Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-18761 | |
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 | 526,563,592 | |
Entity Central Index Key | 0000865752 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Document Quarterly Report | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 701,836 | $ 797,957 |
Short-term investments | 233,513 | 533,063 |
Accounts receivable, net | 670,570 | 540,330 |
Inventories | 352,305 | 360,731 |
Prepaid expenses and other current assets | 71,865 | 54,868 |
Prepaid income taxes | 18,633 | 29,360 |
Total current assets | 2,048,722 | 2,316,309 |
INVESTMENTS | 13,922 | 12,905 |
PROPERTY AND EQUIPMENT, net | 295,570 | 298,640 |
DEFERRED INCOME TAXES, net | 84,777 | 84,777 |
GOODWILL | 1,331,643 | 1,331,643 |
OTHER INTANGIBLE ASSETS, net | 1,053,107 | 1,052,105 |
OTHER ASSETS | 53,756 | 53,973 |
Total Assets | 4,881,497 | 5,150,352 |
CURRENT LIABILITIES: | ||
Accounts payable | 305,529 | 274,045 |
Accrued liabilities | 145,224 | 114,075 |
Accrued promotional allowances | 171,406 | 166,761 |
Deferred revenue | 44,844 | 44,237 |
Accrued compensation | 21,827 | 47,262 |
Income taxes payable | 12,711 | 14,717 |
Total current liabilities | 701,541 | 661,097 |
DEFERRED REVENUE | 278,393 | 287,469 |
OTHER LIABILITIES | 30,617 | 30,505 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
STOCKHOLDERS' EQUITY: | ||
Common stock - $0.005 par value; 1,250,000 shares authorized; 637,104 shares issued and 526,839 shares outstanding as of March 31, 2020; 636,460 shares issued and 536,698 shares outstanding as of December 31, 2019 | 3,186 | 3,182 |
Additional paid-in capital | 4,428,580 | 4,397,511 |
Retained earnings | 5,301,315 | 5,022,480 |
Accumulated other comprehensive loss | (62,682) | (32,387) |
Common stock in treasury, at cost; 110,265 shares and 99,762 shares as of March 31, 2020 and December 31, 2019, respectively | (5,799,453) | (5,219,505) |
Total stockholders' equity | 3,870,946 | 4,171,281 |
Total Liabilities and Stockholders' Equity | $ 4,881,497 | $ 5,150,352 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
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 | 637,104 | 636,460 |
Common stock, shares outstanding | 526,839 | 536,698 |
Common stock in treasury, shares | 110,265 | 99,762 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||
NET SALES | $ 1,062,097 | $ 945,991 |
COST OF SALES | 424,901 | 372,459 |
GROSS PROFIT | 637,196 | 573,532 |
OPERATING EXPENSES | 272,208 | 262,071 |
OPERATING INCOME | 364,988 | 311,461 |
INTEREST and OTHER INCOME, net | 872 | 2,742 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 365,860 | 314,203 |
PROVISION FOR INCOME TAXES | 87,025 | 52,718 |
NET INCOME | $ 278,835 | $ 261,485 |
NET INCOME PER COMMON SHARE: | ||
Basic (in dollars per share) | $ 0.52 | $ 0.48 |
Diluted (in dollars per share) | $ 0.52 | $ 0.48 |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS : | ||
Basic (in shares) | 536,061 | 542,768 |
Diluted (in shares) | 540,518 | 548,273 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income, as reported | $ 278,835 | $ 261,485 |
Other comprehensive loss: | ||
Change in foreign currency translation adjustment | (30,599) | (1,381) |
Available-for-sale investments: | ||
Change in net unrealized gains | 304 | 120 |
Net change in available-for-sale investments | 304 | 120 |
Other comprehensive loss | (30,295) | (1,261) |
Comprehensive income | $ 248,540 | $ 260,224 |
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, 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, net 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, 2019 | $ 3,182 | 4,397,511 | 5,022,480 | (32,387) | $ (5,219,505) | 4,171,281 |
Balance (in shares) at Dec. 31, 2019 | 636,460 | (99,762) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 17,098 | 17,098 | ||||
Exercise of stock options | $ 4 | 13,971 | 13,975 | |||
Exercise of stock options (in shares) | 644 | |||||
Unrealized gain, net on available-for- sale securities | 304 | 304 | ||||
Repurchase of common stock | $ (579,948) | (579,948) | ||||
Repurchase of common stock (in shares) | (10,503) | |||||
Foreign currency translation | (30,599) | (30,599) | ||||
Net income | 278,835 | 278,835 | ||||
Balance at Mar. 31, 2020 | $ 3,186 | $ 4,428,580 | $ 5,301,315 | $ (62,682) | $ (5,799,453) | $ 3,870,946 |
Balance (in shares) at Mar. 31, 2020 | 637,104 | (110,265) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 278,835 | $ 261,485 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 16,546 | 14,870 |
Gain on disposal of property and equipment | (58) | (115) |
Impairment of intangibles | 3,000 | |
Stock-based compensation | 17,098 | 15,324 |
Deferred income taxes | 472 | |
Effect on cash of changes in operating assets and liabilities: | ||
Accounts receivable | (147,660) | (116,426) |
Distributor receivables | 176 | 2,923 |
Inventories | 1,037 | (24,004) |
Prepaid expenses and other assets | (18,081) | (21,492) |
Prepaid income taxes | 8,078 | (25,224) |
Accounts payable | 19,328 | 18,565 |
Accrued liabilities | 34,500 | (2,262) |
Accrued promotional allowances | 9,439 | 23,103 |
Accrued distributor terminations | (282) | 10,272 |
Accrued compensation | (24,807) | (21,832) |
Income taxes payable | (1,552) | (4,125) |
Other liabilities | (192) | 1,338 |
Deferred revenue | (4,273) | (9,476) |
Net cash provided by operating activities | 191,132 | 123,396 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Sales of available-for-sale investments | 513,534 | 232,387 |
Purchases of available-for-sale investments | (214,697) | (175,314) |
Purchases of property and equipment | (11,119) | (8,485) |
Proceeds from sale of property and equipment | 217 | 184 |
(Increase) decrease in intangibles | (6,811) | 298 |
Increase in other assets | (1,148) | (2,291) |
Net cash provided by investing activities | 279,976 | 46,779 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments on debt | (733) | (393) |
Issuance of common stock | 13,975 | 35,163 |
Purchases of common stock held in treasury | (559,210) | (222,792) |
Net cash used in financing activities | (545,968) | (188,022) |
Effect of exchange rate changes on cash and cash equivalents | (21,261) | (1,322) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (96,121) | (19,169) |
CASH AND CASH EQUIVALENTS, beginning of period | 797,957 | 637,513 |
CASH AND CASH EQUIVALENTS, end of period | 701,836 | 618,344 |
Cash paid during the year for: | ||
Interest | 11 | 15 |
Income taxes | $ 79,993 | $ 82,002 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS NON-CASH SUPPLEMENTAL DATA | ||
Accrued liabilities for other intangible assets | $ 12.9 | $ 12.3 |
Accounts payable for repurchase of treasury shares | $ 20.7 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
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, 2019 for a summary of significant accounting policies utilized by the Company and its consolidated subsidiaries and other disclosures, which should be read in conjunction with this Quarterly Report on Form 10-Q (“Form 10-Q”). The Company’s condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and Securities and Exchange Commission (“SEC”) rules and regulations applicable to interim financial reporting. They do not include all the information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP. The information set forth in these interim condensed consolidated financial statements for the three-months ended March 31, 2020 and 2019, respectively, is unaudited and reflects all adjustments, which include only normal recurring adjustments and which in the opinion of management are necessary to make the interim condensed consolidated financial statements not misleading. Results of operations for periods covered by this report may not necessarily be indicative of results of operations for the full year. The preparation of financial statements in conformity with GAAP necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Recently issued accounting pronouncements not yet adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes”, as part of its simplification initiative to reduce the cost and complexity in accounting for income taxes. ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU No. 2019-12 on its financial position, results of operations and liquidity. Recently adopted accounting pronouncements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles–Goodwill and Other–Internal–Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract, with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU No. 2018-15 was effective for the Company on a prospective or retrospective basis beginning on January 1, 2020. The adoption of ASU No. 2018-15 did not have a material impact on the Company’s financial position, results of operations and liquidity. In August 2018, the FASB issued ASU No. 2018-14, “Compensation–Retirement Benefits–Defined Benefit Plans–General (Topic 715): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU No. 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. ASU No. 2018-14 is effective for the Company on a retrospective basis beginning in the year ending December 31, 2020. The adoption of ASU No. 2018-14 did not have a material impact on the Company’s financial position, results of operations and liquidity. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. ASU No. 2018-13 disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU No. 2018-13 was effective for the Company beginning on January 1, 2020. Certain disclosures in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. The adoption of ASU No. 2018-13 did not have a material impact on the Company’s financial position, results of operations and liquidity. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the requirement to calculate the implied fair value of goodwill, but rather requires an entity to record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of ASU No. 2017-04 did not have a material impact on the Company’s financial position, results of operations and liquidity. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The accounting standard changes the methodology for measuring credit losses on financial instruments and the timing when such losses are recorded. ASU No. 2016-13 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s disclosures, financial position, results of operations and liquidity. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION The Company has three operating The Company’s Monster Energy® Drinks segment generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage bottlers/distributors (“bottlers/distributors”). In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, drug stores, foodservice customers, value stores, e-commerce retailers and the military. The Company’s Strategic Brands segment primarily generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold by such bottlers to other bottlers/distributors and to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores, value stores, e-commerce retailers and the military. To a lesser extent, the Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers/distributors. The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Certain of the Company’s bottlers/distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, control of the Company’s products passes to such bottlers/distributors when they notify the Company that they have taken possession or transferred the relevant portion of the Company’s finished goods. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of March 31, 2020 and December 31, 2019. The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to the Company’s bottlers/distributors or retail customers including, but not limited to the following: ● discounts granted off list prices to support price promotions to end-consumers by retailers; ● reimbursements given to the Company’s bottlers/distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products; ● the Company’s agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities; ● the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers, club stores and/or wholesalers; ● incentives given to the Company’s bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals; ● discounted or free products; ● contractual fees given to the Company’s bottlers/distributors related to sales made directly by the Company to certain customers that fall within the bottlers’/distributors’ sales territories; and ● commissions paid to TCCC based on the Company’s sales to certain wholly-owned subsidiaries of TCCC (the “TCCC Subsidiaries”) and/or to certain companies accounted for under the equity method by TCCC (the “TCCC Related Parties”). The Company’s promotional allowance programs with its bottlers/distributors and/or retailers are executed through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, typically ranging from one week to one year. The Company’s promotional and other allowances are calculated based on various programs with bottlers/distributors and retail customers, and accruals are established at the time of initial product sale for the Company’s anticipated liabilities. These accruals are based on agreed upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and/or bottler/distributor and retail customer performance levels. Differences between such estimated expenses and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined. Amounts received pursuant to new and/or amended distribution agreements entered into with certain bottlers/distributors relating to the costs associated with terminating the Company’s prior distributors, are accounted for as revenue ratably over the anticipated life of the respective distribution agreements, generally over 20 years. The Company also enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing the Company’s trademarks including, but not limited to, clothing, hats, t-shirts, jackets, helmets and automotive wheels. Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience. Disaggregation of Revenue The following tables disaggregate the Company’s revenue by geographical markets and reportable segments: Three-Months Ended March 31, 2020 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 690,018 $ 164,771 $ 85,904 $ 51,761 $ 992,454 Strategic Brands 37,870 20,346 5,317 1,005 64,538 Other 5,105 — — — 5,105 Total Net Sales $ 732,993 $ 185,117 $ 91,221 $ 52,766 $ 1,062,097 Three-Months Ended March 31, 2019 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 642,826 $ 124,637 $ 62,456 $ 40,465 $ 870,384 Strategic Brands 41,750 21,908 6,225 403 70,286 Other 5,321 — — — 5,321 Total Net Sales $ 689,897 $ 146,545 $ 68,681 $ 40,868 $ 945,991 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 March 31, 2020, the Company had $323.2 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. As of December 31, 2019, the Company had $331.7 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. During the three-months ended March 31, 2020 and 2019, $10.6 million and $14.2 million, respectively, of deferred revenue was recognized in net sales. See Note 11. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
