Monster Beverage (MNST) Q2 2012 Earnings Call August 08, 2012 5:00 pm ET Executives Rodney C. Sacks - Chairman, Chief Executive Officer, Member of Executive Committee and Chairman of Hansen Beverage Company Analysts Philip Terpolilli - Longbow Research LLC Mark S. Astrachan - Stifel, Nicolaus & Co., Inc., Research Division Judy E. Hong - Goldman Sachs Group Inc., Research Division Kaumil S. Gajrawala - UBS Investment Bank, Research Division Alec Patterson Presentation Operator
An explanation of the non-GAAP measure 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 August 8, 2012. A copy of this information is also available on our website, at www.monsterbevcorp.com, in the Financial Information section.While the beverage industry, in general, experienced softness in second quarter sales volumes in North America and Europe, the energy category in our principal markets in the United States grew in the high teens in the second quarter, slightly lower than the growth rate of the energy category in the United States in the first quarter. Overall, the company had a good second quarter with record gross sales up 28.7% to $678.9 million. Net sales up 28.2% to $592.6 million and operating income up 28.1% to $169.8 million. Diluted earnings per share increased 31% from $0.45 per share in the second quarter of 2011 to $0.59 per share. We also recently commenced reporting sales information for the United States market based on an expanded sample of outlets, which now includes Walmart; dollar stores, such as Family Dollar, Dollar General and Fred's; DeCA military stores and club stores namely Sam's and BJ's, but excluding Costco. On this call and in the future, when we discuss the Nielsen reports for the United States for all outlets combined, the reports and information contained therein will be based on this expanded sample. This will not affect the reports and information covering sales in the convenience and gas channel, the grocery and or drug channels which may, from time to time, be referred to individually. As this will be the first time that we referred to reports based on the expanded sample, we will provide figures on both basis.
According to the Nielsen reports for the 13 weeks through July 21, 2012, for all outlets combined, namely convenience, grocery, drug and mass merchandisers, on an expanded basis I just described, including Wal-Mart, dollar stores, DeCA military stores and club stores, but excluding Costco, sales in dollars in the energy drink category, including shots, increased 16.5% versus the same period a year ago. Sales of Monster grew 24.9% in the 13-week period, while sales of Red Bull increased by 19.3%. Sales of Rockstar increased by 7.2%, and sales of 5-Hour increased by 4.2%. Sales of Amp put down 2.4%, NOS increased 13.8% off a low base and sales of Full Throttle increased 6.5%.For comparative purposes, according to the Nielsen reports, for the 13-week through July 21, 2012, on the previously reported basis for all outlets combined, namely convenience, grocery, drug and mass merchandisers, excluding Walmart, sales in dollars in the energy drink category including shots increased 16.4% versus the same period a year ago. Sales in Monster grew 23.6% in the 13-week period, while sales of Red Bull increased by 19.8%. Sales of Rockstar increased by 7.6% and sales of 5-Hour increased by 6.2%. Sales of Amp were down 2.2%, NOS increased 13.2% off a low base, and sales of Full Throttle increased 6%. According to the Nielsen reports for the 4 weeks ended July 21, 2012, sales of energy drink in the convenience and gas channel in dollars increased by 12.5% over the comparable 4-week period in 2011. Sales of Monster increased by 20.2% over the comparable period last year, while sales of Red Bull increased by 16.2% over the comparable period last year. Rockstar was up 5.9%, while 5-Hour was up 0.7%. Read the rest of this transcript for free on seekingalpha.com