Company Quick10K Filing
Monster Beverage
Price57.81 EPS2
Shares548 P/E37
MCap31,704 P/FCF39
Net Debt-718 EBIT1,124
TEV30,987 TEV/EBIT28
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-02-28
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-01
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-08
10-K 2016-12-31 Filed 2017-03-01
10-Q 2016-09-30 Filed 2016-11-07
10-Q 2016-06-30 Filed 2016-08-05
10-Q 2016-03-31 Filed 2016-05-02
10-K 2015-12-31 Filed 2016-02-29
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-10
10-Q 2015-03-31 Filed 2015-05-11
10-K 2014-12-31 Filed 2015-03-02
10-Q 2014-09-30 Filed 2014-11-07
10-Q 2014-06-30 Filed 2014-08-08
10-Q 2014-03-31 Filed 2014-05-12
10-K 2013-12-31 Filed 2014-03-03
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-01
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-02-29
10-Q 2011-09-30 Filed 2011-11-09
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-01
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-03-01
8-K 2020-06-03
8-K 2020-05-07
8-K 2020-03-13
8-K 2020-02-27
8-K 2020-01-09
8-K 2019-11-07
8-K 2019-08-07
8-K 2019-06-28
8-K 2019-06-06
8-K 2019-06-06
8-K 2019-05-02
8-K 2019-04-16
8-K 2019-02-26
8-K 2019-01-17
8-K 2018-12-07
8-K 2018-11-07
8-K 2018-08-07
8-K 2018-06-07
8-K 2018-05-30
8-K 2018-05-08
8-K 2018-04-13
8-K 2018-03-16
8-K 2018-02-28
8-K 2018-01-18
8-K 2018-01-16

MNST 10Q Quarterly Report

Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
EX-10.1 mnst-20200331xex10d1.htm
EX-10.2 mnst-20200331xex10d2.htm
EX-31.1 mnst-20200331xex31d1.htm
EX-31.2 mnst-20200331xex31d2.htm
EX-32.1 mnst-20200331xex32d1.htm
EX-32.2 mnst-20200331xex32d2.htm

Monster Beverage Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
10.08.06.04.02.00.02012201420172020
Assets, Equity
1.21.00.70.50.20.02012201420172020
Rev, G Profit, Net Income
1.71.00.2-0.5-1.3-2.02012201420172020
Ops, Inv, Fin