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 comprised of real estate and warehouse equipment, and the Company’s finance leases are comprised of vehicles. Right-of-use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. ROU assets also include any lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease commencement date. Additional payments based on the change in an index or rate, or payments based on a change in the Company’s portion of real estate taxes and insurance, are recorded as a period expense when incurred. Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term and is included in operating expenses in the condensed consolidated statement of income. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s estimated useful life and is included in operating expenses in the condensed consolidated statement of income. Interest expense on finance leases is calculated using the amortized cost basis and is included in other income, net in the condensed consolidated statement of income. The Company’s leases have remaining lease terms of less than one year to 14 years, some which leases leases The components of lease cost were comprised of the following: Three-Months Three-Months Ended March 31, Ended March 31, 2020 2019 Operating lease cost $ 1,445 $ 1,115 Short-term lease cost 707 1,082 Variable lease cost 162 165 Finance leases: Amortization of ROU assets 148 80 Interest on lease liabilities 11 15 Finance lease cost 159 95 Total lease cost $ 2,473 $ 2,457 Supplemental cash flow information for the following periods: Three-Months Three-Months Ended March 31, Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,083 $ 889 Operating cash flows from finance leases 11 15 Financing cash flows from finance leases 733 393 ROU assets obtained in exchange for lease obligations: Finance leases 1,465 415 Operating leases 1,163 26,429 ROU assets for operating and finance leases were comprised of the following at: March 31, 2020 Real Estate Equipment Total Balance Sheet Location Operating leases $ 30,291 $ 384 $ 30,675 Other Assets Finance leases — 3,569 3,569 Property and Equipment, net December 31, 2019 Real Estate Equipment Total Balance Sheet Location Operating leases $ 30,926 $ 416 $ 31,342 Other Assets Finance leases — 2,632 2,632 Property and Equipment, net Operating and finance lease liabilities recognized in the condensed consolidated balance sheets were as follows at: March 31, 2020 Operating Leases Finance Leases Accrued liabilities $ 2,830 $ 2,209 Other liabilities 25,284 — Total $ 28,114 $ 2,209 December 31, 2019 Operating Leases Finance Leases Accrued liabilities $ 2,812 $ 1,485 Other liabilities 25,651 — Total $ 28,463 $ 1,485 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases at March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 Operating Leases Finance Leases Weighted-average remaining lease term (years) 9.8 0.8 Weighted-average discount rate 3.2 % 2.7 % December 31, 2019 Operating Leases Finance Leases Weighted-average remaining lease term (years) 10.1 0.6 Weighted-average discount rate 3.1 % 2.9 % 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 March 31, 2020: Undiscounted Future Lease Payments Operating Leases Finance Leases 2020 (excluding the three-months ended March 31, 2020) $ 2,806 $ 1,938 2021 3,450 296 2022 3,482 — 2023 3,068 — 2024 2,791 — 2025 and thereafter 17,692 — Total lease payments 33,289 2,234 Less imputed interest (5,175) (25) Total $ 28,114 $ 2,209 As of March 31, 2020, the Company did not have any significant additional operating or finance leases that have not yet commenced. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 57,107 $ — $ — $ 57,107 $ — $ — Municipal securities 95,819 114 113 95,820 113 — U.S. government agency securities 21,441 62 — 21,503 — — U.S. treasuries 46,055 399 — 46,454 — — Variable rate demand notes 12,628 — — 12,628 — — Long-term: U.S. treasuries 4,083 54 — 4,137 — — Municipal securities 6,292 4 32 6,264 32 — U.S. government agency securities 3,512 10 — 3,522 — — Total $ 246,937 $ 643 $ 145 $ 247,435 $ 145 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 December 31, 2019 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 83,478 $ — $ — $ 83,478 $ — $ — Certificates of deposit 28,049 — — 28,049 — — Municipal securities 147,983 145 20 148,108 20 — U.S. government agency securities 40,620 5 35 40,590 35 — U.S. treasuries 211,055 134 31 211,158 31 — Variable rate demand notes 21,680 — — 21,680 — — Long-term: Municipal securities 1,562 — 1 1,561 1 — U.S. government agency securities 5,267 — 1 5,266 1 — U.S. treasuries 6,077 1 — 6,078 — — Total $ 545,771 $ 285 $ 88 $ 545,968 $ 88 $ — During the three-months ended March 31, 2020 and 2019, realized gains or losses recognized on the sale of investments were not significant. The Company’s investments at March 31, 2020 and December 31, 2019 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: March 31, 2020 December 31, 2019 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 57,107 $ 57,107 $ 83,478 $ 83,478 Municipal securities 95,819 95,820 147,983 148,108 U.S. government agency securities 21,441 21,503 40,620 40,590 Certificates of deposit — — 28,049 28,049 U.S. treasuries 46,055 46,454 211,055 211,158 Due 1 - 10 years: Municipal securities 6,292 6,264 1,562 1,561 U.S. treasuries 4,083 4,137 6,077 6,078 U.S. government agency securities 3,512 3,522 5,267 5,266 Variable rate demand notes 3,911 3,911 3,905 3,905 Due 11 - 20 years: Variable rate demand notes 3,485 3,485 8,886 8,886 Due 21 - 30 years: Variable rate demand notes 3,217 3,217 6,885 6,885 Due 31 - 40 years: Variable rate demand notes 2,015 2,015 2,004 2,004 Total $ 246,937 $ 247,435 $ 545,771 $ 545,968 |
FAIR VALUE OF CERTAIN FINANCIAL
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
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: March 31, 2020 Level 1 Level 2 Level 3 Total Cash $ 497,556 $ — $ — $ 497,556 Money market funds 194,560 — — 194,560 Certificates of deposit — 1,607 — 1,607 Commercial paper — 57,107 — 57,107 Variable rate demand notes — 12,628 — 12,628 Municipal securities — 106,292 — 106,292 U.S. government agency securities — 28,931 — 28,931 U.S. treasuries — 50,590 — 50,590 Foreign currency derivatives — (301) — (301) Total $ 692,116 $ 256,854 $ — $ 948,970 Amounts included in: Cash and cash equivalents $ 692,116 $ 9,720 $ — $ 701,836 Short-term investments — 233,513 — 233,513 Accounts receivable, net — 203 — 203 Investments — 13,922 — 13,922 Accrued liabilities — (504) — (504) Total $ 692,116 $ 256,854 $ — $ 948,970 December 31, 2019 Level 1 Level 2 Level 3 Total Cash $ 518,178 $ — $ — $ 518,178 Money market funds 191,131 — — 191,131 Certificates of deposit — 28,049 — 28,049 Commercial paper — 96,867 — 96,867 Variable rate demand notes — 21,680 — 21,680 Municipal securities — 167,224 — 167,224 U.S. government agency securities — 73,634 — 73,634 U.S. treasuries — 247,162 — 247,162 Foreign currency derivatives — (687) — (687) Total $ 709,309 $ 633,929 $ — $ 1,343,238 Amounts included in: Cash and cash equivalents $ 709,309 $ 88,648 $ — $ 797,957 Short-term investments — 533,063 — 533,063 Accounts receivable, net — 329 — 329 Investments — 12,905 — 12,905 Accrued liabilities — (1,016) — (1,016) Total $ 709,309 $ 633,929 $ — $ 1,343,238 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 three-months ended March 31, 2020 or during the year-ended December 31, 2019, and there were no changes in the Company’s valuation techniques. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2020 | |
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-months ended March 31, 2020 and the year-ended December 31, 2019, 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 March 31, 2020 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: March 31, 2020 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 $ 46,342 $ 62 Accounts receivable, net Receive USD/pay AUD 14,276 60 Accounts receivable, net Receive USD/pay NZD 1,812 35 Accounts receivable, net Receive USD/pay COP 4,174 14 Accounts receivable, net Receive USD/pay SEK 2,160 12 Accounts receivable, net Receive USD/pay ZAR 910 9 Accounts receivable, net Receive USD/pay NOK 1,008 6 Accounts receivable, net Receive USD/pay DKK 1,304 4 Accounts receivable, net Receive SGD/pay USD 914 1 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive EUR/pay USD $ 34,987 $ (272) Accrued liabilities Receive USD/pay RUB 11,840 (147) Accrued liabilities Receive RSD/pay USD 11,530 (85) Accrued liabilities December 31, 2019 Derivatives not designated as hedging instruments under Notional Fair ASC 815-20 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive EUR/pay USD $ 26,731 $ 246 Accounts receivable, net Receive RSD/pay USD 9,018 59 Accounts receivable, net Receive NOK/pay USD 2,122 17 Accounts receivable, net Receive USD/pay SGD 1,555 7 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 38,406 $ (695) Accrued liabilities Receive USD/pay AUD 12,819 (172) Accrued liabilities Receive USD/pay RUB 12,777 (55) Accrued liabilities Receive USD/pay NZD 3,071 (33) Accrued liabilities Receive USD/pay ZAR 3,349 (32) Accrued liabilities Receive USD/pay COP 3,793 (18) Accrued liabilities Receive USD/pay DKK 1,283 (11) Accrued liabilities The net gains (losses) on derivative instruments in the condensed consolidated statements of income were as follows: Amount of gain (loss) recognized in income on derivatives Derivatives not designated as Location of gain (loss) Three-months ended hedging instruments under recognized in income on March 31, March 31, ASC 815-20 derivatives 2020 2019 Foreign currency exchange contracts Interest and other income, net $ 6,292 $ (1,087) |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORIES | |
INVENTORIES | 8. INVENTORIES Inventories consist of the following at: March 31, December 31, 2020 2019 Raw materials $ 140,990 $ 134,885 Finished goods 211,315 225,846 $ 352,305 $ 360,731 |
PROPERTY AND EQUIPMENT, Net
PROPERTY AND EQUIPMENT, Net | 3 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT, Net | |
PROPERTY AND EQUIPMENT, Net | 9. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following at: March 31, December 31, 2020 2019 Land $ 78,275 $ 78,275 Leasehold improvements 11,517 10,417 Furniture and fixtures 8,272 8,426 Office and computer equipment 22,578 22,766 Computer software 4,788 4,450 Equipment 216,125 214,293 Buildings 126,755 126,338 Vehicles 40,964 41,109 509,274 506,074 Less: accumulated depreciation and amortization (213,704) (207,434) $ 295,570 $ 298,640 Total depreciation and amortization expense recorded was $12.4 million and $12.0 million for the three-months ended March 31, 2020 and 2019, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
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 three-months ended March 31, 2020 and March 31, 2019 by reportable segment: Monster Energy® Strategic Drinks Brands Other Total Balance at December 31, 2019 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at March 31, 2020 $ 693,644 $ 637,999 $ — $ 1,331,643 Monster Energy® Strategic Drinks Brands Other Total Balance at December 31, 2018 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at March 31, 2019 $ 693,644 $ 637,999 $ — $ 1,331,643 Intangible assets consist of the following at: March 31, December 31, 2020 2019 Amortizing intangibles $ 66,954 $ 66,949 Accumulated amortization (52,021) (49,128) 14,933 17,821 Non-amortizing intangibles 1,038,174 1,034,284 $ 1,053,107 $ 1,052,105 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 The following is the future estimated amortization expense related to amortizing intangibles as of March 31, 2020: 2020 (excluding the three-months ended March 31, 2020) $ 4,783 2021 4,429 2022 4,404 2023 1,111 2024 13 2025 and thereafter 193 $ 14,933 |
DISTRIBUTION AGREEMENTS
DISTRIBUTION AGREEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
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 termination costs of $0.04 million and $10.7 million for the three-months ended March 31, 2020 and 2019, respectively. In the normal course of business, amounts received pursuant to new and/or amended distribution agreements entered into with certain bottlers/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 $10.6 million and $14.2 million for the three-months ended March 31, 2020 and 2019, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES The Company had purchase commitments aggregating approximately $70.5 million at March 31, 2020, 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 $200.5 million at March 31, 2020, 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 March 31, 2020, the interest rate on borrowings under the line of credit was 5.5%. As of March 31, 2020, the Company had no amounts outstanding on this line of credit. 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 March 31, 2020, the Company’s consolidated balance sheet included accrued loss contingencies of approximately $15.6 million. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 13. ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in accumulated other comprehensive loss (income) by component, after tax, for the three-months ended March 31, 2020 and 2019 are as follows: Unrealized Currency (Gains) Losses Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2019 $ 32,581 $ (194) $ 32,387 Other comprehensive loss (income) before reclassifications 30,599 (304) 30,295 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive loss (income) 30,599 (304) 30,295 Balance at March 31, 2020 $ 63,180 $ (498) $ 62,682 Unrealized Currency (Gains) Losses Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2018 $ 32,775 $ 89 $ 32,864 Other comprehensive loss (income) before reclassifications 1,381 (120) 1,261 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive loss (income) 1,381 (120) 1,261 Balance at March 31, 2019 $ 34,156 $ (31) $ 34,125 |
TREASURY STOCK
TREASURY STOCK | 3 Months Ended |
Mar. 31, 2020 | |
TREASURY STOCK | |
TREASURY STOCK | 14. TREASURY STOCK On February 26, 2019, 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 “February 2019 Repurchase Plan”). During the three-months ended March 31, 2020, the Company purchased 0.6 million shares of common stock at an average purchase price of $58.16 per share, for a total amount of $36.6 million (excluding broker commissions), which exhausted the availability under the February 2019 Repurchase Plan. Such shares are included in common stock in treasury in the accompanying condensed consolidated balance sheet at March 31, 2020. On November 6, 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 “November 2019 Repurchase Plan”). During the three-months ended March 31, 2020, the Company purchased 9.1 million shares of common stock at an average purchase price of $54.86 per share, for a total amount of $499.9 million (excluding broker commissions), which exhausted the availability under the November 2019 Repurchase Plan. Such shares are included in common stock in treasury in the accompanying condensed consolidated balance sheet at March 31, 2020. On March 13, 2020, 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 “March 2020 Repurchase Plan”). During the three-months ended March 31, 2020, the Company purchased 0.8 million shares of common stock at an average purchase price of $57.01 per share, for a total amount of $42.9 million (excluding broker commissions), under the March 2020 Repurchase Plan. Such shares are included in common stock in treasury in the accompanying condensed consolidated balance sheet at March 31, 2020. As of May 8, 2020, $441.5 million remained available for repurchase under the March 2020 Repurchase Plan. During the three-months ended March 31, 2020, 11,007 shares of common stock were purchased from employees in lieu of cash payments for options exercised or withholding taxes due for a total amount of $0.6 million. While such purchases are considered common stock repurchases, they are not counted as purchases against our authorized share repurchase programs. Such shares are included in common stock in treasury in the accompanying condensed consolidated balance sheet at March 31, 2020. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020: 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 $17.1 million and $15.3 million of compensation expense relating to outstanding options, restricted stock units and performance share units during the three-months ended March 31, 2020 and 2019, 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 and performance share units for the three-months ended March 31, 2020 and 2019 was $1.7 million and $22.4 million, respectively. Stock Options Under the Company’s stock-based compensation plans, all stock options granted as of March 31, 2020 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 March 31, 2020 2019 Dividend yield 0.0 % 0.0 % Expected volatility 30.5 % 30.2 % Risk-free interest rate 0.7 % 2.4 % Expected term 5.8 years 6.0 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, 2020 14,941 $ 42.88 6.3 $ 308,884 Granted 01/01/20 - 03/31/20 1,027 $ 62.45 Exercised (372) $ 37.52 Cancelled or forfeited (33) $ 52.50 Outstanding at March 31, 2020 15,563 $ 44.28 6.4 $ 204,418 Vested and expected to vest in the future at March 31, 2020 14,755 $ 43.58 6.2 $ 202,679 Exercisable at March 31, 2020 9,301 $ 36.98 5.2 $ 182,359 The weighted-average grant-date fair value of options granted during the three-months ended March 31, 2020 and 2019 was $18.78 per share and $20.30 per share, respectively. The total intrinsic value of options exercised during the three-months ended March 31, 2020 and 2019 was $10.9 million and $178.5 million, respectively. Cash received from option exercises under all plans for the three-months ended March 31, 2020 and 2019 was $14.0 million and $35.2 million, respectively. At March 31, 2020, there was $86.8 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 2.7 years. Restricted Stock Units and Performance Share Units The cost of stock-based compensation for restricted stock units and performance share 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 or performance share 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 and performance share units as follows: Weighted Number of Average Shares (in Grant-Date thousands) Fair Value Non-vested at January 1, 2020 825 $ 57.62 Granted 01/01/20 - 03/31/20 1 392 $ 62.39 Vested (271) $ 55.53 Forfeited/cancelled (1) $ 59.67 Non-vested at March 31, 2020 945 $ 60.21 1 The grant activity for performance share units is recorded based on the target performance level earning 100% of target performance share units. The actual number of performance share units earned could range from 0% to 200% of target dependent on the pre-established performance goals. The weighted-average grant-date fair value of restricted stock units and performance share units granted during the three-months ended March 31, 2020 was $62.39 per share. The weighted-average grant-date fair value of restricted stock units granted during the three-months ended March 31, 2019 was $59.66 per share. No performance share units were granted during the three-months ended March 31, 2019. As of March 31, 2020, 0.8 million of restricted stock units and performance share units are expected to vest over their respective terms. At March 31, 2020, total unrecognized compensation expense relating to non-vested restricted stock units and performance share units was $47.2 million, which is expected to be recognized over a weighted-average period of 2.9 years. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
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 three-months ended March 31, 2020: Gross Unrecognized Tax Benefits Balance at December 31, 2019 $ 2,993 Additions for tax positions related to the current year — Additions for tax positions related to the prior years — Decreases related to settlement with taxing authority — Balance at March 31, 2020 $ 2,993 The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s condensed consolidated financial statements. As of March 31, 2020, the Company had approximately $0.4 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. The Company is in various stages of examination with certain states and certain foreign jurisdictions, including the United Kingdom and Ireland. The Company’s 2016 through 2019 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 2015 through 2019 tax years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 Weighted-average shares outstanding: Basic 536,061 542,768 Dilutive 4,457 5,505 Diluted 540,518 548,273 For the three-months ended March 31, 2020 and 2019, options and awards outstanding totaling 4.8 million shares and 4.3 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 18. SEGMENT INFORMATION The Company has three operating The Company’s Monster Energy® Drinks segment primarily generates net operating revenues by selling ready-to-drink packaged drinks primarily to bottlers/distributors. In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, drug stores, foodservice customers, value stores, e-commerce retailers and the military. The Company’s Strategic Brands segment primarily generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold by such bottlers to other bottlers/distributors and to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores, value stores, e-commerce retailers and the military. To a lesser extent, the Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers/distributors. 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-months ended March 31, 2020 and 2019 are as follows: Three-Months Ended March 31, 2020 2019 Net sales: Monster Energy® Drinks (1) $ 992,454 $ 870,384 Strategic Brands 64,538 70,286 Other 5,105 5,321 Corporate and unallocated — — $ 1,062,097 $ 945,991 Three-Months Ended March 31, 2020 2019 Operating Income: Monster Energy® (1) (2) $ 411,141 $ 342,999 Strategic Brands 36,719 45,581 Other 787 902 Corporate and unallocated (83,659) (78,021) $ 364,988 $ 311,461 Three-Months Ended March 31, 2020 2019 Income before tax: Monster Energy® (1) (2) $ 411,178 $ 343,016 Strategic Brands 36,719 45,577 Other 787 902 Corporate and unallocated (82,824) (75,292) $ 365,860 $ 314,203 (1) Includes $10.6 million and $14.2 million for the three-months ended March 31, 2020 and 2019, respectively, related to the recognition of deferred revenue. (2) Includes $0.04 million and $10.7 million for the three-months ended March 31, 2020 and 2019, respectively, related to distributor termination costs. Three-Months Ended March 31, 2020 2019 Depreciation and amortization: Monster Energy® $ 9,651 $ 9,798 Strategic Brands 2,030 1,963 Other 1,165 1,155 Corporate and unallocated 2,479 1,954 $ 15,325 $ 14,870 Corporate and unallocated expenses for the three-months ended March 31, 2020 include $55.3 million of payroll costs, of which $17.1 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $16.3 million attributable to professional service expenses, including accounting and legal costs, and $12.1 million of other operating expenses. Corporate and unallocated expenses for the three-months ended March 31, 2019 include $50.4 million of payroll costs, of which $15.3 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $17.5 million attributable to professional service expenses, including accounting and legal costs, and $10.1 million of other operating expenses. Coca-Cola Consolidated, Inc. accounted for approximately 12% and 13% of the Company’s net sales for the three-months ended March 31, 2020 and 2019, respectively. Reyes Coca-Cola Bottling, LLC accounted for approximately 11% and 12% of the Company’s net sales for the three-months ended March 31, 2020 and 2019, respectively. Coca-Cola European Partners accounted for approximately 10% and 9% of the Company’s net sales for the three-months ended March 31, 2020 and 2019, respectively. Net sales to customers outside the United States amounted to $356.8 million and $284.1 million for the three-months ended March 31, 2020 and 2019, respectively. Such sales were approximately 34% and 30% of net sales for the three-months ended March 31, 2020 and 2019, respectively. Goodwill and other intangible assets for the Company’s reportable segments as of March 31, 2020 and December 31, 2019 are as follows: March 31, December 31, 2020 2019 Goodwill and other intangible assets: Monster Energy® $ 1,391,507 $ 1,384,940 Strategic Brands 979,963 984,393 Other 13,280 14,415 Corporate and unallocated — — $ 2,384,750 $ 2,383,748 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS TCCC controls approximately 19.4% of the voting interests of the Company. The TCCC Subsidiaries, the TCCC Related Parties and certain TCCC independent bottlers/distributors, 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 $10.9 million and $12.1 million for the three-months ended March 31, 2020 and 2019, respectively, and are included as a reduction to net sales. TCCC commissions, based on sales to certain TCCC independent bottlers/distributors, were $4.4 million and $3.8 million for the three-months ended March 31, 2020 and 2019, respectively, and are included in operating expenses. Net sales to the TCCC Subsidiaries