage of income before taxes | 16.8 | % | 23.3 | % | ||||
| Net income¹,² | $ | 261,485 | $ | 216,050 | ||||
| Net income as a percentage of net sales | 27.6 | % | 25.4 | % | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.48 | $ | 0.38 | ||||
| Diluted | $ | 0.48 | $ | 0.38 | ||||
| Weighted average number of shares of common stock and common stock equivalents: | ||||||||
| Basic | 542,768 | 566,000 | ||||||
| Diluted | 548,273 | 574,129 | ||||||
| Case sales (in thousands) (in 192-ounce case equivalents) | 101,284 | 92,315 | ||||||
| Average net sales per case3 | $ | 9.29 | $ | 9.17 | ||||
¹Includes
²Includes
3Excludes Other segment net sales of
| MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| AS OF MARCH 31, 2019 AND DECEMBER 31, 2018 | ||||||||
| (In Thousands, Except Par Value) (Unaudited) | ||||||||
| March 31, 2019 |
December 31, 2018 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 618,344 | $ | 637,513 | ||||
| Short-term investments | 263,697 | 320,650 | ||||||
| Accounts receivable, net | 596,661 | 484,562 | ||||||
| Inventories | 300,780 | 277,705 | ||||||
| Prepaid expenses and other current assets | 63,685 | 44,909 | ||||||
| Prepaid income taxes | 64,133 | 38,831 | ||||||
| Total current assets | 1,907,300 | 1,804,170 | ||||||
| PROPERTY AND EQUIPMENT, net | 241,232 | 243,051 | ||||||
| DEFERRED INCOME TAXES | 85,215 | 85,687 | ||||||
| GOODWILL | 1,331,643 | 1,331,643 | ||||||
| OTHER INTANGIBLE ASSETS, net | 1,042,839 | 1,045,878 | ||||||
| OTHER ASSETS | 47,622 | 16,462 | ||||||
| Total Assets | $ | 4,655,851 | $ | 4,526,891 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 267,735 | $ | 248,760 | ||||
| Accrued liabilities | 117,350 | 112,507 | ||||||
| Accrued promotional allowances | 167,700 | 145,741 | ||||||
| Accrued distributor terminations | 10,272 | - | ||||||
| Deferred revenue | 43,591 | 44,045 | ||||||
| Accrued compensation | 18,211 | 39,903 | ||||||
| Income taxes payable | 6,113 | 10,189 | ||||||
| Total current liabilities | 630,972 | 601,145 | ||||||
| DEFERRED REVENUE | 303,241 | 312,224 | ||||||
| OTHER LIABILITIES | 22,818 | 2,621 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock - $0.005 par value; 1,250,000 shares authorized; 634,841 shares issued and 543,547 shares outstanding as of March 31, 2019; 630,970 shares issued and 543,676 shares outstanding as of December 31, 2018 |
3,174 | |
3,155 | |||||
| Additional paid-in capital | 4,288,638 | 4,238,170 | ||||||
| Retained earnings | 4,176,130 | 3,914,645 | ||||||
| Accumulated other comprehensive loss | (34,125 | ) | (32,864 | ) | ||||
| Common stock in treasury, at cost; 91,294 and 87,294 shares as of March 31, 2019 and December 31, 2018, respectively |
(4,734,997 | ) | |
(4,512,205 |
) |
|||
| Total stockholders' equity | 3,698,820 | 3,610,901 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 4,655,851 | $ | 4,526,891 | ||||
| CONTACTS: | Rodney C. Sacks |
| Chairman and Chief Executive Officer | |
| (951) 739-6200 | |
| Hilton H. Schlosberg | |
| Vice Chairman | |
| (951) 739-6200 | |
| Roger S. Pondel / Judy Lin Sfetcu | |
| PondelWilkinson Inc. | |
| (310) 279-5980 |
Source: Monster Beverage Corporation