Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 30, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Entity File Number | 001-18761 | |
Document Transition Report | false | |
Entity Registrant Name | MONSTER BEVERAGE CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-1809393 | |
Entity Address, Address Line One | 1 Monster Way | |
Entity Address, City or Town | Corona | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92879 | |
City Area Code | 951 | |
Local Phone Number | 739 - 6200 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MNST | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 537,681,684 | |
Entity Central Index Key | 0000865752 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 717,617 | $ 637,513 |
Short-term investments | 587,356 | 320,650 |
Accounts receivable, net | 647,983 | 484,562 |
Inventories | 317,745 | 277,705 |
Prepaid expenses and other current assets | 58,390 | 44,909 |
Prepaid income taxes | 31,669 | 38,831 |
Total current assets | 2,360,760 | 1,804,170 |
INVESTMENTS | 14,370 | |
PROPERTY AND EQUIPMENT, net | 251,760 | 243,051 |
DEFERRED INCOME TAXES, net | 85,148 | 85,687 |
GOODWILL | 1,331,643 | 1,331,643 |
OTHER INTANGIBLE ASSETS, net | 1,047,473 | 1,045,878 |
OTHER ASSETS | 46,212 | 16,462 |
Total Assets | 5,137,366 | 4,526,891 |
CURRENT LIABILITIES: | ||
Accounts payable | 304,773 | 248,760 |
Accrued liabilities | 112,318 | 112,507 |
Accrued promotional allowances | 197,239 | 145,741 |
Deferred revenue | 43,805 | 44,045 |
Accrued compensation | 35,747 | 39,903 |
Income taxes payable | 20,334 | 10,189 |
Total current liabilities | 714,216 | 601,145 |
DEFERRED REVENUE | 292,101 | 312,224 |
OTHER LIABILITIES | 23,071 | 2,621 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
STOCKHOLDERS' EQUITY: | ||
Common stock - $0.005 par value; 1,250,000 shares authorized; 636,235 shares issued and 540,591 shares outstanding as of September 30, 2019; 630,970 shares issued and 543,676 shares outstanding as of December 31, 2018 | 3,181 | 3,155 |
Additional paid-in capital | 4,370,280 | 4,238,170 |
Retained earnings | 4,767,526 | 3,914,645 |
Accumulated other comprehensive loss | (43,083) | (32,864) |
Common stock in treasury, at cost; 95,644 shares and 87,294 shares as of September 30, 2019 and December 31, 2018, respectively | (4,989,926) | (4,512,205) |
Total stockholders' equity | 4,107,978 | 3,610,901 |
Total Liabilities and Stockholders' Equity | $ 5,137,366 | $ 4,526,891 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 1,250,000 | 1,250,000 |
Common stock, shares issued | 636,235 | 630,970 |
Common stock, shares outstanding | 540,591 | 543,676 |
Common stock in treasury, shares | 95,644 | 87,294 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
NET SALES | $ 1,133,577 | $ 1,016,160 | $ 3,183,613 | $ 2,882,953 |
COST OF SALES | 460,575 | 408,501 | 1,275,796 | 1,139,780 |
GROSS PROFIT | 673,002 | 607,659 | 1,907,817 | 1,743,173 |
OPERATING EXPENSES | 277,559 | 268,086 | 821,923 | 766,065 |
OPERATING INCOME | 395,443 | 339,573 | 1,085,894 | 977,108 |
INTEREST and OTHER INCOME, net | 3,121 | 2,988 | 8,835 | 5,269 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 398,564 | 342,561 | 1,094,729 | 982,377 |
PROVISION FOR INCOME TAXES | 99,641 | 74,828 | 241,848 | 228,480 |
NET INCOME | $ 298,923 | $ 267,733 | $ 852,881 | $ 753,897 |
NET INCOME PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ 0.55 | $ 0.48 | $ 1.57 | $ 1.35 |
Diluted (in dollars per share) | $ 0.55 | $ 0.48 | $ 1.56 | $ 1.33 |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS : | ||||
Basic (in shares) | 544,469 | 552,694 | 543,804 | 559,472 |
Diluted (in shares) | 548,422 | 559,955 | 548,387 | 566,791 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income, as reported | $ 298,923 | $ 267,733 | $ 852,881 | $ 753,897 |
Other comprehensive loss: | ||||
Change in foreign currency translation adjustment | (14,359) | (4,463) | (10,586) | (13,728) |
Available-for-sale investments: | ||||
Change in net unrealized gains | 32 | (118) | 367 | 610 |
Net change in available-for-sale investments | 32 | (118) | 367 | 610 |
Other comprehensive loss | (14,327) | (4,581) | (10,219) | (13,118) |
Comprehensive income | $ 284,596 | $ 263,152 | $ 842,662 | $ 740,779 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury stock | Total |
Balance at Dec. 31, 2017 | $ 3,146 | $ 4,150,628 | $ 2,928,226 | $ (16,659) | $ (3,170,129) | $ 3,895,212 |
Balance (in shares) at Dec. 31, 2017 | 629,255 | (62,957) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 13,439 | 13,439 | ||||
Exercise of stock options | $ 4 | 6,498 | 6,502 | |||
Exercise of stock options (in shares) | 669 | |||||
Unrealized gain on available-for- sale securities | 215 | 215 | ||||
ASU No. 2016-16 adoption | ASU 2016-16 | (6,585) | (6,585) | ||||
Repurchase of common stock | $ (251,949) | (251,949) | ||||
Repurchase of common stock (in shares) | (4,362) | |||||
Foreign currency translation | 2,723 | 2,723 | ||||
Net income | 216,050 | 216,050 | ||||
Balance at Mar. 31, 2018 | $ 3,150 | 4,170,565 | 3,137,691 | (13,721) | $ (3,422,078) | 3,875,607 |
Balance (in shares) at Mar. 31, 2018 | 629,924 | (67,319) | ||||
Balance at Dec. 31, 2017 | $ 3,146 | 4,150,628 | 2,928,226 | (16,659) | $ (3,170,129) | 3,895,212 |
Balance (in shares) at Dec. 31, 2017 | 629,255 | (62,957) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Unrealized gain on available-for- sale securities | 610 | |||||
Foreign currency translation | (13,728) | |||||
Net income | 753,897 | |||||
Balance at Sep. 30, 2018 | $ 3,154 | 4,219,628 | 3,675,540 | (29,777) | $ (3,975,278) | 3,893,267 |
Balance (in shares) at Sep. 30, 2018 | 630,825 | (77,873) | ||||
Balance at Mar. 31, 2018 | $ 3,150 | 4,170,565 | 3,137,691 | (13,721) | $ (3,422,078) | 3,875,607 |
Balance (in shares) at Mar. 31, 2018 | 629,924 | (67,319) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 14,906 | 14,906 | ||||
Exercise of stock options | $ 2 | 7,112 | 7,114 | |||
Exercise of stock options (in shares) | 406 | |||||
Unrealized gain on available-for- sale securities | 513 | 513 | ||||
Adjustment to excess tax benefits from prior periods | 2,093 | 2,093 | ||||
Repurchase of common stock | $ (553,200) | (553,200) | ||||
Repurchase of common stock (in shares) | (10,554) | |||||
Foreign currency translation | (11,988) | (11,988) | ||||
Net income | 270,116 | 270,116 | ||||
Balance at Jun. 30, 2018 | $ 3,152 | 4,194,676 | 3,407,807 | (25,196) | $ (3,975,278) | 3,605,161 |
Balance (in shares) at Jun. 30, 2018 | 630,330 | (77,873) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 14,091 | 14,091 | ||||
Exercise of stock options | $ 2 | 10,861 | 10,863 | |||
Exercise of stock options (in shares) | 495 | |||||
Unrealized gain on available-for- sale securities | (118) | (118) | ||||
Foreign currency translation | (4,463) | (4,463) | ||||
Net income | 267,733 | 267,733 | ||||
Balance at Sep. 30, 2018 | $ 3,154 | 4,219,628 | 3,675,540 | (29,777) | $ (3,975,278) | 3,893,267 |
Balance (in shares) at Sep. 30, 2018 | 630,825 | (77,873) | ||||
Balance at Dec. 31, 2018 | $ 3,155 | 4,238,170 | 3,914,645 | (32,864) | $ (4,512,205) | 3,610,901 |
Balance (in shares) at Dec. 31, 2018 | 630,970 | (87,294) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 15,324 | 15,324 | ||||
Exercise of stock options | $ 19 | 35,144 | 35,163 | |||
Exercise of stock options (in shares) | 3,871 | |||||
Unrealized gain on available-for- sale securities | 120 | 120 | ||||
Repurchase of common stock | $ (222,792) | (222,792) | ||||
Repurchase of common stock (in shares) | (4,000) | |||||
Foreign currency translation | (1,381) | (1,381) | ||||
Net income | 261,485 | 261,485 | ||||
Balance at Mar. 31, 2019 | $ 3,174 | 4,288,638 | 4,176,130 | (34,125) | $ (4,734,997) | 3,698,820 |
Balance (in shares) at Mar. 31, 2019 | 634,841 | (91,294) | ||||
Balance at Dec. 31, 2018 | $ 3,155 | 4,238,170 | 3,914,645 | (32,864) | $ (4,512,205) | 3,610,901 |
Balance (in shares) at Dec. 31, 2018 | 630,970 | (87,294) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Unrealized gain on available-for- sale securities | 367 | |||||
Foreign currency translation | (10,586) | |||||
Net income | 852,881 | |||||
Balance at Sep. 30, 2019 | $ 3,181 | 4,370,280 | 4,767,526 | (43,083) | $ (4,989,926) | 4,107,978 |
Balance (in shares) at Sep. 30, 2019 | 636,235 | (95,644) | ||||
Balance at Mar. 31, 2019 | $ 3,174 | 4,288,638 | 4,176,130 | (34,125) | $ (4,734,997) | 3,698,820 |
Balance (in shares) at Mar. 31, 2019 | 634,841 | (91,294) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 15,575 | 15,575 | ||||
Exercise of stock options | $ 6 | 45,964 | 45,970 | |||
Exercise of stock options (in shares) | 1,288 | |||||
Unrealized gain on available-for- sale securities | 215 | 215 | ||||
Repurchase of common stock | $ (621) | (621) | ||||
Repurchase of common stock (in shares) | (10) | |||||
Foreign currency translation | 5,154 | 5,154 | ||||
Net income | 292,473 | 292,473 | ||||
Balance at Jun. 30, 2019 | $ 3,180 | 4,350,177 | 4,468,603 | (28,756) | $ (4,735,618) | 4,057,586 |
Balance (in shares) at Jun. 30, 2019 | 636,129 | (91,304) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 15,991 | 15,991 | ||||
Exercise of stock options | $ 1 | 4,112 | 4,113 | |||
Exercise of stock options (in shares) | 106 | |||||
Unrealized gain on available-for- sale securities | 32 | 32 | ||||
Repurchase of common stock | $ (254,308) | (254,308) | ||||
Repurchase of common stock (in shares) | (4,340) | |||||
Foreign currency translation | (14,359) | (14,359) | ||||
Net income | 298,923 | 298,923 | ||||
Balance at Sep. 30, 2019 | $ 3,181 | $ 4,370,280 | $ 4,767,526 | $ (43,083) | $ (4,989,926) | $ 4,107,978 |
Balance (in shares) at Sep. 30, 2019 | 636,235 | (95,644) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 852,881 | $ 753,897 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 47,843 | 42,469 |
Gain on disposal of property and equipment | (7) | (634) |
Stock-based compensation | 46,890 | 42,436 |
Deferred income taxes | 540 | (76) |
Effect on cash of changes in operating assets and liabilities: | ||
Accounts receivable | (179,838) | (181,683) |
Distributor receivables | 5,813 | 7,803 |
Inventories | (44,947) | (10,338) |
Prepaid expenses and other assets | (16,121) | (16,465) |
Prepaid income taxes | 6,174 | 96,462 |
Accounts payable | 69,480 | 39,641 |
Accrued liabilities | (9,592) | 16,516 |
Accrued promotional allowances | 55,799 | 48,682 |
Accrued distributor terminations | 6 | 703 |
Accrued compensation | (3,901) | (4,357) |
Income taxes payable | 10,311 | (1,383) |
Other liabilities | (631) | 1,628 |
Deferred revenue | (19,631) | (13,941) |
Net cash provided by operating activities | 821,069 | 821,360 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Sales of available-for-sale investments | 558,128 | 927,410 |
Purchases of available-for-sale investments | (835,964) | (711,009) |
Purchases of property and equipment | (44,392) | (49,862) |
Proceeds from sale of property and equipment | 810 | 4,009 |
Increase in intangibles | (5,478) | (6,275) |
Increase in other assets | (1,289) | (10,125) |
Net cash (used in) provided by investing activities | (328,185) | 154,148 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments on debt | (12,841) | (1,482) |
Issuance of common stock | 85,245 | 24,481 |
Purchases of common stock held in treasury | (477,721) | (805,149) |
Net cash used in financing activities | (405,317) | (782,150) |
Effect of exchange rate changes on cash and cash equivalents | (7,463) | (8,266) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 80,104 | 185,092 |
CASH AND CASH EQUIVALENTS, beginning of period | 637,513 | 528,622 |
CASH AND CASH EQUIVALENTS, end of period | 717,617 | 713,714 |
Cash paid during the period for: | ||
Interest | 306 | 44 |
Income taxes | $ 226,883 | $ 134,377 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NON-CASH SUPPLEMENTAL DATA | ||
Accrued liabilities for other intangible assets | $ 8.6 | $ 10.9 |
Accrued liabilities for purchase short-term investment | $ 3 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
