MNST Monster Beverage Corporation

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 7, 2024

 

Monster Beverage Corporation

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-18761		47-1809393
(Commission File Number)		(IRS Employer Identification No.)

 

1 Monster Way

Corona, California 92879

(Address of principal executive offices and zip code)

 

(951) 739 - 6200

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: 

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		MNST		Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 7, 2024, Monster Beverage Corporation (the “Company”) issued a press release relating to its financial results for the second quarter ended June 30, 2024, a copy of which is furnished as Exhibit 99.1 hereto. The press release did not include certain financial statements, related footnotes and certain other financial information that will be filed with the Securities and Exchange Commission as part of the Company’s Quarterly Report on Form 10-Q.

 

On August 7, 2024, the Company will conduct a conference call at 2:00 p.m. Pacific Time. The conference call will be open to all interested investors through a live audio web broadcast via the internet at www.monsterbevcorp.com in the “Events & Presentations” section. For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on the website.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit 99.1	Press Release dated August 7, 2024.
Exhibit 104	The cover page from this Current Report on Form 8-K, formatted in iXBRL (Inline eXtensible Business Reporting Language).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Monster Beverage Corporation
Date: August 7, 2024	/s/ Hilton H. Schlosberg
	Hilton H. Schlosberg
	Vice Chairman of the Board of Directors and Co-Chief Executive Officer

 

 

 

Exhibit 99.1

 

	PondelWilkinson Inc.
	2945 Townsgate Road, Suite 200
	Westlake Village, CA 91361
Investor Relations	T            (310) 279 5980
Strategic Public Relations	W        www.pondel.com

 

NEWS RELEASE

CONTACTS:

Rodney C. Sacks Chairman and Co-Chief Executive Officer (951) 739-6200   Hilton H. Schlosberg Vice Chairman and Co-Chief Executive Officer (951) 739-6200   Roger S. Pondel / Judy Lin PondelWilkinson Inc. (310) 279-5980

 

MONSTER BEVERAGE REPORTS 2024 SECOND QUARTER FINANCIAL RESULTS

 

-- Record Second Quarter Net Sales Rise 2.5 Percent to $1.90 Billion --

-- Net Sales, Excluding the Alcohol Brands Segment, Adjusted for Adverse Changes in Foreign Currency of $67.7 Million, Rise 7.4 Percent --

-- Second Quarter Diluted EPS Increases 5.0 Percent --

 

Corona, CA – August 7, 2024 – Monster Beverage Corporation (NASDAQ: MNST) today reported financial results for the three- and six-months ended June 30, 2024.

 

Second Quarter Results

 

Net sales for the 2024 second quarter increased 2.5 percent to $1.90 billion, from $1.85 billion in the same period last year. Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the 2024 second quarter of $67.7 million ($34.0 million related to Argentina). Net sales on a foreign currency adjusted basis increased 6.1 percent (7.4 percent excluding the Alcohol Brands segment) in the 2024 second quarter.

 

Net sales for the Company’s Monster Energy® Drinks segment, which primarily includes the Company’s Monster Energy® drinks, Reign Total Body Fuel® high performance energy drinks, Reign Storm® total wellness energy drinks, Bang Energy® drinks and Monster Tour Water®, increased 3.3 percent to $1.74 billion for the 2024 second quarter, from $1.69 billion for the 2023 second quarter. Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the Monster Energy® Drinks segment of approximately $53.6 million for the 2024 second quarter ($34.0 million related to Argentina). Net sales on a foreign currency adjusted basis for the Monster Energy® Drinks segment increased 6.5 percent in the 2024 second quarter (4.5 percent exclusive of Argentina’s impact).

 

 

Net sales for the Company’s Strategic Brands segment, which primarily includes the various energy drink brands acquired from The Coca-Cola Company, as well as the Company’s affordable energy brands Predator® and Fury®, increased 9.6 percent to $109.2 million for the 2024 second quarter, from $99.7 million in the 2023 second quarter. Net changes in foreign currency exchange rates had an unfavorable impact on net sales for the Strategic Brands segment of approximately $14.0 million for the 2024 second quarter. Net sales on a foreign currency adjusted basis for the Strategic Brands segment increased 23.6 percent in the 2024 second quarter.

