Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 28, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Monster Beverage Corp | ' |
Entity Central Index Key | '0000865752 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 167,077,394 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'FY | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $312,020 | $211,349 |
Short-term investments | 438,932 | 402,247 |
Accounts receivable, net | 342,140 | 291,638 |
Distributor receivables | 3,646 | 4,542 |
Inventories | 204,061 | 221,449 |
Prepaid expenses and other current assets | 28,482 | 21,376 |
Prepaid income taxes | 5,008 | 9,518 |
Deferred income taxes | 20,924 | 20,924 |
Total current assets | 1,355,213 | 1,183,043 |
INVESTMENTS | 8,131 | 9,792 |
PROPERTY AND EQUIPMENT, net | 91,733 | 88,143 |
DEFERRED INCOME TAXES | 63,443 | 63,611 |
INTANGIBLES, net | 65,525 | 65,774 |
OTHER ASSETS | 9,538 | 10,146 |
Total Assets | 1,593,583 | 1,420,509 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable | 125,581 | 119,376 |
Accrued liabilities | 71,959 | 59,113 |
Accrued promotional allowances | 113,846 | 99,470 |
Deferred revenue | 14,034 | 13,832 |
Accrued compensation | 9,046 | 14,864 |
Income taxes payable | 45,900 | 9,359 |
Total current liabilities | 380,366 | 316,014 |
DEFERRED REVENUE | 110,491 | 112,216 |
COMMITMENTS AND CONTINGENCIES (Note 10) | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Common stock - $0.005 par value; 240,000 shares authorized; 206,266 shares issued and 167,074 outstanding as of March 31, 2014; 206,014 shares issued and 166,822 outstanding as of December 31, 2013 | 1,031 | 1,030 |
Additional paid-in capital | 383,183 | 368,069 |
Retained earnings | 1,942,575 | 1,847,325 |
Accumulated other comprehensive loss | -1,131 | -1,233 |
Common stock in treasury, at cost; 39,192 and 39,192 shares as of March 31, 2014 and December 31, 2013, respectively | -1,222,932 | -1,222,912 |
Total stockholders' equity | 1,102,726 | 992,279 |
Total Liabilities and Stockholders' Equity | $1,593,583 | $1,420,509 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 240,000 | 240,000 |
Common stock, shares issued | 206,266 | 206,014 |
Common stock, shares outstanding | 167,074 | 166,822 |
Common stock in treasury, shares | 39,192 | 39,192 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ' | ' |
NET SALES | $536,129 | $484,223 |
COST OF SALES | 249,311 | 232,184 |
GROSS PROFIT | 286,818 | 252,039 |
OPERATING EXPENSES | 137,955 | 144,733 |
OPERATING INCOME | 148,863 | 107,306 |
OTHER INCOME (EXPENSE): | ' | ' |
Interest and other income (expense), net | 155 | -4,473 |
(Loss) gain on investments and put options, net (Note 3) | -1 | 2,571 |
Total other income (expense) | 154 | -1,902 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 149,017 | 105,404 |
PROVISION FOR INCOME TAXES | 53,767 | 41,908 |
NET INCOME | $95,250 | $63,496 |
NET INCOME PER COMMON SHARE: | ' | ' |
Basic (in dollars per share) | $0.57 | $0.38 |
Diluted (in dollars per share) | $0.55 | $0.37 |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: | ' | ' |
Basic (in shares) | 166,913 | 165,525 |
Diluted (in shares) | 173,741 | 172,559 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' |
Net income, as reported | $95,250 | $63,496 |
Other comprehensive income (loss): | ' | ' |
Change in foreign currency translation adjustment | 102 | -1,092 |
Available-for-sale investments: | ' | ' |
Reclassification adjustment for net gains included in net income | ' | -1,525 |
Net change in available-for-sale investments | ' | -1,525 |
Other comprehensive income (loss) | 102 | -2,617 |
Comprehensive income | $95,352 | $60,879 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $95,250 | $63,496 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 6,453 | 5,060 |
Gain on disposal of property and equipment | -100 | -2 |
Stock-based compensation | 6,986 | 6,959 |
Loss (gain) on put option | 67 | -83 |
Gain on investments, net | -66 | -2,489 |
Deferred income taxes | 168 | -398 |
Tax benefit from exercise of stock options | -2,602 | -176 |
Effect on cash of changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -42,544 | -69,713 |
Distributor receivables | 947 | -8,314 |
Inventories | 17,410 | -14,080 |
Prepaid expenses and other current assets | -7,110 | -10,584 |
Prepaid income taxes | 4,417 | 27,417 |
Accounts payable | 6,068 | 7,479 |
Accrued liabilities | 4,610 | 9,879 |
Accrued promotional allowances | 14,708 | 13,939 |
Accrued distributor terminations | ' | 7,372 |
Accrued compensation | -5,838 | -5,377 |
Income taxes payable | 39,095 | 9,270 |
Deferred revenue | -1,517 | 6,238 |
Net cash provided by operating activities | 136,402 | 45,893 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Maturities of held-to-maturity investments | 151,035 | 66,344 |
Sales of trading investments | 1,725 | ' |
Purchases of held-to-maturity investments | -187,718 | -69,464 |
Purchases of property and equipment | -9,871 | -8,732 |
Proceeds from sale of property and equipment | 237 | 18 |
Decrease (increase) in intangibles | 105 | -3,362 |
Decrease (increase) in other assets | 543 | -219 |
Net cash used in investing activities | -43,944 | -15,415 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Principal payments on debt | -620 | -296 |
Tax benefit from exercise of stock options | 2,602 | 176 |
Issuance of common stock | 5,728 | 2,381 |
Purchases of common stock held in treasury | -20 | -13,361 |
Net cash provided by (used in) financing activities | 7,690 | -11,100 |
Effect of exchange rate changes on cash and cash equivalents | 523 | 641 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 100,671 | 20,019 |
CASH AND CASH EQUIVALENTS, beginning of period | 211,349 | 222,514 |
CASH AND CASH EQUIVALENTS, end of period | 312,020 | 242,533 |
Cash paid during the period for: | ' | ' |
Interest | 12 | 5 |
Income taxes | $9,747 | $5,663 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS NON-CASH SUPPLEMENTAL DATA (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED STATEMENTS OF CASH FLOWS NON-CASH SUPPLEMENTAL DATA | ' | ' |
Accounts payable for property and equipment purchases | $0.20 | $2 |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2014 | |
BASIS OF PRESENTATION | ' |
BASIS OF PRESENTATION | ' |
1. BASIS OF PRESENTATION | |
Reference is made to the Notes to Consolidated Financial Statements, in Monster Beverage Corporation and Subsidiaries (the “Company” or, in reference to the Company’s former name, “Hansen Natural Corporation”) Annual Report on Form 10-K for the year ended December 31, 2013 (“Form 10-K”) 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, 2014 and 2013 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 amount 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. | |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2014 | |
RECENT ACCOUNTING PRONOUNCEMENTS | ' |
RECENT ACCOUNTING PRONOUNCEMENTS | ' |
2. RECENT ACCOUNTING PRONOUNCEMENTS | |
In April 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Presentation of Financial Statements and Property, Plant, and Equipment - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 provides new guidance related to the definition of a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. This new guidance is effective for fiscal years beginning on or after December 15, 2014 and interim periods within those years. The adoption of ASU 2014-08 is not expected to have a material impact on the Company’s financial position, results of operations or liquidity. | |
INVESTMENTS
INVESTMENTS | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
INVESTMENTS | ' | ||||||||||||||||||
INVESTMENTS | ' | ||||||||||||||||||
3. INVESTMENTS | |||||||||||||||||||
The following table summarizes the Company’s investments at: | |||||||||||||||||||
March 31, 2014 | Amortized Cost | Gross | Gross | Fair | Continuous | Continuous | |||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | |||||||||||||||
Holding | Holding | Loss Position | Loss Position | ||||||||||||||||
Gains | Losses | less than 12 | greater than 12 | ||||||||||||||||
Months | Months | ||||||||||||||||||
Held-to-Maturity | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Certificates of deposit | $ | 22,043 | $ | - | $ | - | $ | 22,043 | $ | - | $ | - | |||||||
Commercial paper | 9,990 | - | - | 9,990 | - | - | |||||||||||||
Municipal securities | 400,504 | 25 | - | 400,529 | - | - | |||||||||||||
Total | $ | 432,537 | $ | 25 | $ | - | 432,562 | $ | - | $ | - | ||||||||
Trading | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Auction rate securities | 6,395 | ||||||||||||||||||
Long-term: | |||||||||||||||||||
Auction rate securities | 8,131 | ||||||||||||||||||
Total | $ | 447,088 | |||||||||||||||||
December 31, 2013 | Amortized Cost | Gross | Gross | Fair | Continuous | Continuous | |||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | |||||||||||||||
Holding | Holding | Loss Position | Loss Position | ||||||||||||||||
Gains | Losses | less than 12 | greater than 12 | ||||||||||||||||
Months | Months | ||||||||||||||||||
Held-to-Maturity | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Certificates of deposit | $ | 22,045 | $ | - | $ | - | $ | 22,045 | $ | - | $ | - | |||||||
Commercial paper | 5,991 | - | - | 5,991 | - | - | |||||||||||||
Municipal securities | 367,819 | 48 | - | 367,867 | - | - | |||||||||||||
Total | $ | 395,855 | $ | 48 | $ | - | 395,903 | $ | - | $ | - | ||||||||
Trading | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Auction rate securities | 6,392 | ||||||||||||||||||
Long-term: | |||||||||||||||||||
Auction rate securities | 9,792 | ||||||||||||||||||
Total | $ | 412,087 | |||||||||||||||||
During the three-months ended March 31, 2014, realized gains or losses recognized on the sale of investments were not significant. During the year ended December 31, 2013, the Company recognized $2.5 million of realized gains on the sale of available-for-sale investments. Realized gains or losses on the sale of all other investments during the year ended December 31, 2013 were not significant. | |||||||||||||||||||
The Company recognized a net gain through earnings on its trading securities as follows: | |||||||||||||||||||
Three-Months Ended | |||||||||||||||||||
March 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Gain on trading securities sold | $ | 131 | $ | - | |||||||||||||||
(Loss) gain on trading securities held | (64 | ) | 6 | ||||||||||||||||
Gain on trading securites | $ | 67 | $ | 6 | |||||||||||||||
The Company’s investments at March 31, 2014 and December 31, 2013 in certificates of deposit, commercial paper and/or municipal securities carried investment grade credit ratings. All of the Company’s investments at March 31, 2014 and December 31, 2013 in municipal, educational or other public body securities with an auction reset feature (“auction rate securities”) also carried investment grade credit ratings. | |||||||||||||||||||
The following table summarizes the underlying contractual maturities of the Company’s investments at: | |||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||
Less than 1 year: | |||||||||||||||||||
Certificates of deposit | $ | 22,043 | $ | 22,043 | $ | 22,045 | $ | 22,045 | |||||||||||
Commercial paper | 9,990 | 9,990 | 5,991 | 5,991 | |||||||||||||||
Municipal securities | 400,504 | 400,529 | 367,819 | 367,867 | |||||||||||||||
Due 11 - 20 years: | |||||||||||||||||||
Auction rate securities | 11,053 | 11,053 | 11,102 | 11,102 | |||||||||||||||
Due 21 - 30 years: | |||||||||||||||||||
Auction rate securities | 3,473 | 3,473 | 5,082 | 5,082 | |||||||||||||||
Total | $ | 447,063 | $ | 447,088 | $ | 412,039 | $ | 412,087 | |||||||||||
FAIR_VALUE_OF_CERTAIN_FINANCIA
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ' | |||||||||||||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ' | |||||||||||||
4. FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||||||||||||||
Accounting Standards Codification (“ASC”) 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. ASC 820 defines fair value as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below. | ||||||||||||||
· Level 1: Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
· Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. | ||||||||||||||
· Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
ASC 820 requires the use of observable market inputs (quoted market prices) when measuring fair value and requires a Level 1 quoted price to be used to measure fair value whenever possible. | ||||||||||||||