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”) Annual Report on Form 10-K for the year ended December 31, 2018 (“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- and nine-months ended September 30, 2019 and 2018, respectively, is unaudited and reflects all adjustments, which include only normal recurring adjustments and which in the opinion of management are necessary to make the interim condensed consolidated financial statements not misleading. Results of operations for periods covered by this report may not necessarily be indicative of results of operations for the full year. The preparation of financial statements in conformity with GAAP necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Recently issued accounting pronouncements not yet adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, “Intangibles–Goodwill and Other–Internal–Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract, with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU No. 2018-15 is effective for the Company on a prospective or retrospective basis beginning on January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU No. 2018-15 on its financial position, results of operations and liquidity. In August 2018, the FASB issued ASU No. 2018-14, “Compensation–Retirement Benefits–Defined Benefit Plans–General (Topic 715): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU No. 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. ASU No. 2018-14 is effective for the Company on a retrospective basis beginning in the year ending December 31, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU No. 2018-14 on its financial position, results of operations and liquidity. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. ASU No. 2018-13 disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU No. 2018-13 is effective for the Company beginning on January 1, 2020, with early adoption permitted. Certain disclosures in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. The Company is currently evaluating the impact of ASU No. 2018-13 on its financial position, results of operations and liquidity. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment", which eliminates the requirement to calculate the implied fair value of goodwill, but rather requires an entity to record an impairment charge based on the excess of a reporting unit's carrying value over its fair value. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of ASU No. 2017-04 on its financial position and results of operations. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The accounting standard changes the methodology for measuring credit losses on financial instruments and the timing when such losses are recorded. ASU No. 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company is currently evaluating the impact of ASU No. 2016-13 on its financial position, results of operations and liquidity. Recently adopted accounting pronouncements In February 2018, the FASB issued ASU No. 2018-02 (ASU No. 2018-02), “Income Statement - Reporting Comprehensive Income (Topic 220)”, which amended the previous guidance to allow for certain tax effects “stranded” in accumulated other comprehensive income, which are impacted by the Tax Reform Act signed into law on December 22, 2017, to be reclassified from accumulated other comprehensive income into retained earnings. This amendment pertains only to those items impacted by the new tax law and does not apply to any future tax effects stranded in accumulated other comprehensive income. This standard was effective for fiscal years beginning after December 15, 2018, and allowed for early adoption. The adoption of ASU No. 2018-02 did not have an impact on the Company’s financial position, results of operations and liquidity. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. ASU No. 2016-02 requires the recognition of lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous guidance. The accounting for finance leases (capital leases) was substantially unchanged. The original guidance required application on a modified retrospective basis with adjustments to the earliest comparative period presented. In August 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements to ASC 842,” which included an option to not restate comparative periods in transition and elect to use the effective date of ASU No. 2016-02 as the date of initial application, which the Company elected. As a result, the consolidated balance sheet prior to January 1, 2019 was not restated, and continues to be reported under previous guidance that did not require the recognition of operating lease liabilities and corresponding lease assets on the consolidated balance sheet. With the adoption of ASU No. 2016-02 on January 1, 2019, the Company recorded operating lease right-of-use assets of $26.3 million and operating lease liabilities of $22.6 million. The adoption of ASU No. 2016-02 had an immaterial impact on the Company’s condensed consolidated statement of income and condensed consolidated statement of cash flows for the nine-month period ended September 30, 2019. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward the historical lease classification, not reassess prior conclusions related to expired or existing contracts that are or that contain leases, and not reassess the accounting for initial direct costs. Additional information and disclosures required by ASU No. 2016-02 are contained in Note 4. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2019 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION The Company has three operating and reportable segments, (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of the Company’s Monster Energy® drinks and Reign Total Body Fuel TM The Company's Monster Energy® Drinks segment generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage distributors. In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, drug stores, foodservice customers and the military. The Company's Strategic Brands segment primarily generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold by such bottlers to other bottlers and full service distributors and to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores and the military. To a lesser extent, the Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers and full service beverage distributors. The majority of the Company's revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company's products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Certain of the Company's bottlers/distributors may also perform a separate function as a co-packer on the Company's behalf. In such cases, control of the Company's products passes to such bottlers/distributors when they notify the Company that they have taken possession or transferred the relevant portion of the Company's finished goods. The Company's general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of September 30, 2019 or December 31, 2018. The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. Distribution expenses to transport the Company's products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to the Company's bottlers/distributors or retail customers including, but not limited to the following: ● discounts granted off list prices to support price promotions to end-consumers by retailers; ● reimbursements given to the Company's bottlers/distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products; ● the Company's agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities; ● the Company's agreed share of slotting, shelf space allowances and other fees given directly to retailers; ● incentives given to the Company's bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals; ● discounted or free products; ● contractual fees given to the Company's bottlers/distributors related to sales made directly by the Company to certain customers that fall within the bottlers’/distributors' sales territories; and ● commissions paid to TCCC based on the Company’s sales to certain wholly-owned subsidiaries of TCCC (the “TCCC Subsidiaries”) and/or to certain companies accounted for by TCCC under the equity method (“the TCCC Related Parties”). The Company's promotional allowance programs with its bottlers/distributors and/or retailers are executed through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, typically ranging from one week to one year. The Company's promotional and other allowances are calculated based on various programs with bottlers/distributors and retail customers, and accruals are established at the time of initial product sale for the Company's anticipated liabilities. These accruals are based on agreed upon terms as well as the Company's historical experience with similar programs and require management's judgment with respect to estimating consumer participation and/or distributor and retail customer performance levels. Differences between such estimated expenses and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined. Amounts received pursuant to new and/or amended distribution agreements entered into with certain distributors relating to the costs associated with terminating the Company’s prior distributors, are accounted for as revenue ratably over the anticipated life of the respective distribution agreements, generally over 20 years. The Company also enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing the Company’s trademarks including, but not limited to, clothing, hats, t-shirts, jackets, helmets and automotive wheels. Disaggregation of Revenue The following tables disaggregate the Company's revenue by geographical markets and reportable segments: Three-Months Ended September 30, 2019 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 737,457 $ 178,569 $ 97,153 $ 48,205 $ 1,061,384 Strategic Brands 43,205 16,673 6,243 212 66,333 Other 5,860 — — — 5,860 Total Net Sales $ 786,522 $ 195,242 $ 103,396 $ 48,417 $ 1,133,577 Three-Months Ended September 30, 2018 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 710,172 $ 127,286 $ 63,758 $ 33,930 $ 935,146 Strategic Brands 47,645 18,287 8,231 278 74,441 Other 6,573 — — — 6,573 Total Net Sales $ 764,390 $ 145,573 $ 71,989 $ 34,208 $ 1,016,160 Nine-Months Ended September 30, 2019 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 2,118,835 $ 458,655 $ 242,561 $ 130,826 $ 2,950,877 Strategic Brands 132,375 62,374 20,024 990 215,763 Other 16,973 — — — 16,973 Total Net Sales $ 2,268,183 $ 521,029 $ 262,585 $ 131,816 $ 3,183,613 Nine-Months Ended September 30, 2018 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 1,994,950 $ 376,823 $ 171,796 $ 101,520 $ 2,645,089 Strategic Brands 137,502 60,567 20,148 1,794 220,011 Other 17,853 — — — 17,853 Total Net Sales $ 2,150,305 $ 437,390 $ 191,944 $ 103,314 $ 2,882,953 1 Europe, Middle East and Africa (“EMEA”) Contract Liabilities Amounts received from certain bottlers/distributors at inception of their distribution contracts or at the inception of certain sales/marketing programs are accounted for as deferred revenue. As of September 30, 2019, the Company had $335.9 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. As of December 31, 2018, the Company had $356.3 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. During the three-months ended September 30, 2019 and 2018, $10.7 million and $11.1 million, respectively, of deferred revenue was recognized in net sales. During the nine-months ended September 30, 2019 and 2018, $35.6 million and $33.3 million, respectively, of deferred revenue was recognized in net sales. See Note 11. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
LEASES | |
LEASES | 4. LEASES The Company leases identified assets comprising real estate and equipment. Real estate leases consist primarily of office and warehouse space and equipment leases consist of vehicles and warehouse equipment. At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately. Leases are classified as either finance leases or operating leases based on criteria in Accounting Standards Codification (“ASC”) 842. The Company’s operating leases are generally comprised of real estate and warehouse equipment, and the Company’s finance leases are generally comprised of vehicles. Operating leases are included in Other Assets, Accrued Liabilities and Other Liabilities in the condensed consolidated balance sheet. Finance leases are included in Property and Equipment and Accrued Liabilities in the condensed consolidated balance sheet. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date if the implicit rate cannot be determined. ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease commencement date. Additional payments based on the change in an index or rate, or payments based on a change in the Company’s portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s estimated useful life and interest expense is calculated using the amortized cost basis. The Company’s leases have remaining lease terms of less than one year to 15 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. The Company has elected not to recognize ROU assets and lease liabilities for short-term operating leases that have a term of 12 months or less. The components of lease cost for the three- and nine-months ended September 30, 2019 was as follows: Three-Months Nine-Months Ended September 30, Ended September 30, 2019 2019 Operating leases: Lease cost $ 1,223 $ 3,548 Variable lease cost 168 503 Operating lease cost 1,391 4,051 Short term lease cost 993 2,552 Finance leases: Amortization of ROU assets 172 346 Interest on finance lease liabilities 13 43 Finance lease cost 185 389 Total lease cost $ 2,569 $ 6,992 Supplemental cash flow information for leases for the nine-months ended September 30, 2019 was as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,026 Operating cash flows from finance leases 43 Financing cash flows from finance leases 1,497 ROU assets obtained in exchange for lease obligations: Finance leases 2,499 Operating leases 27,965 ROU assets for operating and finance leases at September 30, 2019 were comprised of the following: Real Estate Equipment Total Operating leases $ 24,384 $ 497 $ 24,881 Finance leases — 3,525 3,525 The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases at September 30, 2019 was as follows: Operating Leases Finance Leases Weighted-average remaining lease term (years) 10.4 0.8 Weighted-average discount rate 3.6 % 3.2 % The following table reconciles the undiscounted future lease payments for operating and finance leases to the operating and finance leases recorded in the condensed consolidated balance sheet at September 30, 2019: Undiscounted Future Lease Payments Operating Leases Finance Leases 2019 (excluding the nine-months ended September 30, 2019) $ 1,014 $ 678 2020 3,509 1,187 2021 2,888 — 2022 2,349 — 2023 1,894 — 2024 and thereafter 14,707 — Total lease payments 26,361 1,865 Less interest (4,666) (23) Total $ 21,695 $ 1,842 Accrued liabilities $ 3,061 $ 1,842 Other liabilities 18,634 — As of September 30, 2019, the Company did not have any significant additional operating or finance leases that have not yet commenced. The Company’s future minimum operating lease commitments, as of December 31, 2018, under ASC 840, the predecessor to ASC 842, were as follows: Year Ending December 31: 2019 $ 3,954 2020 2,949 2021 2,410 2022 2,114 2023 1,681 2024 and thereafter 14,860 $ 27,968 |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2019 | |
INVESTMENTS | |