 

Net sales for the Alcohol Brands segment, which is comprised of The Beast Unleashed®, Nasty Beast™ Hard Tea, as well as various craft beers and hard seltzers, decreased 31.9 percent to $41.6 million for the 2024 second quarter, from $61.1 million in the 2023 second quarter. The decrease in net sales was primarily due to decreased sales by volume of flavored malt beverages.

 

Net sales for the Company’s Other segment, which primarily includes certain products of American Fruits and Flavors, LLC, a wholly owned subsidiary of the Company, sold to independent third-party customers (the “AFF Third-Party Products”), decreased 4.2 percent to $7.0 million for the 2024 second quarter, from $7.3 million in the 2023 second quarter.

 

Net sales to customers outside the United States increased 4.3 percent to $746.0 million in the 2024 second quarter, from $715.4 million in the 2023 second quarter. Such sales were approximately 39 percent of total net sales in both the 2024 and 2023 second quarters. Net sales to customers outside the United States, on a foreign currency adjusted basis, increased 13.7 percent in the 2024 second quarter (9.0 percent exclusive of Argentina’s impact).

 

Gross profit as a percentage of net sales for the 2024 second quarter was 53.6 percent, compared with 52.5 percent in the 2023 second quarter. The increase in gross profit as a percentage of net sales was primarily the result of decreased freight-in costs, pricing actions in certain markets and lower aluminum can costs, partially offset by production inefficiencies.

 

Operating expenses for the 2024 second quarter were $492.3 million, compared with $450.4 million in the 2023 second quarter. Operating expenses as a percentage of net sales for the 2024 second quarter were 25.9 percent, compared with 24.3 percent in the 2023 second quarter.

 

Distribution expenses for the 2024 second quarter were $87.4 million, or 4.6 percent of net sales, compared with $82.0 million, or 4.4 percent of net sales, in the 2023 second quarter.

 

Selling expenses for the 2024 second quarter were $192.1 million, or 10.1 percent of net sales, compared with $172.6 million, or 9.3 percent of net sales, in the 2023 second quarter.

 

General and administrative expenses for the 2024 second quarter were $212.8 million, or 11.2 percent of net sales, compared with $195.8 million, or 10.6 percent of net sales, for the 2023 second quarter. Stock-based compensation was $18.8 million for the 2024 second quarter, compared with $18.6 million in the 2023 second quarter.

 

Operating income for the 2024 second quarter was $527.2 million, compared with $523.8 million in the 2023 second quarter.

 

The effective tax rate for the 2024 second quarter was 22.9 percent, compared with 23.2 percent in the 2023 second quarter.

 

Net income for the 2024 second quarter increased 2.8 percent to $425.4 million, from $413.9 million in the 2023 second quarter. Net income per diluted share for the 2024 second quarter increased 5.0 percent to $0.41, from $0.39 in the second quarter of 2023.

 

 

Hilton H. Schlosberg, Vice Chairman and Co-Chief Executive Officer, said, “The energy drink category in the United States and in certain other countries experienced lower growth rates in the second quarter. Retailers have reported a reduction in convenience store foot traffic and we have seen a shift at retail towards more mass and dollar channels.  Other beverage and consumer packaged product companies have also seen a tighter consumer spending environment and weaker demand in the quarter.

 

“The energy category globally continues to grow and has demonstrated resilience, as we believe that consumers view energy drinks as an ‘affordable luxury.’

 

“Growth opportunities in penetration, per capita consumption, along with consumers’ growing need for energy are positive trends for the category. We continue to expand our sales in non-Nielsen measured channels.

 

“We achieved another quarter of solid revenue growth, with record second quarter sales. The quarter was again impacted by unfavorable foreign currency exchange rates in certain markets.

 

“Gross profit margins improved in the second quarter, compared with the 2023 second quarter.  This improvement was primarily the result of decreased freight-in costs, pricing actions in certain markets and lower aluminum can costs, partially offset by production inefficiencies. On a sequential quarterly basis, gross margins were 0.5 percent below first quarter margins primarily as a result of higher allowances, certain of which we believe are non-recurring as well as production inefficiencies.