000000865752--12-312020Q1falsetrueNASDAQLarge Accelerated Filerfalsefalse3P1YP14YP5YP1YP5Y3400000000865752us-gaap:TreasuryStockMember2020-01-012020-03-310000865752us-gaap:TreasuryStockMember2019-01-012019-03-310000865752mnst:November2019RepurchasePlanMember2020-01-012020-03-310000865752mnst:March2020RepurchasePlanMember2020-01-012020-03-310000865752mnst:February2019RepurchasePlanMember2020-01-012020-03-310000865752mnst:March2020RepurchasePlanMember2020-03-310000865752mnst:March2020RepurchasePlanMember2020-03-130000865752srt:MaximumMembermnst:November2019RepurchasePlanMember2019-11-060000865752mnst:February2019RepurchasePlanMember2019-02-260000865752us-gaap:CommonStockMember2020-01-012020-03-310000865752us-gaap:CommonStockMember2019-01-012019-03-310000865752us-gaap:RetainedEarningsMember2020-03-310000865752us-gaap:AdditionalPaidInCapitalMember2020-03-310000865752us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310000865752us-gaap:RetainedEarningsMember2019-12-310000865752us-gaap:AdditionalPaidInCapitalMember2019-12-310000865752us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000865752us-gaap:RetainedEarningsMember2019-03-310000865752us-gaap:AdditionalPaidInCapitalMember2019-03-310000865752us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-310000865752us-gaap:RetainedEarningsMember2018-12-310000865752us-gaap:AdditionalPaidInCapitalMember2018-12-310000865752us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310000865752us-gaap:TreasuryStockMember2020-03-310000865752us-gaap:CommonStockMember2020-03-310000865752us-gaap:TreasuryStockMember2019-12-310000865752us-gaap:CommonStockMember2019-12-310000865752us-gaap:TreasuryStockMember2019-03-310000865752us-gaap:CommonStockMember2019-03-310000865752us-gaap:TreasuryStockMember2018-12-310000865752us-gaap:CommonStockMember2018-12-310000865752us-gaap:EmployeeStockOptionMember2019-01-012019-12-310000865752us-gaap:EmployeeStockOptionMember2019-12-310000865752mnst:RestrictedStockUnitsAndPerformanceShareUnitsMember2019-12-310000865752mnst:RestrictedStockUnitsAndPerformanceShareUnitsMember2019-01-012019-03-310000865752us-gaap:PerformanceSharesMember2019-01-012019-03-310000865752us-gaap:EMEAMembermnst:StrategicBrandsSegmentMember2020-01-012020-03-310000865752us-gaap:EMEAMembermnst:MonsterEnergyDrinksSegmentMember2020-01-012020-03-310000865752srt:AsiaPacificMembermnst:StrategicBrandsSegmentMember2020-01-012020-03-310000865752srt:AsiaPacificMembermnst:MonsterEnergyDrinksSegmentMember2020-01-012020-03-310000865752mnst:U.s.AndCanadaMemberus-gaap:AllOtherSegmentsMember2020-01-012020-03-310000865752mnst:U.s.AndCanadaMembermnst:StrategicBrandsSegmentMember2020-01-012020-03-310000865752mnst:U.s.AndCanadaMembermnst:MonsterEnergyDrinksSegmentMember2020-01-012020-03-310000865752mnst:LatinAmericaAndCaribbeanMembermnst:StrategicBrandsSegmentMember2020-01-012020-03-310000865752mnst:LatinAmericaAndCaribbeanMembermnst:MonsterEnergyDrinksSegmentMember2020-01-012020-03-310000865752us-gaap:EMEAMember2020-01-012020-03-310000865752us-gaap:AllOtherSegmentsMember2020-01-012020-03-310000865752srt:AsiaPacificMember2020-01-012020-03-310000865752mnst:U.s.AndCanadaMember2020-01-012020-03-310000865752mnst:StrategicBrandsSegmentMember2020-01-012020-03-310000865752mnst:MonsterEnergyDrinksSegmentMember2020-01-012020-03-310000865752mnst:LatinAmericaAndCaribbeanMember2020-01-012020-03-310000865752us-gaap:EMEAMembermnst:StrategicBrandsSegmentMember2019-01-012019-03-310000865752us-gaap:EMEAMembermnst:MonsterEnergyDrinksSegmentMember2019-01-012019-03-310000865752srt:AsiaPacificMembermnst:StrategicBrandsSegmentMember2019-01-012019-03-310000865752srt:AsiaPacificMembermnst:MonsterEnergyDrinksSegmentMember2019-01-012019-03-310000865752mnst:U.s.AndCanadaMemberus-gaap:AllOtherSegmentsMember2019-01-012019-03-310000865752mnst:U.s.AndCanadaMembermnst:StrategicBrandsSegmentMember2019-01-012019-03-310000865752mnst:U.s.AndCanadaMembermnst:MonsterEnergyDrinksSegmentMember2019-01-012019-03-310000865752mnst:LatinAmericaAndCaribbeanMembermnst:StrategicBrandsSegmentMember2019-01-012019-03-310000865752mnst:LatinAmericaAndCaribbeanMembermnst:MonsterEnergyDrinksSegmentMember2019-01-012019-03-310000865752us-gaap:EMEAMember2019-01-012019-03-310000865752us-gaap:AllOtherSegmentsMember2019-01-012019-03-310000865752srt:AsiaPacificMember2019-01-012019-03-310000865752mnst:U.s.AndCanadaMember2019-01-012019-03-310000865752mnst:StrategicBrandsSegmentMember2019-01-012019-03-310000865752mnst:MonsterEnergyDrinksSegmentMember2019-01-012019-03-310000865752mnst:LatinAmericaAndCaribbeanMember2019-01-012019-03-310000865752mnst:CocaColaCompanyMember2020-01-012020-03-310000865752mnst:CocaColaCompanyMember2019-01-012019-03-310000865752mnst:PrincipalOwnersMember2019-01-012019-03-310000865752us-gaap:VehiclesMember2020-03-310000865752us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-03-310000865752us-gaap:OfficeEquipmentMember2020-03-310000865752us-gaap:LeaseholdImprovementsMember2020-03-310000865752us-gaap:LandMember2020-03-310000865752us-gaap:FurnitureAndFixturesMember2020-03-310000865752us-gaap:EquipmentMember2020-03-310000865752us-gaap:BuildingMember2020-03-310000865752us-gaap:VehiclesMember2019-12-310000865752us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2019-12-310000865752us-gaap:OfficeEquipmentMember2019-12-310000865752us-gaap:LeaseholdImprovementsMember2019-12-310000865752us-gaap:LandMember2019-12-310000865752us-gaap:FurnitureAndFixturesMember2019-12-310000865752us-gaap:EquipmentMember2019-12-310000865752us-gaap:BuildingMember2019-12-310000865752us-gaap:EmployeeStockOptionMember2019-01-012019-03-310000865752us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-310000865752us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-03-310000865752us-gaap:AccumulatedTranslationAdjustmentMember2019-01-012019-03-310000865752us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-01-012019-03-310000865752us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310000865752us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-310000865752mnst:RealEstateLeaseArrangementMember2020-03-310000865752mnst:RealEstateLeaseArrangementMember2019-12-310000865752us-gaap:OtherLiabilitiesMember2020-03-310000865752us-gaap:OtherLiabilitiesMember2019-12-310000865752us-gaap:RetainedEarningsMember2020-01-012020-03-310000865752us-gaap:RetainedEarningsMember2019-01-012019-03-310000865752us-gaap:InventoriesMember2020-01-012020-03-310000865752us-gaap:LineOfCreditMember2018-02-280000865752us-gaap:LineOfCreditMember2018-01-310000865752srt