Hansen Natural CEO Discusses Q3 2010 Results - Earnings Call Transcript
Hansen Natural Corporation (
)
Q3 2010 Earnings Call
October 04, 2010 05:00 pm ET
Executives
Rodney Sacks - Chief Chairman and CEO
Hilton Schlosberg - President, CFO
Analysts
Judy Hong - Goldman Sachs
Kaumil Gajrawala - UBS
Mark Astrachan - Stifel Nicolaus
Presentation
Operator
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Hansen Natural Corporation Q3 2009 Earnings Call Transcript
Good afternoon, ladies and gentlemen, Thank you for standing by. Welcome to the Hansen Natural Corporation third quarter 2010 financial results conference call. During today's presentation, all parties will be in a listen-only mode, following the presentation, the conference will be open for questions. (Operator Instructions)
I would now like to turn the conference over to Mr. Rodney Sacks, Chief Chairman and Chief Executive Officer. Please go ahead.
Rodney Sacks
Good afternoon, ladies and gentlemen, thank you for taking this call. I'm Rodney Sacks, Schlosberg, our Vice Chairman and President is with me today, as he becomes Vice President of Finance.
Before we begin, I would like to remind listeners that certain statements made during this call may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of our Securities Exchange Act of 1934, as amended, and which are based on currently available information regarding the expectations of management with respect to revenues, profitability, future business, future events, financial performance, and trends.
Management 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 the control of the company that may cause actual results to differ materially from the forward-looking statements made herein.
Please refer to our filings with the Securities and Exchange Commission including our most recent Annual Report on Form 10-K filed on March 1, 2010, and our most recent quarterly reports on Form 10-Q, including the sections contained therein entitled risk factors and forward-looking statements for a discussion on specific risks and uncertainties that may affect our performance. The company assumes no obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.
An explanation of the non-GAAP measures of gross sales and certain expenditures, which may be mentioned during the course of this call, is provided in the notes designated with asterisks in the condensed consolidated statements of income and other information attached to the earnings release dated November 4, 2010. A copy of this information is also available on our website, www.hansens.com in the Investor Relations Section.
We are continuing to see an improvement in the beverage market in general in North America and certain countries internationally. In particular, the energy category is building momentum with increased growth, principally in the important convenience and gas store channel, and to a lesser degree in the grocery and drug channels.
That said, the macro environment continues to be challenging, as we still face economic uncertainty and high unemployment levels in the United States and many of the other countries in which we are selling Monster, and which appears to be keeping a consumer lead recovery at bay in many regions, particularly in developed markets such as the United States and Europe, which includes the U.K.
While we believe these conditions are likely to persist, we are confident that we will be able to continue to grow the Monster brand. Our ability to accelerate profitable growth in this quarter demonstrates our ability to leverage the significant opportunities available to the Monster brand.
We will also continue to focus on innovation and introduce new products to the marketplace. During the third quarter, we launched Monster Energy Absolutely Zero to address increased consumer demand for zero calorie beverage products. We are enthusiastic about the prospects for Absolutely Zero, and since its launch, Absolutely Zero has been well received by distributors, retail customers and consumers.
During the quarter, we also introduced Monster Energy Import Light, which is a lower calorie version of our Monster Energy Import Energy drink in 18.6 ounce BRE which is a Ball Re-sealable End cans, which has also been well received by the market. We also introduced a Dub Edition Monster Energy drink in that package, which we believe will enable us to achieve greater preserves and visibility on store sales for our three packages in the 18.6 ounce BRE Re-sealable can size.
To facilitate the introduction of new products for 2011, we are planning to launch a number of new products in the fourth quarter of this year, these products include Monster M3, which is a super concentrate Monster Energy drink in a 5-ounce glass bottle, as well as a new energy shot under the WORX brand name, WORX is spell W-O-R-X, which will be launched in 2-ounce bottles in two variants, original and extra strength.
During the fourth quarter, we are planning to reposition our Java Monster line by replacing three flavors with new improved flavors as well as discontinuing to Java Monster flavors. And we are also introducing X-Presso Monster in a larger 12-ounce slim can and adding a new X-Presso Monster product called Midnight.
We believe that an additional X-Presso Monster SKU together with the use of a larger sized can will improve the visibility on shelf of our original 6.7-ounce single X-Presso Monster product, which was packaged in a small 8-ounce can.
During the fourth quarter, we are also planning to reposition our Nitrous Monster Energy line to better communicate it's attributes to consumers, as Monster Energy extra strength that utilizes Nitrous technology.
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