The following tables present the Company’s held-to-maturity investments at amortized cost as well as the fair value of the Company’s financial assets and liabilities that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy at: | ||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Cash | $ | 207,079 | $ | - | $ | - | $ | 207,079 | ||||||
Money market funds | 73,014 | - | - | 73,014 | ||||||||||
Certificates of deposit | - | 22,043 | - | 22,043 | ||||||||||
Commercial paper | - | 9,990 | - | 9,990 | ||||||||||
Municipal securities | - | 432,431 | - | 432,431 | ||||||||||
Auction rate securities | - | - | 14,526 | 14,526 | ||||||||||
Put option related to auction rate securities | - | - | 1,024 | 1,024 | ||||||||||
Foreign currency derivatives | - | (21 | ) | - | (21 | ) | ||||||||
Total | $ | 280,093 | $ | 464,443 | $ | 15,550 | $ | 760,086 | ||||||
Amounts included in: | ||||||||||||||
Cash and cash equivalents | $ | 280,093 | $ | 31,927 | $ | - | $ | 312,020 | ||||||
Short-term investments | - | 432,537 | 6,395 | 438,932 | ||||||||||
Accounts receivable, net | - | 349 | - | 349 | ||||||||||
Investments | - | - | 8,131 | 8,131 | ||||||||||
Prepaid expenses and other current assets | - | - | 485 | 485 | ||||||||||
Other assets | - | - | 539 | 539 | ||||||||||
Accrued liabilities | - | (370 | ) | - | (370 | ) | ||||||||
Total | $ | 280,093 | $ | 464,443 | $ | 15,550 | $ | 760,086 | ||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Cash | $ | 139,300 | $ | - | $ | - | $ | 139,300 | ||||||
Money market funds | 60,102 | - | - | 60,102 | ||||||||||
Certificates of deposit | - | 22,045 | - | 22,045 | ||||||||||
Commercial paper | - | 5,991 | - | 5,991 | ||||||||||
Municipal securities | - | 379,766 | - | 379,766 | ||||||||||
Auction rate securities | - | - | 16,184 | 16,184 | ||||||||||
Put option related to auction rate securities | - | - | 1,092 | 1,092 | ||||||||||
Total | $ | 199,402 | $ | 407,802 | $ | 17,276 | $ | 624,480 | ||||||
Amounts included in: | ||||||||||||||
Cash and cash equivalents | $ | 199,402 | $ | 11,947 | $ | - | $ | 211,349 | ||||||
Short-term investments | - | 395,855 | 6,392 | 402,247 | ||||||||||
Investments | - | - | 9,792 | 9,792 | ||||||||||
Prepaid expenses and other current assets | - | - | 486 | 486 | ||||||||||
Other assets | - | - | 606 | 606 | ||||||||||
Total | $ | 199,402 | $ | 407,802 | $ | 17,276 | $ | 624,480 | ||||||
The majority of the Company’s short-term investments are classified within Level 1 or Level 2 of the fair value hierarchy. The Company’s valuation of its Level 1 investments, which include money market funds, is based on quoted market prices in active markets for identical securities. The Company’s valuation of its Level 2 investments, which include certificates of deposit, commercial paper and municipal securities, is based on other observable inputs, specifically a market approach which utilizes valuation models, pricing systems, mathematical tools and other relevant information for the same or similar securities. The Company’s valuation of its Level 2 foreign exchange contracts is based on quoted market prices of the same or similar instruments, adjusted for counterparty risk. There were no transfers between Level 1 and Level 2 measurements during the three-months ended March 31, 2014 or the year ended December 31, 2013, and there were no changes in the Company’s valuation techniques. | ||||||||||||||
The Company’s Level 3 assets are comprised of auction rate securities and put options. The Company’s Level 3 valuation utilized a mark-to-model approach which included estimates for interest rates, timing and amount of cash flows, credit and liquidity premiums, as well as expected holding periods for the auction rate securities. These assumptions are typically volatile and subject to change as the underlying data sources and market conditions evolve. A significant change in any single input could have a significant valuation impact; however, no single input has a more significant impact on valuation than another. There were no changes in the Company’s valuation techniques of its Level 3 assets during the three-months ended March 31, 2014. | ||||||||||||||
The following table presents quantitative information related to the significant unobservable inputs utilized in the Company’s Level 3 recurring fair value measurements as of March 31, 2014. | ||||||||||||||
Valuation Technique | Unobservable Input | Range (Weighted-Average) | ||||||||||||
Auction Rate Securities: Trading | Discounted cash flow | Maximum rate probability | 0.61%-2.48% (1.53%) | |||||||||||
Principal returned probability | 85.58%-94.70% (86.91%) | |||||||||||||
Default probability | 4.28%-12.18% (11.56%) | |||||||||||||
Liquidity risk | 3.00%-3.00% (3.00%) | |||||||||||||
Recovery rate | 60-60 (60) | |||||||||||||
Put Options | Discounted cash flow | Counterparty risk | 0.43%-0.68% (0.51%) | |||||||||||
At March 31, 2014, the Company held auction rate securities with a face value of $15.5 million (amortized cost basis of $14.5 million). A Level 3 valuation was performed on the Company’s auction rate securities as of March 31, 2014 resulting in a fair value of $14.5 million for the Company’s trading auction rate securities (after a $1.0 million impairment), which are included in short-term and long-term investments. | ||||||||||||||
In June 2011, the Company entered into an agreement (the “2011 ARS Agreement”), related to $24.5 million of par value auction rate securities (the “2011 ARS Securities”). Under the 2011 ARS Agreement, the Company has the right to sell the 2011 ARS Securities including all accrued but unpaid interest thereon (the “2011 Put Option”) as follows: (i) on or after July 1, 2013, up to $1.0 million aggregate par value; (ii) on or after October 1, 2013, up to an additional $1.0 million aggregate par value; and (iii) in quarterly installments thereafter based on a formula of the then outstanding 2011 ARS Securities, as adjusted for normal market redemptions, with full sale rights available on or after April 1, 2016. The 2011 ARS Securities will continue to accrue interest until redeemed through the 2011 Put Option, or as determined by the auction process, or should the auction process fail, the terms outlined in the prospectus of the respective 2011 ARS Securities. Under the 2011 ARS Agreement, the Company has the obligation, should it receive written notification from the put issuer, to sell the 2011 ARS Securities at par plus all accrued but unpaid interest. During the three-months ended March 31, 2014, $1.7 million of 2011 ARS Securities were redeemed at par through the exercise of a portion of the 2011 Put Option ($2.3 million, $1.3 million and $3.7 million of par value 2011 ARS Securities were redeemed at par during the years ended December 31, 2013, 2012 and 2011, respectively). Subsequent to March 31, 2014, $1.7 million of 2011 ARS Securities were redeemed at par through the exercise of a portion of the 2011 Put Option. The 2011 Put Option does not meet the definition of derivative instruments under ASC 815. Therefore, the Company elected the fair value option under ASC 825-10 in accounting for the 2011 Put Option. As of March 31, 2014, the Company recorded $1.0 million as the fair market value of the 2011 Put Option, included in prepaid expenses and other current assets, as well as in other assets, in the condensed consolidated balance sheet. | ||||||||||||||
The net effect of (i) the revaluation of the 2011 Put Option as of March 31, 2014; (ii) the redemption at par of certain 2011 ARS Securities; and (iii) the revaluation of the Company’s trading auction rate securities as of March 31, 2014 resulted in a loss of $0.001 million, which is included in other income (expense) for the three-months ended March 31, 2014. The net effect of (i) the revaluation of the 2011 Put Option as of March 31, 2013; (ii) the revaluation of the Company’s trading auction rate securities as of March 31, 2013; and (iii) a recognized gain resulting from the redemption of previously other-than-temporary impaired securities resulted in a gain of $2.6 million, which is included in other income (expense) for the three-months ended March 31, 2013. | ||||||||||||||
The following table provides a summary reconciliation of the Company’s financial assets that are recorded at fair value on a recurring basis using significant unobservable inputs (Level 3): | ||||||||||||||
Three-Months Ended | Three-Months Ended | |||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||
Auction | Put Options | Auction | Put Options | |||||||||||
Rate | Rate | |||||||||||||
Securities | Securities | |||||||||||||
Opening Balance | $ | 16,184 | $ | 1,092 | $ | 23,156 | $ | 1,929 | ||||||
Transfers into Level 3 | - | - | - | - | ||||||||||
Transfers out of Level 3 | - | - | - | - | ||||||||||
Total gains (losses) for the period: | ||||||||||||||
Included in earnings | 67 | -68 | 2,489 | 82 | ||||||||||
Included in other comprehensive income | - | - | -2,483 | - | ||||||||||
Settlements | -1,725 | - | -5,792 | - | ||||||||||
Closing Balance | $ | 14,526 | $ | 1,024 | $ | 17,370 | $ | 2,011 | ||||||
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||
5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||
The Company is exposed to foreign currency exchange rate risks related primarily to its foreign business operations. During the three-months ended March 31, 2014, the Company entered into forward currency exchange contracts with financial institutions to create an economic hedge to specifically manage a portion of the foreign exchange risk exposure associated with certain consolidated subsidiaries’ non-functional currency denominated assets and liabilities. All foreign currency exchange contracts entered into by the Company as of March 31, 2014 have terms of one month or less. The Company does not enter into forward currency exchange contracts for speculation or trading purposes. | ||||||||||
The Company has not designated its foreign currency exchange contracts as hedge transactions under ASC 815. Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in interest and other income (expense), net, in the condensed consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item. | ||||||||||
The notional amount and fair value of all outstanding foreign currency derivative instruments in the condensed consolidated balance sheets consist of the following at: | ||||||||||
March 31,2014 | ||||||||||
Derivatives not designated as | Notional | Fair | Balance Sheet Location | |||||||
hedging instruments under | Amount | Value | ||||||||
FASB ASC 815-20 | ||||||||||
Assets: | ||||||||||
Foreign currency exchange contracts: | ||||||||||
Receive CAD/pay USD | $ | 12,234 | $ | 70 | Accounts receivable, net | |||||
Receive USD/pay JPY | 24,216 | 279 | Accounts receivable, net | |||||||
Liabilities: | ||||||||||
Foreign currency exchange contracts: | ||||||||||
Receive EUR/pay USD | $ | 15,577 | $ | -8 | Accrued liabilities | |||||
Receive USD/pay AUD | 9,204 | -51 | Accrued liabilities | |||||||
Receive USD/pay ZAR | 14,713 | -235 | Accrued liabilities | |||||||
Receive USD/pay MXN | 3,742 | -25 | Accrued liabilities | |||||||
Receive USD/pay CLP | 5,106 | -46 | Accrued liabilities | |||||||
Receive USD/pay COP | 2,229 | -5 | Accrued liabilities | |||||||
The Company had no foreign currency exchange contracts outstanding at December 31, 2013. | ||||||||||
The net losses on derivative instruments in the condensed consolidated statements of income were as follows: | ||||||||||
Amount of loss | ||||||||||
recognized in income on | ||||||||||
derivatives | ||||||||||
Three-months ended | ||||||||||
Derivatives not designated as | Location of loss | March 31, | March 31, | |||||||
hedging instruments under | recognized in income on | 2014 | 2013 | |||||||
FASB ASC 815-20 | derivatives | |||||||||
Foreign currency exchange contracts | Interest and other income (expense), net | $ | 359 | $ | - | |||||
INVENTORIES
INVENTORIES | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
INVENTORIES | ' | ||||||||
INVENTORIES | ' | ||||||||
6. INVENTORIES | |||||||||
Inventories consist of the following at: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 64,550 | $ | 68,088 | |||||
Finished goods | 139,511 | 153,361 | |||||||
$ | 204,061 | $ | 221,449 | ||||||
PROPERTY_AND_EQUIPMENT_Net
PROPERTY AND EQUIPMENT, Net | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
PROPERTY AND EQUIPMENT, Net | ' | ||||||
PROPERTY AND EQUIPMENT, Net | ' | ||||||
7. PROPERTY AND EQUIPMENT, Net | |||||||
