CORONA, Calif., June 06, 2024 (GLOBE NEWSWIRE) -- Monster Beverage Corporation ("Monster") (NASDAQ:MNST) announced today the preliminary results of its modified "Dutch auction" tender offer, which expired at 11:59 p.m., New York City time, on June 5, 2024. Based on the preliminary count by Equiniti Trust Company, LLC, the depositary for the tender offer, a total of approximately 77,418,093 shares of Monster's common stock were validly tendered and not validly withdrawn at a purchase price of $53.00 per shar ...

Core Points - Monster Beverage Corporation announced the preliminary results of its modified "Dutch auction" tender offer, which expired on June 5, 2024 [1] - A total of approximately 77,418,093 shares were validly tendered at a purchase price of $53.00 per share, with an additional 41,603,083 shares tendered through notice of guaranteed delivery [2] - The company expects to accept for payment an aggregate of 56,603,773 shares at a total cost of approximately $3.0 billion, representing about 5.4% of the outstanding shares as of April 22, 2024 [3] Tender Offer Details - The preliminary proration factor for the tender offer is approximately 47.56%, and shares will be accepted on a pro rata basis, with "odd lots" accepted in full [3] - The final number of shares to be purchased will be confirmed after the expiration of the guaranteed delivery period [4] - Payment for accepted shares will be made in cash, without interest, and the return of all other shares will occur promptly thereafter [4] Future Share Repurchase Plans - Monster may consider purchasing additional shares in the future, subject to market conditions, but cannot repurchase any shares until June 21, 2024 [5] - Future repurchases will depend on various factors, including market price, tender offer results, and the company's financial condition [5] Company Overview - Monster Beverage Corporation is based in Corona, California, and operates through its consolidated subsidiaries, which develop and market a wide range of energy drinks and other beverages [6]

Core Points - Monster Beverage Corporation is amending its modified "Dutch auction" tender offer to purchase shares at a price between $53.00 and $60.00, with a maximum aggregate purchase price of up to $3.0 billion [1] - The tender offer commenced on May 8, 2024, and will expire on June 5, 2024, unless extended or terminated earlier [1] - Monster has entered into a new credit agreement for a $750 million three-year delayed draw senior term loan and a $750 million five-year senior revolving credit facility [2] - The tender offer was initially conditioned on the credit agreement and at least $1.0 billion being funded under the Term Loan and RCF, but this condition has been waived [2] - Certain family members of Monster's co-CEOs intend to tender a total of 10 million shares, along with individual tenders from the co-CEOs [3] Financial Details - Monster plans to borrow $750 million under the new credit agreement and use $2.25 billion in cash on hand to complete the tender offer [2] - The tender offer is subject to the terms outlined in the Offer to Purchase and related documents [4] Management and Advisory - Evercore Group L.L.C. and J.P. Morgan Securities LLC are acting as dealer managers for the tender offer, with D.F. King & Co., Inc. serving as the information agent [5] - Shareholders are encouraged to read the tender offer materials carefully for important information [5]

Core Viewpoint - Monster Beverage Corporation is amending its modified Dutch auction tender offer to purchase shares of its common stock for cash at a price between $53.00 and $60.00, with a maximum aggregate purchase price of up to $3.0 billion [1] Group 1: Tender Offer Details - The tender offer commenced on May 8, 2024, and will expire on June 5, 2024, unless extended or terminated earlier [1] - The tender offer was originally conditioned on entering a new credit agreement and funding at least $1.0 billion under the Term Loan and Revolving Credit Facility prior to the expiration of the tender offer [2] - Monster intends to use $2.25 billion in cash on hand and expects to borrow $750 million under a new credit agreement to consummate the tender offer, waiving the Financing Condition [2] Group 2: Shareholder Participation - Sterling Trustees LLC intends to tender up to 10,000,000 shares on behalf of certain family members of Monster's co-CEOs, subject to market conditions [3] - Co-CEO Hilton Schlosberg plans to tender up to 350,000 shares he beneficially owns, while co-CEO Rodney Sacks intends to tender up to 610,000 shares he beneficially owns, both subject to market conditions [3] Group 3: Financial and Legal Advisors - Evercore Group L.L.C. and J.P. Morgan Securities LLC are acting as dealer managers for the tender offer, while D.F. King & Co., Inc. serves as the information agent [5] - The Offer to Purchase and related documents have been filed with the SEC, and shareholders can obtain these documents from the SEC's website [5]