for the three-months ended March 31, 2020 and 2019 were $19.5 million and $17.3 million, respectively. The Company also purchases concentrates from TCCC which are then sold to certain of the Company’s bottlers/distributors. Concentrate purchases from TCCC were $4.2 million and $6.6 million for the three-months ended March 31, 2020 and 2019, respectively. Certain TCCC Subsidiaries also contract manufacture certain of the Company’s energy drinks. Such contract manufacturing expenses were $4.0 million and $4.5 million for the three-months ended March 31, 2020 and 2019, respectively. Accounts receivable, accounts payable, accrued promotional allowances and accrued liabilities related to the TCCC Subsidiaries are as follows at: March 31, December 31, 2020 2019 Accounts receivable, net $ 49,289 $ 21,670 Accounts payable $ (18,356) $ (18,217) Accrued promotional allowances $ (6,007) $ (5,321) Accrued liabilities $ (14,451) $ — One director of the Company through certain trusts, and a family member of one director, are principal owners of a company that provides promotional materials to the Company. Expenses incurred with such company in connection with promotional materials purchased during the three-months ended March 31, 2020 and 2019 were $0.7 million and $0.3 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 March 31, 2020. During the three-months ended March 31, 2020, the Company made no additional capital contributions and recorded an equity loss of $0.03 million. As of March 31, 2020, the Company’s equity investment is $1.8 million and is included in other assets (non-current) in the accompanying condensed consolidated balance sheet. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS In April 2020, the Company entered into an agreement to acquire a three-story office building located in Uxbridge, United Kingdom for approximately $10.0 million. The acquisition of the building is expected to close in mid-May 2020. The building is currently being leased by the Company. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue by geographical markets | Three-Months Ended March 31, 2020 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 690,018 $ 164,771 $ 85,904 $ 51,761 $ 992,454 Strategic Brands 37,870 20,346 5,317 1,005 64,538 Other 5,105 — — — 5,105 Total Net Sales $ 732,993 $ 185,117 $ 91,221 $ 52,766 $ 1,062,097 Three-Months Ended March 31, 2019 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 642,826 $ 124,637 $ 62,456 $ 40,465 $ 870,384 Strategic Brands 41,750 21,908 6,225 403 70,286 Other 5,321 — — — 5,321 Total Net Sales $ 689,897 $ 146,545 $ 68,681 $ 40,868 $ 945,991 1 Europe, Middle East and Africa (“EMEA”) |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
Schedule of lease cost | Three-Months Three-Months Ended March 31, Ended March 31, 2020 2019 Operating lease cost $ 1,445 $ 1,115 Short-term lease cost 707 1,082 Variable lease cost 162 165 Finance leases: Amortization of ROU assets 148 80 Interest on lease liabilities 11 15 Finance lease cost 159 95 Total lease cost $ 2,473 $ 2,457 |
Schedule of supplemental cash flow information for leases | Three-Months Three-Months Ended March 31, Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,083 $ 889 Operating cash flows from finance leases 11 15 Financing cash flows from finance leases 733 393 ROU assets obtained in exchange for lease obligations: Finance leases 1,465 415 Operating leases 1,163 26,429 |
Schedule of ROU assets for operating and finance leases | March 31, 2020 Real Estate Equipment Total Balance Sheet Location Operating leases $ 30,291 $ 384 $ 30,675 Other Assets Finance leases — 3,569 3,569 Property and Equipment, net December 31, 2019 Real Estate Equipment Total Balance Sheet Location Operating leases $ 30,926 $ 416 $ 31,342 Other Assets Finance leases — 2,632 2,632 Property and Equipment, net |
Summary of operating and finance lease liabilities recognized in the condensed consolidated balance sheets | March 31, 2020 Operating Leases Finance Leases Accrued liabilities $ 2,830 $ 2,209 Other liabilities 25,284 — Total $ 28,114 $ 2,209 December 31, 2019 Operating Leases Finance Leases Accrued liabilities $ 2,812 $ 1,485 Other liabilities 25,651 — Total $ 28,463 $ 1,485 |
Schedule of weighted-average remaining lease term and weighted-average discount rate | March 31, 2020 Operating Leases Finance Leases Weighted-average remaining lease term (years) 9.8 0.8 Weighted-average discount rate 3.2 % 2.7 % December 31, 2019 Operating Leases Finance Leases Weighted-average remaining lease term (years) 10.1 0.6 Weighted-average discount rate 3.1 % 2.9 % |
Schedule of reconciliation of undiscounted future lease payments for operating and finance leases | Undiscounted Future Lease Payments Operating Leases Finance Leases 2020 (excluding the three-months ended March 31, 2020) $ 2,806 $ 1,938 2021 3,450 296 2022 3,482 — 2023 3,068 — 2024 2,791 — 2025 and thereafter 17,692 — Total lease payments 33,289 2,234 Less imputed interest (5,175) (25) Total $ 28,114 $ 2,209 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 57,107 $ — $ — $ 57,107 $ — $ — Municipal securities 95,819 114 113 95,820 113 — U.S. government agency securities 21,441 62 — 21,503 — — U.S. treasuries 46,055 399 — 46,454 — — Variable rate demand notes 12,628 — — 12,628 — — Long-term: U.S. treasuries 4,083 54 — 4,137 — — Municipal securities 6,292 4 32 6,264 32 — U.S. government agency securities 3,512 10 — 3,522 — — Total $ 246,937 $ 643 $ 145 $ 247,435 $ 145 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 December 31, 2019 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 83,478 $ — $ — $ 83,478 $ — $ — Certificates of deposit 28,049 — — 28,049 — — Municipal securities 147,983 145 20 148,108 20 — U.S. government agency securities 40,620 5 35 40,590 35 — U.S. treasuries 211,055 134 31 211,158 31 — Variable rate demand notes 21,680 — — 21,680 — — Long-term: Municipal securities 1,562 — 1 1,561 1 — U.S. government agency securities 5,267 — 1 5,266 1 — U.S. treasuries 6,077 1 — 6,078 — — Total $ 545,771 $ 285 $ 88 $ 545,968 $ 88 $ — |
Summary of the underlying contractual maturities of investments | March 31, 2020 December 31, 2019 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 57,107 $ 57,107 $ 83,478 $ 83,478 Municipal securities 95,819 95,820 147,983 148,108 U.S. government agency securities 21,441 21,503 40,620 40,590 Certificates of deposit — — 28,049 28,049 U.S. treasuries 46,055 46,454 211,055 211,158 Due 1 - 10 years: Municipal securities 6,292 6,264 1,562 1,561 U.S. treasuries 4,083 4,137 6,077 6,078 U.S. government agency securities 3,512 3,522 5,267 5,266 Variable rate demand notes 3,911 3,911 3,905 3,905 Due 11 - 20 years: Variable rate demand notes 3,485 3,485 8,886 8,886 Due 21 - 30 years: Variable rate demand notes 3,217 3,217 6,885 6,885 Due 31 - 40 years: Variable rate demand notes 2,015 2,015 2,004 2,004 Total $ 246,937 $ 247,435 $ 545,771 $ 545,968 |
FAIR VALUE OF CERTAIN FINANCI_2
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | |
Schedule of financial assets and liabilities recorded at fair value on a recurring basis | March 31, 2020 Level 1 Level 2 Level 3 Total Cash $ 497,556 $ — $ — $ 497,556 Money market funds 194,560 — — 194,560 Certificates of deposit — 1,607 — 1,607 Commercial paper — 57,107 — 57,107 Variable rate demand notes — 12,628 — 12,628 Municipal securities — 106,292 — 106,292 U.S. government agency securities — 28,931 — 28,931 U.S. treasuries — 50,590 — 50,590 Foreign currency derivatives — (301) — (301) Total $ 692,116 $ 256,854 $ — $ 948,970 Amounts included in: Cash and cash equivalents $ 692,116 $ 9,720 $ — $ 701,836 Short-term investments — 233,513 — 233,513 Accounts receivable, net — 203 — 203 Investments — 13,922 — 13,922 Accrued liabilities — (504) — (504) Total $ 692,116 $ 256,854 $ — $ 948,970 December 31, 2019 Level 1 Level 2 Level 3 Total Cash $ 518,178 $ — $ — $ 518,178 Money market funds 191,131 — — 191,131 Certificates of deposit — 28,049 — 28,049 Commercial paper — 96,867 — 96,867 Variable rate demand notes — 21,680 — 21,680 Municipal securities — 167,224 — 167,224 U.S. government agency securities — 73,634 — 73,634 U.S. treasuries — 247,162 — 247,162 Foreign currency derivatives — (687) — (687) Total $ 709,309 $ 633,929 $ — $ 1,343,238 Amounts included in: Cash and cash equivalents $ 709,309 $ 88,648 $ — $ 797,957 Short-term investments — 533,063 — 533,063 Accounts receivable, net — 329 — 329 Investments — 12,905 — 12,905 Accrued liabilities — (1,016) — (1,016) Total $ 709,309 $ 633,929 $ — $ 1,343,238 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Schedule of notional amount and fair value of all outstanding foreign currency derivative instruments in the condensed consolidated balance sheets | March 31, 2020 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 $ 46,342 $ 62 Accounts receivable, net Receive USD/pay AUD 14,276 60 Accounts receivable, net Receive USD/pay NZD 1,812 35 Accounts receivable, net Receive USD/pay COP 4,174 14 Accounts receivable, net Receive USD/pay SEK 2,160 12 Accounts receivable, net Receive USD/pay ZAR 910 9 Accounts receivable, net Receive USD/pay NOK 1,008 6 Accounts receivable, net Receive USD/pay DKK 1,304 4 Accounts receivable, net Receive SGD/pay USD 914 1 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive EUR/pay USD $ 34,987 $ (272) Accrued liabilities Receive USD/pay RUB 11,840 (147) Accrued liabilities Receive RSD/pay USD 11,530 (85) Accrued liabilities December 31, 2019 Derivatives not designated as hedging instruments under Notional Fair ASC 815-20 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive EUR/pay USD $ 26,731 $ 246 Accounts receivable, net Receive RSD/pay USD 9,018 59 Accounts receivable, net Receive NOK/pay USD 2,122 17 Accounts receivable, net Receive USD/pay SGD 1,555 7 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 38,406 $ (695) Accrued liabilities Receive USD/pay AUD 12,819 (172) Accrued liabilities Receive USD/pay RUB 12,777 (55) Accrued liabilities Receive USD/pay NZD 3,071 (33) Accrued liabilities Receive USD/pay ZAR 3,349 (32) Accrued liabilities Receive USD/pay COP 3,793 (18) Accrued liabilities Receive USD/pay DKK 1,283 (11) Accrued liabilities |
Schedule of net gains (losses) on derivative instruments in the condensed consolidated statements of income | Amount of gain (loss) recognized in income on derivatives Derivatives not designated as Location of gain (loss) Three-months ended hedging instruments under recognized in income on March 31, March 31, ASC 815-20 derivatives 2020 2019 Foreign currency exchange contracts Interest and other income, net $ 6,292 $ (1,087) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORIES | |
Schedule of inventories | March 31, December 31, 2020 2019 Raw materials $ 140,990 $ 134,885 Finished goods 211,315 225,846 $ 352,305 $ 360,731 |
PROPERTY AND EQUIPMENT, Net (Ta
PROPERTY AND EQUIPMENT, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT, Net | |
Schedule of property and equipment | March 31, December 31, 2020 2019 Land $ 78,275 $ 78,275 Leasehold improvements 11,517 10,417 Furniture and fixtures 8,272 8,426 Office and computer equipment 22,578 22,766 Computer software 4,788 4,450 Equipment 216,125 214,293 Buildings 126,755 126,338 Vehicles 40,964 41,109 509,274 506,074 Less: accumulated depreciation and amortization (213,704) (207,434) $ 295,570 $ 298,640 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill | Monster Energy® Strategic Drinks Brands Other Total Balance at December 31, 2019 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at March 31, 2020 $ 693,644 $ 637,999 $ — $ 1,331,643 Monster Energy® Strategic Drinks Brands Other Total Balance at December 31, 2018 $ 693,644 $ 637,999 $ — $ 1,331,643 Acquisitions — — — — Balance at March 31, 2019 $ 693,644 $ 637,999 $ — $ 1,331,643 |
Schedule of intangible assets | March 31, December 31, 2020 2019 Amortizing intangibles $ 66,954 $ 66,949 Accumulated amortization (52,021) (49,128) 14,933 17,821 Non-amortizing intangibles 1,038,174 1,034,284 $ 1,053,107 $ 1,052,105 |
Schedule of future estimated amortization expense related to amortizing intangibles | The following is the future estimated amortization expense related to amortizing intangibles as of March 31, 2020: 2020 (excluding the three-months ended March 31, 2020) $ 4,783 2021 4,429 2022 4,404 2023 1,111 2024 13 2025 and thereafter 193 $ 14,933 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2019 $ 32,581 $ (194) $ 32,387 Other comprehensive loss (income) before reclassifications 30,599 (304) 30,295 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive loss (income) 30,599 (304) 30,295 Balance at March 31, 2020 $ 63,180 $ (498) $ 62,682 Unrealized Currency (Gains) Losses Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2018 $ 32,775 $ 89 $ 32,864 Other comprehensive loss (income) before reclassifications 1,381 (120) 1,261 Amounts reclassified from accumulated other comprehensive loss (income) — — — Net current-period other comprehensive loss (income) 1,381 (120) 1,261 Balance at March 31, 2019 $ 34,156 $ (31) $ 34,125 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION | |
Schedule of weighted-average assumptions used to estimate the fair value of options granted | Three-Months Ended March 31, 2020 2019 Dividend yield 0.0 % 0.0 % Expected volatility 30.5 % 30.2 % Risk-free interest rate 0.7 % 2.4 % Expected term 5.8 years 6.0 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, 2020 14,941 $ 42.88 6.3 $ 308,884 Granted 01/01/20 - 03/31/20 1,027 $ 62.45 Exercised (372) $ 37.52 Cancelled or forfeited (33) $ 52.50 Outstanding at March 31, 2020 15,563 $ 44.28 6.4 $ 204,418 Vested and expected to vest in the future at March 31, 2020 14,755 $ 43.58 6.2 $ 202,679 Exercisable at March 31, 2020 9,301 $ 36.98 5.2 $ 182,359 |
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, 2020 825 $ 57.62 Granted 01/01/20 - 03/31/20 1 392 $ 62.39 Vested (271) $ 55.53 Forfeited/cancelled (1) $ 59.67 Non-vested at March 31, 2020 945 $ 60.21 1 The grant activity for performance share units is recorded based on the target performance level earning 100% of target performance share units. The actual number of performance share units earned could range from 0% to 200% of target dependent on the pre-established performance goals. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2019 $ 2,993 Additions for tax positions related to the current year — Additions for tax positions related to the prior years — Decreases related to settlement with taxing authority — Balance at March 31, 2020 $ 2,993 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 Weighted-average shares outstanding: Basic 536,061 542,768 Dilutive 4,457 5,505 Diluted 540,518 548,273 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SEGMENT INFORMATION | |
Schedule of net revenues and other financial information by segment | Three-Months Ended March 31, 2020 2019 Net sales: Monster Energy® Drinks (1) $ 992,454 $ 870,384 Strategic Brands 64,538 70,286 Other 5,105 5,321 Corporate and unallocated — — $ 1,062,097 $ 945,991 Three-Months Ended March 31, 2020 2019 Operating Income: Monster Energy® (1) (2) $ 411,141 $ 342,999 Strategic Brands 36,719 45,581 Other 787 902 Corporate and unallocated (83,659) (78,021) $ 364,988 $ 311,461 Three-Months Ended March 31, 2020 2019 Income before tax: Monster Energy® (1) (2) $ 411,178 $ 343,016 Strategic Brands 36,719 45,577 Other 787 902 Corporate and unallocated (82,824) (75,292) $ 365,860 $ 314,203 (1) Includes $10.6 million and $14.2 million for the three-months ended March 31, 2020 and 2019, respectively, related to the recognition of deferred revenue. (2) Includes $0.04 million and $10.7 million for the three-months ended March 31, 2020 and 2019, respectively, related to distributor termination costs. Three-Months Ended March 31, 2020 2019 Depreciation and amortization: Monster Energy® $ 9,651 $ 9,798 Strategic Brands 2,030 1,963 Other 1,165 1,155 Corporate and unallocated 2,479 1,954 $ 15,325 $ 14,870 |