Property and equipment consist of the following at: | |||||||
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
Land | $ | 5,382 | $ | 5,382 | |||
Leasehold improvements | 2,737 | 2,222 | |||||
Furniture and fixtures | 3,494 | 3,474 | |||||
Office and computer equipment | 14,514 | 14,135 | |||||
Computer software | 655 | 791 | |||||
Equipment | 66,752 | 62,552 | |||||
Buildings | 37,980 | 33,468 | |||||
Vehicles | 29,860 | 30,442 | |||||
161,374 | 152,466 | ||||||
Less: accumulated depreciation and amortization | -69,641 | -64,323 | |||||
$ | 91,733 | $ | 88,143 | ||||
INTANGIBLES_Net
INTANGIBLES, Net | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
INTANGIBLES, Net | ' | ||||||
INTANGIBLES, Net | ' | ||||||
8. INTANGIBLES, Net | |||||||
Intangibles consist of the following at: | |||||||
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
Amortizing intangibles | $ | 1,140 | $ | 1,076 | |||
Accumulated amortization | -665 | -590 | |||||
475 | 486 | ||||||
Non-amortizing intangibles | 65,050 | 65,288 | |||||
$ | 65,525 | $ | 65,774 | ||||
All amortizing intangibles have been assigned an estimated useful life and such intangibles are amortized on a straight-line basis over the number of years that approximate their respective useful lives ranging from one to 25 years (weighted-average life of 19 years). Amortization expense was $0.1 million and $0.01 million for the three-months ended March 31, 2014 and 2013, respectively. | |||||||
DISTRIBUTION_AGREEMENTS
DISTRIBUTION AGREEMENTS | 3 Months Ended |
Mar. 31, 2014 | |
DISTRIBUTION AGREEMENTS | ' |
DISTRIBUTION AGREEMENTS | ' |
9. DISTRIBUTION AGREEMENTS | |
Amounts received pursuant to new and/or amended distribution agreements entered into with certain distributors, relating to the costs associated with terminating agreements with the Company’s prior distributors, have been accounted for as deferred revenue in the accompanying condensed consolidated balance sheets and are recognized as revenue ratably over the anticipated life of the respective distribution agreement, generally 20 years. Revenue recognized was $1.9 million and $2.4 million for the three-months ended March 31, 2014 and 2013, respectively. | |
The Company incurred termination costs to certain of its prior distributors amounting to $0.01 million and $8.3 million in aggregate for the three-months ended March 31, 2014 and 2013, respectively. Such termination costs have been expensed in full and are included in operating expenses for the three-months ended March 31, 2014 and 2013. | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | ' |
COMMITMENTS AND CONTINGENCIES | ' |
10. COMMITMENTS AND CONTINGENCIES | |
The Company had purchase commitments aggregating approximately $31.3 million at March 31, 2014, which represented commitments made by the Company and its subsidiaries to various suppliers of raw materials for the production of its products. These obligations vary in terms, but are generally satisfied within one year. | |
The Company had contractual obligations aggregating approximately $92.9 million at March 31, 2014, which related primarily to sponsorships and other marketing activities. | |
The Company had operating lease commitments aggregating approximately $14.8 million at March 31, 2014, which related primarily to warehouse and office space. | |
Value Added Tax (“VAT”) – The Company sought guidance from Her Majesty’s Revenue & Customs (“HMRC”), the VAT taxing authority in the United Kingdom, to determine if the Company should have charged VAT in the United Kingdom on a portion of the Company’s sales beginning May 26, 2010. The Company did not receive conclusive guidance from HMRC and has taken the position that it should only have charged VAT beginning October 3, 2013, pursuant to a new production agreement effective on this date. As a result, the Company has recorded for the period from October 3, 2013 to March 31, 2014, an $8.7 million VAT receivable and an $8.7 million VAT payable included in accounts receivable, net and accrued liabilities, respectively, in the accompanying condensed consolidated balance sheet at March 31, 2014. | |
Should it be determined that VAT should have been charged on such sales beginning on May 26, 2010, such VAT would represent a pass-through tax in the United Kingdom and would result in an adjustment to accounts receivable and a corresponding adjustment to accrued liabilities on the balance sheet and have no impact on the Company’s results of operations. The Company estimates the maximum amount of the potential VAT pass-through tax for the period beginning on May 26, 2010 through October 3, 2013 to be $47.1 million. If it is determined that the Company should have charged VAT on such sales prior to October 3, 2013, it is possible that a tax penalty may be assessed by HMRC. However, the Company believes that any such penalty would not have a material impact on its financial position, results of operations or liquidity. | |
Litigation – On October 17, 2012, Wendy Crossland and Richard Fournier filed a lawsuit in the Superior Court of the State of California, County of Riverside, styled Wendy Crossland and Richard Fournier v. Monster Beverage Corporation, against the Company claiming that the death of their 14 year old daughter (Anais Fournier) was caused by her consumption of two 24-ounce Monster Energy® drinks over the course of two days in December 2011. The plaintiffs allege strict product liability, negligence, fraudulent concealment, breach of implied warranties and wrongful death. The plaintiffs claim general damages in excess of $25,000 and punitive damages. The Company filed a demurrer and a motion to strike the plaintiffs’ complaint on November 19, 2012, and the plaintiffs filed a first amended complaint on December 19, 2012. The Company filed its answer to the first amended complaint on June 7, 2013. The parties attended a court ordered mediation on January 23, 2014. Discovery has commenced but no trial date has been set. The Company believes that the plaintiffs’ complaint is without merit and plans a vigorous defense. The Company also believes that any such damages, if awarded, would not have a material adverse effect on the Company’s financial position or results of operations. | |
The Company has also been named as a defendant in other complaints containing similar allegations to those presented in the Fournier lawsuit, each of which the Company believes is also without merit and would not have a material adverse effect on the Company’s financial position or results of operations in the event any damages were awarded. | |
Securities Litigation – On September 11, 2008, a federal securities class action complaint styled Cunha v. Hansen Natural Corp., et al. was filed in the United States District Court for the Central District of California (the “District Court”). On September 17, 2008, a second federal securities class action complaint styled Brown v. Hansen Natural Corp., et al. was also filed in the District Court. After the District Court consolidated the two actions and appointed the Structural Ironworkers Local Union #1 Pension Fund as lead plaintiff, a Consolidated Complaint for Violations of Federal Securities Laws was filed on August 28, 2009 (the “Consolidated Class Action Complaint”). | |
The Consolidated Class Action Complaint purported to be brought on behalf of a class of purchasers of the Company’s stock during the period November 9, 2006 through November 8, 2007 (the “Class Period”). It named as defendants the Company, Rodney C. Sacks, Hilton H. Schlosberg, and Thomas J. Kelly. Plaintiff principally alleged that, during the Class Period, the defendants made false and misleading statements relating to the Company’s distribution coordination agreements with Anheuser-Busch, Inc. (“AB”) and its sales of “Allied” energy drink lines, and engaged in sales of shares in the Company on the basis of material non-public information. Plaintiff also alleged that the Company’s financial statements for the second quarter of 2007 did not include certain promotional expenses. The Consolidated Class Action Complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and sought an unspecified amount of damages. | |
The District Court dismissed the Consolidated Class Action Complaint, with leave to amend, on July 12, 2010. Plaintiff thereafter filed a Consolidated Amended Class Action Complaint for Violations of Federal Securities Laws on August 27, 2010 (the “Amended Class Action Complaint”). While similar in many respects to the Consolidated Class Action Complaint, the Amended Class Action Complaint dropped certain of the allegations set forth in the Consolidated Class Action Complaint and made certain new allegations, including that the Company engaged in “channel stuffing” during the Class Period that rendered false or misleading the Company’s reported sales results and certain other statements made by the defendants. In addition, it no longer named Thomas J. Kelly as a defendant. | |
On September 4, 2012, the District Court dismissed certain of the claims in the Amended Class Action Complaint, including plaintiff’s allegations relating to promotional expenses, but denied defendants’ motion to dismiss with regard to the majority of plaintiff’s claims, including plaintiff’s channel stuffing allegations. Plaintiff filed a motion seeking class certification on December 6, 2012, which the court denied, without prejudice, on January 17, 2014. | |
Following a mediation conducted by an independent mediator, the Company entered into a Stipulation of Settlement on April 16, 2014 that, if approved by the District Court, will resolve the litigation and result in the action being dismissed with prejudice. A preliminary approval hearing with respect to the proposed settlement is scheduled for June 19, 2014. | |
Under the terms of the proposed settlement, the Company has agreed that certain of its insurance carriers will pay $16.25 million into an escrow account for distribution to a proposed settlement class, certified by the District Court for settlement purposes only and consisting of all persons who purchased or otherwise acquired the Company’s stock during the Class Period. Excluded from the proposed settlement class are the Company’s officers and directors, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which defendants have or had a controlling interest, as well as any putative member of the settlement class who submits a valid and timely request for exclusion in the manner ultimately approved by the District Court. Under the proposed settlement, defendants and various of their related persons and entities will receive a full release of all claims that were or could have been brought in the action as well as all claims that arise out of, are based upon or relate to the allegations, transactions, facts, representations, omissions or other matters involved in the complaints filed in the action or any statement communicated to the public during the Class Period, and the purchase, acquisition or sale of the Company’s stock during the Class Period. | |
The proposed settlement contains no admission of any liability or wrongdoing on the part of the defendants, each of whom continues to deny all of the allegations against them and believes that the claims are without merit. Because the full amount of the proposed settlement will be paid by the Company’s insurance carriers, the settlement will not have an effect on the Company’s results of operations. | |
State Attorney General Inquiry – In July 2012, the Company received a subpoena from a state attorney general in connection with an investigation concerning the Company’s advertising, marketing, promotion, ingredients, usage and sale of its Monster Energy® brand of energy drinks. It is unknown what, if any, action the state attorney general may take against the Company, the relief which may be sought in the event of any such proceeding or whether such proceeding could have a material adverse effect on the Company’s business, financial condition or results of operations. | |
San Francisco City Attorney Litigation. On October 31, 2012, the Company received a written request for information from the City Attorney for the City and County of San Francisco concerning the Company’s advertising and marketing of its Monster Energy® brand of energy drinks and specifically concerning the safety of its products for consumption by adolescents. In a letter dated March 29, 2013, the San Francisco City Attorney threatened to bring suit against the Company if it did not agree to take the following five steps immediately: (i) “Reformulate its products to lower the caffeine content to safe levels”; (ii) “Provide adequate warning labels”; (iii) “Cease promoting over-consumption in marketing”; (iv) “Cease use of alcohol and drug references in marketing”; and (v) “Cease targeting minors.” | |