INVESTMENTS | 5. INVESTMENTS The following table summarizes the Company’s investments at: Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 September 30, 2019 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 81,869 $ — $ — $ 81,869 $ — $ — Certificates of deposit 2,502 — — 2,502 — — Municipal securities 138,072 151 9 138,214 9 — U.S. government agency securities 41,186 7 37 41,156 37 — U.S. treasuries 294,099 179 10 294,268 10 — Variable rate demand notes 29,347 — — 29,347 — — Long-term: U.S. treasuries 11,174 7 4 11,177 4 — Municipal securities 3,198 — 5 3,193 5 — Total $ 601,447 $ 344 $ 65 $ 601,726 $ 65 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 December 31, 2018 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 52,838 $ — $ — $ 52,838 $ — $ — Certificates of deposit 14,075 — — 14,075 — — Municipal securities 151,690 16 62 151,644 62 — U.S. government agency securities 19,943 — 12 19,931 12 — U.S. treasuries 78,189 — 32 78,157 32 — Variable rate demand notes 4,005 — — 4,005 — — Total $ 320,740 $ 16 $ 106 $ 320,650 $ 106 $ — During the nine-months ended September 30, 2019 and 2018, realized gains or losses recognized on the sale of investments were not significant. The Company’s investments at September 30, 2019 and December 31, 2018 in commercial paper, certificates of deposit, municipal securities, U.S. government agency securities, U.S. treasuries and/or variable rate demand notes (“VRDNs”) carried investment grade credit ratings. VRDNs are floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest. All of the put options are secured by a pledged liquidity source. While they are classified as marketable investment securities, the put option allows the VRDNs to be liquidated at par on a same day, or more generally, on a seven-day settlement basis. The following table summarizes the underlying contractual maturities of the Company’s investments at: September 30, 2019 December 31, 2018 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 81,869 $ 81,869 $ 52,838 $ 52,838 Municipal securities 138,072 138,214 151,690 151,644 U.S. government agency securities 41,186 41,156 19,943 19,931 Certificates of deposit 2,502 2,502 14,075 14,075 U.S. treasuries 294,099 294,268 78,189 78,157 Due 1 - 10 years: Municipal securities 3,198 3,193 — — U.S. treasuries 11,174 11,177 — — Variable rate demand notes 5,412 5,412 — — Due 11 - 20 years: Variable rate demand notes 12,197 12,197 — — Due 21 - 30 years: Variable rate demand notes 9,721 9,721 4,005 4,005 Due 31 - 40 years: Variable rate demand notes 2,017 2,017 — — Total $ 601,447 $ 601,726 $ 320,740 $ 320,650 |
FAIR VALUE OF CERTAIN FINANCIAL
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | 6. FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES ASC 820 provides a framework for measuring fair value and requires 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 that 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 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: September 30, 2019 Level 1 Level 2 Level 3 Total Cash $ 557,925 $ — $ — $ 557,925 Money market funds 69,362 — — 69,362 Certificates of deposit — 11,533 — 11,533 Commercial paper — 95,972 — 95,972 Variable rate demand notes — 29,347 — 29,347 Municipal securities — 159,884 — 159,884 U.S. government agency securities — 80,879 — 80,879 U.S. treasuries — 314,441 — 314,441 Foreign currency derivatives — 30 — 30 Total $ 627,287 $ 692,086 $ — $ 1,319,373 Amounts included in: Cash and cash equivalents $ 627,287 $ 90,330 $ — $ 717,617 Short-term investments — 587,356 — 587,356 Accounts receivable, net — 168 — 168 Investments — 14,370 — 14,370 Accrued liabilities — (138) — (138) Total $ 627,287 $ 692,086 $ — $ 1,319,373 December 31, 2018 Level 1 Level 2 Level 3 Total Cash $ 393,936 $ — $ — $ 393,936 Money market funds 191,358 — — 191,358 Certificates of deposit — 14,075 — 14,075 Commercial paper — 60,422 — 60,422 Variable rate demand notes — 4,005 — 4,005 Municipal securities — 177,118 — 177,118 U.S. government agency securities — 39,092 — 39,092 U.S. treasuries — 78,157 — 78,157 Foreign currency derivatives — (492) — (492) Total $ 585,294 $ 372,377 $ — $ 957,671 Amounts included in: Cash and cash equivalents $ 585,294 $ 52,219 $ — $ 637,513 Short-term investments — 320,650 — 320,650 Accounts receivable, net — 43 — 43 Accrued liabilities — (535) — (535) Total $ 585,294 $ 372,377 $ — $ 957,671 All of the Company’s short-term and long-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 municipal securities, commercial paper, certificates of deposit, VRDNs, U.S. treasuries and U.S. government agency 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 currency 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 nine-months ended September 30, 2019 or during the year-ended December 31, 2018, and there were no changes in the Company’s valuation techniques. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2019 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 7. 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- and nine-months ended September 30, 2019 and the year-ended December 31, 2018, 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 of the Company that were outstanding as of September 30, 2019 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, 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: September 30, 2019 Derivatives not designated as hedging instruments under Notional Fair ASC 815-20 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive USD/pay GBP $ 35,513 $ 86 Accounts receivable, net Receive USD/pay AUD 9,625 29 Accounts receivable, net Receive USD/pay COP 3,040 23 Accounts receivable, net Receive USD/pay ZAR 2,748 19 Accounts receivable, net Receive USD/pay NZD 2,581 11 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive EUR/pay USD $ 39,576 $ (136) Accrued liabilities Receive USD/pay SGD 1,156 (2) Accrued liabilities December 31, 2018 Derivatives not designated as hedging instruments under Notional Fair ASC 815-20 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD $ 8,341 $ 30 Accounts receivable, net Receive NOK/pay USD 902 13 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 40,648 $ (323) Accrued liabilities Receive USD/pay AUD 15,124 (105) Accrued liabilities Receive USD/pay ZAR 8,618 (68) Accrued liabilities Receive USD/pay COP 2,931 (33) Accrued liabilities Receive USD/pay NZD 2,952 (4) Accrued liabilities Receive USD/pay EUR 6,894 (2) Accrued liabilities The net gains on derivative instruments in the condensed consolidated statements of income were as follows: Amount of gain recognized in income on derivatives Derivatives not designated as Location of gain Three-months ended hedging instruments under recognized in income on September 30, September 30, ASC 815-20 derivatives 2019 2018 Foreign currency exchange contracts Interest and other income, net $ 627 $ 2,175 Amount of gain recognized in income on derivatives Derivatives not designated as Location of gain Nine-months ended hedging instruments under recognized in income on September 30, September 30, ASC 815-20 derivatives 2019 2018 Foreign currency exchange contracts Interest and other income, net $ 475 $ 7,909 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2019 | |
INVENTORIES | |
INVENTORIES | 8. INVENTORIES Inventories consist of the following at: September 30, December 31, 2019 2018 Raw materials $ 136,555 $ 94,421 Finished goods 181,190 183,284 $ 317,745 $ 277,705 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2019 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 9. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following at: September 30, December 31, 2019 2018 Land $ 44,261 $ 44,261 Leasehold improvements 8,487 5,909 Furniture and fixtures 7,649 6,932 Office and computer equipment 21,066 18,717 Computer software 4,252 3,278 Equipment 193,326 183,727 Buildings 126,052 115,242 Vehicles 40,610 39,026 445,703 417,092 Less: accumulated depreciation and amortization (193,943) (174,041) $ 251,760 $ 243,051 Total depreciation and amortization expense recorded was $11.6 million and $11.3 million for the three-months ended September 30, 2019 and 2018, respectively. Total depreciation and amortization expense recorded was $36.3 million and $33.5 million for the nine-months ended September 30, 2019 and 2018, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS The following is a roll-forward of goodwill for the nine-months ended September 30, 2019 and September 30, 2018 by reportable segment: Monster Energy ® Strategic Drinks Brands Other Total Balance at December 31, 2018 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at September 30, 2019 $ 693,644 $ 637,999 $ — $ 1,331,643 Monster Energy ® Strategic Drinks Brands Other Total Balance at December 31, 2017 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at September 30, 2018 $ 693,644 $ 637,999 $ — $ 1,331,643 Intangible assets consist of the following at: September 30, December 31, 2019 2018 Amortizing intangibles $ 66,952 $ 71,350 Accumulated amortization (46,227) (38,311) 20,725 33,039 Non-amortizing intangibles 1,026,748 1,012,839 $ 1,047,473 $ 1,045,878 Amortizing intangibles primarily consist of customer relationships. All amortizing intangibles have been assigned an estimated finite useful life and such intangibles are amortized on a straight-line basis over the number of years that approximate their respective useful lives, generally five to seven years. Total amortization expense recorded was $2.9 million and $3.0 million for the three-months ended September 30, 2019 and 2018, respectively. Total amortization expense recorded was $8.7 million and $9.0 million for the nine-months ended September 30, 2019 and 2018, respectively. The following is the future estimated amortization expense related to amortizing intangibles as of September 30, 2019: 2019 (excluding the nine-months ended September 30, 2019) $ 2,887 2020 7,668 2021 4,424 2022 4,399 2023 1,106 2024 and thereafter 241 $ 20,725 |
DISTRIBUTION AGREEMENTS
DISTRIBUTION AGREEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
DISTRIBUTION AGREEMENTS | |
DISTRIBUTION AGREEMENTS | 11 In accordance with ASC 420, the Company expenses distributor termination costs in the period in which the written notification of termination occurs. The Company incurred no termination costs during the three-months ended September 30, 2019. The Company incurred termination costs of $14.1 million for the three-months ended September 30, 2018. The Company incurred termination costs of $11.0 million and $26.6 million for the nine-months ended September 30, 2019 and 2018, respectively. In the normal course of business, 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, are accounted for as deferred revenue and are recognized as revenue ratably over the anticipated life of the respective distribution agreement, generally 20 years. Revenue recognized was $10.7 million and $11.1 million for the three-months ended September 30, 2019 and 2018, respectively. Revenue recognized was $35.6 million and $33.3 million for the nine-months ended September 30, 2019 and 2018, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES The Company had purchase commitments aggregating approximately $29.3 million at September 30, 2019, 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 $171.6 million at September 30, 2019, which related primarily to sponsorships and other marketing activities. In February 2018, the working capital line limit for the Company's credit facility with HSBC Bank (China) Company Limited, Shanghai Branch, was increased from $9.0 million to $15.0 million. At September 30, 2019, the interest rate on borrowings under the line of credit was 5.5%. As of September 30, 2019, the Company had no amounts outstanding on this line of credit. During the three-months ended September 30, 2019, the Company entered into an agreement to acquire a manufacturing plant and adjoining land in Athy, County Kildare, Ireland for a purchase price of $12.0 million, of which an initial $1.2 million was paid in October 2019. The acquisition of the facility is expected to close in late December 2019. The Company intends to utilize the facility to produce and supply ingredients for certain of its international markets. In addition, during the three-months ended September 30, 2019, the Company entered into an agreement to purchase approximately 7.66 acres of land in San Fernando, California for a purchase price of $33.7 million. The Company intends to construct a new production facility on such land in order to consolidate AFF’s operations into a single location. The full purchase price was paid in October 2019. Legal Proceedings Litigation Furthermore, from time to time in the normal course of business, the Company is named in other litigation, including consumer class actions, intellectual property litigation and claims from prior distributors. Although it is not possible to predict the ultimate outcome of such litigation, based on the facts known to the Company, management believes that such litigation in aggregate will likely not have a material adverse effect on the Company’s financial position or results of operations. The Company evaluates, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that is accrued, if any, or in the amount of any related insurance reimbursements recorded. As of September 30, 2019, the Company’s condensed consolidated balance sheet included accrued loss contingencies of approximately $2.0 million. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 13. ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in accumulated other comprehensive loss by component, after tax, for the nine-months ended September 30, 2019 and 2018 are as follows: Unrealized Currency (Gains) Losses Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2018 $ 32,775 $ 89 $ 32,864 Other comprehensive income before reclassifications 10,586 (367) 10,219 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive (income) loss 10,586 (367) 10,219 Balance at September 30, 2019 $ 43,361 $ (278) $ 43,083 Unrealized Currency (Gains) Losses Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2017 $ 15,818 $ 841 $ 16,659 Other comprehensive loss (income) before reclassifications 13,728 (610) 13,118 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive loss (income) 13,728 (610) 13,118 Balance at September 30, 2018 $ 29,546 $ 231 $ 29,777 |
TREASURY STOCK
TREASURY STOCK | 9 Months Ended |
Sep. 30, 2019 | |
TREASURY STOCK | |