 

“As previously reported, we will be taking an approximately 5 percent price increase on our core brands and packages in the United States, effective November 1, 2024,” Schlosberg added.

 

Rodney C. Sacks, Chairman and Co-Chief Executive Officer, said, “Innovation continues to play a key role in our strategy and globally, our innovation has been well received by our bottlers/distributors, wholesalers, retailers and consumers. We are planning to launch Monster Energy® Ultra Vice Guava™ in the United States in October.

 

“Response to Predator Energy® Gold Strike, launched in April 2024 in selected provinces in China, has been positive and plans are underway to continue its rollout into more markets in China later this year and in 2025.

 

“The Beast Unleashed® is now available in all 50 states. Nasty Beast™, our new hard tea line is now available in 49 states. We are currently launching a second variety pack of the Beast Unleashed® in a 12-pack of slim 12-oz cans, comprising of Mean Green, Pink Poison, Gnarly Grape and Killer Sunrise.

 

“Our innovation pipeline for both our non-alcoholic and alcoholic beverages remains robust,” Sacks said.

 

2024 Six-Months Results

 

Net sales for the six-months ended June 30, 2024 increased 6.9 percent to $3.80 billion, from $3.55 billion in the comparable period last year. Net changes in foreign currency exchange rates had an unfavorable impact of $132.0 million on net sales for the six-months ended June 30, 2024. Net sales on a foreign currency adjusted basis increased 10.6 percent in the six-months ended June 30, 2024.

 

Gross profit as a percentage of net sales for the six-months ended June 30, 2024 was 53.9 percent, compared with 52.7 percent in the comparable period last year.

 

Operating expenses for the six-months ended June 30, 2024 were $977.5 million, compared with $863.2 million in the comparable period last year.

 

Operating income for the six-months ended June 30, 2024 increased to $1.07 billion, from $1.01 billion in the comparable period last year.

 

The effective tax rate for the six-months ended June 30, 2024 was 23.2 percent, compared with 21.7 percent in the comparable period last year.

 

 

Net income for the six-months ended June 30, 2024 increased 6.9 percent to $867.4 million, from $811.3 million in the comparable period last year.  Net income per diluted share for the six-months ended June 30, 2024 was $0.83, compared with $0.77 in the comparable period last year.

 

Tender Offer and Share Repurchases

 

On June 10, 2024, the Company announced the final results of its $3.0 billion modified “Dutch auction” tender offer. The Company accepted for purchase approximately 56.6 million shares of common stock at a purchase price of $53.00 per share for an aggregate purchase price of approximately $3.0 billion, excluding fees and expenses relating to the tender offer. In addition, during the three-months ended June 30, 2024, the Company repurchased approximately 2.2 million shares of its common stock at an average purchase price of $49.55 per share for total consideration of approximately $107.7 million, excluding broker commissions. Subsequent to June 30, 2024, the Company repurchased approximately 3.9 million shares of its common stock at an average purchase price of $49.59 per share for total consideration of approximately $192.2 million, excluding broker commissions. As of August 6, 2024, approximately $342.4 million remained available for repurchase under the previously authorized repurchase program.

 

Investor Conference Call

 

The Company will host an investor conference call today, August 7, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call will be open to all interested investors through a live audio web broadcast via the internet at www.monsterbevcorp.com in the “Events & Presentations” section. For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on the website.

 

Monster Beverage Corporation

 

