Monster Beverage Reports 2016 Fourth Quarter & Full Year Financial Results
Source Monster Beverage Corporation
CORONA, Calif., March 01, 2017 (GLOBE NEWSWIRE) -- Monster Beverage Corporation (NASDAQ:MNST) today reported financial results for the fourth quarter and fiscal year ended December 31, 2016.
2016 Fourth Quarter Net sales for the 2016 fourth quarter increased 16.8 percent to $753.8 million, from $645.4 million in the same period last year. Gross sales for the 2016 fourth quarter increased 14.2 percent to $848.8 million, from $743.2 million in the same period last year. Comparative net and gross sales amounts for the 2015 fourth quarter were negatively impacted by advance purchases made by the Company's customers due to a pre-announced price increase, effective August 31, 2015 ("Advance Purchases"), on certain of the Company's Monster Energy® brand energy drinks. The Company estimates that net and gross sales for the 2015 fourth quarter were reduced by approximately $11.0 million and $12.0 million, respectively, as a result of such Advance Purchases. Net and gross sales for the 2016 fourth quarter, after adjusting the 2015 fourth quarter comparatives for Advance Purchases, increased by 14.8 percent and 12.4 percent, respectively. Unfavorable currency exchange rates reduced net sales by approximately $3.3 million and gross sales by approximately $5.9 million in the 2016 fourth quarter.
Net sales for the Company's Monster Energy® Drinks segment, which is comprised of the Company's Monster Energy® drinks, as well as Mutant® Super Soda drinks, increased 17.0 percent to $684.4 million for the 2016 fourth quarter, from $585.1 million for the same period last year. Net sales for the Company's Strategic Brands segment, which includes the various energy drink brands acquired from The Coca-Cola Company, increased 6.9 percent to $64.5 million for the 2016 fourth quarter, from $60.4 million in the comparable 2015 quarter. Net sales for the Company's Other segment, which includes certain products of American Fruits & Flavors sold to independent third parties, were $4.7 million for the 2016 fourth quarter. There were no net sales for the Other segment for the 2015 fourth quarter.
Net sales to customers outside the United States rose to $193.5 million in the 2016 fourth quarter, from $145.3 million in the corresponding quarter in 2015.
Gross profit, as a percentage of net sales, for the 2016 fourth quarter, increased to 66.1 percent from 62.5 percent for the comparable 2015 fourth quarter.
Operating expenses for the 2016 fourth quarter were $246.4 million, compared with $174.9 million in the 2015 fourth quarter. Included in operating expenses were distributor termination expenses of $46.3 million and $3.3 million for the 2016 and 2015 fourth quarters, respectively.
Distribution costs as a percentage of net sales were 3.2 percent for the 2016 fourth quarter, the same as in the 2015 fourth quarter.
Selling expenses as a percentage of net sales for the 2016 fourth quarter were 12.0 percent, compared with 12.9 percent in the 2015 fourth quarter.
General and administrative expenses for the 2016 fourth quarter were $132.2 million or 17.5 percent of net sales, compared with $70.9 million, or 11.0 percent of net sales, for the comparable 2015 fourth quarter. General and administrative expenses, excluding distributor termination expenses, were 11.4 percent of net sales for the 2016 fourth quarter compared with 10.5 percent of net sales for the comparable 2015 fourth quarter. Stock-based compensation (a non-cash item) was $12.1 million for the fourth quarter of 2016, compared with $9.0 million in the 2015 fourth quarter.
Operating income for the 2016 fourth quarter increased 10.2 percent to $251.7 million, from $228.4 million in the 2015 fourth quarter.
The effective tax rate for the 2016 fourth quarter was 29.9 percent, compared with 39.5 percent in the same period last year. The decrease in the effective tax rate was due in part to an increase in the domestic production deduction as well as an increase in the stock compensation deduction due to the adoption of new accounting guidance effective January 1, 2016, under which excess tax benefits are recorded in net income. These excess tax benefits were previously recorded in additional paid-in-capital. The amount of excess tax benefits recorded in income for the 2016 fourth quarter was $13.7 million.
Net income for the 2016 fourth quarter increased 24.7 percent to $172.9 million, from $138.7 million in the same period last year.
Net income per diluted share for the 2016 fourth quarter increased 32.6 percent to $0.30, from $0.22 in the fourth quarter of 2015. The Company estimates that distributor termination expenses in the 2016 fourth quarter of $46.3 million reduced reported diluted earnings per share by approximately $0.05 per share, after tax. There was no diluted earnings per share impact of distributor termination expenses, after tax, in the comparable 2015 fourth quarter.