TREASURY STOCK | 14. TREASURY STOCK On August 7, 2018, the Company's Board of Directors authorized a share repurchase program for the purchase of up to $500.0 million of the Company's outstanding common stock (the “August 2018 Repurchase Plan”). During the three-months ended September 30, 2019, the Company purchased 0.4 million shares of common stock at an average purchase price of $58.32 per share, for a total amount of $20.6 million (excluding broker commissions), which exhausted the availability under the August 2018 Repurchase Plan. Such shares are included in common stock in treasury in the accompanying condensed consolidated balance sheet at September 30, 2019. On February 26, 2019, the Company’s Board of Directors authorized a new share repurchase program for the purchase of up to $500.0 million of the Company’s outstanding common stock (the “February 2019 Repurchase Plan”). During the three-months ended September 30, 2019, the Company purchased 4.0 million shares of common stock at an average purchase price of $58.62 per share, for a total amount of $233.7 million (excluding broker commissions), under the February 2019 Repurchase Plan. Such shares are included in common stock in treasury in the accompanying condensed consolidated balance sheet at September 30, 2019. As of November 6, 2019, $36.6 million remained available for repurchase under the February 2019 Repurchase Plan. During the three-months ended September 30, 2019, no shares of common stock were purchased from employees in lieu of cash payments for options exercised or withholding taxes due. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 15. STOCK-BASED COMPENSATION The Company has two stock-based compensation plans under which shares were available for grant at September 30, 2019: the Monster Beverage Corporation 2011 Omnibus Incentive Plan, including the Monster Beverage Corporation Deferred Compensation Plan as a sub plan thereunder, and the Monster Beverage Corporation 2017 Compensation Plan for Non-Employee Directors, including the Monster Beverage Corporation Deferred Compensation Plan for Non-Employee Directors as a sub plan thereunder. The Company recorded $16.0 million and $14.1 million of compensation expense relating to outstanding options and restricted stock units during the three-months ended September 30, 2019 and 2018, respectively. The Company recorded $46.9 million and $42.4 million of compensation expense relating to outstanding options and restricted stock units during the nine-months ended September 30, 2019 and 2018, respectively. The tax benefit for tax deductions from non-qualified stock option exercises, disqualifying dispositions of incentive stock options and vesting of restricted stock units for the three-months ended September 30, 2019 and 2018 was $0.5 million and $3.1 million, respectively. The tax benefit for tax deductions from non-qualified stock option exercises, disqualifying dispositions of incentive stock options and vesting of restricted stock units for the nine-months ended September 30, 2019 and 2018 was $26.7 million and $7.7 million, respectively. Stock Options Under the Company’s stock-based compensation plans, all stock options granted as of September 30, 2019 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 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 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 September 30, Nine-Months Ended September 30, 2019 2018 2019 2018 Dividend yield 0 % 0 % 0 % 0 % Expected volatility 30.2 % 34.5 % 30.2 % 34.9 % Risk-free interest rate 1.4 % 2.9 % 2.4 % 2.8 % Expected term 5.8 years 6.1 years 6.0 years 6.1 years Expected Volatility Risk-Free Interest Rate Expected Term 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 Outstanding at January 1, 2019 18,890 $ 34.61 5.8 $ 303,627 Granted 01/01/19 - 03/31/19 1,570 $ 59.52 Granted 04/01/19 - 06/30/19 — $ — Granted 07/01/19 - 09/30/19 52 $ 58.54 Exercised (4,999) $ 17.05 Cancelled or forfeited (373) $ 50.42 Outstanding at September 30, 2019 15,140 $ 42.69 6.5 $ 237,041 Vested and expected to vest in the future at September 30, 2019 14,290 $ 41.98 6.4 $ 233,489 Exercisable at September 30, 2019 7,557 $ 33.14 5.2 $ 188,583 The weighted-average grant-date fair value of options granted during the three-months ended September 30, 2019 and 2018 was $18.32 per share and $22.80 per share, respectively. The weighted-average grant-date fair value of options granted during the nine-months ended September 30, 2019 and 2018 was $20.24 per share and $22.51 per share, respectively. The total intrinsic value of options exercised during the three-months ended September 30, 2019 and 2018 was $2.4 million and $19.2 million, respectively. The total intrinsic value of options exercised during the nine-months ended September 30, 2019 and 2018 was $213.8 million and $52.1 million, respectively. Cash received from option exercises under all plans for the three-months ended September 30, 2019 and 2018 was $4.1 million and $10.9 million, respectively. Cash received from option exercises under all plans for the nine-months ended September 30, 2019 and 2018 was $85.2 million and $24.5 million, respectively. At September 30, 2019, there was $90.4 million of total unrecognized compensation expense related to non-vested options granted to employees under the Company’s stock-based payment plans. That cost is expected to be recognized over a weighted-average period of 2.5 years. Restricted Stock Units The cost of stock-based compensation for 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 units as follows: Weighted Number of Average Shares (in Grant-Date thousands) Fair Value Non-vested at January 1, 2019 529 $ 51.55 Granted 01/01/19 - 03/31/19 548 $ 59.66 Granted 04/01/19 - 06/30/19 18 $ 63.48 Granted 07/01/19 - 09/30/19 1 $ 66.00 Vested (265) $ 50.10 Forfeited/cancelled (6) $ 59.67 Non-vested at September 30, 2019 825 $ 57.63 The weighted-average grant-date fair value of restricted stock units granted during the three-months ended September 30, 2019 and 2018 was $66.00 per share and $58.72 per share, respectively. The weighted-average grant-date fair value of restricted stock units granted during the nine-months ended September 30, 2019 and 2018 was $59.79 per share and $57.59 per share, respectively. As of September 30, 2019, 0.7 million of restricted stock units are expected to vest over their respective terms. At September 30, 2019, total unrecognized compensation expense relating to non-vested restricted stock units was $33.4 million, which is expected to be recognized over a weighted-average period of 2.9 years. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
INCOME TAXES | |
INCOME TAXES | 16. INCOME TAXES The following is a roll-forward of the Company’s total gross unrecognized tax benefits, not including interest and penalties, for the nine-months ended September 30, 2019: Gross Unrecognized Tax Benefits Balance at December 31, 2018 $ 5,035 Additions for tax positions related to the current year — Additions for tax positions related to the prior years 1,171 Decreases related to settlement with taxing authority — Balance at September 30, 2019 $ 6,206 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 September 30, 2019, the Company had approximately $1.4 million in accrued 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 any change in the amount of unrecognized tax benefits within the next 12 months will not be significant. The Company is subject to U.S. federal income tax as well as to income tax in multiple state and foreign jurisdictions. On October 18, 2016, the IRS began its examination of the Company’s U.S. federal income tax return for the year ended December 31, 2014. On March 27, 2017, the IRS began its examination of the Company’s U.S. federal income tax return for the year ended December 31, 2015. The Company is in various stages of examination with certain states and certain foreign jurisdictions, including Revenue Commissioners, Her Majesty’s Revenue and Customs, among others. The Company’s 2014 through 2018 U.S. federal income tax returns are subject to examination by the IRS. The Company’s state income tax returns are subject to examination for the 2014 through 2018 tax years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 17. EARNINGS PER SHARE A reconciliation of the weighted-average shares used in the basic and diluted earnings per common share computations is presented below (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Weighted-average shares outstanding: Basic 544,469 552,694 543,804 559,472 Dilutive 3,953 7,261 4,583 7,319 Diluted 548,422 559,955 548,387 566,791 For the three-months ended September 30, 2019 and 2018, options and awards outstanding totaling 4.7 million shares and 3.2 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive. For the nine-months ended September 30, 2019 and 2018, options and awards outstanding totaling 4.3 million shares and 3.0 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 18. SEGMENT INFORMATION The Company has three operating and reportable segments, (i) Monster Energy® Drinks segment, which is primarily comprised of the Company’s Monster Energy® drinks and Reign Total Body Fuel TM The Company’s Monster Energy® Drinks segment primarily generates net operating revenues by selling ready-to-drink packaged drinks primarily to bottlers and full service beverage distributors. In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers and the military. The Company’s Strategic Brands segment primarily generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold by such bottlers to other bottlers, full service distributors or retailers, including, retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores and the military. To a lesser extent, the Company’s Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers and full service beverage distributors. Generally, the Monster Energy® Drinks segment generates higher per case net operating revenues, but lower per case gross profit margin percentages than the Strategic Brands segment. Corporate and unallocated amounts that do not relate to a reportable segment have been allocated to “Corporate & Unallocated.” No asset information, other than goodwill and other intangible assets, has been provided in the Company’s reportable segments, as management does not measure or allocate such assets on a segment basis. The net revenues derived from the Company’s reportable segments and other financial information related thereto for the three- and nine-months ended September 30, 2019 and 2018 are as follows: Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Net sales: Monster Energy® Drinks (1) $ 1,061,383 $ 935,146 $ 2,950,877 $ 2,645,089 Strategic Brands 66,333 74,441 215,763 220,011 Other 5,861 6,573 16,973 17,853 Corporate and unallocated — — — — $ 1,133,577 $ 1,016,160 $ 3,183,613 $ 2,882,953 Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Operating Income: Monster Energy® (1) (2) $ 433,848 $ 359,090 $ 1,187,652 $ 1,033,895 Strategic Brands 35,107 41,661 130,762 135,054 Other 1,005 1,742 3,026 4,539 Corporate and unallocated (74,517) (62,920) (235,546) (196,380) $ 395,443 $ 339,573 $ 1,085,894 $ 977,108 Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Income before tax: Monster Energy® (1) (2) $ 434,003 $ 359,216 $ 1,187,916 $ 1,034,521 Strategic Brands 35,106 41,659 130,758 135,075 Other 1,005 1,742 3,031 4,539 Corporate and unallocated (71,550) (60,056) (226,976) (191,758) $ 398,564 $ 342,561 $ 1,094,729 $ 982,377 (1) Includes $10.7 million and $11.1 million for the three-months ended September 30, 2019 and 2018, respectively, related to the recognition of deferred revenue. Includes $35.6 million and $33.3 million for the nine-months ended September 30, 2019 and 2018, respectively, related to the recognition of deferred revenue. (2) Includes $0.0 million and $14.1 million for the three-months ended September 30, 2019 and 2018, respectively, related to distributor termination costs. Includes $11.0 million and $26.6 million for the nine-months ended September 30, 2019 and 2018, respectively, related to distributor termination costs. Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Depreciation and amortization: Monster Energy® $ 9,319 $ 9,157 $ 29,449 $ 26,926 Strategic Brands 1,990 1,947 5,925 5,819 Other 1,162 1,167 3,475 3,493 Corporate and unallocated 2,050 2,014 6,172 6,231 $ 14,521 $ 14,285 $ 45,021 $ 42,469 Corporate and unallocated expenses for the three-months ended September 30, 2019 include $50.1 million of payroll costs, of which $16.0 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $13.3 million attributable to professional service expenses, including accounting and legal costs, and $11.1 million of other operating expenses. Corporate and unallocated expenses for the three-months ended September 30, 2018 include $42.1 million of payroll costs, of which $14.0 million was attributable to stock-based compensation expenses (see Note 15, “Stock-Based Compensation”), as well as $12.3 million attributable to professional service expenses, including accounting and legal costs, and $8.5 million of other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2019 include $151.0 million of payroll costs, of which $46.9 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $49.2 million attributable to professional service expenses, including accounting and legal costs, and $35.3 million of other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2018 include $129.9 million of payroll costs, of which $42.4 million was attributable to stock-based compensation expenses (see Note 15, “Stock-Based Compensation”), as well as $36.5 million attributable to professional service expenses, including accounting and legal costs, and $30.0 million of other operating expenses. CCBCC Operations, LLC accounted for approximately 13% and 14% of the Company's net sales for the three-months ended September 30, 2019 and 2018, respectively. CCBCC Operations, LLC accounted for approximately 13% and 14% of the Company's net sales for the nine-months ended September 30, 2019 and 2018, respectively. Reyes Coca-Cola Bottling accounted for approximately 12% and 13% of the Company's net sales for the three-months ended September 30, 2019 and 2018, respectively. Reyes Coca-Cola Bottling accounted for approximately 12% and 13% of the Company's net sales for the nine-months ended September 30, 2019 and 2018, respectively. Coca-Cola European Partners accounted for approximately 10% and 9% of the Company's net sales for the three-months ended September 30, 2019 and 2018, respectively. Coca-Cola European Partners accounted for approximately 10% and 9% of the Company's net sales for the nine-months ended September 30, 2019 and 2018, respectively. Net sales to customers outside the United States amounted to $379.8 million and $283.0 million for the three-months ended September 30, 2019 and 2018, respectively. Such sales were approximately 34% and 28% of net sales for the three-months ended September 30, 2019 and 2018, respectively. Net sales to customers outside the United States amounted to $1.01 billion and $818.8 million for the nine-months ended September 30, 2019 and 2018, respectively. Such sales were approximately 32% and 28% of net sales for the nine-months ended September 30, 2019 and 2018, respectively. Goodwill and other intangible assets for the Company's reportable segments as of September 30, 2019 and December 31, 2018 are as follows: September 30, December 31, 2019 2018 Goodwill and other intangible assets: Monster Energy® $ 1,377,824 $ 1,368,620 Strategic Brands 985,742 989,944 Other 15,550 18,957 Corporate and unallocated — — $ 2,379,116 $ 2,377,521 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS TCCC controls approximately 18.9% of the voting interests of the Company. The TCCC Subsidiaries, the TCCC Related Parties and the TCCC independent bottlers, purchase and distribute the Company’s products in domestic and certain international markets. The Company also pays TCCC a commission based on certain sales within the TCCC distribution network. TCCC commissions, based on sales to the TCCC Subsidiaries and the TCCC Related Parties, were $11.6 million and $13.7 million for the three-months ended September 30, 2019 and 2018, respectively, and are included as a reduction to net sales. TCCC commissions, based on sales to the TCCC Subsidiaries and the TCCC Related Parties, were $39.5 million and $38.1 million for the nine-months ended September 30, 2019 and 2018, respectively, and are included as a reduction to net sales. TCCC commissions, based on sales to TCCC independent bottlers/distributors, were $4.7 million and $4.3 million for the three-months ended September 30, 2019 and 2018, respectively, and are included in operating expenses. TCCC commissions, based on sales to TCCC independent bottlers/distributors, were $13.6 million and $11.8 million for the nine-months ended September 30, 2019 and 2018, respectively, and are included in operating expenses. Net sales to the TCCC Subsidiaries for the three-months ended September 30, 2019 and 2018 were $21.0 million and $42.3 million, respectively. Net sales to the TCCC Subsidiaries for the nine-months ended September 30, 2019 and 2018 were $59.5 million and $117.0 million, respectively. As part of TCCC’s North America refranchising, the territories of certain TCCC Subsidiaries have been transitioned to certain independent TCCC bottlers/distributors and/or TCCC Related Parties. Accordingly, the Company’s net sales classified as sales to the TCCC Subsidiaries significantly decreased for the three- and nine-months ended September 30, 2019. The Company also purchases concentrates from TCCC which are then sold to certain of the Company's bottlers/distributors. Concentrate purchases from TCCC were $6.3 million and $7.4 million for the three-months ended September 30, 2019 and 2018, respectively. Concentrate purchases from TCCC were $20.2 million and $21.6 million for the nine-months ended September 30, 2019 and 2018, respectively. Certain TCCC Subsidiaries also contract manufacture certain of the Company’s energy drinks. Such contract manufacturing expenses were $4.2 million and $7.0 million for the three-months ended September 30, 2019 and 2018, respectively. Such contract manufacturing expenses were $13.1 million and $18.8 million for the nine-months ended September 30, 2019 and 2018, respectively. Accounts receivable, accounts payable and accrued promotional allowances related to the TCCC Subsidiaries are as follows at: September 30, December 31, 2019 2018 Accounts receivable, net $ 35,520 $ 25,312 Accounts payable $ (25,601) $ (54,430) Accrued promotional allowances $ (6,185) $ (4,044) One director of the Company and his family, and one director's family, 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 September 30, 2019 and 2018 were $0.5 million and $0.2 million, respectively. Expenses incurred with such company in connection with promotional materials purchased during the nine-months ended September 30, 2019 and 2018 were $1.1 million and $1.6 million, respectively. In December 2018, the Company and a director of the Company entered into a 50-50 partnership that purchased land, and real property thereon, in Kona, Hawaii for the purpose of producing coffee products. The Company’s initial 50% contribution of $1.9 million was accounted for as an equity investment and is included in other assets (non-current) in the accompanying condensed consolidated balance sheet at December 31, 2018. During the three-months ended September 30, 2019, the Company made no additional capital contributions and recorded an equity loss of $0.02 million. During the nine-months ended September 30, 2019, the Company made an additional $0.05 million capital contribution and recorded an equity loss of $0.06 million. As of September 30, 2019, the Company’s equity investment is $1.9 million and is included in other assets (non-current) in the accompanying condensed consolidated balance sheet at September 30, 2019. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS On November 6, 2019, the Company’s Board of Directors authorized a new share repurchase program for the purchase of up to |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue by geographical markets | Three-Months Ended September 30, 2019 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 737,457 $ 178,569 $ 97,153 $ 48,205 $ 1,061,384 Strategic Brands 43,205 16,673 6,243 212 66,333 Other 5,860 — — — 5,860 Total Net Sales $ 786,522 $ 195,242 $ 103,396 $ 48,417 $ 1,133,577 Three-Months Ended September 30, 2018 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 710,172 $ 127,286 $ 63,758 $ 33,930 $ 935,146 Strategic Brands 47,645 18,287 8,231 278 74,441 Other 6,573 — — — 6,573 Total Net Sales $ 764,390 $ 145,573 $ 71,989 $ 34,208 $ 1,016,160 Nine-Months Ended September 30, 2019 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 2,118,835 $ 458,655 $ 242,561 $ 130,826 $ 2,950,877 Strategic Brands 132,375 62,374 20,024 990 215,763 Other 16,973 — — — 16,973 Total Net Sales $ 2,268,183 $ 521,029 $ 262,585 $ 131,816 $ 3,183,613 Nine-Months Ended September 30, 2018 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 1,994,950 $ 376,823 $ 171,796 $ 101,520 $ 2,645,089 Strategic Brands 137,502 60,567 20,148 1,794 220,011 Other 17,853 — — — 17,853 Total Net Sales $ 2,150,305 $ 437,390 $ 191,944 $ 103,314 $ 2,882,953 1 Europe, Middle East and Africa (“EMEA”) |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
LEASES | |
Schedule of lease cost | Three-Months Nine-Months Ended September 30, Ended September 30, 2019 2019 Operating leases: Lease cost $ 1,223 $ 3,548 Variable lease cost 168 503 Operating lease cost 1,391 4,051 Short term lease cost 993 2,552 Finance leases: Amortization of ROU assets 172 346 Interest on finance lease liabilities 13 43 Finance lease cost 185 389 Total lease cost $ 2,569 $ 6,992 |
Schedule of supplemental cash flow information for leases | Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,026 Operating cash flows from finance leases 43 Financing cash flows from finance leases 1,497 ROU assets obtained in exchange for lease obligations: Finance leases 2,499 Operating leases 27,965 |
Schedule of ROU assets for operating and finance leases | Real Estate Equipment Total Operating leases $ 24,384 $ 497 $ 24,881 Finance leases — 3,525 3,525 |
Schedule of weighted-average remaining lease term and weighted-average discount rate | Operating Leases Finance Leases Weighted-average remaining lease term (years) 10.4 0.8 Weighted-average discount rate 3.6 % 3.2 % |
Schedule of reconciliation of undiscounted future lease payments for finance leases | Undiscounted Future Lease Payments Operating Leases Finance Leases 2019 (excluding the nine-months ended September 30, 2019) $ 1,014 $ 678 2020 3,509 1,187 2021 2,888 — 2022 2,349 — 2023 1,894 — 2024 and thereafter 14,707 — Total lease payments 26,361 1,865 Less interest (4,666) (23) Total $ 21,695 $ 1,842 Accrued liabilities $ 3,061 $ 1,842 Other liabilities 18,634 — |
Schedule of future minimum operating lease commitments | Year Ending December 31: 2019 $ 3,954 2020 2,949 2021 2,410 2022 2,114 2023 1,681 2024 and thereafter 14,860 $ 27,968 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
INVESTMENTS | |
Summary of investments in available-for-sale | Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 September 30, 2019 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 81,869 $ — $ — $ 81,869 $ — $ — Certificates of deposit 2,502 — — 2,502 — — Municipal securities 138,072 151 9 138,214 9 — U.S. government agency securities 41,186 7 37 41,156 37 — U.S. treasuries 294,099 179 10 294,268 10 — Variable rate demand notes 29,347 — — 29,347 — — Long-term: U.S. treasuries 11,174 7 4 11,177 4 — Municipal securities 3,198 — 5 3,193 5 — Total $ 601,447 $ 344 $ 65 $ 601,726 $ 65 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 December 31, 2018 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 52,838 $ — $ — $ 52,838 $ — $ — Certificates of deposit 14,075 — — 14,075 — — Municipal securities 151,690 16 62 151,644 62 — U.S. government agency securities 19,943 — 12 19,931 12 — U.S. treasuries 78,189 — 32 78,157 32 — Variable rate demand notes 4,005 — — 4,005 — — Total $ 320,740 $ 16 $ 106 $ 320,650 $ 106 $ — |
Summary of the underlying contractual maturities of investments | September 30, 2019 December 31, 2018 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 81,869 $ 81,869 $ 52,838 $ 52,838 Municipal securities 138,072 138,214 151,690 151,644 U.S. government agency securities 41,186 41,156 19,943 19,931 Certificates of deposit 2,502 2,502 14,075 14,075 U.S. treasuries 294,099 294,268 78,189 78,157 Due 1 - 10 years: Municipal securities 3,198 3,193 — — U.S. treasuries 11,174 11,177 — — Variable rate demand notes 5,412 5,412 — — Due 11 - 20 years: Variable rate demand notes 12,197 12,197 — — Due 21 - 30 years: Variable rate demand notes 9,721 9,721 4,005 4,005 Due 31 - 40 years: Variable rate demand notes 2,017 2,017 — — Total $ 601,447 $ 601,726 $ 320,740 $ 320,650 |
FAIR VALUE OF CERTAIN FINANCI_2
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | |
Schedule of financial assets and liabilities recorded at fair value on a recurring basis | September 30, 2019 Level 1 Level 2 Level 3 Total Cash $ 557,925 $ — $ — $ 557,925 Money market funds 69,362 — — 69,362 Certificates of deposit — 11,533 — 11,533 Commercial paper — 95,972 — 95,972 Variable rate demand notes — 29,347 — 29,347 Municipal securities — 159,884 — 159,884 U.S. government agency securities — 80,879 — 80,879 U.S. treasuries — 314,441 — 314,441 Foreign currency derivatives — 30 — 30 Total $ 627,287 $ 692,086 $ — $ 1,319,373 Amounts included in: Cash and cash equivalents $ 627,287 $ 90,330 $ — $ 717,617 Short-term investments — 587,356 — 587,356 Accounts receivable, net — 168 — 168 Investments — 14,370 — 14,370 Accrued liabilities — (138) — (138) Total $ 627,287 $ 692,086 $ — $ 1,319,373 December 31, 2018 Level 1 Level 2 Level 3 Total Cash $ 393,936 $ — $ — $ 393,936 Money market funds 191,358 — — 191,358 Certificates of deposit — 14,075 — 14,075 Commercial paper — 60,422 — 60,422 Variable rate demand notes — 4,005 — 4,005 Municipal securities — 177,118 — 177,118 U.S. government agency securities — 39,092 — 39,092 U.S. treasuries — 78,157 — 78,157 Foreign currency derivatives — (492) — (492) Total $ 585,294 $ 372,377 $ — $ 957,671 Amounts included in: Cash and cash equivalents $ 585,294 $ 52,219 $ — $ 637,513 Short-term investments — 320,650 — 320,650 Accounts receivable, net — 43 — 43 Accrued liabilities — (535) — (535) Total $ 585,294 $ 372,377 $ — $ 957,671 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Schedule of notional amount and fair value of all outstanding foreign currency derivative instruments in the consolidated balance sheets | September 30, 2019 Derivatives not designated as hedging instruments under Notional Fair ASC 815-20 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive USD/pay GBP $ 35,513 $ 86 Accounts receivable, net Receive USD/pay AUD 9,625 29 Accounts receivable, net Receive USD/pay COP 3,040 23 Accounts receivable, net Receive USD/pay ZAR 2,748 19 Accounts receivable, net Receive USD/pay NZD 2,581 11 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive EUR/pay USD $ 39,576 $ (136) Accrued liabilities Receive USD/pay SGD 1,156 (2) Accrued liabilities December 31, 2018 Derivatives not designated as hedging instruments under Notional Fair ASC 815-20 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD $ 8,341 $ 30 Accounts receivable, net Receive NOK/pay USD 902 13 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 40,648 $ (323) Accrued liabilities Receive USD/pay AUD 15,124 (105) Accrued liabilities Receive USD/pay ZAR 8,618 (68) Accrued liabilities Receive USD/pay COP 2,931 (33) Accrued liabilities Receive USD/pay NZD 2,952 (4) Accrued liabilities Receive USD/pay EUR 6,894 (2) Accrued liabilities |