Based in Corona, California, Monster Beverage Corporation is a holding company and conducts no operating business except through its consolidated subsidiaries. The Company’s subsidiaries develop and market energy drinks, including Monster Energy® drinks, Monster Energy Ultra® energy drinks, Juice Monster® Energy + Juice energy drinks, Java Monster® non-carbonated coffee + energy drinks, Rehab® Monster® non-carbonated energy drinks, Monster Energy® Nitro energy drinks, Reign® Total Body Fuel high performance energy drinks, Reign Storm® total wellness energy drinks, NOS® energy drinks, Full Throttle® energy drinks, Bang Energy® drinks, BPM® energy drinks, BU® energy drinks, Burn® energy drinks, Gladiator® energy drinks, Live+® energy drinks, Mother® energy drinks, Nalu® energy drinks, Play® and Power Play® (stylized) energy drinks, Relentless® energy drinks, Samurai® energy drinks, Ultra Energy® drinks, Predator® energy drinks and Fury® energy drinks. The Company’s subsidiaries also develop and market still and sparkling waters under the Monster Tour Water® brand name. The Company’s subsidiaries also develop and market craft beers, hard seltzers and flavored malt beverages under a number of brands, including Jai Alai® IPA, Dale’s Pale Ale®, Dallas Blonde®, Wild Basin® hard seltzers, The Beast Unleashed® and Nasty Beast™ Hard Tea. For more information visit www.monsterbevcorp.com.

 

 

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: the impact of the military conflict in Ukraine, including supply chain disruptions, volatility in commodity prices, increased economic uncertainty and escalating geopolitical tensions; our extensive commercial arrangements with The Coca-Cola Company (TCCC) and, as a result, our future performance’s substantial dependence on the success of our relationship with TCCC; our ability to implement our growth strategy, including expanding our business in existing and new sectors; the inherent operational risks presented by the alcoholic beverage industry that may not be adequately covered by insurance or lead to litigation relating to the abuse or misuse of our products; our ability to successfully integrate Bang Energy® businesses and assets, transition the acquired beverages to the Company’s primary distributors, and retain and increase sales of the acquired beverages; exposure to significant liabilities due to litigation, legal or regulatory proceedings; intellectual property injunctions; unanticipated litigation concerning the Company’s products; the current uncertainty and volatility in the national and global economy and changes in demand due to such economic conditions, including a slowdown in consumer spending generally or reduced demand for consumer goods; changes in consumer preferences; adverse publicity surrounding obesity, alcohol consumption and other health concerns related to our products, product safety and quality; activities and strategies of competitors, including the introduction of new products and competitive pricing and/or marketing of similar products; changes in the price and/or availability of raw materials; other supply issues, including the availability of products and/or suitable production facilities including limitations on co-packing availability including retort production; disruption to our manufacturing facilities and operations related to climate, labor, production difficulties, capacity limitations, regulations or other causes; product distribution and placement decisions by retailers; the effects of retailer and/or bottler/distributor consolidation on our business; unilateral decisions by bottlers/distributors, buying groups, convenience chains, grocery chains, mass merchandisers, specialty chain stores, e-commerce retailers, e-commerce websites, club stores and other customers to discontinue carrying all or any of our products that they are carrying at any time, restrict the range of our products they carry, impose restrictions or limitations on the sale of our products and/or the sizes of containers for our products and/or devote less resources to the sale of our products; changes in governmental regulation; the imposition of new and/or increased excise sales and/or other taxes on our products; our ability to adapt to the changing retail landscape with the rapid growth in e-commerce retailers and e-commerce websites; the impact of proposals to limit or restrict the sale of energy or alcohol drinks to minors and/or persons below a specified age and/or restrict the venues and/or the size of containers in which energy or alcohol drinks can be sold; possible recalls of our products and/or the consequences and costs of defective production; or our ability to absorb, reduce or pass on to our bottlers/distributors increases in commodity costs, including freight costs. For a more detailed discussion of these and other risks that could affect our operating results, see the Company’s reports filed with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2023 and our subsequently filed quarterly report. The Company’s actual results could differ materially from those contained in the forward-looking statements. The Company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

# # #

(tables below)

 

 

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER INFORMATION

FOR THE THREE- AND SIX-MONTHS ENDED JUNE 30, 2024 AND 2023

(In Thousands, Except Per Share Amounts) (Unaudited)

 