On April 29, 2013, the Company and its wholly owned subsidiary, Monster Energy Company, filed a complaint for declaratory and injunctive relief against the San Francisco City Attorney in United States District Court for the Central District of California (the “Central District Court”), styled Monster Beverage Corp., et al. v. Dennis Herrera. The Company seeks a declaration from the Central District Court that the San Francisco City Attorney’s investigation and demands are impermissible and preempted, subject to the doctrine of primary jurisdiction, are unconstitutional in that they violate the First and Fourteenth Amendments’ prohibitions against compelled speech, content-based speech and commercial speech, are impermissibly void-for-vagueness, and/or violate the Commerce Clause. On June 3, 2013, the City Attorney filed a motion to dismiss the Company’s complaint, arguing in part that the complaint should be dismissed in light of the San Francisco Action (described below) filed on May 6, 2013. On August 22, 2013, the Central District Court granted in part and denied in part the City Attorney’s motion. | |
On May 6, 2013, the San Francisco City Attorney filed a complaint for declaratory and injunctive relief, civil penalties and restitution for alleged violation of California’s Unfair Competition Law, Business & Professions Code sections 17200, et seq., styled People Of The State Of California ex rel. Dennis Herrera, San Francisco City Attorney v. Monster Beverage Corporation, in San Francisco Superior Court (the “San Francisco Action”). The City Attorney alleges that the Company (1) mislabeled its products as a dietary supplement, in violation of California’s Sherman Food, Drug and Cosmetic Law, California Health & Safety Code sections 109875 et. seq.; (2) is selling an “adulterated” product because caffeine is not generally recognized as safe (“GRAS”) due to the alleged lack of scientific consensus concerning the safety of the levels of caffeine in the Company’s products; and (3) is engaged in unfair and misleading business practices because its marketing (a) does not disclose the health risks that energy drinks pose for children and teens; (b) fails to warn against and promotes unsafe consumption; (c) implicitly promotes mixing of energy drinks with alcohol or drugs; and (d) is deceptive because it includes unsubstantiated claims about the purported special benefits of its “killer” ingredients and “energy blend.” The City Attorney seeks a declaration that the Company has engaged in unfair and unlawful business acts and practices in violation of the Unfair Competition Law; an injunction from performing or proposing to perform any acts in violation of the Unfair Competition Law; restitution; and civil penalties. On June 3, 2013, the Company removed the case to the United States District Court for the Northern District of California (the “Northern District Court”). On July 3, 2013, the City Attorney filed a motion to remand the case back to state court. On September 18, 2013, the Northern District Court granted the City Attorney’s motion to remand the San Francisco Action back to state court. | |
On October 17, 2013 (after the San Francisco Action described above was remanded to San Francisco Superior Court), the City Attorney filed a renewed motion to dismiss and on December 16, 2013, the Central District Court granted the City Attorney’s renewed motion, dismissing the action. The Company filed a Notice of Appeal to the Ninth Circuit on December 18, 2013. | |
On January 15, 2014, the Company filed a demurrer to and motion to strike allegations in the complaint in the San Francisco Action. On March 5, 2014, the Court overruled the demurrer, granted the motion to strike as to one theory for relief pleaded by the City Attorney, and lifted the stay on discovery. | |
On March 20, 2014, the City Attorney filed an amended complaint, adding allegations supporting the theory for relief as to which the Court had granted the motion to strike. On April 18, 2014, the Company filed a renewed motion to strike, challenging the theory for relief previously rejected by the Court, as well as a motion asking the Court to bifurcate and/or stay claims relating to the safety of Monster Energy® drinks, pending resolution of the ongoing FDA investigation of the safety and labeling of food products to which caffeine is added. These motions are calendared for hearing on May 21, 2014. | |
The Company denies that it has violated the Unfair Competition Law or any other law and believes that the City Attorney’s claims and demands are preempted and unconstitutional, as alleged in the action the Company filed in the Central District Court. The Company intends to vigorously defend against this lawsuit. At this time, no evaluation of the likelihood of an unfavorable outcome or range of potential loss can be expressed. | |
In addition to the above matters, the Company has been named as a defendant in various false advertising putative class actions and in a private attorney general action. In these actions, plaintiffs allege that defendants misleadingly labeled and advertised Monster Energy® brand products that allegedly were ineffective for the advertised benefits (including, but not limited to, an allegation that the products do not hydrate as advertised because they contain caffeine). The plaintiffs further allege that the Monster Energy® brand products at issue are unsafe because they contain one or more ingredients that allegedly could result in illness, injury or death. In connection with these product safety allegations, the plaintiffs claim that the product labels did not provide adequate warnings and/or that the Company did not include sufficiently specific statements with respect to contra-indications and/or adverse reactions associated with the consumption of its energy drink products (including, but not limited to, claims that certain ingredients, when consumed individually or in combination with other ingredients, could result in high blood pressure, palpitations, liver damage or other negative health effects and/or that the products themselves are unsafe). Based on these allegations, the plaintiffs assert claims for violation of state consumer protection statutes, including unfair competition and false advertising statutes, and for breach of warranty and unjust enrichment. In their prayers for relief, the plaintiffs seek, inter alia, compensatory and punitive damages, restitution, attorneys’ fees, and, in some cases, injunctive relief. The Company regards these cases and allegations as having no merit. Furthermore, the Company is subject to litigation from time to time in the normal course of business, including intellectual property litigation and claims from terminated distributors. Although it is not possible to predict the outcome of such litigation, based on the facts known to the Company, management believes that such litigation in the aggregate will likely not have a material adverse effect on the Company’s financial position or results of operations. | |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | |||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | |||||
11. ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||
Changes in accumulated other comprehensive loss by component, after tax, for the three-months ended March 31, 2014 are as follows: | ||||||
Currency | ||||||
Translation | ||||||
Gains (Losses) | ||||||
Balance at December 31, 2013 | $ | -1,233 | ||||
Other comprehensive income before reclassifications | 102 | |||||
Amounts reclassified from accumulated other comprehensive loss | - | |||||
Net current-period other comprehensive income | 102 | |||||
Balance at March 31, 2014 | $ | -1,131 | ||||
TREASURY_STOCK_PURCHASE
TREASURY STOCK PURCHASE | 3 Months Ended |
Mar. 31, 2014 | |
TREASURY STOCK PURCHASE | ' |
TREASURY STOCK PURCHASE | ' |
12. TREASURY STOCK PURCHASE | |
On April 7, 2013, the Company’s Board of Directors authorized a new share repurchase program for the repurchase of up to $200.0 million of the Company’s outstanding common stock (the “April 2013 Repurchase Plan”). During the three-months ended March 31, 2014, no shares of common stock were purchased under the April 2013 Repurchase Plan. During the year ended December 31, 2013, the Company purchased 0.951 million shares of common stock at an average purchase price of $56.98 per share for a total amount of $54.2 million (excluding broker commissions) under the April 2013 Repurchase Plan. | |
During the three-months ended March 31, 2014, 281 shares were purchased from employees in lieu of cash payments for options exercised or withholding taxes due for a total amount of $0.02 million. While such purchases are considered common stock repurchases, they are not counted as purchases against the Company’s authorized share repurchase programs, including the April 2013 Repurchase Plan. | |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||
13. STOCK-BASED COMPENSATION | ||||||||||||
The Company has two stock-based compensation plans under which shares were available for grant at March 31, 2014: the Monster Beverage Corporation 2011 Omnibus Incentive Plan (the “2011 Omnibus Incentive Plan”) and the 2009 Monster Beverage Corporation Stock Incentive Plan for Non-Employee Directors (the “2009 Directors Plan”). | ||||||||||||
The Company recorded $7.0 million of compensation expense relating to outstanding options, restricted stock awards, stock appreciation rights and restricted stock units for both the three-months ended March 31, 2014 and 2013. | ||||||||||||
The excess tax benefit realized for tax deductions from non-qualified stock option exercises, disqualifying dispositions of incentive stock options, vesting of restricted stock units and restricted stock awards for the three-months ended March 31, 2014 and 2013 was $2.6 million and $0.2 million, respectively. | ||||||||||||
Stock Options | ||||||||||||
Under the Company’s stock-based compensation plans, all stock options granted as of March 31, 2014 were granted at prices based on the fair value of the Company’s common stock on the date of grant. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes-Merton option pricing formula with the assumptions included in the table below. The Company records compensation expense for non-employee stock options based on the estimated fair value of the options as of the earlier of (1) the date at which a commitment for performance by the non-employee to earn the stock option is reached or (2) the date at which the non-employee’s performance is complete, using the Black-Scholes-Merton option pricing formula with the assumptions included in the table below. The Company uses historical data to determine the exercise behavior, volatility and forfeiture rate of the options. | ||||||||||||
The following weighted-average assumptions were used to estimate the fair value of options granted during: | ||||||||||||
Three-Months Ended March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Dividend yield | 0.00% | 0.00% | ||||||||||
Expected volatility | 43.10% | 47.80% | ||||||||||
Risk-free interest rate | 1.60% | 0.90% | ||||||||||
Expected term | 5.9 years | 5.4 years | ||||||||||
Expected Volatility: The Company uses historical volatility as it provides a reasonable estimate of the expected volatility. Historical volatility is based on the most recent volatility of the stock price over a period of time equivalent to the expected term of the option. | ||||||||||||
Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury zero coupon yield curve in effect at the time of grant for the expected term of the option. | ||||||||||||
Expected Term: The Company’s expected term represents the weighted-average period that the Company’s stock options are expected to be outstanding. The expected term is based on expected time to post-vesting exercise of options by employees. The Company uses historical exercise patterns of previously granted options to derive employee behavioral patterns used to forecast expected exercise patterns. | ||||||||||||
The following table summarizes the Company’s activities with respect to its stock option plans as follows: | ||||||||||||
Weighted- | ||||||||||||
Weighted- | Average | |||||||||||