:MinimumMember2020-03-310000865752srt:MaximumMember2020-03-310000865752us-gaap:CertificatesOfDepositMembermnst:InvestmentsMaturitiesWithin1YearMember2020-03-310000865752mnst:StrategicBrandsSegmentMember2020-03-310000865752mnst:MonsterEnergyDrinksSegmentMember2020-03-310000865752mnst:StrategicBrandsSegmentMember2019-12-310000865752mnst:MonsterEnergyDrinksSegmentMember2019-12-310000865752mnst:StrategicBrandsSegmentMember2019-03-310000865752mnst:MonsterEnergyDrinksSegmentMember2019-03-310000865752mnst:StrategicBrandsSegmentMember2018-12-310000865752mnst:MonsterEnergyDrinksSegmentMember2018-12-310000865752srt:MinimumMember2020-01-012020-03-310000865752mnst:EquipmentLeaseArrangementMember2020-03-310000865752mnst:EquipmentLeaseArrangementMember2019-12-310000865752us-gaap:AccruedLiabilitiesMember2020-03-310000865752us-gaap:AccruedLiabilitiesMember2019-12-310000865752srt:DirectorMember2020-03-310000865752srt:DirectorMember2018-12-310000865752srt:MaximumMemberus-gaap:ForeignExchangeContractMember2020-01-012020-03-310000865752us-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMembermnst:InterestAndOtherIncomeNetMember2020-01-012020-03-310000865752us-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMembermnst:InterestAndOtherIncomeNetMember2019-01-012019-03-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUsdPayRubMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveRsdPayUsdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveEurPayUsdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUSDPayZARMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUsdPayRubMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUsdPayNzdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUsdPayGbpMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUsdPayDkkMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUSDPayCOPMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccruedLiabilitiesMembermnst:ReceiveUSDPayAUDMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUSDPayZARMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUsdPaySekMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUsdPayNzdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUsdPayNokMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUsdPayGbpMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUsdPayDkkMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUSDPayCOPMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUSDPayAUDMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveSgdPayUsdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2020-03-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveUsdPaySgdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveRsdPayUsdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveNokPayUsdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:AccountsReceivableMembermnst:ReceiveEurPayUsdMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2019-12-310000865752us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2020-01-012020-03-310000865752us-gaap:OperatingSegmentsMembermnst:StrategicBrandsSegmentMember2020-01-012020-03-310000865752us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2019-01-012019-03-310000865752us-gaap:OperatingSegmentsMembermnst:StrategicBrandsSegmentMember2019-01-012019-03-310000865752us-gaap:LineOfCreditMember2020-03-310000865752mnst:ReyesCocaColaBottlingMemberus-gaap:SalesRevenueProductLineMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-03-310000865752mnst:CocaColaEuropeanPartnersMemberus-gaap:SalesRevenueProductLineMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-03-310000865752mnst:CocaColaConsolidatedIncMemberus-gaap:SalesRevenueProductLineMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-03-310000865752us-gaap:NonUsMemberus-gaap:SalesRevenueProductLineMember2020-01-012020-03-310000865752mnst:ReyesCocaColaBottlingMemberus-gaap:SalesRevenueProductLineMemberus-gaap:CustomerConcentrationRiskMember2019-01-012019-03-310000865752mnst:CocaColaEuropeanPartnersMemberus-gaap:SalesRevenueProductLineMemberus-gaap:CustomerConcentrationRiskMember2019-01-012019-03-310000865752mnst:CocaColaConsolidatedIncMemberus-gaap:SalesRevenueProductLineMemberus-gaap:CustomerConcentrationRiskMember2019-01-012019-03-310000865752us-gaap:NonUsMemberus-gaap:SalesRevenueProductLineMember2019-01-012019-03-310000865752mnst:CocaColaCompanyMember2020-03-310000865752us-gaap:VariableRateDemandObligationMemberus-gaap:ShortTermInvestmentsMember2020-03-310000865752us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMember2020-03-310000865752us-gaap:USTreasurySecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2020-03-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:ShortTermInvestmentsMember2020-03-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2020-03-310000865752us-gaap:MunicipalBondsMemberus-gaap:ShortTermInvestmentsMember2020-03-310000865752us-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2020-03-310000865752us-gaap:CommercialPaperMemberus-gaap:ShortTermInvestmentsMember2020-03-310000865752us-gaap:VariableRateDemandObligationMemberus-gaap:ShortTermInvestmentsMember2019-12-310000865752us-gaap:USTreasurySecuritiesMemberus-gaap:ShortTermInvestmentsMember2019-12-310000865752us-gaap:USTreasurySecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2019-12-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:ShortTermInvestmentsMember2019-12-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:OtherLongTermInvestmentsMember2019-12-310000865752us-gaap:MunicipalBondsMemberus-gaap:ShortTermInvestmentsMember2019-12-310000865752us-gaap:MunicipalBondsMemberus-gaap:OtherLongTermInvestmentsMember2019-12-310000865752us-gaap:CommercialPaperMemberus-gaap:ShortTermInvestmentsMember2019-12-310000865752us-gaap:CertificatesOfDepositMemberus-gaap:ShortTermInvestmentsMember2019-12-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:VariableRateDemandObligationMember2020-03-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2020-03-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-03-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:MunicipalBondsMember2020-03-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2020-03-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2020-03-310000865752us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:VariableRateDemandObligationMember2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MunicipalBondsMember2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CommercialPaperMember2