Schedule of net losses on derivative instruments in the consolidated statements of income | Amount of gain recognized in income on derivatives Derivatives not designated as Location of gain Three-months ended hedging instruments under recognized in income on September 30, September 30, ASC 815-20 derivatives 2019 2018 Foreign currency exchange contracts Interest and other income, net $ 627 $ 2,175 Amount of gain recognized in income on derivatives Derivatives not designated as Location of gain Nine-months ended hedging instruments under recognized in income on September 30, September 30, ASC 815-20 derivatives 2019 2018 Foreign currency exchange contracts Interest and other income, net $ 475 $ 7,909 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
INVENTORIES | |
Schedule of inventories | September 30, December 31, 2019 2018 Raw materials $ 136,555 $ 94,421 Finished goods 181,190 183,284 $ 317,745 $ 277,705 |
PROPERTY AND EQUIPMENT, Net (Ta
PROPERTY AND EQUIPMENT, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | September 30, December 31, 2019 2018 Land $ 44,261 $ 44,261 Leasehold improvements 8,487 5,909 Furniture and fixtures 7,649 6,932 Office and computer equipment 21,066 18,717 Computer software 4,252 3,278 Equipment 193,326 183,727 Buildings 126,052 115,242 Vehicles 40,610 39,026 445,703 417,092 Less: accumulated depreciation and amortization (193,943) (174,041) $ 251,760 $ 243,051 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill | Monster Energy ® Strategic Drinks Brands Other Total Balance at December 31, 2018 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at September 30, 2019 $ 693,644 $ 637,999 $ — $ 1,331,643 Monster Energy ® Strategic Drinks Brands Other Total Balance at December 31, 2017 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at September 30, 2018 $ 693,644 $ 637,999 $ — $ 1,331,643 |
Schedule of intangible assets | September 30, December 31, 2019 2018 Amortizing intangibles $ 66,952 $ 71,350 Accumulated amortization (46,227) (38,311) 20,725 33,039 Non-amortizing intangibles 1,026,748 1,012,839 $ 1,047,473 $ 1,045,878 |
Schedule of future estimated amortization expense related to amortizing intangibles | The following is the future estimated amortization expense related to amortizing intangibles as of September 30, 2019: 2019 (excluding the nine-months ended September 30, 2019) $ 2,887 2020 7,668 2021 4,424 2022 4,399 2023 1,106 2024 and thereafter 241 $ 20,725 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Schedule of components of accumulated other comprehensive loss | Unrealized Currency (Gains) Losses Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2018 $ 32,775 $ 89 $ 32,864 Other comprehensive income before reclassifications 10,586 (367) 10,219 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive (income) loss 10,586 (367) 10,219 Balance at September 30, 2019 $ 43,361 $ (278) $ 43,083 Unrealized Currency (Gains) Losses Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2017 $ 15,818 $ 841 $ 16,659 Other comprehensive loss (income) before reclassifications 13,728 (610) 13,118 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive loss (income) 13,728 (610) 13,118 Balance at September 30, 2018 $ 29,546 $ 231 $ 29,777 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
STOCK-BASED COMPENSATION | |
Schedule of weighted-average assumptions used to estimate the fair value of options granted | Three-Months Ended September 30, Nine-Months Ended September 30, 2019 2018 2019 2018 Dividend yield 0 % 0 % 0 % 0 % Expected volatility 30.2 % 34.5 % 30.2 % 34.9 % Risk-free interest rate 1.4 % 2.9 % 2.4 % 2.8 % Expected term 5.8 years 6.1 years 6.0 years 6.1 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 Outstanding at January 1, 2019 18,890 $ 34.61 5.8 $ 303,627 Granted 01/01/19 - 03/31/19 1,570 $ 59.52 Granted 04/01/19 - 06/30/19 — $ — Granted 07/01/19 - 09/30/19 52 $ 58.54 Exercised (4,999) $ 17.05 Cancelled or forfeited (373) $ 50.42 Outstanding at September 30, 2019 15,140 $ 42.69 6.5 $ 237,041 Vested and expected to vest in the future at September 30, 2019 14,290 $ 41.98 6.4 $ 233,489 Exercisable at September 30, 2019 7,557 $ 33.14 5.2 $ 188,583 |
Summary of activities with respect to non-vested restricted stock units | Weighted Number of Average Shares (in Grant-Date thousands) Fair Value Non-vested at January 1, 2019 529 $ 51.55 Granted 01/01/19 - 03/31/19 548 $ 59.66 Granted 04/01/19 - 06/30/19 18 $ 63.48 Granted 07/01/19 - 09/30/19 1 $ 66.00 Vested (265) $ 50.10 Forfeited/cancelled (6) $ 59.67 Non-vested at September 30, 2019 825 $ 57.63 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2018 $ 5,035 Additions for tax positions related to the current year — Additions for tax positions related to the prior years 1,171 Decreases related to settlement with taxing authority — Balance at September 30, 2019 $ 6,206 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations | A reconciliation of the weighted-average shares used in the basic and diluted earnings per common share computations is presented below (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Weighted-average shares outstanding: Basic 544,469 552,694 543,804 559,472 Dilutive 3,953 7,261 4,583 7,319 Diluted 548,422 559,955 548,387 566,791 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SEGMENT INFORMATION | |
Schedule of net revenues and other financial information by segment | Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Net sales: Monster Energy® Drinks (1) $ 1,061,383 $ 935,146 $ 2,950,877 $ 2,645,089 Strategic Brands 66,333 74,441 215,763 220,011 Other 5,861 6,573 16,973 17,853 Corporate and unallocated — — — — $ 1,133,577 $ 1,016,160 $ 3,183,613 $ 2,882,953 Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Operating Income: Monster Energy® (1) (2) $ 433,848 $ 359,090 $ 1,187,652 $ 1,033,895 Strategic Brands 35,107 41,661 130,762 135,054 Other 1,005 1,742 3,026 4,539 Corporate and unallocated (74,517) (62,920) (235,546) (196,380) $ 395,443 $ 339,573 $ 1,085,894 $ 977,108 Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Income before tax: Monster Energy® (1) (2) $ 434,003 $ 359,216 $ 1,187,916 $ 1,034,521 Strategic Brands 35,106 41,659 130,758 135,075 Other 1,005 1,742 3,031 4,539 Corporate and unallocated (71,550) (60,056) (226,976) (191,758) $ 398,564 $ 342,561 $ 1,094,729 $ 982,377 (1) Includes $10.7 million and $11.1 million for the three-months ended September 30, 2019 and 2018, respectively, related to the recognition of deferred revenue. Includes $35.6 million and $33.3 million for the nine-months ended September 30, 2019 and 2018, respectively, related to the recognition of deferred revenue. (2) Includes $0.0 million and $14.1 million for the three-months ended September 30, 2019 and 2018, respectively, related to distributor termination costs. Includes $11.0 million and $26.6 million for the nine-months ended September 30, 2019 and 2018, respectively, related to distributor termination costs. Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Depreciation and amortization: Monster Energy® $ 9,319 $ 9,157 $ 29,449 $ 26,926 Strategic Brands 1,990 1,947 5,925 5,819 Other 1,162 1,167 3,475 3,493 Corporate and unallocated 2,050 2,014 6,172 6,231 $ 14,521 $ 14,285 $ 45,021 $ 42,469 |
Schedule of goodwill and other intangible assets for the reportable segments | September 30, December 31, 2019 2018 Goodwill and other intangible assets: Monster Energy® $ 1,377,824 $ 1,368,620 Strategic Brands 985,742 989,944 Other 15,550 18,957 Corporate and unallocated — — $ 2,379,116 $ 2,377,521 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party transactions | September 30, December 31, 2019 2018 Accounts receivable, net $ 35,520 $ 25,312 Accounts payable $ (25,601) $ (54,430) Accrued promotional allowances $ (6,185) $ (4,044) |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS - (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Jan. 01, 2019 | |
RECENT ACCOUNTING PRONOUNCEMENTS | ||
Lease, practical expedients | true | |
Operating lease right-of-use assets | $ 24,881 | |
Operating lease liabilities | $ 21,695 | |
ASU 2016-02 | ||
RECENT ACCOUNTING PRONOUNCEMENTS | ||
Operating lease right-of-use assets | $ 26,300 | |
Operating lease liabilities | $ 22,600 |
REVENUE RECOGNITION - (Details)
REVENUE RECOGNITION - (Details) | 9 Months Ended |
Sep. 30, 2019segment | |
REVENUE RECOGNITION | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Distribution agreement, revenue recognition period | 20 years |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Total Net Sales | $ 1,133,577 | $ 1,016,160 | $ 3,183,613 | $ 2,882,953 | |
Contract Liabilities | |||||
Deferred revenue | 335,900 | 335,900 | $ 356,300 | ||
Deferred revenue recognized in net sales | 10,700 | 11,100 | 35,600 | 33,300 | |
U.S. And Canada | |||||
Total Net Sales | 786,522 | 764,390 | 2,268,183 | 2,150,305 | |
EMEA | |||||
Total Net Sales | 195,242 | 145,573 | 521,029 | 437,390 | |
Asia Pacific | |||||
Total Net Sales | 103,396 | 71,989 | 262,585 | 191,944 | |
Latin America And Caribbean | |||||
Total Net Sales | 48,417 | 34,208 | 131,816 | 103,314 | |
Monster Energy Drinks | |||||
Total Net Sales | 1,061,384 | 935,146 | 2,950,877 | 2,645,089 | |
Monster Energy Drinks | U.S. And Canada | |||||
Total Net Sales | 737,457 | 710,172 | 2,118,835 | 1,994,950 | |
Monster Energy Drinks | EMEA | |||||
Total Net Sales | 178,569 | 127,286 | 458,655 | 376,823 | |
Monster Energy Drinks | Asia Pacific | |||||
Total Net Sales | 97,153 | 63,758 | 242,561 | 171,796 | |
Monster Energy Drinks | Latin America And Caribbean | |||||
Total Net Sales | 48,205 | 33,930 | 130,826 | 101,520 | |
Strategic Brands | |||||
Total Net Sales | 66,333 | 74,441 | 215,763 | 220,011 | |
Strategic Brands | U.S. And Canada | |||||
Total Net Sales | 43,205 | 47,645 | 132,375 | 137,502 | |
Strategic Brands | EMEA | |||||
Total Net Sales | 16,673 | 18,287 | 62,374 | 60,567 | |
Strategic Brands | Asia Pacific | |||||
Total Net Sales | 6,243 | 8,231 | 20,024 | 20,148 | |
Strategic Brands | Latin America And Caribbean | |||||
Total Net Sales | 212 | 278 | 990 | 1,794 | |
Other | |||||
Total Net Sales | 5,860 | 6,573 | 16,973 | 17,853 | |
Other | U.S. And Canada | |||||
Total Net Sales | $ 5,860 | $ 6,573 | $ 16,973 | $ 17,853 |
LEASES - Lease Terms (Details)
LEASES - Lease Terms (Details) | 9 Months Ended |
Sep. 30, 2019 | |
LEASES | |
Operating leases, options to extend | true |
Finance leases, options to extend | true |
Operating leases, options to terminate | true |
Finance leases, options to terminate | true |
Minimum | |
LEASES | |
Operating leases, lease term (in years) | 1 year |
Finance leases, lease term (in years) | 1 year |
Maximum | |
LEASES | |
Operating leases, lease term (in years) | 15 years |
Finance leases, lease term (in years) | 15 years |
Operating leases, renewal lease term (in years) | 5 years |
Finance leases, renewal lease term (in years) | 5 years |
Operating leases, termination period (in years) | 1 year |
Finance leases, termination period (in years) | 1 year |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Operating leases: | ||
Lease cost | $ 1,223 | $ 3,548 |
Variable lease cost | 168 | 503 |
Operating lease cost | 1,391 | 4,051 |
Short term lease cost | 993 | 2,552 |
Finance leases: | ||
Amortization of ROU assets | 172 | 346 |
Interest on finance lease liabilities | 13 | 43 |
Finance lease cost | 185 | 389 |
Total lease cost | $ 2,569 | $ 6,992 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 3,026 |
Operating cash flows from finance leases | 43 |
Financing cash flows from finance leases | 1,497 |
ROU assets obtained in exchange for lease obligations: | |
Finance leases | 2,499 |
Operating leases | $ 27,965 |
LEASES - ROU assets for operati
LEASES - ROU assets for operating and finance leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
ROU assets for operating and finance leases | |
Operating leases | $ 24,881 |
Finance leases | 3,525 |
Real Estate | |
ROU assets for operating and finance leases | |
Operating leases | 24,384 |
Equipment | |
ROU assets for operating and finance leases | |
Operating leases | 497 |
Finance leases | $ 3,525 |
LEASES - Weighted-average remai
LEASES - Weighted-average remaining lease term and weighted-average discount rate (Details) | Sep. 30, 2019 |
LEASES | |
Weighted-average remaining lease term (years), Operating Leases | 10 years 4 months 24 days |
Weighted-average remaining lease term (years), Finance Leases | 9 months 18 days |
Weighted-average discount rate, Operating Leases | 3.60% |
Weighted-average discount rate, Finance Leases | 3.20% |
LEASES - Undiscounted future le
LEASES - Undiscounted future lease payments for operating and finance leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
2019 (excluding the nine-months ended September 30, 2019) | $ 1,014 |
2020 | 3,509 |
2021 | 2,888 |
2022 | 2,349 |
2023 | 1,894 |
2024 and thereafter | 14,707 |
Total lease payments | 26,361 |
Less interest | (4,666) |
Total | 21,695 |
Finance Leases | |
2019 (excluding the nine-months ended September 30, 2019) | 678 |
2020 | 1,187 |
Total lease payments | 1,865 |
Less interest | (23) |
Total | 1,842 |
Accrued liabilities, Operating Leases | 3,061 |
Accrued liabilities, Finance Leases | 1,842 |
Other liabilities, Operating Leases | $ 18,634 |
LEASES - ASC 840 (Details)
LEASES - ASC 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future minimum operating lease commitments | |
2019 | $ 3,954 |
2020 | 2,949 |
2021 | 2,410 |
2022 | 2,114 |
2023 | 1,681 |
2024 and thereafter | 14,860 |
Total | $ 27,968 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Available-for-sale | ||
Amortized Cost | $ 601,447 | $ 320,740 |
Gross Unrealized Holding Gains | 344 | 16 |
Gross Unrealized Holding Losses | 65 | 106 |
Fair Value | 601,726 | 320,650 |
Continuous Unrealized Loss Position less than 12 Months | 65 | 106 |
Short-term | Commercial paper | ||
Available-for-sale | ||
Amortized Cost | 81,869 | 52,838 |
Fair Value | 81,869 | 52,838 |
Short-term | Certificates of deposit | ||
Available-for-sale | ||
Amortized Cost | 2,502 | 14,075 |
Fair Value | 2,502 | 14,075 |
Short-term | Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 138,072 | 151,690 |