Average | Remaining | |||||||||||
Number of | Exercise | Contractual | ||||||||||
Shares (In | Price Per | Term (In | Aggregate | |||||||||
Options | thousands) | Share | years) | Intrinsic Value | ||||||||
Outstanding at January 1, 2014 | 12,973 | $ | 15.7 | 3.7 | $ | 675,595 | ||||||
Granted | 689 | $ | 70.06 | |||||||||
Exercised | -235 | $ | 24.33 | |||||||||
Cancelled or forfeited | -16 | $ | 47.09 | |||||||||
Outstanding at March 31, 2014 | 13,411 | $ | 18.3 | 3.8 | $ | 686,398 | ||||||
Vested and expected to vest in the future at March 31, 2014 | 12,905 | $ | 16.92 | 3.6 | $ | 678,326 | ||||||
Exercisable at March 31, 2014 | 10,323 | $ | 9.45 | 2.4 | $ | 619,368 | ||||||
The weighted-average grant-date fair value of options granted during the three-months ended March 31, 2014 and 2013 was $29.86 per share and $20.52 per share, respectively. The total intrinsic value of options exercised during the three-months ended March 31, 2014 and 2013 was $11.4 million and $3.3 million, respectively. | ||||||||||||
Cash received from option exercises under all plans for the three-months ended March 31, 2014 and 2013 was approximately $5.7 million and $2.4 million, respectively. | ||||||||||||
At March 31, 2014, there was $56.2 million of total unrecognized compensation expense related to non-vested options granted to employees under the Company’s share-based payment plans. That cost is expected to be recognized over a weighted-average period of 2.8 years. | ||||||||||||
Restricted Stock Awards and Restricted Stock Units | ||||||||||||
Stock-based compensation cost for restricted stock awards and restricted stock units is measured based on the closing fair market value of the Company’s common stock at the date of grant. In the event that the Company has the option and intent to settle a restricted stock unit in cash, the award is classified as a liability and revalued at each balance sheet date. | ||||||||||||
The following table summarizes the Company’s activities with respect to non-vested restricted stock awards and non-vested restricted stock units as follows: | ||||||||||||
Number of | Weighted | |||||||||||
Shares (in | Average | |||||||||||
thousands) | Grant-Date | |||||||||||
Fair Value | ||||||||||||
Non-vested at January 1, 2014 | 391 | $ | 49.27 | |||||||||
Granted | - | $ | - | |||||||||
Vested | (17 | ) | $ | 57.18 | ||||||||
Forfeited/cancelled | (6 | ) | $ | 57.3 | ||||||||
Non-vested at March 31, 2014 | 368 | $ | 48.78 | |||||||||
No awards were granted during the three-months ended March 31, 2014. The weighted-average grant-date fair value of restricted stock units and restricted stock awards granted during the three-months ended March 31, 2013 was $50.89 per share. As of March 31, 2014, 0.3 million of restricted stock units and restricted stock awards are expected to vest over their respective terms. | ||||||||||||
At March 31, 2014, total unrecognized compensation expense relating to non-vested restricted stock awards and non-vested restricted stock units was $10.9 million, which is expected to be recognized over a weighted-average period of 1.9 years. | ||||||||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
INCOME TAXES | ' | |||||
INCOME TAXES | ' | |||||
14. INCOME TAXES | ||||||
The following is a roll-forward of the Company’s total gross unrecognized tax benefits, not including interest and penalties, for the three-months ended March 31, 2014: | ||||||
Gross Unrecognized Tax | ||||||
Benefits | ||||||
Balance at December 31, 2013 | $ | 935 | ||||
Additions for tax positions related to the current year | - | |||||
Additions for tax positions related to the prior year | - | |||||
Decreases related to settlement with taxing authority | - | |||||
Balance at March 31, 2014 | $ | 935 | ||||
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s condensed consolidated financial statements. As of March 31, 2014, the Company had accrued approximately $0.4 million in interest and penalties related to unrecognized tax benefits. If the Company were to prevail on all uncertain tax positions, the resultant impact on the Company’s effective tax rate would not be significant. It is expected that the amount of unrecognized tax benefits will not change within the next 12 months. | ||||||
The Company is subject to U.S. federal income tax as well as to income tax in multiple state and foreign jurisdictions. | ||||||
On March 8, 2013, the Internal Revenue Service (“IRS”) began its examination of the Company’s U.S. federal income tax returns for the years ended December 31, 2010 and 2011. The Company is also in various stages of examination with certain states. The 2012 U.S. federal income tax return is subject to IRS examination. State income tax returns are subject to examination for the 2009 through 2012 tax years. | ||||||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
EARNINGS PER SHARE | ' | |||||
EARNINGS PER SHARE | ' | |||||
15. EARNINGS PER SHARE | ||||||
A reconciliation of the weighted-average shares used in the basic and diluted earnings per common share computations is presented below: | ||||||
Three-Months Ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Weighted-average shares outstanding: | ||||||
Basic | 166,913 | 165,525 | ||||
Dilutive securities | 6,828 | 7,034 | ||||
Diluted | 173,741 | 172,559 | ||||
For the three-months ended March 31, 2014 and 2013, options and awards outstanding totaling 0.6 million shares and 0.8 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive. | ||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||
16. SEGMENT INFORMATION | |||||||||||||||||
The Company has two reportable segments, namely Direct Store Delivery (“DSD”), whose principal products comprise energy drinks, and Warehouse (“Warehouse”), whose principal products comprise juice-based and soda beverages. The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily direct to retailers. Corporate and unallocated amounts that do not relate to DSD or Warehouse segments have been allocated to “Corporate & Unallocated.” | |||||||||||||||||
The net revenues derived from the DSD and Warehouse segments and other financial information related thereto are as follows: | |||||||||||||||||
Three-Months Ended March 31, 2014 | |||||||||||||||||
DSD | Warehouse | Corporate and | Total | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 514,355 | $ | 21,774 | $ | - | $ | 536,129 | |||||||||
Contribution margin | 186,468 | 296 | - | 186,764 | |||||||||||||
Corporate and unallocated expenses | - | - | (37,901 | ) | (37,901 | ) | |||||||||||
Operating income | 148,863 | ||||||||||||||||
Other income (expense) | 26 | - | 128 | 154 | |||||||||||||
Income before provision for income taxes | 149,017 | ||||||||||||||||
Depreciation and amortization | (4,944 | ) | (81 | ) | (1,428 | ) | (6,453 | ) | |||||||||
Three-Months Ended March 31, 2013 | |||||||||||||||||
DSD | Warehouse | Corporate and | Total | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 460,175 | $ | 24,048 | $ | - | $ | 484,223 | |||||||||
Contribution margin | 138,974 | 382 | - | 139,356 | |||||||||||||
Corporate and unallocated expenses | - | - | (32,050 | ) | (32,050 | ) | |||||||||||
Operating income | 107,306 | ||||||||||||||||
Other income (expense) | 188 | - | (2,090 | ) | (1,902 | ) | |||||||||||
Income before provision for income taxes | 105,404 | ||||||||||||||||
Depreciation and amortization | (4,421 | ) | (58 | ) | (581 | ) | (5,060 | ) | |||||||||
Revenue is derived from sales to external customers. Operating expenses that pertain to each segment are allocated to the appropriate segment. | |||||||||||||||||
Corporate and unallocated expenses were $37.9 million for the three-months ended March 31, 2014 and included $21.1 million of payroll costs, of which $7.0 million was attributable to stock-based compensation expense (see Note 13, “Stock-Based Compensation”), $10.1 million attributable to professional service expenses, including accounting and legal costs and $6.7 million of other operating expenses. Corporate and unallocated expenses were $32.0 million for the three-months ended March 31, 2013 and included $19.4 million of payroll costs, of which $7.0 million was attributable to stock-based compensation expense (see Note 13, “Stock-Based Compensation”), $7.6 million attributable to professional service expenses, including accounting and legal costs and $5.0 million attributable to other operating expenses. | |||||||||||||||||
Coca-Cola Refreshments USA Inc. (“CCR”), a customer of the DSD segment, accounted for approximately 31% and 30% of the Company’s net sales for the three-months ended March 31, 2014 and 2013, respectively. | |||||||||||||||||
Net sales to customers outside the United States amounted to $115.8 million and $106.3 million for the three-months ended March 31, 2014 and 2013, respectively. | |||||||||||||||||
The Company’s net sales by product line were as follows: | |||||||||||||||||
Three-Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Product Line | 2014 | 2013 | |||||||||||||||
Energy drinks | $ | 499,013 | $ | 446,026 | |||||||||||||
Non-carbonated (primarily juice based beverages and Peace Tea® iced teas) | 26,446 | 27,972 | |||||||||||||||
Carbonated (primarily soda beverages) | 7,014 | 6,401 | |||||||||||||||
Other | 3,656 | 3,824 | |||||||||||||||
$ | 536,129 | $ | 484,223 | ||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2014 | |
RELATED PARTY TRANSACTIONS | ' |
RELATED PARTY TRANSACTIONS | ' |
17. RELATED PARTY TRANSACTIONS | |
Two directors and officers of the Company and their families are principal owners of a company that provides promotional materials to the Company. Expenses incurred with such company in connection with promotional materials purchased during the three-months ended March 31, 2014 and 2013 were $0.07 million and $0.2 million, respectively. |
INVESTMENTS_Tables
INVESTMENTS (Tables) | 3 Months Ended | ||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||
INVESTMENTS | ' | ||||||||||||||||||
Summary of investments in held-to-maturity, available-for-sale and trading securities | ' | ||||||||||||||||||
March 31, 2014 | Amortized Cost | Gross | Gross | Fair | Continuous | Continuous | |||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | |||||||||||||||
Holding | Holding | Loss Position | Loss Position | ||||||||||||||||
Gains | Losses | less than 12 | greater than 12 | ||||||||||||||||
Months | Months | ||||||||||||||||||
Held-to-Maturity | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Certificates of deposit | $ | 22,043 | $ | - | $ | - | $ | 22,043 | $ | - | $ | - | |||||||
Commercial paper | 9,990 | - | - | 9,990 | - | - | |||||||||||||
Municipal securities | 400,504 | 25 | - | 400,529 | - | - | |||||||||||||
Total | $ | 432,537 | $ | 25 | $ | - | 432,562 | $ | - | $ | - | ||||||||
Trading | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Auction rate securities | 6,395 | ||||||||||||||||||
Long-term: | |||||||||||||||||||
Auction rate securities | 8,131 | ||||||||||||||||||
Total | $ | 447,088 | |||||||||||||||||
December 31, 2013 | Amortized Cost | Gross | Gross | Fair | Continuous | Continuous | |||||||||||||
Unrealized | Unrealized | Value | Unrealized | Unrealized | |||||||||||||||
Holding | Holding | Loss Position | Loss Position | ||||||||||||||||
Gains | Losses | less than 12 | greater than 12 | ||||||||||||||||
Months | Months | ||||||||||||||||||
Held-to-Maturity | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Certificates of deposit | $ | 22,045 | $ | - | $ | - | $ | 22,045 | $ | - | $ | - | |||||||
Commercial paper | 5,991 | - | - | 5,991 | - | - | |||||||||||||
Municipal securities | 367,819 | 48 | - | 367,867 | - | - | |||||||||||||
Total | $ | 395,855 | $ | 48 | $ | - | 395,903 | $ | - | $ | - | ||||||||
Trading | |||||||||||||||||||
Short-term: | |||||||||||||||||||
Auction rate securities | 6,392 | ||||||||||||||||||
Long-term: | |||||||||||||||||||
Auction rate securities | 9,792 | ||||||||||||||||||
Total | $ | 412,087 | |||||||||||||||||
Schedule of net gain recognized through earnings on trading securities | ' | ||||||||||||||||||
Three-Months Ended | |||||||||||||||||||
March 31, | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Gain on trading securities sold | $ | 131 | $ | - | |||||||||||||||
(Loss) gain on trading securities held | (64 | ) | 6 | ||||||||||||||||
Gain on trading securites | $ | 67 | $ | 6 | |||||||||||||||
Summarizes the underlying contractual maturities of the Company's investments | ' | ||||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||