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CertificatesOfDepositMember2020-03-310000865752us-gaap:FairValueInputsLevel1Member2020-03-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:VariableRateDemandObligationMember2019-12-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2019-12-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2019-12-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:MunicipalBondsMember2019-12-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2019-12-310000865752us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2019-12-310000865752us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:VariableRateDemandObligationMember2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USTreasurySecuritiesMember2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MunicipalBondsMember2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CommercialPaperMember2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:CertificatesOfDepositMember2019-12-310000865752us-gaap:FairValueInputsLevel1Member2019-12-310000865752us-gaap:CorporateNonSegmentMember2020-01-012020-03-310000865752us-gaap:CorporateNonSegmentMember2019-01-012019-03-310000865752us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310000865752us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-310000865752us-gaap:AccumulatedTranslationAdjustmentMember2020-03-310000865752us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-03-310000865752us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310000865752us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310000865752us-gaap:AccumulatedTranslationAdjustmentMember2019-03-310000865752us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-03-3100008657522019-03-310000865752us-gaap:AccumulatedTranslationAdjustmentMember2018-12-310000865752us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2018-12-3100008657522018-12-310000865752us-gaap:FairValueInputsLevel2Member2020-03-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-03-310000865752us-gaap:FairValueInputsLevel2Member2019-12-310000865752us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310000865752mnst:TcccSubsidiariesMember2020-03-310000865752mnst:TcccSubsidiariesMember2019-12-310000865752mnst:PrincipalOwnersMember2020-01-012020-03-310000865752srt:MinimumMemberus-gaap:PerformanceSharesMember2020-01-012020-03-310000865752srt:MaximumMemberus-gaap:PerformanceSharesMember2020-01-012020-03-310000865752us-gaap:PerformanceSharesMember2020-01-012020-03-310000865752srt:MaximumMember2020-01-012020-03-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter31YearsThrough40YearsMember2020-03-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter20YearsThrough30YearsMember2020-03-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2020-03-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter10YearsThrough20YearsMember2020-03-310000865752us-gaap:USTreasurySecuritiesMembermnst:InvestmentsMaturitiesWithin1YearMember2020-03-310000865752us-gaap:USTreasurySecuritiesMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2020-03-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMembermnst:InvestmentsMaturitiesWithin1YearMember2020-03-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2020-03-310000865752us-gaap:MunicipalBondsMembermnst:InvestmentsMaturitiesWithin1YearMember2020-03-310000865752us-gaap:MunicipalBondsMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2020-03-310000865752us-gaap:CommercialPaperMembermnst:InvestmentsMaturitiesWithin1YearMember2020-03-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter31YearsThrough40YearsMember2019-12-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter20YearsThrough30YearsMember2019-12-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2019-12-310000865752us-gaap:VariableRateDemandObligationMembermnst:InvestmentsMaturitiesAfter10YearsThrough20YearsMember2019-12-310000865752us-gaap:USTreasurySecuritiesMembermnst:InvestmentsMaturitiesWithin1YearMember2019-12-310000865752us-gaap:USTreasurySecuritiesMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2019-12-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMembermnst:InvestmentsMaturitiesWithin1YearMember2019-12-310000865752us-gaap:USGovernmentAgenciesDebtSecuritiesMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2019-12-310000865752us-gaap:MunicipalBondsMembermnst:InvestmentsMaturitiesWithin1YearMember2019-12-310000865752us-gaap:MunicipalBondsMembermnst:InvestmentsMaturitiesAfter1YearThrough10YearsMember2019-12-310000865752us-gaap:CommercialPaperMembermnst:InvestmentsMaturitiesWithin1YearMember2019-12-310000865752us-gaap:CertificatesOfDepositMembermnst:InvestmentsMaturitiesWithin1YearMember2019-12-310000865752us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2020-03-310000865752us-gaap:OperatingSegmentsMembermnst:StrategicBrandsSegmentMember2020-03-310000865752us-gaap:OperatingSegmentsMembermnst:MonsterEnergyDrinksSegmentMember2020-03-310000865752us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2019-12-310000865752us-gaap:OperatingSegmentsMembermnst:StrategicBrandsSegmentMember2019-12-310000865752us-gaap:OperatingSegmentsMembermnst:MonsterEnergyDrinksSegmentMember2019-12-3100008657522019-01-012019-12-310000865752us-gaap:EmployeeStockOptionMember2020-01-012020-03-310000865752mnst:RestrictedStockUnitsAndPerformanceShareUnitsMember2020-01-012020-03-310000865752us-gaap:EmployeeStockOptionMember2020-03-310000865752mnst:RestrictedStockUnitsAndPerformanceShareUnitsMember2020-03-310000865752us-gaap:OperatingSegmentsMembermnst:MonsterEnergyDrinksSegmentMember2020-01-012020-03-310000865752us-gaap:OperatingSegmentsMembermnst:MonsterEnergyDrinksSegmentMember2019-01-012019-03-3100008657522019-01-012019-03-310000865752mnst:TcccSubsidiariesMembermnst:MonsterEnergyDrinksSegmentMember2020-01-012020-03-310000865752mnst:TcccSubsidiariesMembermnst:MonsterEnergyDrinksSegmentMember2019-01-012019-03-310000865752us-gaap:OperatingExpenseMembermnst:TcccRelatedPartiesAndTcccIndependentBottlersMember2020-01-012020-03-310000865752mnst:TcccSubsidiariesAndTcccRelatedPartiesMember2020-01-012020-03-310000865752us-gaap:OperatingExpenseMembermnst:TcccRelatedPartiesAndTcccIndependentBottlersMember2019-01-012019-03-310000865752mnst:TcccSubsidiariesAndTcccRelatedPartiesMember2019-01-012019-03-310000865752us-gaap:SubsequentEventMember2020-04-3000008657522020-03-3100008657522019-12-3100008657522020-04-3000008657522020-01-012020-03-31xbrli:sharesiso4217:USDmnst:planxbrli:puremnst:directoriso4217:USDxbrli:sharesmnst:segment