Gross Unrealized Holding Gains | 151 | 16 |
Gross Unrealized Holding Losses | 9 | 62 |
Fair Value | 138,214 | 151,644 |
Continuous Unrealized Loss Position less than 12 Months | 9 | 62 |
Short-term | U.S. government agency securities | ||
Available-for-sale | ||
Amortized Cost | 41,186 | 19,943 |
Gross Unrealized Holding Gains | 7 | |
Gross Unrealized Holding Losses | 37 | 12 |
Fair Value | 41,156 | 19,931 |
Continuous Unrealized Loss Position less than 12 Months | 37 | 12 |
Short-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 294,099 | 78,189 |
Gross Unrealized Holding Gains | 179 | |
Gross Unrealized Holding Losses | 10 | 32 |
Fair Value | 294,268 | 78,157 |
Continuous Unrealized Loss Position less than 12 Months | 10 | 32 |
Short-term | Variable rate demand notes | ||
Available-for-sale | ||
Amortized Cost | 29,347 | 4,005 |
Fair Value | 29,347 | $ 4,005 |
Long-term | Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 3,198 | |
Gross Unrealized Holding Losses | 5 | |
Fair Value | 3,193 | |
Continuous Unrealized Loss Position less than 12 Months | 5 | |
Long-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 11,174 | |
Gross Unrealized Holding Gains | 7 | |
Gross Unrealized Holding Losses | 4 | |
Fair Value | 11,177 | |
Continuous Unrealized Loss Position less than 12 Months | $ 4 |
INVESTMENTS - Maturity Period (
INVESTMENTS - Maturity Period (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investments | ||
Amortized Cost | $ 601,447 | $ 320,740 |
Fair Value | 601,726 | 320,650 |
Commercial paper | Less than 1 year | ||
Investments | ||
Amortized Cost | 81,869 | 52,838 |
Fair Value | 81,869 | 52,838 |
Municipal securities | Less than 1 year | ||
Investments | ||
Amortized Cost | 138,072 | 151,690 |
Fair Value | 138,214 | 151,644 |
Municipal securities | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 3,198 | |
Fair Value | 3,193 | |
U.S. government agency securities | Less than 1 year | ||
Investments | ||
Amortized Cost | 41,186 | 19,943 |
Fair Value | 41,156 | 19,931 |
Certificates of deposit | Less than 1 year | ||
Investments | ||
Amortized Cost | 2,502 | 14,075 |
Fair Value | 2,502 | 14,075 |
U.S. treasuries | Less than 1 year | ||
Investments | ||
Amortized Cost | 294,099 | 78,189 |
Fair Value | 294,268 | 78,157 |
U.S. treasuries | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 11,174 | |
Fair Value | 11,177 | |
Variable rate demand notes | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 5,412 | |
Fair Value | 5,412 | |
Variable rate demand notes | Due 11 - 20 years | ||
Investments | ||
Amortized Cost | 12,197 | |
Fair Value | 12,197 | |
Variable rate demand notes | Due 21 - 30 years | ||
Investments | ||
Amortized Cost | 9,721 | 4,005 |
Fair Value | 9,721 | $ 4,005 |
Variable rate demand notes | Due 31 - 40 years | ||
Investments | ||
Amortized Cost | 2,017 | |
Fair Value | $ 2,017 |
FAIR VALUE OF CERTAIN FINANCI_3
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES - Assets - Recurring Basis (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair value of certain financial assets and liabilities | ||||
Cash and cash equivalents | $ 717,617 | $ 637,513 | $ 713,714 | $ 528,622 |
Short-term investments | 587,356 | 320,650 | ||
Investments | 14,370 | |||
Asset transfers between Level 1 and Level 2 measurements | 0 | 0 | ||
Total fair value | ||||
Fair value of certain financial assets and liabilities | ||||
Cash | 557,925 | 393,936 | ||
Foreign currency derivatives | 30 | |||
Assets measured at fair value | 1,319,373 | 957,671 | ||
Cash and cash equivalents | 717,617 | 637,513 | ||
Short-term investments | 587,356 | 320,650 | ||
Accounts receivable, net | 168 | 43 | ||
Investments | 14,370 | |||
Accrued liabilities | (138) | (535) | ||
Foreign currency derivatives | (492) | |||
Total fair value | Money market funds | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 69,362 | 191,358 | ||
Total fair value | Certificates of deposit | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 11,533 | 14,075 | ||
Total fair value | Commercial paper | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 95,972 | 60,422 | ||
Total fair value | Variable rate demand notes | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 29,347 | 4,005 | ||
Total fair value | Municipal securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 159,884 | 177,118 | ||
Total fair value | U.S. government agency securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 80,879 | 39,092 | ||
Total fair value | U.S. treasuries | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 314,441 | 78,157 | ||
Level 1 | ||||
Fair value of certain financial assets and liabilities | ||||
Cash | 557,925 | 393,936 | ||
Assets measured at fair value | 627,287 | 585,294 | ||
Cash and cash equivalents | 627,287 | 585,294 | ||
Level 1 | Money market funds | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 69,362 | 191,358 | ||
Level 2 | ||||
Fair value of certain financial assets and liabilities | ||||
Foreign currency derivatives | 30 | |||
Assets measured at fair value | 692,086 | 372,377 | ||
Cash and cash equivalents | 90,330 | 52,219 | ||
Short-term investments | 587,356 | 320,650 | ||
Accounts receivable, net | 168 | 43 | ||
Investments | 14,370 | |||
Accrued liabilities | (138) | (535) | ||
Foreign currency derivatives | (492) | |||
Level 2 | Certificates of deposit | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 11,533 | 14,075 | ||
Level 2 | Commercial paper | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 95,972 | 60,422 | ||
Level 2 | Variable rate demand notes | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 29,347 | 4,005 | ||
Level 2 | Municipal securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 159,884 | 177,118 | ||
Level 2 | U.S. government agency securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 80,879 | 39,092 | ||
Level 2 | U.S. treasuries | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | $ 314,441 | $ 78,157 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Notional Amount and Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Foreign currency exchange contracts | Maximum | ||
Derivative Instruments and Hedging Activities | ||
Term of derivative instrument | 1 month | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay GBP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | $ 35,513 | |
Fair Value, Assets | 86 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay AUD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 9,625 | |
Fair Value, Assets | 29 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay COP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 3,040 | |
Fair Value, Assets | 23 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay ZAR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 2,748 | |
Fair Value, Assets | 19 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay NZD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 2,581 | |
Fair Value, Assets | 11 | |
Not designated as hedging instruments | Accounts receivable, net | Receive SGD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | $ 8,341 | |
Fair Value, Assets | 30 | |
Not designated as hedging instruments | Accounts receivable, net | Receive NOK/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 902 | |
Fair Value, Assets | 13 | |
Not designated as hedging instruments | Accrued liabilities | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 15,124 | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay GBP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 40,648 | |
Fair Value, Liabilities | (323) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay AUD | ||
Derivative Instruments and Hedging Activities | ||
Fair Value, Liabilities | (105) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay COP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 2,931 | |
Fair Value, Liabilities | (33) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay ZAR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 8,618 | |
Fair Value, Liabilities | (68) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay NZD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 2,952 | |
Fair Value, Liabilities | (4) | |
Not designated as hedging instruments | Accrued liabilities | Receive EUR/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 39,576 | |
Fair Value, Liabilities | (136) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay SGD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 1,156 | |
Fair Value, Liabilities | $ (2) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay EUR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 6,894 | |
Fair Value, Liabilities | $ (2) |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Nonhedging Designation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Not designated as hedging instruments | Foreign currency exchange contracts | Interest and other income, net | ||||
Net (losses) gains on derivative instruments | ||||
Amount of (loss) gain recognized in income on derivatives | $ 627 | $ 2,175 | $ 475 | $ 7,909 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
INVENTORIES | ||
Raw materials | $ 136,555 | $ 94,421 |
Finished goods | 181,190 | 183,284 |
Inventories | $ 317,745 | $ 277,705 |
PROPERTY AND EQUIPMENT, Net (De
PROPERTY AND EQUIPMENT, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and equipment, net | |||||
Property and equipment, gross | $ 445,703 | $ 445,703 | $ 417,092 | ||
Less: accumulated depreciation and amortization | (193,943) | (193,943) | (174,041) | ||
Property and equipment, net | 251,760 | 251,760 | 243,051 | ||
Total depreciation and amortization expense | 11,600 | $ 11,300 | 36,300 | $ 33,500 | |
Land | |||||
Property and equipment, net | |||||
Property and equipment, gross | 44,261 | 44,261 | 44,261 | ||
Leasehold improvements | |||||
Property and equipment, net | |||||
Property and equipment, gross | 8,487 | 8,487 | 5,909 | ||
Furniture and fixtures | |||||
Property and equipment, net | |||||
Property and equipment, gross | 7,649 | 7,649 | 6,932 | ||
Office and computer equipment | |||||
Property and equipment, net | |||||
Property and equipment, gross | 21,066 | 21,066 | 18,717 | ||
Computer software | |||||
Property and equipment, net | |||||
Property and equipment, gross | 4,252 | 4,252 | 3,278 | ||
Equipment | |||||
Property and equipment, net | |||||
Property and equipment, gross | 193,326 | 193,326 | 183,727 | ||
Buildings | |||||
Property and equipment, net | |||||
Property and equipment, gross | 126,052 | 126,052 | 115,242 | ||
Vehicles | |||||
Property and equipment, net | |||||
Property and equipment, gross | $ 40,610 | $ 40,610 | $ 39,026 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Goodwill | |||
Goodwill, Beginning Balance | $ 1,331,643 | $ 1,331,643 | $ 1,331,643 |
Goodwill, Ending Balance | 1,331,643 | 1,331,643 | 1,331,643 |
Monster Energy Drinks | |||
Goodwill | |||
Goodwill, Beginning Balance | 693,644 | 693,644 | 693,644 |
Goodwill, Ending Balance | 693,644 | 693,644 | 693,644 |
Strategic Brands | |||
Goodwill | |||
Goodwill, Beginning Balance | 637,999 | 637,999 | 637,999 |
Goodwill, Ending Balance | $ 637,999 | $ 637,999 | $ 637,999 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Intangible assets | |||||
Amortizing intangibles | $ 66,952 | $ 66,952 | $ 71,350 | ||
Accumulated amortization | (46,227) | (46,227) | (38,311) | ||
Amortizing intangibles, net | 20,725 | 20,725 | 33,039 | ||
Non-amortizing intangibles | 1,026,748 | 1,026,748 | 1,012,839 | ||
Intangibles, net | 1,047,473 | 1,047,473 | $ 1,045,878 | ||
Amortization expense | $ 2,900 | $ 3,000 | $ 8,700 | $ 9,000 | |
Minimum | |||||
Intangible assets | |||||
Useful life of intangible assets | 5 years | ||||
Maximum | |||||
Intangible assets | |||||
Useful life of intangible assets | 7 years |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Future estimated amortization expense related to amortizing intangibles | ||
2019 | $ 2,887 | |
2020 | 7,668 | |
2021 | 4,424 | |
2022 | 4,399 | |
2023 | 1,106 | |
2024 and thereafter | 241 | |
Amortizing intangibles, net | $ 20,725 | $ 33,039 |
DISTRIBUTION AGREEMENTS (Detail
DISTRIBUTION AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
DISTRIBUTION AGREEMENTS | ||||
Termination costs | $ 0 | $ 14.1 | $ 11 | $ 26.6 |
Distribution agreement (in years) | 20 years | |||
Revenue recognized | $ 10.7 | $ 11.1 | $ 35.6 | $ 33.3 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($)a | Sep. 30, 2019USD ($)a | Dec. 31, 2018USD ($) | Feb. 28, 2018USD ($) | |
Purchase Commitments | |||||
Aggregate contractual obligations | $ 171.6 | $ 171.6 | |||
Line of credit | |||||
Purchase Commitments | |||||
Maximum borrowing capacity | $ 9 | $ 15 | |||
Interest rate (as a percent) | 5.50% | 5.50% | |||
Amount outstanding | $ 0 | $ 0 | |||
Land in Athy, County Kildare, Ireland | |||||
Purchase Commitments | |||||
Purchase price | 12 | ||||
Initial payment on acquisition | $ 1.2 | ||||
Land in San Fernando | |||||
Purchase Commitments | |||||
Purchase price | $ 33.7 | ||||
Land (in acres) | a | 7.66 | 7.66 | |||
Raw materials | |||||
Purchase Commitments | |||||
Purchase commitments | $ 29.3 | ||||
Obligation term ( in years) | 1 year |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Millions | Sep. 30, 2019USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Accrued loss contingencies | $ 2 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | $ 32,864 | $ 16,659 |
Other comprehensive loss (income) before reclassifications | 10,219 | 13,118 |
Net current-period other comprehensive loss (income) | 10,219 | 13,118 |
Balance at the end of the period | 43,083 | 29,777 |
Currency Translation Losses | ||
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | 32,775 | 15,818 |
Other comprehensive loss (income) before reclassifications | 10,586 | 13,728 |
Net current-period other comprehensive loss (income) | 10,586 | 13,728 |
Balance at the end of the period | 43,361 | 29,546 |
Unrealized (Gains) Losses on Available-for-Sale Securities | ||