Less than 1 year: | |||||||||||||||||||
Certificates of deposit | $ | 22,043 | $ | 22,043 | $ | 22,045 | $ | 22,045 | |||||||||||
Commercial paper | 9,990 | 9,990 | 5,991 | 5,991 | |||||||||||||||
Municipal securities | 400,504 | 400,529 | 367,819 | 367,867 | |||||||||||||||
Due 11 - 20 years: | |||||||||||||||||||
Auction rate securities | 11,053 | 11,053 | 11,102 | 11,102 | |||||||||||||||
Due 21 - 30 years: | |||||||||||||||||||
Auction rate securities | 3,473 | 3,473 | 5,082 | 5,082 | |||||||||||||||
Total | $ | 447,063 | $ | 447,088 | $ | 412,039 | $ | 412,087 | |||||||||||
FAIR_VALUE_OF_CERTAIN_FINANCIA1
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ' | |||||||||||||
Schedule of financial assets and liabilities recorded at fair value on a recurring basis | ' | |||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Cash | $ | 207,079 | $ | - | $ | - | $ | 207,079 | ||||||
Money market funds | 73,014 | - | - | 73,014 | ||||||||||
Certificates of deposit | - | 22,043 | - | 22,043 | ||||||||||
Commercial paper | - | 9,990 | - | 9,990 | ||||||||||
Municipal securities | - | 432,431 | - | 432,431 | ||||||||||
Auction rate securities | - | - | 14,526 | 14,526 | ||||||||||
Put option related to auction rate securities | - | - | 1,024 | 1,024 | ||||||||||
Foreign currency derivatives | - | (21 | ) | - | (21 | ) | ||||||||
Total | $ | 280,093 | $ | 464,443 | $ | 15,550 | $ | 760,086 | ||||||
Amounts included in: | ||||||||||||||
Cash and cash equivalents | $ | 280,093 | $ | 31,927 | $ | - | $ | 312,020 | ||||||
Short-term investments | - | 432,537 | 6,395 | 438,932 | ||||||||||
Accounts receivable, net | - | 349 | - | 349 | ||||||||||
Investments | - | - | 8,131 | 8,131 | ||||||||||
Prepaid expenses and other current assets | - | - | 485 | 485 | ||||||||||
Other assets | - | - | 539 | 539 | ||||||||||
Accrued liabilities | - | (370 | ) | - | (370 | ) | ||||||||
Total | $ | 280,093 | $ | 464,443 | $ | 15,550 | $ | 760,086 | ||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Cash | $ | 139,300 | $ | - | $ | - | $ | 139,300 | ||||||
Money market funds | 60,102 | - | - | 60,102 | ||||||||||
Certificates of deposit | - | 22,045 | - | 22,045 | ||||||||||
Commercial paper | - | 5,991 | - | 5,991 | ||||||||||
Municipal securities | - | 379,766 | - | 379,766 | ||||||||||
Auction rate securities | - | - | 16,184 | 16,184 | ||||||||||
Put option related to auction rate securities | - | - | 1,092 | 1,092 | ||||||||||
Total | $ | 199,402 | $ | 407,802 | $ | 17,276 | $ | 624,480 | ||||||
Amounts included in: | ||||||||||||||
Cash and cash equivalents | $ | 199,402 | $ | 11,947 | $ | - | $ | 211,349 | ||||||
Short-term investments | - | 395,855 | 6,392 | 402,247 | ||||||||||
Investments | - | - | 9,792 | 9,792 | ||||||||||
Prepaid expenses and other current assets | - | - | 486 | 486 | ||||||||||
Other assets | - | - | 606 | 606 | ||||||||||
Total | $ | 199,402 | $ | 407,802 | $ | 17,276 | $ | 624,480 | ||||||
Schedule of quantitative information related to the significant unobservable inputs utilized in Level 3 recurring fair value measurements | ' | |||||||||||||
The following table presents quantitative information related to the significant unobservable inputs utilized in the Company’s Level 3 recurring fair value measurements as of March 31, 2014. | ||||||||||||||
Valuation Technique | Unobservable Input | Range (Weighted-Average) | ||||||||||||
Auction Rate Securities: Trading | Discounted cash flow | Maximum rate probability | 0.61%-2.48% (1.53%) | |||||||||||
Principal returned probability | 85.58%-94.70% (86.91%) | |||||||||||||
Default probability | 4.28%-12.18% (11.56%) | |||||||||||||
Liquidity risk | 3.00%-3.00% (3.00%) | |||||||||||||
Recovery rate | 60-60 (60) | |||||||||||||
Put Options | Discounted cash flow | Counterparty risk | 0.43%-0.68% (0.51%) | |||||||||||
Summary of changes in fair value of the Company's Level 3 financial assets | ' | |||||||||||||
Three-Months Ended | Three-Months Ended | |||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||
Auction | Put Options | Auction | Put Options | |||||||||||
Rate | Rate | |||||||||||||
Securities | Securities | |||||||||||||
Opening Balance | $ | 16,184 | $ | 1,092 | $ | 23,156 | $ | 1,929 | ||||||
Transfers into Level 3 | - | - | - | - | ||||||||||
Transfers out of Level 3 | - | - | - | - | ||||||||||
Total gains (losses) for the period: | ||||||||||||||
Included in earnings | 67 | -68 | 2,489 | 82 | ||||||||||
Included in other comprehensive income | - | - | -2,483 | - | ||||||||||
Settlements | -1,725 | - | -5,792 | - | ||||||||||
Closing Balance | $ | 14,526 | $ | 1,024 | $ | 17,370 | $ | 2,011 | ||||||
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||
Schedule of notional amount and fair value of all outstanding foreign currency derivative instruments in the condensed consolidated balance sheets | ' | |||||||||
March 31,2014 | ||||||||||
Derivatives not designated as | Notional | Fair | Balance Sheet Location | |||||||
hedging instruments under | Amount | Value | ||||||||
FASB ASC 815-20 | ||||||||||
Assets: | ||||||||||
Foreign currency exchange contracts: | ||||||||||
Receive CAD/pay USD | $ | 12,234 | $ | 70 | Accounts receivable, net | |||||
Receive USD/pay JPY | 24,216 | 279 | Accounts receivable, net | |||||||
Liabilities: | ||||||||||
Foreign currency exchange contracts: | ||||||||||
Receive EUR/pay USD | $ | 15,577 | $ | -8 | Accrued liabilities | |||||
Receive USD/pay AUD | 9,204 | -51 | Accrued liabilities | |||||||
Receive USD/pay ZAR | 14,713 | -235 | Accrued liabilities | |||||||
Receive USD/pay MXN | 3,742 | -25 | Accrued liabilities | |||||||
Receive USD/pay CLP | 5,106 | -46 | Accrued liabilities | |||||||
Receive USD/pay COP | 2,229 | -5 | Accrued liabilities | |||||||
Schedule of net losses on derivative instruments in the condensed consolidated statements of income | ' | |||||||||
Amount of loss | ||||||||||
recognized in income on | ||||||||||
derivatives | ||||||||||
Three-months ended | ||||||||||
Derivatives not designated as | Location of loss | March 31, | March 31, | |||||||
hedging instruments under | recognized in income on | 2014 | 2013 | |||||||
FASB ASC 815-20 | derivatives | |||||||||
Foreign currency exchange contracts | Interest and other income (expense), net | $ | 359 | $ | - | |||||
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
INVENTORIES | ' | ||||||||
Schedule of inventories | ' | ||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 64,550 | $ | 68,088 | |||||
Finished goods | 139,511 | 153,361 | |||||||
$ | 204,061 | $ | 221,449 | ||||||
PROPERTY_AND_EQUIPMENT_Net_Tab
PROPERTY AND EQUIPMENT, Net (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
PROPERTY AND EQUIPMENT, Net | ' | ||||||
Schedule of property and equipment | ' | ||||||
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
Land | $ | 5,382 | $ | 5,382 | |||
Leasehold improvements | 2,737 | 2,222 | |||||
Furniture and fixtures | 3,494 | 3,474 | |||||
Office and computer equipment | 14,514 | 14,135 | |||||
Computer software | 655 | 791 | |||||
Equipment | 66,752 | 62,552 | |||||
Buildings | 37,980 | 33,468 | |||||
Vehicles | 29,860 | 30,442 | |||||
161,374 | 152,466 | ||||||
Less: accumulated depreciation and amortization | -69,641 | -64,323 | |||||
$ | 91,733 | $ | 88,143 | ||||
INTANGIBLES_Net_Tables
INTANGIBLES, Net (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
INTANGIBLES, Net | ' | ||||||
Schedule of intangibles | ' | ||||||
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
Amortizing intangibles | $ | 1,140 | $ | 1,076 | |||
Accumulated amortization | -665 | -590 | |||||
475 | 486 | ||||||
Non-amortizing intangibles | 65,050 | 65,288 | |||||
$ | 65,525 | $ | 65,774 |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | |||||
Changes in accumulated other comprehensive loss by component, after tax | ' | |||||
Currency | ||||||
Translation | ||||||
Gains (Losses) | ||||||
Balance at December 31, 2013 | $ | -1,233 | ||||
Other comprehensive income before reclassifications | 102 | |||||
Amounts reclassified from accumulated other comprehensive loss | - | |||||
Net current-period other comprehensive income | 102 | |||||
Balance at March 31, 2014 | $ | -1,131 | ||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||
Schedule of weighted-average assumptions used to estimate the fair value of options granted | ' | |||||||||||
Three-Months Ended March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Dividend yield | 0.00% | 0.00% | ||||||||||
Expected volatility | 43.10% | 47.80% | ||||||||||
Risk-free interest rate | 1.60% | 0.90% | ||||||||||
Expected term | 5.9 years | 5.4 years | ||||||||||
Summary of activities with respect to its stock option plans | ' | |||||||||||
Weighted- | ||||||||||||
Weighted- | Average | |||||||||||
Average | Remaining | |||||||||||
Number of | Exercise | Contractual | ||||||||||
Shares (In | Price Per | Term (In | Aggregate | |||||||||
Options | thousands) | Share | years) | Intrinsic Value | ||||||||
Outstanding at January 1, 2014 | 12,973 | $ | 15.7 | 3.7 | $ | 675,595 | ||||||
Granted | 689 | $ | 70.06 | |||||||||
Exercised | -235 | $ | 24.33 | |||||||||
Cancelled or forfeited | -16 | $ | 47.09 | |||||||||
Outstanding at March 31, 2014 | 13,411 | $ | 18.3 | 3.8 | $ | 686,398 | ||||||
Vested and expected to vest in the future at March 31, 2014 | 12,905 | $ | 16.92 | 3.6 | $ | 678,326 | ||||||
Exercisable at March 31, 2014 | 10,323 | $ | 9.45 | 2.4 | $ | 619,368 | ||||||
Summary of activities with respect to non-vested restricted stock awards and non-vested restricted stock units | ' | |||||||||||
Number of | Weighted | |||||||||||
Shares (in | Average | |||||||||||
thousands) | Grant-Date | |||||||||||
Fair Value | ||||||||||||
Non-vested at January 1, 2014 | 391 | $ | 49.27 | |||||||||
Granted | - | $ | - | |||||||||
Vested | (17 | ) | $ | 57.18 | ||||||||
Forfeited/cancelled | (6 | ) | $ | 57.3 | ||||||||
Non-vested at March 31, 2014 | 368 | $ | 48.78 | |||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
INCOME TAXES | ' | |||||
Schedule of roll-forward of the total gross unrecognized tax benefits, not including interest and penalties | ' | |||||
Gross Unrecognized Tax | ||||||
Benefits | ||||||
Balance at December 31, 2013 | $ | 935 | ||||
Additions for tax positions related to the current year | - | |||||
Additions for tax positions related to the prior year | - | |||||
Decreases related to settlement with taxing authority | - | |||||
Balance at March 31, 2014 | $ | 935 | ||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
EARNINGS PER SHARE | ' | |||||
Schedule of reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations | ' | |||||
Three-Months Ended | ||||||
March 31, | ||||||
2014 | 2013 | |||||
Weighted-average shares outstanding: | ||||||
Basic | 166,913 | 165,525 | ||||
Dilutive securities | 6,828 | 7,034 | ||||
Diluted | 173,741 | 172,559 | ||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||
Schedule of net revenues and other financial information by segment | ' | ||||||||||||||||
Three-Months Ended March 31, 2014 | |||||||||||||||||
DSD | Warehouse | Corporate and | Total | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 514,355 | $ | 21,774 | $ | - | $ | 536,129 | |||||||||
Contribution margin | 186,468 | 296 | - | 186,764 | |||||||||||||
Corporate and unallocated expenses | - | - | (37,901 | ) | (37,901 | ) | |||||||||||
Operating income | 148,863 | ||||||||||||||||
Other income (expense) | 26 | - | 128 | 154 | |||||||||||||
Income before provision for income taxes | 149,017 | ||||||||||||||||
Depreciation and amortization | (4,944 | ) | (81 | ) | (1,428 | ) | (6,453 | ) | |||||||||
Three-Months Ended March 31, 2013 | |||||||||||||||||
DSD | Warehouse | Corporate and | Total | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 460,175 | $ | 24,048 | $ | - | $ | 484,223 | |||||||||
Contribution margin | 138,974 | 382 | - | 139,356 | |||||||||||||
Corporate and unallocated expenses | - | - | (32,050 | ) | (32,050 | ) | |||||||||||
Operating income | 107,306 | ||||||||||||||||
Other income (expense) | 188 | - | (2,090 | ) | (1,902 | ) | |||||||||||
Income before provision for income taxes | 105,404 | ||||||||||||||||
Depreciation and amortization | (4,421 | ) | (58 | ) | (581 | ) | (5,060 | ) | |||||||||
Schedule of net sales by product line | ' | ||||||||||||||||
Three-Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Product Line | 2014 | 2013 | |||||||||||||||
Energy drinks | $ | 499,013 | $ | 446,026 | |||||||||||||
Non-carbonated (primarily juice based beverages and Peace Tea® iced teas) | 26,446 | 27,972 | |||||||||||||||