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2020

Commission File Number 001-18761

MONSTER BEVERAGE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

47-1809393

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

1 Monster Way

Corona, California 92879

(Address of principal executive offices) (Zip code)

(951) 739 - 6200

(Registrant’s telephone number, including area code)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  X   No ___

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  X   No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ___ No   X 

The registrant had 526,563,592 shares of common stock, par value $0.005 per share, outstanding as of April 30, 2020.

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

MARCH 31, 2020

INDEX

Part I.

FINANCIAL INFORMATION

Page No.

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019

3

Condensed Consolidated Statements of Income for the Three-Months Ended March 31, 2020 and 2019

4

Condensed Consolidated Statements of Comprehensive Income for the Three-Months Ended March 31, 2020 and 2019

5

Condensed Consolidated Statements of Stockholders’ Equity for the Three-Months Ended March 31, 2020 and 2019

6

Condensed Consolidated Statements of Cash Flows for the Three-Months Ended March 31, 2020 and 2019

7

Notes to Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

43

Item 4.

Controls and Procedures

43

Part II.

OTHER INFORMATION

Item 1.

Legal Proceedings

43

Item 1A.

Risk Factors

43

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

45

Item 3.

Defaults Upon Senior Securities

46

Item 4.

Mine Safety Disclosures

46

Item 5.

Other Information

46

Item 6.

Exhibits

47

Signatures

48

2

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2020 AND DECEMBER 31, 2019

(In Thousands, Except Par Value) (Unaudited)

March 31, 

December 31, 

    

2020

    

2019

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

701,836

$

797,957

Short-term investments

 

233,513

533,063

Accounts receivable, net

 

670,570

540,330

Inventories

 

352,305

360,731

Prepaid expenses and other current assets

 

71,865

54,868

Prepaid income taxes

 

18,633

29,360

Total current assets

 

2,048,722

2,316,309

INVESTMENTS

13,922

12,905

PROPERTY AND EQUIPMENT, net

 

295,570

298,640

DEFERRED INCOME TAXES, net

 

84,777

84,777

GOODWILL

 

1,331,643

1,331,643

OTHER INTANGIBLE ASSETS, net

 

1,053,107

1,052,105

OTHER ASSETS

 

53,756

53,973

Total Assets

$

4,881,497

$

5,150,352

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

305,529

$

274,045

Accrued liabilities

 

145,224

114,075

Accrued promotional allowances

 

171,406

166,761

Deferred revenue

 

44,844

44,237

Accrued compensation

 

21,827

47,262

Income taxes payable

 

12,711

14,717

Total current liabilities

 

701,541

661,097

DEFERRED REVENUE

 

278,393

287,469

OTHER LIABILITIES

30,617

30,505

COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS' EQUITY:

Common stock - $0.005 par value; 1,250,000 shares authorized; 637,104 shares issued and 526,839 shares outstanding as of March 31, 2020; 636,460 shares issued and 536,698 shares outstanding as of December 31, 2019

 

3,186

3,182

Additional paid-in capital

 

4,428,580

4,397,511

Retained earnings

 

5,301,315

5,022,480

Accumulated other comprehensive loss

 

(62,682)

(32,387)

Common stock in treasury, at cost; 110,265 shares and 99,762 shares as of March 31, 2020 and December 31, 2019, respectively

 

(5,799,453)

(5,219,505)

Total stockholders’ equity

 

3,870,946

4,171,281

Total Liabilities and Stockholders’ Equity

$

4,881,497

$

5,150,352

See accompanying notes to condensed consolidated financial statements.