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | 89 | 841 |
Other comprehensive loss (income) before reclassifications | (367) | (610) |
Net current-period other comprehensive loss (income) | (367) | (610) |
Balance at the end of the period | $ (278) | $ 231 |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Nov. 06, 2019 | Feb. 26, 2019 | Aug. 07, 2018 | |
Treasury Stock Purchase | ||||||||
Common stock repurchased | $ 254,308 | $ 621 | $ 222,792 | $ 553,200 | $ 251,949 | |||
Number of shares repurchased of common stock from employees in lieu of cash or withholding taxes due | 0 | |||||||
August 2018 Repurchase Plan | ||||||||
Treasury Stock Purchase | ||||||||
Share repurchase program, authorized amount | $ 500,000 | |||||||
Common stock repurchased (in shares) | 400,000 | |||||||
Average purchase price (in dollars per share) | $ 58.32 | |||||||
Common stock repurchased | $ 20,600 | |||||||
February 2019 Repurchase Plan | ||||||||
Treasury Stock Purchase | ||||||||
Common stock repurchased (in shares) | 4 | |||||||
Average purchase price (in dollars per share) | $ 58.62 | |||||||
Common stock repurchased | $ 233,700 | |||||||
Share repurchase program, authorized remaining amount | $ 36,600 | |||||||
February 2019 Repurchase Plan | Maximum | ||||||||
Treasury Stock Purchase | ||||||||
Share repurchase program, authorized amount | $ 500,000 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plans (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)plan | Sep. 30, 2018USD ($) | |
STOCK-BASED COMPENSATION | ||||
Stock-based compensation plans | plan | 2 | |||
Compensation expense on share-based plans | $ 16 | $ 14.1 | $ 46.9 | $ 42.4 |
Excess tax benefit realized for tax deductions from non-qualified stock option exercises and disqualifying dispositions of incentive stock options | $ 0.5 | $ 3.1 | $ 26.7 | $ 7.7 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value Assumptions (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Weighted-average assumptions used to estimate the fair value of options granted | ||||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | ||
Expected volatility (as a percent) | 30.20% | 34.50% | 30.20% | 34.90% | ||
Risk-free interest rate (as a percent) | 1.40% | 2.90% | 2.40% | 2.80% | ||
Expected term | 5 years 9 months 18 days | 6 years 1 month 6 days | 6 years | 6 years 1 month 6 days | ||
Stock options, Number of Shares | ||||||
Balance at the beginning of the period (in shares) | 18,890 | 18,890 | ||||
Granted (in shares) | 52 | 1,570 | ||||
Exercised (in shares) | (4,999) | |||||
Cancelled or forfeited (in shares) | (373) | |||||
Balance at the end of the period (in shares) | 15,140 | 15,140 | 18,890 | |||
Vested and expected to vest in the future at the end of the period (in shares) | 14,290 | 14,290 | ||||
Exercisable at the end of the period (in shares) | 7,557 | 7,557 | ||||
Stock options, Weighted-Average Exercise Price Per Share | ||||||
Balance at the beginning of the period (in dollars per share) | $ 34.61 | $ 34.61 | ||||
Granted (in dollars per share) | $ 59.52 | |||||
Exercised (in dollars per share) | 17.05 | |||||
Cancelled or forfeited (in dollars per share) | 50.42 | |||||
Balance at the end of the period (in dollars per share) | $ 42.69 | 42.69 | $ 34.61 | |||
Vested and expected to vest in the future at the end of the period (in dollars per share) | 41.98 | 41.98 | ||||
Exercisable at the end of the period (in dollars per share) | $ 33.14 | $ 33.14 | ||||
Weighted-Average Remaining Contractual Term (in years) | ||||||
Balance at the beginning of the period | 6 years 6 months | 5 years 9 months 18 days | ||||
Balance at the end of the period | 6 years 6 months | 5 years 9 months 18 days | ||||
Vested and expected to vest in the future at the end of the period | 6 years 4 months 24 days | |||||
Exercisable at the end of the period | 5 years 2 months 12 days | |||||
Aggregate Intrinsic Value | ||||||
Balance at the beginning of the period | $ 303,627 | $ 303,627 | ||||
Balance at the end of the period | $ 237,041 | 237,041 | $ 303,627 | |||
Vested and expected to vest in the future at the end of the period | 233,489 | 233,489 | ||||
Exercisable at the end of the period | $ 188,583 | $ 188,583 |
STOCK-BASED COMPENSATION - Equi
STOCK-BASED COMPENSATION - Equity Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
STOCK-BASED COMPENSATION | ||||||
Cost expected to be recognized over a weighted-average period | 2 years 6 months | |||||
Stock options | ||||||
STOCK-BASED COMPENSATION | ||||||
Granted (in shares) | 52 | 1,570 | ||||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ 18.32 | $ 22.80 | $ 20.24 | $ 22.51 | ||
Total intrinsic value of options exercised | $ 2.4 | $ 19.2 | $ 213.8 | $ 52.1 | ||
Cash received from option exercises | 4.1 | $ 10.9 | 85.2 | $ 24.5 | ||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 90.4 | $ 90.4 | ||||
Stock units expected to vest (in shares) | 14,290 | 14,290 | ||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 58.54 | |||||
Restricted stock units | ||||||
STOCK-BASED COMPENSATION | ||||||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 33.4 | $ 33.4 | ||||
Cost expected to be recognized over a weighted-average period | 2 years 10 months 24 days | |||||
Stock units expected to vest (in shares) | 700 | 700 | ||||
Number of Shares | ||||||
Non-vested at the beginning of the period (in shares) | 529 | 529 | ||||
Granted (in shares) | 1 | 18 | 548 | |||
Vested (in shares) | (265) | |||||
Forfeited/cancelled (in shares) | (6) | |||||
Non-vested at the end of the period (in shares) | 825 | 825 | ||||
Weighted Average Grant-Date Fair Value | ||||||
Non-vested at the beginning of the period (in dollars per share) | $ 51.55 | $ 51.55 | ||||
Granted (in dollars per share) | $ 66 | $ 63.48 | $ 59.66 | $ 58.72 | 59.79 | $ 57.59 |
Vested (in dollars per share) | 50.10 | |||||
Forfeited/cancelled (in dollars per share) | 59.67 | |||||
Non-vested at the end of the period (in dollars per share) | $ 57.63 | $ 57.63 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefit Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Gross unrecognized tax benefits, roll forward | |
Balance at the beginning of the period | $ 5,035 |
Additions for tax positions related to the prior years | 1,171 |
Balance at the end of the period | 6,206 |
Accrued interest and penalties related to unrecognized tax benefits | $ 1,400 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Weighted-average shares outstanding: | ||||
Basic | 544,469 | 552,694 | 543,804 | 559,472 |
Dilutive | 3,953 | 7,261 | 4,583 | 7,319 |
Diluted | 548,422 | 559,955 | 548,387 | 566,791 |
Options and awards outstanding excluded from the calculations as their effect would have been antidilutive (in shares) | 4,700 | 3,200 | 4,300 | 3,000 |
SEGMENT INFORMATION - Net Reven
SEGMENT INFORMATION - Net Revenues (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment information | ||||
Number of reportable segments | segment | 3 | |||
Number of operating segments | segment | 3 | |||
Total Net Sales | $ 1,133,577 | $ 1,016,160 | $ 3,183,613 | $ 2,882,953 |
Operating income | 395,443 | 339,573 | 1,085,894 | 977,108 |
Income before tax | 398,564 | 342,561 | 1,094,729 | 982,377 |
Recognition of deferred revenue | 10,700 | 11,100 | 35,600 | 33,300 |
Corporate and unallocated | ||||
Segment information | ||||
Operating income | (74,517) | (62,920) | (235,546) | (196,380) |
Income before tax | (71,550) | (60,056) | (226,976) | (191,758) |
Monster Energy Drinks | ||||
Segment information | ||||
Total Net Sales | 1,061,384 | 935,146 | 2,950,877 | 2,645,089 |
Monster Energy Drinks | Operating segment | ||||
Segment information | ||||
Total Net Sales | 1,061,383 | 935,146 | 2,950,877 | 2,645,089 |
Operating income | 433,848 | 359,090 | 1,187,652 | 1,033,895 |
Income before tax | 434,003 | 359,216 | 1,187,916 | 1,034,521 |
Recognition of deferred revenue | 10,700 | 11,100 | 35,600 | 33,300 |
Distribution Agreements Termination Cost | 0 | 14,100 | 11,000 | 26,600 |
Strategic Brands | ||||
Segment information | ||||
Total Net Sales | 66,333 | 74,441 | 215,763 | 220,011 |
Strategic Brands | Operating segment | ||||
Segment information | ||||
Total Net Sales | 66,333 | 74,441 | 215,763 | 220,011 |
Operating income | 35,107 | 41,661 | 130,762 | 135,054 |
Income before tax | 35,106 | 41,659 | 130,758 | 135,075 |
Other | ||||
Segment information | ||||
Total Net Sales | 5,860 | 6,573 | 16,973 | 17,853 |
Other | Operating segment | ||||
Segment information | ||||
Total Net Sales | 5,861 | 6,573 | 16,973 | 17,853 |
Operating income | 1,005 | 1,742 | 3,026 | 4,539 |
Income before tax | $ 1,005 | $ 1,742 | $ 3,031 | $ 4,539 |
SEGMENT INFORMATION - Depreciat
SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment information | ||||
Depreciation and amortization | $ 14,521 | $ 14,285 | $ 47,843 | $ 42,469 |
Depreciation and amortization | 45,021 | |||
Corporate and unallocated | ||||
Segment information | ||||
Depreciation and amortization | 2,050 | 2,014 | 6,172 | 6,231 |
Monster Energy Drinks | Operating segment | ||||
Segment information | ||||
Depreciation and amortization | 9,319 | 9,157 | 29,449 | 26,926 |
Strategic Brands | Operating segment | ||||
Segment information | ||||
Depreciation and amortization | 1,990 | 1,947 | 5,925 | 5,819 |
Other | Operating segment | ||||
Segment information | ||||
Depreciation and amortization | $ 1,162 | $ 1,167 | $ 3,475 | $ 3,493 |
SEGMENT INFORMATION - Expenses
SEGMENT INFORMATION - Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment information | ||||
Stock-based compensation expense | $ 16 | $ 14.1 | $ 46.9 | $ 42.4 |
Corporate and unallocated | ||||
Segment information | ||||
Payroll costs | 50.1 | 42.1 | 151 | 129.9 |
Stock-based compensation expense | 16 | 14 | 46.9 | 42.4 |
Professional service expenses | 13.3 | 12.3 | 49.2 | 36.5 |
Other operating expenses | $ 11.1 | $ 8.5 | $ 35.3 | $ 30 |
SEGMENT INFORMATION - Concentra
SEGMENT INFORMATION - Concentration Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment information | ||||
Total Net Sales | $ 1,133,577 | $ 1,016,160 | $ 3,183,613 | $ 2,882,953 |
Net Sales | Outside United States | ||||
Segment information | ||||
Percentage of net sales | 34.00% | 28.00% | 32.00% | 28.00% |
Total Net Sales | $ 379,800 | $ 283,000 | $ 1,010,000 | $ 818,800 |
CCBCC Operations, LLC | Net Sales | Customer concentration | ||||
Segment information | ||||
Percentage of net sales | 13.00% | 14.00% | 13.00% | 14.00% |
Reyes Coca-Cola Bottling | Net Sales | Customer concentration | ||||
Segment information | ||||
Percentage of net sales | 12.00% | 13.00% | 12.00% | 13.00% |
Coca-Cola European Partners | Net Sales | Customer concentration | ||||
Segment information | ||||
Percentage of net sales | 10.00% | 9.00% | 10.00% | 9.00% |
SEGMENT INFORMATION - Goodwill
SEGMENT INFORMATION - Goodwill and other intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Segment information | ||
Goodwill and other intangible assets | $ 2,379,116 | $ 2,377,521 |
Corporate and unallocated | ||
Segment information | ||
Goodwill and other intangible assets | 0 | 0 |
Monster Energy Drinks | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | 1,377,824 | 1,368,620 |
Strategic Brands | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | 985,742 | 989,944 |
Other | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | $ 15,550 | $ 18,957 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)director | Sep. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Related party transactions | ||||||||||
Capital contribution | $ 0 | $ 50 | ||||||||
Equity loss | (4,107,978) | $ (3,893,267) | (4,107,978) | $ (3,893,267) | $ (4,057,586) | $ (3,698,820) | $ (3,610,901) | $ (3,605,161) | $ (3,875,607) | $ (3,895,212) |
TCCC | ||||||||||
Related party transactions | ||||||||||
Net sales | 21,000 | 42,300 | 59,500 | 117,000 | ||||||
Purchases from related party | 6,300 | 7,400 | 20,200 | 21,600 | ||||||
TCCC Subsidiaries and TCCC Related parties | ||||||||||
Related party transactions | ||||||||||
Commission expenses | 39,500 | |||||||||
TCCC Independent Bottlers | ||||||||||
Related party transactions | ||||||||||
Commission expenses | 11,600 | 13,700 | 38,100 | |||||||
TCCC Subsidiaries | ||||||||||
Related party transactions | ||||||||||
Commission expenses | 4,700 | 13,600 | ||||||||
Accounts receivable, net | 35,520 | 35,520 | 25,312 | |||||||
Accounts payable | (25,601) | (25,601) | (54,430) | |||||||
Accrued promotional allowances | (6,185) | $ (6,185) | $ (4,044) | |||||||
TCCC Subsidiaries | Operating expense | ||||||||||
Related party transactions | ||||||||||
Commission expenses | 11,800 | |||||||||
TCCC Related parties and TCCC Independent Bottlers | Operating expense | ||||||||||
Related party transactions | ||||||||||
Commission expenses | 4,300 | |||||||||
Principal owners | ||||||||||
Related party transactions | ||||||||||
Number of directors who are principal owners of a company that provides promotional materials | director | 1 | |||||||||
Expenses incurred in connection with materials or services provided by a related party | 500 | 200 | $ 1,100 | 1,600 | ||||||
Director | ||||||||||
Related party transactions | ||||||||||
Ownership percentage | 50.00% | |||||||||
Partnership contribution | 1,900 | 1,900 | $ 1,900 | |||||||
Equity loss | 20 | 20 | ||||||||
Director. | ||||||||||
Related party transactions | ||||||||||
Equity loss | 60 | 60 | ||||||||
Monster Energy Drinks | TCCC Subsidiaries | ||||||||||
Related party transactions | ||||||||||
Contract manufacturing expenses | $ 4,200 | $ 7,000 | $ 13,100 | $ 18,800 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Nov. 07, 2019 | Nov. 06, 2019 |
Subsequent event | ||
Subsequent Events | ||
Share repurchase program, authorized amount | $ 536.6 | $ 500 |
February 2019 Repurchase Plan | ||
Subsequent Events | ||
Share repurchase program, authorized remaining amount | 36.6 | |
February 2019 Repurchase Plan | Subsequent event | ||
Subsequent Events | ||
Share repurchase program, authorized remaining amount | $ 36.6 |