Company Overview - Monster Beverage (NASDAQ:MNST) is a major player in the energy drink market, known for its innovative products and strong brand portfolio, including Monster Energy, Burn, and Bang Energy [2][3] - The company generated 65% of its revenues from the U.S. and Canada, with the remaining 35% from international markets [3] - Monster Energy Drinks account for 92% of total revenues, indicating a dominant position in the non-alcoholic beverage segment [3] Financial Performance - In Q1 FY24, revenues increased by 11.8%, with the Monster Energy segment growing by 10.7% and other segments collectively seeing over 20% growth [5] - The company has achieved a 15-year CAGR of 13.8% in revenues, significantly outperforming the S&P 500's 5.2% CAGR [8] - Gross margins are over 50%, and net income margins are in the low 20s, reflecting high profitability [8][9] Market Position and Competition - MNST has a strategic partnership with Coca-Cola, which acquired a 16.7% stake in 2015, enhancing its market position [4] - The energy drinks market is expected to grow between 5.9% and 8.5% in the mid-term, with MNST projected to grow faster than the overall market [5] - Competitors include Red Bull and Celsius Holdings, with Celsius showing impressive growth but remaining a smaller player [3][5] Valuation and Growth Potential - The company is currently trading at a lower PE ratio compared to its historical average, suggesting it may be undervalued [15][16] - A target price of $61.5 for FY24 and $65.3 for one year from now has been established based on expected EPS growth [15] - MNST's strong cash position of $2.6 billion and minimal debt allows for continued share repurchase programs, enhancing shareholder value [9][17] Strategic Outlook - The company is focusing on diversifying its product offerings to include 'better for you' options in response to increasing health awareness [17] - Distribution agreements with Coca-Cola and strong presence in U.S. convenience stores bolster its market dominance [17] - Despite facing competition and potential risks from market saturation, MNST's strong brand and innovative pipeline position it well for future growth [17][18]

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, 2024 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 (A ...

Financial Data and Key Metrics Changes - The company achieved record first quarter net sales of $1.9 billion in Q1 2024, an increase of 11.8% compared to $1.7 billion in Q1 2023, and 15.6% higher on a foreign currency adjusted basis [7][38] - Gross profit as a percentage of net sales for Q1 2024 was 54.1%, up from 52.8% in Q1 2023, primarily due to decreased freight costs, pricing actions, and lower import costs [7] - Operating expenses for Q1 2024 were $485.1 million, compared to $412.8 million in Q1 2023, representing 25.5% of net sales, up from 24.3% [8] - Net income increased 11.2% to $442 million compared to $397.4 million in Q1 2023, with diluted earnings per share rising 12% to $0.42 from $0.38 [10] Business Line Data and Key Metrics Changes - Sales of Monster declined 1.4%, while Reign sales increased 16.1%, NOS increased 4.9%, and Full Throttle increased 1.7% in the 13-week period ending April 20, 2024 [11] - In the four-week period ending April 20, 2024, sales of Monster decreased by 3.3%, while Reign sales increased 5.3% [11] - Java Monster's share of the coffee plus energy drink category increased to 59.5%, while Starbucks Energy's share decreased to 40.1% [14] Market Data and Key Metrics Changes - In EMEA, net sales for Q1 2024 increased 28.2% in dollars and 32% on a currency neutral basis compared to Q1 2023 [23] - In Latin America, net sales increased 14.7% in dollars and 46.2% on a currency neutral basis, with Brazil seeing a 32.2% increase in dollars [25][26] - In Argentina, net sales increased 300.2% due to inflation-related price increases, with market share rising to 58.5% [17] Company Strategy and Development Direction - The company plans to launch new products, including Predator and Nasty Beast Hard Tea, and expand distribution channels [27][37] - A Dutch auction tender offer for up to $3 billion in shares is planned, funded by cash on hand and new borrowings, indicating a strategic focus on shareholder returns [30][31] - The company continues to innovate and differentiate its brands while capitalizing on its relationship with the Coca-Cola bottling system [76] Management's Comments on Operating Environment and Future Outlook - Management noted a slight slowdown in consumer demand, attributed to inflation and high gas prices, but remains optimistic about future sales growth [61] - The company expects to implement price increases in Q4 2024, indicating a strategic approach to pricing amid market conditions [46] - Management highlighted the importance of maintaining strong inventory levels to meet demand and improve service [67] Other Important Information - The company purchased approximately 1.8 million shares of its common stock at an average price of $54.96 per share during the quarter [30] - The company is optimistic about the long-term prospects for the Monster brand in China, particularly with the launch of Predator [25] Q&A Session Summary Question: Clarification on April sales numbers - The two extra selling days in April were included in the reported sales numbers, and shipment timing to bottlers can affect sales figures [41][43] Question: Consumer behavior in the U.S. market - Management acknowledged a softening in consumer demand but emphasized the strength of the brand and plans for future pricing actions [46] Question: Dutch auction decision process - The timing for the Dutch auction is seen as opportunistic due to recent market softness, allowing for a larger share repurchase [48] Question: International gross margins - The improvement in international gross margins is attributed to ongoing efforts to enhance margins across the board [53] Question: U.S. sales growth and measured channels - Management noted that while Nielsen numbers reflect sales to consumers, the company also has strong performance in non-measured channels [56] Question: Update on Bang Energy brand - Sales of Bang are starting to accelerate as listings increase, with marketing efforts ramping up for the summer [64] Question: Operating expense increases - Increases in operating expenses are due to higher inventory levels, freight costs, and marketing expenses, with a focus on improving service levels [68]