Carbonated (primarily soda beverages) | 7,014 | 6,401 | |||||||||||||||
Other | 3,656 | 3,824 | |||||||||||||||
$ | 536,129 | $ | 484,223 | ||||||||||||||
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Held to Maturity and Available-for-sale | ' | ' |
Held to maturity and available-for-sale securities, Amortized Cost | $432,537 | $395,855 |
Held to maturity and available-for-sale securities, Gross Unrealized Holding Gains | 25 | 48 |
Held to maturity and available-for-sale securities, Fair Value | 432,562 | 395,903 |
Held to Maturity, Available-for-sale, and Trading | ' | ' |
Total Fair Value | 447,088 | 412,087 |
Short-term | Certificates of deposit | ' | ' |
Held-to-Maturity | ' | ' |
Amortized Cost | 22,043 | 22,045 |
Fair Value | 22,043 | 22,045 |
Short-term | Commercial paper | ' | ' |
Held-to-Maturity | ' | ' |
Amortized Cost | 9,990 | 5,991 |
Fair Value | 9,990 | 5,991 |
Short-term | Municipal securities | ' | ' |
Held-to-Maturity | ' | ' |
Amortized Cost | 400,504 | 367,819 |
Gross Unrealized Holding Gains | 25 | 48 |
Fair Value | 400,529 | 367,867 |
Short-term | Auction rate securities | ' | ' |
Trading | ' | ' |
Fair Value | 6,395 | 6,392 |
Long-term | Auction rate securities | ' | ' |
Trading | ' | ' |
Fair Value | $8,131 | $9,792 |
INVESTMENTS_Details_2
INVESTMENTS (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Auction rate securities | Auction rate securities | ||
INVESTMENTS | ' | ' | ' |
Realized gains on the sale of available-for-sale investments | $2,500,000 | ' | ' |
Net gain recognized through earnings on trading securities | ' | ' | ' |
Gain on trading securities sold | ' | 131,000 | ' |
(Loss) gain on trading securities held | ' | -64,000 | 6,000 |
Gain on trading securities | ' | $67,000 | $6,000 |
INVESTMENTS_Details_3
INVESTMENTS (Details 3) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Disclosure of underlying contractual maturities of investments | ' | ' |
Amortized Cost | $447,063 | $412,039 |
Fair Value | 447,088 | 412,087 |
Certificates of deposit | Less than 1 year | ' | ' |
Disclosure of underlying contractual maturities of investments | ' | ' |
Amortized Cost | 22,043 | 22,045 |
Fair Value | 22,043 | 22,045 |
Commercial paper | Less than 1 year | ' | ' |
Disclosure of underlying contractual maturities of investments | ' | ' |
Amortized Cost | 9,990 | 5,991 |
Fair Value | 9,990 | 5,991 |
Municipal securities | Less than 1 year | ' | ' |
Disclosure of underlying contractual maturities of investments | ' | ' |
Amortized Cost | 400,504 | 367,819 |
Fair Value | 400,529 | 367,867 |
Auction rate securities | Due 11 - 20 years | ' | ' |
Disclosure of underlying contractual maturities of investments | ' | ' |
Amortized Cost | 11,053 | 11,102 |
Fair Value | 11,053 | 11,102 |
Auction rate securities | Due 21 - 30 years | ' | ' |
Disclosure of underlying contractual maturities of investments | ' | ' |
Amortized Cost | 3,473 | 5,082 |
Fair Value | $3,473 | $5,082 |
FAIR_VALUE_OF_CERTAIN_FINANCIA2
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Level 1 | ' | ' |
Fair value of certain assets | ' | ' |
Cash | $207,079 | $139,300 |
Assets measured at fair value | 280,093 | 199,402 |
Level 1 | Money market funds | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 73,014 | 60,102 |
Level 2 | ' | ' |
Fair value of certain assets | ' | ' |
Foreign currency derivatives | -21 | ' |
Assets measured at fair value | 464,443 | 407,802 |
Level 2 | Certificates of deposit | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 22,043 | 22,045 |
Level 2 | Commercial paper | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 9,990 | 5,991 |
Level 2 | Municipal securities | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 432,431 | 379,766 |
Level 3 | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 15,550 | 17,276 |
Level 3 | Auction rate securities | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 14,526 | 16,184 |
Level 3 | Put option related to auction rate securities | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 1,024 | 1,092 |
Total fair value | ' | ' |
Fair value of certain assets | ' | ' |
Cash | 207,079 | 139,300 |
Foreign currency derivatives | -21 | ' |
Assets measured at fair value | 760,086 | 624,480 |
Total fair value | Money market funds | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 73,014 | 60,102 |
Total fair value | Certificates of deposit | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 22,043 | 22,045 |
Total fair value | Commercial paper | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 9,990 | 5,991 |
Total fair value | Municipal securities | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 432,431 | 379,766 |
Total fair value | Auction rate securities | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | 14,526 | 16,184 |
Total fair value | Put option related to auction rate securities | ' | ' |
Fair value of certain assets | ' | ' |
Assets measured at fair value | $1,024 | $1,092 |
FAIR_VALUE_OF_CERTAIN_FINANCIA3
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
Fair value amounts included in the carrying value of | ' | ' | ' | ' |
Cash and cash equivalents | $312,020 | $211,349 | $242,533 | $222,514 |
Short-term investments | 438,932 | 402,247 | ' | ' |
Investments | 8,131 | 9,792 | ' | ' |
Asset transfers between Level 1 and Level 2 measurements | 0 | 0 | ' | ' |
Level 1 | ' | ' | ' | ' |
Fair value amounts included in the carrying value of | ' | ' | ' | ' |
Cash and cash equivalents | 280,093 | 199,402 | ' | ' |
Total | 280,093 | 199,402 | ' | ' |
Level 2 | ' | ' | ' | ' |
Fair value amounts included in the carrying value of | ' | ' | ' | ' |
Cash and cash equivalents | 31,927 | 11,947 | ' | ' |
Short-term investments | 432,537 | 395,855 | ' | ' |
Accounts receivable, net | 349 | ' | ' | ' |
Accrued liabilities | -370 | ' | ' | ' |
Total | 464,443 | 407,802 | ' | ' |
Level 3 | ' | ' | ' | ' |
Fair value amounts included in the carrying value of | ' | ' | ' | ' |
Short-term investments | 6,395 | 6,392 | ' | ' |
Investments | 8,131 | 9,792 | ' | ' |
Prepaid expenses and other current assets | 485 | 486 | ' | ' |
Other assets | 539 | 606 | ' | ' |
Total | 15,550 | 17,276 | ' | ' |
Total fair value | ' | ' | ' | ' |
Fair value amounts included in the carrying value of | ' | ' | ' | ' |
Cash and cash equivalents | 312,020 | 211,349 | ' | ' |
Short-term investments | 438,932 | 402,247 | ' | ' |
Accounts receivable, net | 349 | ' | ' | ' |
Investments | 8,131 | 9,792 | ' | ' |
Prepaid expenses and other current assets | 485 | 486 | ' | ' |
Other assets | 539 | 606 | ' | ' |
Accrued liabilities | -370 | ' | ' | ' |
Total | $760,086 | $624,480 | ' | ' |
FAIR_VALUE_OF_CERTAIN_FINANCIA4
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details 3) (Discounted cash flow, Level 3, Assets at fair value on recurring basis) | 3 Months Ended |
Mar. 31, 2014 | |
Auction Rate Securities: Trading | Minimum | ' |
Quantitative information related to the significant unobservable inputs | ' |
Maximum rate probability (as a percent) | 0.61% |
Principal returned probability (as a percent) | 85.58% |
Default probability (as a percent) | 4.28% |
Liquidity risk (as a percent) | 3.00% |
Recovery rate (as a percent) | 60.00% |
Auction Rate Securities: Trading | Maximum | ' |
Quantitative information related to the significant unobservable inputs | ' |
Maximum rate probability (as a percent) | 2.48% |
Principal returned probability (as a percent) | 94.70% |
Default probability (as a percent) | 12.18% |
Liquidity risk (as a percent) | 3.00% |
Recovery rate (as a percent) | 60.00% |
Auction Rate Securities: Trading | Weighted Average | ' |
Quantitative information related to the significant unobservable inputs | ' |
Maximum rate probability (as a percent) | 1.53% |
Principal returned probability (as a percent) | 86.91% |
Default probability (as a percent) | 11.56% |
Liquidity risk (as a percent) | 3.00% |
Recovery rate (as a percent) | 60.00% |
Put Options | Minimum | ' |
Quantitative information related to the significant unobservable inputs | ' |
Counterparty risk (as a percent) | 0.43% |
Put Options | Maximum | ' |
Quantitative information related to the significant unobservable inputs | ' |
Counterparty risk (as a percent) | 0.68% |
Put Options | Weighted Average | ' |
Quantitative information related to the significant unobservable inputs | ' |
Counterparty risk (as a percent) | 0.51% |
FAIR_VALUE_OF_CERTAIN_FINANCIA5
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details 4) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2011 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Oct. 02, 2013 | Jul. 02, 2013 |
Auction rate securities | 2011 ARS Agreement | 2011 ARS Agreement | 2011 ARS Agreement | 2011 ARS Agreement | 2011 ARS Agreement | Put option related to auction rate securities | 2011 Put Option | 2011 Put Option | 2011 Put Option | 2011 Put Option | |||
Subsequent event | Maximum | Maximum | |||||||||||
ARS Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face value of investments | ' | ' | $15,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortized Cost | 447,063,000 | 412,039,000 | 14,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trading auction rate securities, in short-term and long-term investments | ' | ' | 14,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of investments, trading securities | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of securities of par value | ' | ' | ' | ' | ' | ' | 24,500,000 | ' | ' | ' | ' | 1,000,000 | 1,000,000 |
Redemption of investment securities through the exercise of the put option | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' |
Redemption of investment securities at par through normal market channels | ' | ' | ' | 2,300,000 | 1,300,000 | 3,700,000 | ' | 1,700,000 | ' | ' | ' | ' | ' |
Fair market value of investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' |
Resulted (loss) gain on revaluation of investment securities included in other income (expense) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($1,000) | $2,600,000 | ' | ' |
FAIR_VALUE_OF_CERTAIN_FINANCIA6
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details 5) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Auction rate securities | ' | ' |
Fair value of level 3 financial assets, roll forward | ' | ' |
Balance at the beginning of the period | $16,184 | $23,156 |
Total gains (losses) for the period: Included in earnings | 67 | 2,489 |
Total gains (losses) for the period: Included in other comprehensive income | ' | -2,483 |
Settlements | -1,725 | -5,792 |
Balance at the end of the period | 14,526 | 17,370 |
Put Options | ' | ' |
Fair value of level 3 financial assets, roll forward | ' | ' |
Balance at the beginning of the period | 1,092 | 1,929 |
Total gains (losses) for the period: Included in earnings | -68 | 82 |
Balance at the end of the period | $1,024 | $2,011 |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) (USD $) | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | item | Foreign currency exchange contracts | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments | Derivatives not designated as hedging instruments |
Maximum | Accounts receivables, net | Accounts receivables, net | Accrued liabilities | Accrued liabilities | Accrued liabilities | Accrued liabilities | Accrued liabilities | Accrued liabilities | ||
Derivative Instruments and Hedging Activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of derivative instrument | ' | '1 month | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount, Assets | ' | ' | $12,234 | $24,216 | ' | ' | ' | ' | ' | ' |
Notional amount, Liabilities | ' | ' | ' | ' | 15,577 | 9,204 | 14,713 | 3,742 | 5,106 | 2,229 |
Fair Value, Assets | ' | ' | 70 | 279 | ' | ' | ' | ' | ' | ' |
Fair Value, Liabilities | ' | ' | ' | ' | ($8) | ($51) | ($235) | ($25) | ($46) | ($5) |
Number of foreign exchange contract outstanding | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) (Derivatives not designated as hedging instruments, Foreign currency exchange contracts, Interest and other income (expense), net, USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Derivatives not designated as hedging instruments | Foreign currency exchange contracts | Interest and other income (expense), net | ' |
Net losses on derivative instruments | ' |
Amount of loss recognized in income on derivatives | $359 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
INVENTORIES | ' | ' |
Raw materials | $64,550 | $68,088 |
