CORONA, Calif., Aug. 08, 2017 (GLOBE NEWSWIRE) -- Monster Beverage Corporation (NASDAQ:MNST) today reported financial results for the three- and six-months ended June 30, 2017.
Second Quarter Results
Net sales for the 2017 second quarter increased 9.6 percent to $907.1 million from $827.5 million in the same period last year. Gross sales for the 2017 second quarter increased 9.8 percent to $1.04 billion from $945.8 million a year ago. Unfavorable currency exchange rates reduced net sales by approximately $8.2 million and gross sales by approximately $11.6 million in the 2017 second quarter. The comparable 2016 second quarter net and gross sales included $5.0 million of accelerated deferred revenue related to distributor transitions. Excluding accelerated recognition of deferred revenue from the comparable 2016 second quarter, net and gross sales for the 2017 second quarter increased 10.3 percent and 10.4 percent, respectively.
Net sales for the Company’s Monster Energy® Drinks segment, which is comprised of the Company’s Monster Energy® drinks, Monster HydroTM energy drinks and Mutant® Super Soda drinks, increased 9.7 percent to $815.3 million for the 2017 second quarter, from $743.5 million for the same period last year. The comparable 2016 second quarter net sales for the Company’s Monster Energy® Drinks segment included $5.0 million of accelerated deferred revenue related to distributor transitions. Net sales for the Company’s Strategic Brands segment, which includes the various energy drink brands acquired from The Coca-Cola Company, increased 10.6 percent to $85.6 million for the 2017 second quarter, from $77.4 million in the comparable 2016 quarter. Net sales for the Company’s Other segment, which includes certain products of American Fruits & Flavors (“AFF”) sold to independent third parties, were $6.2 million for the 2017 second quarter, compared with $6.6 million in the 2016 second quarter.
Net sales to customers outside the United States increased 23.8 percent to $247.9 million in the 2017 second quarter, from $200.2 million in the corresponding quarter last year.
Gross profit, as a percentage of net sales, for the 2017 second quarter, increased to 64.3 percent from 62.6 percent for the comparable 2016 second quarter.
Operating expenses for the 2017 second quarter were $233.5 million, compared with $229.3 million in the 2016 second quarter. Included in operating expenses were distributor termination expenses of $0.2 million and $25.3 million for the 2017 and 2016 second quarters, respectively. Included in operating expenses for the comparable 2016 second quarter were AFF transaction related expenses of $3.6 million and stock repurchase expenses of $1.5 million.
Distribution costs as a percentage of net sales were 3.0 percent for the 2017 second quarter, compared with 3.2 percent in the second quarter last year.
Selling expenses as a percentage of net sales for the 2017 second quarter were 12.6 percent, compared with 11.2 percent in the second quarter last year.
General and administrative expenses for the 2017 second quarter were $91.4 million, or 10.1 percent of net sales, compared with $110.0 million, or 13.3 percent of net sales, for the comparable 2016 second quarter. Included in general and administrative expenses were distributor termination expenses of $0.2 million and $25.3 million for the 2017 and 2016 second quarters, respectively. Included in general and administrative expenses for the comparable 2016 second quarter were AFF transaction related expenses of $3.6 million and stock repurchase expenses of $1.5 million. General and administrative expenses, excluding distributor terminations, AFF transaction expenses and stock repurchase expenses, were 10.1 percent of net sales for the 2017 second quarter, compared with 9.6 percent of net sales for the comparable 2016 second quarter. Stock-based compensation (a non-cash item) was $12.8 million for the second quarter of 2017, compared with $11.5 million in the second quarter last year.
Operating income for the 2017 second quarter increased to $350.0 million from $288.5 million in the comparable 2016 quarter.
The effective tax rate for the 2017 second quarter was 35.9 percent, compared with 36.1 percent in the same period last year.
Net income for the 2017 second quarter increased 20.9 percent to $222.6 million from $184.2 million in the same period last year. Net income per diluted share for the 2017 second quarter increased 28.6 percent to $0.39 from $0.30 in the second quarter of 2016.
Rodney C. Sacks, Chairman and Chief Executive Officer, said: “We are pleased to report that gross sales in the quarter exceeded a record $1 billion, marking a milestone in the Company’s progress. In the quarter, we continued with the strategic alignment of our distribution system with Coca-Cola system bottlers. During the second quarter, we launched 14 new operating units in China, with the remaining two operating units having launched in July. We also successfully transitioned Hong Kong and Macau to Coca-Cola bottlers. We are planning to launch or transition the Monster brand in other countries later this year and relaunch in India. During the quarter, we launched Monster HydroTM energy drinks in a unique PET can in the United States and in a PET bottle in the United Kingdom and Ireland, as well as Monster Energy® Lewis Hamilton 44 in a number of countries in Europe, Mutant® Super Soda White Lightning® in the United States, as well as Juice Monster® Mango Loco in the United States. Further new product launches are planned for 2017 and 2018.
“Our 2017 second quarter results continued to be adversely impacted by unfavorable currency exchange rates as well as production shortages of our Java Monster® and Muscle Monster® products,” Sacks added.
