Monster Beverage Corp. Reports 28.7 Percent Second Quarter Sales Gain

Monster Beverage Corp. reported financial results for the second quarter ended June 30, 2012.

Gross sales for the 2012 second quarter increased 28.7 percent to $678.9 million from $527.5 million in the same period last year. Net sales for the three-months ended June 30, 2012 increased 28.2 percent to $592.6 million from $462.1 million in the same quarter a year ago.

Gross profit, as a percentage of net sales, for the 2012 second quarter was 51.8 percent, compared with 52.8 percent for the comparable 2011 second quarter. Operating expenses for the 2012 second quarter increased to $137.2 million from $111.7 million in the same quarter last year.

Distribution costs as a percentage of net sales were 4.1 percent for both the 2012 and 2011 second quarters.

Selling expenses as a percentage of net sales were 11.6 percent for the 2012 second quarter, compared with 12.9 percent in the same quarter a year ago.

General and administrative expenses as a percentage of net sales for the 2012 second quarter were 7.5 percent, compared with 7.2 percent for the corresponding quarter last year. Stock-based compensation (a non-cash item) was $7.1 million in the second quarter of 2012, compared with $4.1 million for the same period in 2011.

Operating income for the 2012 second quarter increased 28.1 percent to $169.8 million from $132.5 million in the 2011 comparable quarter.

The effective tax rate for the 2012 second quarter was 35.3 percent compared with 36.5 percent in the same quarter last year.

Net income for the 2012 second quarter increased 30.3 percent to $109.8 million from $84.2 million in the same quarter last year. Net income per diluted share increased 31.0 percent to $0.59, from $0.45 per diluted share in the 2011 comparable quarter.

Net sales for the Company's DSD segment for the 2012 second quarter increased 30.1 percent to $568.0 million from $436.7 million for the same period in 2011.

Gross sales to customers outside the U.S. rose to $153.4 million in the 2012 second quarter from $102.6 million in the corresponding quarter in 2011.

Rodney C. Sacks, chairman and chief executive officer, said that both the energy drink category in the U.S. and Europe and the Monster Energy® brand in particular, continue to experience positive growth, with the Monster Energy® brand increasing in excess of category growth in both the U.S. and Europe. On the company's global expansion, Sacks said: "We are continuing to expand into new international markets with retail sales of Monster Energy® commencing in Ecuador, Hong Kong, Japan, Macau and Slovenia in the second quarter. We are planning launches in additional international markets later this year and in 2013."

For the first half of 2012, gross sales rose to $1,196.2 million from $935.1 million for the comparable period a year earlier. Net sales for the first six months of 2012 increased to $1,047.2 million from $818.6 million in the same period in 2011.

Gross profit as a percentage of net sales was 52.3 percent for the first six months of 2012, compared with 52.5 percent for the same period in 2011.

Operating expenses for the six-months ended June 30, 2012, increased to $252.1 million from $208.8 million in the same period last year. Operating income rose to $296.1 million, from $220.9 million in the first six months of 2011.

Net income for the first half of 2012 was $185.9 million, or $1.00 per diluted share, compared with $139.3 million, or $0.74 per diluted share, for the same period last year.

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