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Hansen Natural Reports Record 2010 Second Quarter Financial Results

Hansen Natural Corporation

Based in Corona, California, Hansen Natural Corporation markets and distributes Hansen's® natural sodas, sparkling beverages, apple juice and juice blends, fruit juice smoothies, multi-vitamin juice drinks in aseptic packaging, iced teas, energy drinks, Junior Juice® juices and water beverages, Blue Sky® brand beverages, Monster Energy® brand energy drinks, Nitrous™ Monster Energy® brand energy drinks, Monster Hitman™ energy shooters, Java Monster™ brand non-carbonated coffee + energy drinks, X-Presso Monster™ brand non-carbonated espresso energy drinks, Peace Tea™ iced teas, Lost® Energy™ brand energy drinks, Rumba®, Samba and Tango brand energy juices, Vidration™ brand vitamin enhanced waters and Admiral™ iced teas. For more information visit www.hansens.com and www.monsterenergy.com .

Note Regarding Use of Non-GAAP Measures

Gross sales, although used internally by management as an indicator of operating performance, should not be considered as an alternative to net sales, which is determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and should not be used alone as an indicator of operating performance in place of net sales. Additionally, gross sales may not be comparable to similarly titled measures used by other companies as gross sales has been defined by our internal reporting requirements. However, gross sales are used by management to monitor operating performance including sales performance of particular products, salesperson performance, product growth or declines and our overall performance. The use of gross sales allows evaluation of sales performance before the effect of any promotional items, which can mask certain performance issues. Management believes the presentation of gross sales allows a more comprehensive presentation of our operating performance. Gross sales may not be realized in the form of cash receipts as promotional payments and allowances may be deducted from payments received from customers.                                                                            
HANSEN NATURAL CORPORATION AND SUBSIDIARIES             
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION        
FOR THE THREE- AND SIX-MONTHS ENDED JUNE 30, 2010 AND 2009         
(In Thousands, Except Per Share Amounts) (Unaudited)              
    Three-Months Ended June 30,   Six-Months Ended June 30,
    2010   2009   2010   2009
Gross sales, net of discounts & returns* $ 415,297    $ 345,830   $ 685,864    $ 624,684
Less: Promotional and other allowances** 49,596   45,580   82,052   80,228
                 
Net sales   365,701   300,250   603,812   544,456
Cost of sales   172,351   138,421   285,907   252,448
                 
Gross profit    193,350   161,829   317,905   292,008
Gross profit margin as a percentage of net sales   52.9%   53.9%   52.6%   53.6%
                 
Operating expenses   83,674   69,046   157,443   133,448
Operating expenses as a percentage of net sales   22.9%   23.0%   26.1%   24.5%
                 
Operating income   109,676   92,783   160,462   158,560
Operating income as a percentage of net sales   30.0%   30.9%   26.6%   29.1%
                 
Other income (expense):                
Interest and other income, net   1,034   401   1,443   1,418
Loss on investments and put option, net     (713)   --   (137)   (3,539)
Total other income (expense) 321   401   1,306   (2,121)
               
Income before provision for income taxes 109,997   93,184   161,768    156,439
                 
Provision for income taxes   46,159   35,895   65,367    57,584
                 
Net income   $ 63,838    $ 57,289   $ 96,401    $ 98,855
Net income as a percentage of net sales   17.5%   19.1%   16.0%   18.2%
                 
Net income per common share:                
 Basic   $ 0.72   $ 0.63   $ 1.09   $ 1.09
 Diluted   $ 0.69   $ 0.60   $ 1.04   $ 1.04
                 
Weighted average number of shares of common stock    and common stock equivalents:                
 Basic   88,587   90,604   88,467   90,519
 Diluted   92,969   95,282   92,983   95,285
               
Case sales (in thousands)  (in 192-ounce case equivalents) 35,861   29,256   60,066    52,724
Average net sales price per case   $ 10.20   $ 10.26   $ 10.05    $  10.33

*Gross sales, although used internally by management as an indicator of operating performance, should not be considered as an alternative to net sales, which is determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"), and should not be used alone as an indicator of operating performance in place of net sales. Additionally, gross sales may not be comparable to similarly titled measures used by other companies as gross sales has been defined by our internal reporting requirements. However, gross sales are used by management to monitor operating performance including sales performance of particular products, salesperson performance, product growth or declines and our overall performance. The use of gross sales allows evaluation of sales performance before the effect of any promotional items, which can mask certain performance issues. Management believes the presentation of gross sales allows a more comprehensive presentation of our operating performance. Gross sales may not be realized in the form of cash receipts as promotional payments and allowances may be deducted from payments received from customers.

** Although the expenditures described in this line item are determined in accordance with GAAP and meet GAAP requirements, the disclosure thereof does not conform with GAAP presentation requirements. Additionally, the presentation of promotional and other allowances may not be comparable to similar items presented by other companies. The presentation of promotional and other allowances facilitates an evaluation of the impact thereof on the determination of net sales and illustrates the spending levels incurred to secure such sales. Promotional and other allowances constitute a material portion of our marketing activities.                                                                                                        
HANSEN NATURAL CORPORATION AND SUBSIDIARIES        
CONDENSED CONSOLIDATED BALANCE SHEETS        
AS OF JUNE 30, 2010 AND DECEMBER 31, 2009         
(In Thousands, Except Par Value) (Unaudited)         
         
    June 30, 2010   December 31, 2009
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents   $  409,911    $  328,349
Short-term investments   61,662     18,487
Trade accounts receivable, net   127,564     104,206
Distributor receivables   3,916     4,699
Inventories   139,233     108,143
Prepaid expenses and other current assets   16,577     11,270
Deferred income taxes   10,350    10,350
 Total current assets   769,213     585,504
         
INVESTMENTS   59,484     80,836
PROPERTY AND EQUIPMENT, net   32,038     33,314
DEFERRED INCOME TAXES   61,065     65,678
INTANGIBLES, net   39,752     33,512
OTHER ASSETS   3,343    1,226
  Total Assets   $ 964,895    $ 800,070
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES:        
Accounts payable   $ 87,504   $ 48,863
Accrued liabilities   34,003   14,174
Deferred revenue   9,452   9,125
Accrued distributor terminations   2,553   2,977
Accrued compensation   5,978   7,623
Current portion of debt   135   206
Income taxes payable   19,293   761
 Total current liabilities   158,918   83,729
         
DEFERRED REVENUE   127,513   131,388
         
STOCKHOLDERS' EQUITY:        
Common stock -- $0.005 par value; 120,000 shares authorized;  97,917 shares issued and 88,166 outstanding as of June 30, 2010;  97,285 shares issued and 88,159 outstanding as of December 31, 2009  490       486
Additional paid-in capital   157,204   137,040
Retained earnings   766,797   670,396
Accumulated other comprehensive loss   (4,185)   (4,667)
Common stock in treasury, at cost; 9,751 shares as of  June 30, 2010 and 9,126 shares as of December 31, 2009 (241,842)     (218,302)
 Total stockholders' equity   678,464   584,953
  Total Liabilities and Stockholders' Equity   $ 964,895   $ 800,070

CONTACT:  Hansen Natural Corporation 
          Rodney C. Sacks, Chairman and Chief Executive Officer
            (951) 739-6200
          Hilton H. Schlosberg, Vice Chairman
            (951) 739-6200

          PondelWilkinson Inc.
          Roger S. Pondel
          Judy Lin Sfetcu
          (310) 279-5980

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