CORONA, Calif., Feb. 25, 2016 (GLOBE NEWSWIRE) -- Monster Beverage Corporation today reported financial results for the three- and twelve-months ended December 31, 2015.
2015 Fourth Quarter
Gross sales for the 2015 fourth quarter increased 6.7 percent to $743.2 million from $696.3 million in the same period last year. Net sales for the 2015 fourth quarter increased 6.6 percent to $645.4 million from $605.6 million in the same period last year. Unfavorable currency exchange rates had the effect of reducing gross sales by approximately $23.1 million and net sales by approximately $19.7 million in the 2015 fourth quarter.
Gross and net sales for the three-months ended December 31, 2015 were negatively impacted by advance purchases made by customers due to a pre-announced price increase effective August 31, 2015 on certain Monster Energy® brand energy drinks. The Company estimates that the advance purchases reduced gross and net sales for the fourth quarter of 2015 by approximately$12.0 million and $11.0 million, respectively. Gross and net sales for the fourth quarter of 2015 were also impacted by destocking in certain EMEA countries.
Net sales for the Company's Finished Products segment for the 2015 fourth quarter increased 1.8 percent to $585.1 million from$574.8 million for the same period last year.
Net sales for the Company's Concentrate segment for the 2015 fourth quarter were $60.4 million. There were no corresponding sales in the comparable 2014 quarter. There were no net sales for the Company's Other Segment in the fourth quarter of 2015, as compared with net sales of $30.8 million for the same period last year.
Gross sales to customers outside the United States increased to $177.1 million in the 2015 fourth quarter from $160.1 million in the same period last year. Net sales to customers outside the United States rose to $145.3 million in the 2015 fourth quarter, from $133.8 million in the same period last year.
Gross profit, as a percentage of net sales, for the 2015 fourth quarter rose to 62.5 percent, from 54.8 percent for the same period last year.
Operating expenses for the 2015 fourth quarter increased to $174.9 million from $138.9 million in the same period last year.
Distribution costs as a percentage of net sales were 3.2 percent for the 2015 fourth quarter, compared with 4.1 percent in the same period last year.
Selling expenses as a percentage of net sales for the 2015 fourth quarter were 12.9 percent, compared with 9.3 percent in the same period last year.
General and administrative expenses for the 2015 fourth quarter were $70.9 million, or 11.0 percent of net sales, compared with$57.6 million, or 9.5 percent of net sales, for the same period last year. Stock-based compensation (a non-cash item) was $9.0 million in the 2015 fourth quarter, compared with $6.0 million in the same period last year. Included in general and administrative expenses in the 2015 fourth quarter were expenses of $6.0 million related to regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sale of the Company's Monster Energy® brand energy drinks, as compared with $2.9 million in the same period last year.
Operating income for the 2015 fourth quarter increased 18.4 percent to $228.4 million from $192.9 million in the same period last year.
The effective tax rate for the 2015 fourth quarter was 39.5 percent, compared with 34.7 percent in the same period last year.
Net income for the 2015 fourth quarter increased 10.7 percent to $138.7 million from $125.3 million in the same period last year. Net income per diluted share decreased 5.9 percent to $0.67 from $0.72 in the same period last year.
Impact of the Coca-Cola Transaction
As a result of the long-term strategic partnership entered into with The Coca-Cola Company during the second quarter of 2015, the Company incurred obligations related to distributor terminations in the amount of $3.3 million and $224.0 million during the three- and twelve-months ended December 31, 2015, respectively. Such termination costs have been expensed in full and are included in operating expenses for the corresponding periods. In addition, the Company recognized revenue of $39.8 millionrelated to the acceleration of deferred revenue associated with the terminated distributors during the year ended December 31, 2015 and incurred transaction expenses of $0.07 million and $15.5 million during the three- and twelve-months ended December 31, 2015. The Company recognized a gain on sale of its non-energy business in the amount of $161.5 million for the year endedDecember 31, 2015.
2015 Fiscal Year
For the year ended December 31, 2015, gross sales rose to $3.11 billion. Excluding acceleration of deferred revenue, gross sales for the year ended December 31, 2015 increased by 8.4 percent to $3.07 billion, as compared with $2.83 billion in the prior year. Net sales for the year ended December 31, 2015 increased to $2.72 billion. Excluding acceleration of deferred revenue, net sales for the year ended December 31, 2015 rose to $2.68 billion, as compared with $2.46 billion in the prior year. Unfavorable currency exchange rates had the effect of reducing gross sales by approximately $102.4 million and net sales by approximately $84.3 million in the twelve-months ended December 31, 2015.
Gross profit as a percentage of net sales was 60.0 percent for the year ended December 31, 2015, compared with 54.4 percent a year earlier.
Operating expenses for the year ended December 31, 2015 were $900.1 million. Excluding distributor termination costs and transaction expenses, operating expenses were $660.6 million, as compared with $587.6 million in the prior year. Included in operating expenses for the year ended December 31, 2015 were expenses of $17.8 million related to regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sale of the Company's Monster Energy® brand energy drinks, as compared with $20.6 million in the prior year.
Operating income for the year ended December 31, 2015 was $893.7 million. Excluding the acceleration of deferred revenue, the gain on the sale of the non-energy business, distributor termination costs and transaction expenses, operating income increased to $931.9 million in the year ended December 31, 2015 from $752.2 million in the prior year.
The effective tax rate for the year ended December 31, 2015 was 38.7 percent, compared with 35.2 percent in the prior year.
Net income for the year ended December 31, 2015 was $546.7 million, or $2.84 per diluted share. Net income for the year ended December 31, 2015, excluding the acceleration of deferred revenue, the gain on the sale of the non-energy business, distributor termination costs and transaction expenses, on a tax affected basis, increased to $575.2 million, or $2.99 per diluted share, compared with $487.9 million or $2.80 per diluted share for the same period last year.
Rodney C. Sacks, Chairman and Chief Executive Officer, said: "Earlier this week, we reported on the acquisition of our principal flavor supplier, American Fruits and Flavors. The transaction secures our ownership of the unique intellectual property of many of our key flavors. We have known and worked with American Fruits and Flavors as a valued supplier for more than 20 years.
"We are pleased to note continued progress on the implementation of our strategic alignment with Coca-Cola bottlers internationally. We have launched distribution of our Monster Energy® drinks with Coca-Cola bottlers in Korea, Portugal, Russia,Spain and a number of other markets in the past few months and are making good progress thus far. We are also pleased to report that we have reached agreement with a number of other international Coca-Cola bottlers for distribution of the Monster Energy® brand. In the United States, we are seeing improvement in distribution in All Measured Channels and have expanded the number of outlets in which Monster Energy® drinks are available.
"Distributor transitions and uncertainties in portions of our international non-Coca-Cola distribution network limited further revenue growth during the quarter. Changes in foreign currency exchange rates also continued to adversely affect our results," Sacks added. Full report.