3

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE-MONTHS ENDED MARCH 31, 2020 AND 2019

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

Three-Months Ended

March 31, 

    

2020

    

2019

NET SALES

$

1,062,097

$

945,991

COST OF SALES

 

424,901

 

372,459

GROSS PROFIT

 

637,196

 

573,532

OPERATING EXPENSES

 

272,208

 

262,071

OPERATING INCOME

 

364,988

 

311,461

INTEREST and OTHER INCOME, net

 

872

 

2,742

INCOME BEFORE PROVISION FOR INCOME TAXES

 

365,860

 

314,203

PROVISION FOR INCOME TAXES

87,025

52,718

NET INCOME

$

278,835

$

261,485

NET INCOME PER COMMON SHARE:

Basic

$

0.52

$

0.48

Diluted

$

0.52

$

0.48

WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS:

Basic

 

536,061

 

542,768

Diluted

 

540,518

 

548,273

See accompanying notes to condensed consolidated financial statements.

4

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTHS ENDED MARCH 31, 2020 AND 2019

(In Thousands) (Unaudited)

    

Three-Months Ended

March 31, 

2020

    

2019

Net income, as reported

$

278,835

$

261,485

Other comprehensive loss:

Change in foreign currency translation adjustment

 

(30,599)

 

(1,381)

Available-for-sale investments:

Change in net unrealized gains

 

304

 

120

Reclassification adjustment for net gains included in net income

 

 

Net change in available-for-sale investments

 

304

 

120

Other comprehensive loss

 

(30,295)

 

(1,261)

Comprehensive income

$

248,540

$

260,224

See accompanying notes to condensed consolidated financial statements.

5

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE-MONTHS ENDED MARCH 31, 2020 AND 2019

(In Thousands) (Unaudited)

Accumulated

Additional

Other

Total

Common stock

Paid-in

Retained

Comprehensive

Treasury stock

Stockholders'

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

    

Shares

    

Amount

    

Equity

Balance, December 31, 2019

 

636,460

$

3,182

$

4,397,511

$

5,022,480

$

(32,387)

 

(99,762)

$

(5,219,505)

$

4,171,281

Stock-based compensation

 

 

 

17,098

 

 

 

 

 

17,098

Exercise of stock options

 

644

 

4

 

13,971

 

 

 

 

 

13,975

Unrealized gain, net on available-for-sale securities

 

 

 

 

 

304

 

 

 

304

Repurchase of common stock

 

 

 

 

 

 

(10,503)

 

(579,948)

 

(579,948)

Foreign currency translation

 

 

 

 

 

(30,599)

 

 

 

(30,599)

Net income

 

 

 

 

278,835

 

 

 

 

278,835

Balance, March 31, 2020

 

637,104

$

3,186

$

4,428,580

$

5,301,315

$

(62,682)

 

(110,265)

$

(5,799,453)

$

3,870,946

Accumulated

Additional

Other

                

Total

Common stock

Paid-in

Retained

Comprehensive

Treasury stock

Stockholders'

    

Shares

    

Amount

    

Capital

    

Earnings

    

Loss

    

Shares

    

Amount

    

Equity

Balance, December 31, 2018

 

630,970

$

3,155

$

4,238,170

$

3,914,645

$

(32,864)

 

(87,294)

$

(4,512,205)

$

3,610,901

Stock-based compensation

 

 

 

15,324

 

 

 

 

 

15,324

Exercise of stock options

 

3,871

 

19

 

35,144

 

 

 

 

 

35,163

Unrealized gain, net on available-for-sale securities

 

 

 

 

 

120

 

 

 

120

Repurchase of common stock

 

 

 

 

 

 

(4,000)

 

(222,792)

 

(222,792)

Foreign currency translation

 

 

 

 

 

(1,381)

 

 

 

(1,381)

Net income

 

 

 

 

261,485

 

 

 

 

261,485

Balance, March 31, 2019

 

634,841

$

3,174

$

4,288,638

$

4,176,130

$

(34,125)

 

(91,294)

$

(4,734,997)

$

3,698,820

See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTHS ENDED MARCH 31, 2020 AND 2019

(In Thousands) (Unaudited)

Three-Months Ended

March 31, 

    

2020

    

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

278,835

$

261,485

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

 

16,546

14,870

Gain on disposal of property and equipment

 

(58)

(115)

Impairment of intangibles

3,000

Stock-based compensation

 

17,098

15,324

Deferred income taxes

 

472

Effect on cash of changes in operating assets and liabilities:

Accounts receivable

 

(147,660)

(116,426)

Distributor receivables

 

176

2,923

Inventories

 

1,037

(24,004)

Prepaid expenses and other assets

 

(18,081)

(21,492)

Prepaid income taxes

 

8,078

(25,224)

Accounts payable

 

19,328

18,565

Accrued liabilities

 

34,500

(2,262)

Accrued promotional allowances

 

9,439

23,103

Accrued distributor terminations

 

(282)