		Three-Months Ended								Six-Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Net sales¹		$	1,900,597			$	1,854,961			$	3,799,695			$	3,553,891
Cost of sales			881,091				880,739				1,753,061				1,681,820
Gross profit¹			1,019,506				974,222				2,046,634				1,872,071
Gross profit as a percentage of net sales			53.6	%			52.5	%			53.9	%			52.7	%
Operating expenses			492,343				450,417				977,480				863,201
Operating expenses as a percentage of net sales			25.9	%			24.3	%			25.7	%			24.3	%
Operating income¹			527,163				523,805				1,069,154				1,008,870
Operating income as a percentage of net sales			27.7	%			28.2	%			28.1	%			28.4	%
Interest and other income, net			24,376				15,159				60,131				27,653
Income before provision for income taxes¹			551,539				538,964				1,129,285				1,036,523
Provision for income taxes			126,170				125,093				261,867				225,208
Income taxes as a percentage of income before taxes			22.9	%			23.2	%			23.2	%			21.7	%
Net income		$	425,369			$	413,871			$	867,418			$	811,315
Net income as a percentage of net sales			22.4	%			22.3	%			22.8	%			22.8	%
Net income per common share:
Basic		$	0.41			$	0.40			$	0.84			$	0.78
Diluted		$	0.41			$	0.39			$	0.83			$	0.77
Weighted average number of shares of common stock and common stock equivalents:
Basic			1,029,268				1,047,065				1,035,175				1,045,993
Diluted			1,037,378				1,060,093				1,044,363				1,059,667
Energy drink case sales (in thousands) (in 192-ounce case equivalents)			212,194				198,406				423,624				380,850
Average net sales per case2		$	8.73			$	9.00			$	8.71			$	9.02

 

¹Includes $10.0 million for both the three-months ended June 30, 2024 and 2023, related to the recognition of deferred revenue. Includes $19.9 million for both the six-months ended June 30, 2024 and 2023, related to the recognition of deferred revenue.

 

²Excludes Alcohol Brands segment and Other segment net sales.

 

 

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(In Thousands, Except Par Value) (Unaudited)

 

		June 30, 2024				December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	1,564,734			$	2,297,675
Short-term investments			-				955,605
Accounts receivable, net			1,362,398				1,193,964
Inventories			834,404				971,406
Prepaid expenses and other current assets			129,303				116,195
Prepaid income taxes			63,458				54,151
Total current assets			3,954,297				5,588,996
INVESTMENTS			-				76,431
PROPERTY AND EQUIPMENT, net			960,962				890,796
DEFERRED INCOME TAXES, net			187,269				175,003
GOODWILL			1,417,941				1,417,941
OTHER INTANGIBLE ASSETS, net			1,433,326				1,427,139
OTHER ASSETS			107,109				110,216
Total Assets		$	8,060,904			$	9,686,522
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$	511,137			$	564,379
Accrued liabilities			213,905				183,988
Accrued promotional allowances			319,757				269,061
Deferred revenue			44,377				41,914
Accrued compensation			60,357				87,392
Income taxes payable			10,990				14,955
Total current liabilities			1,160,523				1,161,689
DEFERRED REVENUE			192,354				204,251
DEFERRED INCOME TAXES			28,896				-
OTHER LIABILITIES			64,068				91,838
LONG-TERM DEBT			748,740				-
STOCKHOLDERS' EQUITY:
Common stock - $0.005 par value; 5,000,000 shares authorized; 1,125,330 shares issued and 983,380 shares outstanding as of June 30, 2024; 1,122,592 shares issued and 1,041,571 shares outstanding as of December 31, 2023			5,627				5,613
Additional paid-in capital			5,068,291				4,975,115
Retained earnings			6,807,154				5,939,736
Accumulated other comprehensive loss			(182,304	)			(125,337	)
Common stock in treasury, at cost; 141,950 shares and 81,021 shares as of June 30, 2024 and December 31, 2023, respectively			(5,832,445	)			(2,566,383	)
Total stockholders' equity			5,866,323				8,228,744
Total Liabilities and Stockholders’ Equity		$	8,060,904			$	9,686,522

 

 

v3.24.2.u1

Cover	Aug. 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 07, 2024
Entity File Number	001-18761
Entity Registrant Name	Monster Beverage Corporation
Entity Central Index Key	0000865752
Entity Tax Identification Number	47-1809393
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1 Monster Way
Entity Address, City or Town	Corona
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92879
City Area Code	951
Local Phone Number	739 - 6200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	MNST
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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