Finished goods | 139,511 | 153,361 |
Inventories, net | $204,061 | $221,449 |
PROPERTY_AND_EQUIPMENT_Net_Det
PROPERTY AND EQUIPMENT, Net (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property and equipment, net | ' | ' |
Property and equipment, gross | $161,374 | $152,466 |
Less: accumulated depreciation and amortization | -69,641 | -64,323 |
Property and equipment, net | 91,733 | 88,143 |
Land | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 5,382 | 5,382 |
Leasehold improvements | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 2,737 | 2,222 |
Furniture and fixtures | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 3,494 | 3,474 |
Office and computer equipment | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 14,514 | 14,135 |
Computer software | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 655 | 791 |
Equipment | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 66,752 | 62,552 |
Building | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 37,980 | 33,468 |
Vehicles | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | $29,860 | $30,442 |
INTANGIBLES_Net_Details
INTANGIBLES, Net (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Intangibles, Net | ' | ' | ' |
Amortizing intangibles | $1,140,000 | ' | $1,076,000 |
Accumulated amortization | -665,000 | ' | -590,000 |
Amortizing intangibles, net | 475,000 | ' | 486,000 |
Non-amortizing intangibles | 65,050,000 | ' | 65,288,000 |
Intangible, net | 65,525,000 | ' | 65,774,000 |
Weighted-average useful life | '19 years | ' | ' |
Amortization expense | $100,000 | $10,000 | ' |
Minimum | ' | ' | ' |
Intangibles, Net | ' | ' | ' |
Weighted-average useful life | '1 year | ' | ' |
Maximum | ' | ' | ' |
Intangibles, Net | ' | ' | ' |
Weighted-average useful life | '25 years | ' | ' |
DISTRIBUTION_AGREEMENTS_Detail
DISTRIBUTION AGREEMENTS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
DISTRIBUTION AGREEMENTS | ' | ' |
Distribution agreement, revenue recognition period | '20 years | ' |
Revenue recognized | $1.90 | $2.40 |
Termination costs of prior distributors | $0.01 | $8.30 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Commitments and Contingencies | ' |
Aggregate contractual obligations | $92.90 |
Aggregate operating lease commitments | 14.8 |
Raw material items | ' |
Commitments and Contingencies | ' |
Purchase Commitments | $31.30 |
Period over which obligations will be paid | '1 year |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | Mar. 31, 2014 | Oct. 03, 2013 | Oct. 17, 2012 | Sep. 17, 2008 | Apr. 16, 2014 |
Charge of VAT pass-through tax to customers in the United Kingdom | Lawsuit in Superior Court by Wendy Crossland and Richard Fournier | Securities Litigation | Securities Litigation | ||
oz | item | Subsequent event | |||
item | |||||
Commitments and contingencies | ' | ' | ' | ' | ' |
VAT receivable included in accounts receivable, net | $8,700,000 | ' | ' | ' | ' |
VAT payable included in accrued liabilities | 8,700,000 | ' | ' | ' | ' |
Estimated maximum amount of potential VAT pass-through tax | ' | 41,700,000 | ' | ' | ' |
Age of the plaintiff's deceased daughter | ' | ' | '14 years | ' | ' |
Number of 24 ounce energy drinks | ' | ' | 2 | ' | ' |
Number of ounce energy drink | ' | ' | 24 | ' | ' |
Number of days over which the energy drink was consumed | ' | ' | '2 days | ' | ' |
Minimum amount of plaintiff claims for general damages | ' | ' | 25,000 | ' | ' |
Number of actions consolidated | ' | ' | ' | 2 | ' |
Escrow Deposit | ' | ' | ' | ' | $16,250,000 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | Currency Translation Gains (Losses) | ||
Changes in accumulated other comprehensive (loss) income by component, after tax | ' | ' | ' |
Balance at the beginning of the period | ($1,131) | ($1,233) | ($1,233) |
Other comprehensive income before reclassifications | ' | ' | 102 |
Net current-period other comprehensive income | ' | ' | 102 |
Balance at the end of the period | ($1,131) | ($1,233) | ($1,131) |
TREASURY_STOCK_PURCHASE_Detail
TREASURY STOCK PURCHASE (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Apr. 07, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
TREASURY STOCK PURCHASE | ' | ' | ' |
Number of shares repurchased of common stock from employees in lieu of cash or withholding taxes due | ' | 281 | ' |
Cash payment for repurchase of common stock from employees in lieu of cash or withholding taxes due | ' | 0.02 | ' |
April 2013 Repurchase Plan | ' | ' | ' |
TREASURY STOCK PURCHASE | ' | ' | ' |
Maximum amount of common stock the board of directors authorized to repurchase | 200 | ' | ' |
Common stock repurchased (in shares) | ' | 0 | 951,000 |
Average purchase price (in dollars per share) | ' | ' | $56.98 |
Common stock repurchased | ' | ' | $54.20 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Stock-based compensation | ' | ' | ' |
Stock-based compensation plans | 2 | ' | ' |
Compensation expense on share-based plans | $7,000,000 | $7,000,000 | ' |
Stock options | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Excess tax benefit realized for tax deductions from non-qualified stock option exercises and disqualifying dispositions of incentive stock options | 2,600,000 | 200,000 | ' |
Weighted-average assumptions used to estimate the fair value of options granted | ' | ' | ' |
Dividend yield (as a percent) | 0.00% | 0.00% | ' |
Expected volatility (as a percent) | 43.10% | 47.80% | ' |
Risk-free interest rate (as a percent) | 1.60% | 0.90% | ' |
Expected term | '5 years 10 months 24 days | '5 years 4 months 24 days | ' |
Stock Options, Number of Shares | ' | ' | ' |
Balance at the beginning of the period (in shares) | 12,973 | ' | ' |
Granted (in shares) | 689 | ' | ' |
Exercised (in shares) | -235 | ' | ' |
Cancelled or forfeited (in shares) | -16 | ' | ' |
Balance at the end of the period (in shares) | 13,411 | ' | 12,973 |
Vested and expected to vest in the future at the end of the period (in shares) | 12,905 | ' | ' |
Exercisable at the end of the period (in shares) | 10,323 | ' | ' |
Stock options, Weighted-Average Exercise Price Per Share | ' | ' | ' |
Balance at the beginning of the period (in dollars per share) | $15.70 | ' | ' |
Granted (in dollars per share) | $70.06 | ' | ' |
Exercised (in dollars per share) | $24.33 | ' | ' |
Cancelled or forfeited (in dollars per share) | $47.09 | ' | ' |
Balance at the end of the period (in dollars per share) | $18.30 | ' | $15.70 |
Vested and expected to vest in the future at the end of the period (in dollars per share) | $16.92 | ' | ' |
Exercisable at the end of the period (in dollars per share) | $9.45 | ' | ' |
Weighted-Average Remaining Contractual Term | ' | ' | ' |
Balance at the beginning of the period | '3 years 9 months 18 days | ' | '3 years 8 months 12 days |
Balance at the end of the period | '3 years 9 months 18 days | ' | '3 years 8 months 12 days |
Vested and expected to vest in the future at the end of the period | '3 years 7 months 6 days | ' | ' |
Exercisable at the end of the period | '2 years 4 months 24 days | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' |
Balance at the beginning of the period | 675,595,000 | ' | ' |
Balance at the end of the period | 686,398,000 | ' | 675,595,000 |
Vested and expected to vest in the future at the end of the period | 678,326,000 | ' | ' |
Exercisable at the end of the period | $619,368,000 | ' | ' |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 2) (USD $) | 3 Months Ended | |
In Millions, except Share data in Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock options | ' | ' |
Stock-based compensation | ' | ' |
Weighted-average grant-date fair value of options granted (in dollars per share) | $29.86 | $20.52 |
Total intrinsic value of options exercised | $11.40 | $3.30 |
Cash received from option exercises | 5.7 | 2.4 |
Total unrecognized compensation expense related to non-vested shares granted to employees | 56.2 | ' |
Cost expected to be recognized over a weighted-average period | '2 years 9 months 18 days | ' |
Stock units and stock awards expected to vest (in shares) | 12,905 | ' |
Restricted stock units | ' | ' |
Stock-based compensation | ' | ' |
Total unrecognized compensation expense related to non-vested shares granted to employees | $10.90 | ' |
Cost expected to be recognized over a weighted-average period | '1 year 10 months 24 days | ' |
Stock units and stock awards expected to vest (in shares) | 300 | ' |
Number of Shares | ' | ' |
Non-vested at the beginning of the period (in shares) | 391 | ' |
Granted (in shares) | 0 | ' |
Vested (in shares) | -17 | ' |
Forfeited/cancelled (in shares) | -6 | ' |
Non-vested at the end of the period (in shares) | 368 | ' |
Weighted Average Grant-Date Fair Value | ' | ' |
Non-vested at the beginning of the period (in dollars per share) | $49.27 | ' |
Granted (in dollars per share) | ' | $50.89 |
Vested (in dollars per share) | $57.18 | ' |
Forfeited/cancelled (in dollars per share) | $57.30 | ' |
Non-vested at the end of the period (in dollars per share) | $48.78 | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Gross unrecognized tax benefits, roll forward | ' | ' |
Balance at the beginning of the period | $935,000 | $935,000 |
Balance at the end of the period | 935,000 | 935,000 |
Accrued interest and penalties related to unrecognized tax benefits | $400,000 | ' |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Weighted-average shares outstanding: | ' | ' |
Basic | 166,913,000 | 165,525,000 |
Dilutive securities | 6,828,000 | 7,034,000 |
Diluted | 173,741,000 | 172,559,000 |
Options and awards outstanding excluded from the calculations as their effect would have been antidilutive (in shares) | 600,000 | 800,000 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
item | ||
SEGMENT INFORMATION | ' | ' |
Number of reportable segments | 2 | ' |
Segment information | ' | ' |
Net sales | $536,129,000 | $484,223,000 |
Contribution margin | 186,764,000 | 139,356,000 |
Corporate and unallocated expenses | -37,901,000 | -32,050,000 |
Operating income | 148,863,000 | 107,306,000 |
Other income (expense) | 154,000 | -1,902,000 |
Income before provision for income taxes | 149,017,000 | 105,404,000 |
Depreciation and amortization | -6,453,000 | -5,060,000 |
Stock-based compensation expense | 7,000,000 | 7,000,000 |
Corporate and Unallocated | ' | ' |
Segment information | ' | ' |
Corporate and unallocated expenses | -37,901,000 | -32,050,000 |
Other income (expense) | 128,000 | -2,090,000 |
Depreciation and amortization | -1,428,000 | -581,000 |
Payroll cost | 21,100,000 | 19,400,000 |
Stock-based compensation expense | 7,000,000 | 7,000,000 |
Professional service expenses | 10,100,000 | 7,600,000 |
Other operating expenses | 6,700,000 | 5,000,000 |
Direct Store Delivery ("DSD") | Operating segment | ' | ' |
Segment information | ' | ' |
Net sales | 514,355,000 | 460,175,000 |
Contribution margin | 186,468,000 | 138,974,000 |
Other income (expense) | 26,000 | 188,000 |
Depreciation and amortization | -4,944,000 | -4,421,000 |
Warehouse ("Warehouse") | Operating segment | ' | ' |
Segment information | ' | ' |
Net sales | 21,774,000 | 24,048,000 |
Contribution margin | 296,000 | 382,000 |
Depreciation and amortization | ($81,000) | ($58,000) |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment information | ' | ' |
Net sales | $536,129 | $484,223 |
Outside United States | ' | ' |
Segment information | ' | ' |
Net sales | 115,800 | 106,300 |
Energy drinks | ' | ' |
Segment information | ' | ' |
Net sales | 499,013 | 446,026 |
Non-carbonated (primarily juice based beverages and Peace Tea iced teas) | ' | ' |
Segment information | ' | ' |
Net sales | 26,446 | 27,972 |
Carbonated (primarily soda beverages) | ' | ' |
Segment information | ' | ' |
Net sales | 7,014 | 6,401 |
Other | ' | ' |
Segment information | ' | ' |
Net sales | $3,656 | $3,824 |
Coca-Cola Refreshments ("CCR") | Direct Store Delivery ("DSD") | Sales | Customer concentration | ' | ' |
Segment information | ' | ' |
Percentage of net sales from major customer | 31.00% | 30.00% |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (Directors and Officers that provide promotional materials, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
item | ||
Directors and Officers that provide promotional materials | ' | ' |
Related party transactions | ' | ' |
Number of directors and officers who are principal owners of a company that provides promotional materials | 2 | ' |
Expenses incurred in connection with materials or services provided by a related party | $0.07 | $0.20 |