10,272

Accrued compensation

 

(24,807)

(21,832)

Income taxes payable

 

(1,552)

(4,125)

Other liabilities

(192)

1,338

Deferred revenue

 

(4,273)

(9,476)

Net cash provided by operating activities

 

191,132

123,396

CASH FLOWS FROM INVESTING ACTIVITIES:

Sales of available-for-sale investments

 

513,534

232,387

Purchases of available-for-sale investments

 

(214,697)

(175,314)

Purchases of property and equipment

 

(11,119)

(8,485)

Proceeds from sale of property and equipment

 

217

184

(Increase) decrease in intangibles

 

(6,811)

298

Increase in other assets

 

(1,148)

(2,291)

Net cash provided by investing activities

 

279,976

46,779

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on debt

 

(733)

(393)

Issuance of common stock

 

13,975

35,163

Purchases of common stock held in treasury

 

(559,210)

(222,792)

Net cash used in financing activities

 

(545,968)

(188,022)

Effect of exchange rate changes on cash and cash equivalents

 

(21,261)

(1,322)

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

(96,121)

(19,169)

CASH AND CASH EQUIVALENTS, beginning of period

 

797,957

637,513

CASH AND CASH EQUIVALENTS, end of period

$

701,836

$

618,344

SUPPLEMENTAL INFORMATION:

Cash paid during the period for:

Interest

$

11

$

15

Income taxes

$

79,993

$

82,002

See accompanying notes to condensed consolidated financial statements.

7

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTHS ENDED MARCH 31, 2020 AND 2019

(In Thousands) (Unaudited) (Continued)

SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS

Included in accrued liabilities as of March 31, 2020 and 2019 were $12.9 million and $12.3 million, respectively, related to additions to other intangible assets.

Included in accounts payable as of March 31, 2020 were $20.7 million of treasury stock repurchases.

See accompanying notes to condensed consolidated financial statements.

8

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Per Share Amounts) (Unaudited)

1.

BASIS OF PRESENTATION

Reference is made to the Notes to Consolidated Financial Statements, in Monster Beverage Corporation and Subsidiaries (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2019 for a summary of significant accounting policies utilized by the Company and its consolidated subsidiaries and other disclosures, which should be read in conjunction with this Quarterly Report on Form 10-Q (“Form 10-Q”).

The Company’s condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and Securities and Exchange Commission (“SEC”) rules and regulations applicable to interim financial reporting.  They do not include all the information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP.  The information set forth in these interim condensed consolidated financial statements for the three-months ended March 31, 2020 and 2019, respectively, is unaudited and reflects all adjustments, which include only normal recurring adjustments and which in the opinion of management are necessary to make the interim condensed consolidated financial statements not misleading.  Results of operations for periods covered by this report may not necessarily be indicative of results of operations for the full year.

The preparation of financial statements in conformity with GAAP necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from these estimates.

2.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently issued accounting pronouncements not yet adopted

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes”, as part of its simplification initiative to reduce the cost and complexity in accounting for income taxes. ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU No. 2019-12 on its financial position, results of operations and liquidity.

Recently adopted accounting pronouncements

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles–Goodwill and Other–Internal–Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract, with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU No. 2018-15 was effective for the Company on a prospective or retrospective basis beginning on January 1, 2020. The adoption of ASU No. 2018-15 did not have a material impact on the Company’s financial position, results of operations and liquidity.

In August 2018, the FASB issued ASU No. 2018-14, “Compensation–Retirement Benefits–Defined Benefit Plans–General (Topic 715): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU No. 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. ASU No. 2018-14 is effective for the Company on a retrospective basis beginning in the year ending December 31, 2020. The adoption of ASU No. 2018-14 did not have a material impact on the Company’s financial position, results of operations and liquidity.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure

9

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Per Share Amounts) (Unaudited)

requirements. ASU No. 2018-13 disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU No. 2018-13 was effective for the Company beginning on January 1, 2020. Certain disclosures in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. The adoption of ASU No. 2018-13 did not have a material impact on the Company’s financial position, results of operations and liquidity.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the requirement to calculate the implied fair value of goodwill, but rather requires an entity to record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of ASU No. 2017-04 did not have a material impact on the Company’s financial position, results of operations and liquidity.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The accounting standard changes the methodology for measuring credit losses on financial instruments and the timing when such losses are recorded. ASU No. 2016-13 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s disclosures, financial position, results of operations and liquidity.

3.

REVENUE RECOGNITION

The Company has three operating and reportable segments: (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of the Company’s Monster Energy® drinks and Reign Total Body Fuel® high performance energy drinks (ii) Strategic Brands segment (“Strategic Brands”), which is primarily comprised of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in 2015 as well as the Company’s affordable energy brands, and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits and Flavors, LLC, a wholly-owned subsidiary of the Company, to independent third-party customers (the “AFF Third-Party Products”).

The Company’s Monster Energy® Drinks segment generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage bottlers/distributors (“bottlers/distributors”). In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, drug stores, foodservice customers, value stores, e-commerce retailers and the military.