Financial Performance - First quarter net sales increased 11.8% to $1.90 billion, up from $1.70 billion in the same period last year[2] - Net sales adjusted for foreign currency changes rose 15.6%, with a 12.6% increase excluding Argentina's impact[2] - Net income for the first quarter increased 11.2% to $442.0 million, with diluted earnings per share rising 12.0% to $0.42[10] - For the three months ended March 31, 2024, net sales increased to $1,899,098, a 11.8% increase from $1,698,930 in the same period of 2023[24] - Net income for the quarter was $442,049, which is 23.3% of net sales, compared to 23.4% in the prior year[24] Sales Growth - The Monster Energy® Drinks segment saw a 10.7% sales increase to $1.73 billion, while the Strategic Brands segment grew 25.6% to $108.4 million[3][5] - International sales rose 19.5% to $744.1 million, accounting for approximately 39% of total net sales[6] - Energy drink case sales reached 211,430 thousand (192-ounce case equivalents), an increase from 182,444 thousand in the previous year[24] - Average net sales per case decreased to $8.69 from $9.03 year-over-year[24] Profitability - Gross profit margin improved to 54.1%, compared to 52.8% in the prior year, driven by decreased freight-in costs and lower input costs[7] - Gross profit for the same period was $1,027,129, representing a gross profit margin of 54.1%, up from 52.8% in 2023[24] - Operating income rose to $541,991, accounting for 28.5% of net sales, slightly down from 28.6% in the previous year[24] Expenses and Taxation - Operating expenses increased to $485.1 million, representing 25.5% of net sales, up from 24.3% in the previous year[7] - The effective tax rate rose to 23.5%, primarily due to a decrease in stock-based compensation deductions[8] - The company reported a provision for income taxes of $135,696, which is 23.6% of income before taxes, up from 20.1% in the previous year[24] Assets and Equity - Current assets as of March 31, 2024, totaled $6,035,514, up from $5,588,996 at the end of 2023[25] - Total assets increased to $10,098,066 from $9,686,522 at the end of 2023[25] - Stockholders' equity rose to $8,577,789, compared to $8,228,744 at the end of 2023[25] Strategic Initiatives - The company plans to initiate a tender offer to repurchase up to $3.0 billion of common stock, funded by $2.0 billion in cash and $1.0 billion in borrowings[14][16] - New product launches included Monster Energy® Ultra Fantasy Ruby Red™ and Predator Energy® in the Philippines, with positive initial responses[11][12]

Core Viewpoint - Monster Beverage Corporation is expected to report revenue and earnings growth for the first quarter of 2024, with revenues projected at $1.92 billion, reflecting a 13.1% increase year-over-year, and earnings estimated at 44 cents per share, indicating a 15.8% growth from the previous year [1] Group 1: Performance Expectations - The company has shown continued strength in its energy drinks category, driven by product innovation and expansion, which is anticipated to positively impact both top and bottom-line performance in the first quarter [2] - Positive trends are expected in the Monster Energy family of brands and strength in Strategic and Affordable energy brands, supported by a steady lineup of product launches and a strong distribution network in international markets [2] Group 2: Cost Management and Pricing Strategy - Price increases, along with lower freight-in costs and reduced aluminum can costs, have contributed to robust margins, with management strategically adjusting pricing to offset inflationary pressures while maintaining customer loyalty [3] - The company implemented price hikes in Q4 2023, with additional hikes planned for 2024, which are expected to bolster margins and revenue in the upcoming quarter [3] Group 3: Industry Challenges - The beverage industry presents challenges for Monster Beverage, including rising costs and shifts in consumer preferences affecting soda and energy drink volumes [4] - Increased product-mix costs and higher advertising expenses have pressured profits and margins [4] Group 4: Earnings Prediction Model - The current model indicates that Monster Beverage does not conclusively predict an earnings beat, with an Earnings ESP of -2.33% and a Zacks Rank of 3 [5]

CORONA, Calif., April 26, 2024 (GLOBE NEWSWIRE) -- Monster Beverage Corporation (NASDAQ:MNST) announced today that results for its first quarter ended March 31, 2024, will be reported on Thursday, May 2, 2024, after the close of the market. The company also said that Co-Chief Executive Officers, Rodney Sacks and Hilton Schlosberg, will host an investor conference call that same day at 2 p.m. Pacific Time to review the company's financial results and operations. The call will be open to all interested invest ...