The Company’s Strategic Brands segment primarily generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold by such bottlers to other bottlers/distributors and to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores, value stores, e-commerce retailers and the military. To a lesser extent, the Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers/distributors.

The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Certain of the Company’s bottlers/distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, control of the Company’s products passes to such bottlers/distributors when they notify the Company that they have taken possession or transferred the relevant portion of the Company’s finished goods. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of March 31, 2020 and December 31, 2019.

The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers.

10

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Per Share Amounts) (Unaudited)

Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses.

Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to the Company’s bottlers/distributors or retail customers including, but not limited to the following:

discounts granted off list prices to support price promotions to end-consumers by retailers;
reimbursements given to the Company’s bottlers/distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products;
the Company’s agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities;
the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers, club stores and/or wholesalers;
incentives given to the Company’s bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals;
discounted or free products;
contractual fees given to the Company’s bottlers/distributors related to sales made directly by the Company to certain customers that fall within the bottlers’/distributors’ sales territories; and
commissions paid to TCCC based on the Company’s sales to certain wholly-owned subsidiaries of TCCC (the “TCCC Subsidiaries”) and/or to certain companies accounted for under the equity method by TCCC (the “TCCC Related Parties”).

The Company’s promotional allowance programs with its bottlers/distributors and/or retailers are executed through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, typically ranging from one week to one year. The Company’s promotional and other allowances are calculated based on various programs with bottlers/distributors and retail customers, and accruals are established at the time of initial product sale for the Company’s anticipated liabilities. These accruals are based on agreed upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and/or bottler/distributor and retail customer performance levels. Differences between such estimated expenses and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined.

Amounts received pursuant to new and/or amended distribution agreements entered into with certain bottlers/distributors relating to the costs associated with terminating the Company’s prior distributors, are accounted for as revenue ratably over the anticipated life of the respective distribution agreements, generally over 20 years.

The Company also enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing the Company’s trademarks including, but not limited to, clothing, hats, t-shirts, jackets, helmets and automotive wheels.

Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience.

11

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Per Share Amounts) (Unaudited)

Disaggregation of Revenue

The following tables disaggregate the Company’s revenue by geographical markets and reportable segments:

Three-Months Ended March 31, 2020

    

    

    

    

Latin

    

America

U.S. and

and

Net Sales

Canada

EMEA1

Asia Pacific

Caribbean

Total

Monster Energy® Drinks

$

690,018

$

164,771

$

85,904

$

51,761

$

992,454

Strategic Brands

37,870

20,346

5,317

1,005

64,538

Other

5,105

5,105

Total Net Sales

$

732,993

$

185,117

$

91,221

$

52,766

$

1,062,097

Three-Months Ended March 31, 2019

    

    

    

    

Latin

    

America

 

U.S. and

and

 

Net Sales

Canada

EMEA1

Asia Pacific

Caribbean

Total

Monster Energy® Drinks

$

642,826

$

124,637

$

62,456

$

40,465

$

870,384

Strategic Brands

 

41,750

 

21,908

 

6,225

 

403

 

70,286

Other

 

5,321

 

 

 

 

5,321

Total Net Sales

$

689,897

$

146,545

$

68,681

$

40,868

$

945,991

1Europe, Middle East and Africa (“EMEA”)

Contract Liabilities

Amounts received from certain bottlers/distributors at inception of their distribution contracts or at the inception of certain sales/marketing programs are accounted for as deferred revenue. As of March 31, 2020, the Company had $323.2 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. As of December 31, 2019, the Company had $331.7 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. During the three-months ended March 31, 2020 and 2019, $10.6 million and $14.2 million, respectively, of deferred revenue was recognized in net sales. See Note 11.

4.

LEASES

The Company leases identified assets comprising real estate and equipment.  Real estate leases consist primarily of office and warehouse space and equipment leases consist of vehicles and warehouse equipment. At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately.

Leases are classified as either finance leases or operating leases based on criteria in Accounting Standards Codification (“ASC”) 842. The Company’s operating leases are comprised of real estate and warehouse equipment, and the Company’s finance leases are comprised of vehicles.

Right-of-use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the

12

Table of Contents

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Per Share Amounts) (Unaudited)

commencement date. ROU assets also include any lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease commencement date. Additional payments based on the change in an index or rate, or payments based on a change in the Company’s portion of real estate taxes and insurance, are recorded as a period expense when incurred.

Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term and is included in operating expenses in the condensed consolidated statement of income. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s estimated useful life and is included in operating expenses in the condensed consolidated statement of income. Interest expense on finance leases is calculated using the amortized cost basis and is included in other income, net in the condensed consolidated statement of income.

The Company’s leases have remaining lease terms of less than one year to 14 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year.  The Company has elected not to recognize ROU assets and lease liabilities for short-term operating leases that have a term of 12 months or less.

The components of lease cost were comprised of the following:

Three-Months

Three-Months

Ended March 31,

Ended March 31,

    

2020

    

2019

Operating lease cost