Schedule of goodwill and other intangible assets for the reportable segments | March 31, December 31, 2020 2019 Goodwill and other intangible assets: Monster Energy® $ 1,391,507 $ 1,384,940 Strategic Brands 979,963 984,393 Other 13,280 14,415 Corporate and unallocated — — $ 2,384,750 $ 2,383,748 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party transactions | March 31, December 31, 2020 2019 Accounts receivable, net $ 49,289 $ 21,670 Accounts payable $ (18,356) $ (18,217) Accrued promotional allowances $ (6,007) $ (5,321) Accrued liabilities $ (14,451) $ — |
REVENUE RECOGNITION - (Details)
REVENUE RECOGNITION - (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
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 | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Total Net Sales | $ 1,062,097 | $ 945,991 | |
Contract Liabilities | |||
Deferred revenue | 323,200 | $ 331,700 | |
Deferred revenue recognized in net sales | 10,600 | 14,200 | |
U.S. and Canada | |||
Total Net Sales | 732,993 | 689,897 | |
EMEA | |||
Total Net Sales | 185,117 | 146,545 | |
Asia Pacific | |||
Total Net Sales | 91,221 | 68,681 | |
Latin America and Caribbean | |||
Total Net Sales | 52,766 | 40,868 | |
Monster Energy Drinks | |||
Total Net Sales | 992,454 | 870,384 | |
Monster Energy Drinks | U.S. and Canada | |||
Total Net Sales | 690,018 | 642,826 | |
Monster Energy Drinks | EMEA | |||
Total Net Sales | 164,771 | 124,637 | |
Monster Energy Drinks | Asia Pacific | |||
Total Net Sales | 85,904 | 62,456 | |
Monster Energy Drinks | Latin America and Caribbean | |||
Total Net Sales | 51,761 | 40,465 | |
Strategic Brands | |||
Total Net Sales | 64,538 | 70,286 | |
Strategic Brands | U.S. and Canada | |||
Total Net Sales | 37,870 | 41,750 | |
Strategic Brands | EMEA | |||
Total Net Sales | 20,346 | 21,908 | |
Strategic Brands | Asia Pacific | |||
Total Net Sales | 5,317 | 6,225 | |
Strategic Brands | Latin America and Caribbean | |||
Total Net Sales | 1,005 | 403 | |
Other | |||
Total Net Sales | 5,105 | 5,321 | |
Other | U.S. and Canada | |||
Total Net Sales | $ 5,105 | $ 5,321 |
LEASES - Lease Terms (Details)
LEASES - Lease Terms (Details) | 3 Months Ended |
Mar. 31, 2020 | |
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) | 14 years |
Finance leases, lease term (in years) | 14 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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
LEASES | ||
Operating lease cost | $ 1,445 | $ 1,115 |
Short-term lease cost | 707 | 1,082 |
Variable lease cost | 162 | 165 |
Finance leases: | ||
Amortization of ROU assets | 148 | 80 |
Interest on lease liabilities | 11 | 15 |
Finance lease cost | 159 | 95 |
Total lease cost | $ 2,473 | $ 2,457 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 1,083 | $ 889 |
Operating cash flows from finance leases | 11 | 15 |
Financing cash flows from finance leases | 733 | 393 |
ROU assets obtained in exchange for lease obligations: | ||
Finance leases | 1,465 | 415 |
Operating leases | $ 1,163 | $ 26,429 |
LEASES - ROU assets for operati
LEASES - ROU assets for operating and finance leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ROU assets for operating and finance leases | ||
Operating leases | $ 30,675 | $ 31,342 |
Finance leases | 3,569 | 2,632 |
Real Estate | ||
ROU assets for operating and finance leases | ||
Operating leases | 30,291 | 30,926 |
Equipment | ||
ROU assets for operating and finance leases | ||
Operating leases | 384 | 416 |
Finance leases | $ 3,569 | $ 2,632 |
LEASES - Operating and finance
LEASES - Operating and finance leases liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Operating Leases | $ 28,114 | $ 28,463 |
Finance Leases | 2,209 | 1,485 |
Accrued liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases | 2,830 | 2,812 |
Finance Leases | 2,209 | 1,485 |
Other Liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases | $ 25,284 | $ 25,651 |
LEASES - Weighted-average remai
LEASES - Weighted-average remaining lease term and weighted-average discount rate (Details) | Mar. 31, 2020 | Dec. 31, 2019 |
LEASES | ||
Weighted-average remaining lease term (years), Operating Leases | 9 years 9 months 18 days | 10 years 1 month 6 days |
Weighted-average remaining lease term (years), Finance Leases | 9 months 18 days | 7 months 6 days |
Weighted-average discount rate, Operating Leases | 3.20% | 3.10% |
Weighted-average discount rate, Finance Leases | 2.70% | 2.90% |
LEASES - Undiscounted future le
LEASES - Undiscounted future lease payments for operating and finance leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2020 (excluding the three-months ended March 31, 2019) | $ 2,806 | |
2021 | 3,450 | |
2022 | 3,482 | |
2023 | 3,068 | |
2024 | 2,791 | |
2025 and thereafter | 17,692 | |
Total lease payments | 33,289 | |
Less imputed interest | (5,175) | |
Total | 28,114 | $ 28,463 |
Finance Leases | ||
2020 (excluding the three-months ended March 31, 2020) | 1,938 | |
2021 | 296 | |
Total lease payments | 2,234 | |
Less imputed interest | (25) | |
Total | $ 2,209 | $ 1,485 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available-for-sale | ||
Amortized Cost | $ 246,937 | $ 545,771 |
Gross Unrealized Holding Gains | 643 | 285 |
Gross Unrealized Holding Losses | 145 | 88 |
Fair Value | 247,435 | 545,968 |
Continuous Unrealized Loss Position less than 12 Months | 145 | 88 |
Short-term | Commercial paper | ||
Available-for-sale | ||
Amortized Cost | 57,107 | 83,478 |
Fair Value | 57,107 | 83,478 |
Short-term | Certificates of deposit | ||
Available-for-sale | ||
Amortized Cost | 28,049 | |
Fair Value | 28,049 | |
Short-term | Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 95,819 | 147,983 |
Gross Unrealized Holding Gains | 114 | 145 |
Gross Unrealized Holding Losses | 113 | 20 |
Fair Value | 95,820 | 148,108 |
Continuous Unrealized Loss Position less than 12 Months | 113 | 20 |
Short-term | U.S. government agency securities | ||
Available-for-sale | ||
Amortized Cost | 21,441 | 40,620 |
Gross Unrealized Holding Gains | 62 | 5 |
Gross Unrealized Holding Losses | 35 | |
Fair Value | 21,503 | 40,590 |
Continuous Unrealized Loss Position less than 12 Months | 35 | |
Short-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 46,055 | 211,055 |
Gross Unrealized Holding Gains | 399 | 134 |
Gross Unrealized Holding Losses | 31 | |
Fair Value | 46,454 | 211,158 |
Continuous Unrealized Loss Position less than 12 Months | 31 | |
Short-term | Variable rate demand notes | ||
Available-for-sale | ||
Amortized Cost | 12,628 | 21,680 |
Fair Value | 12,628 | 21,680 |
Long-term | Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 6,292 | 1,562 |
Gross Unrealized Holding Gains | 4 | |
Gross Unrealized Holding Losses | 32 | 1 |
Fair Value | 6,264 | 1,561 |
Continuous Unrealized Loss Position less than 12 Months | 32 | 1 |
Long-term | U.S. government agency securities | ||
Available-for-sale | ||
Amortized Cost | 3,512 | 5,267 |
Gross Unrealized Holding Gains | 10 | |
Gross Unrealized Holding Losses | 1 | |
Fair Value | 3,522 | 5,266 |
Continuous Unrealized Loss Position less than 12 Months | 1 | |
Long-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 4,083 | 6,077 |
Gross Unrealized Holding Gains | 54 | 1 |
Fair Value | $ 4,137 | $ 6,078 |
INVESTMENTS - Maturity Period (
INVESTMENTS - Maturity Period (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Amortized Cost | $ 246,937 | $ 545,771 |
Fair Value | 247,435 | 545,968 |
Commercial paper | Less than 1 year | ||
Investments | ||
Amortized Cost | 57,107 | 83,478 |
Fair Value | 57,107 | 83,478 |
Municipal securities | Less than 1 year | ||
Investments | ||
Amortized Cost | 95,819 | 147,983 |
Fair Value | 95,820 | 148,108 |
Municipal securities | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 6,292 | 1,562 |
Fair Value | 6,264 | 1,561 |
U.S. government agency securities | Less than 1 year | ||
Investments | ||
Amortized Cost | 21,441 | 40,620 |
Fair Value | 21,503 | 40,590 |
U.S. government agency securities | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 3,512 | 5,267 |
Fair Value | 3,522 | 5,266 |
Certificates of deposit | Less than 1 year | ||
Investments | ||
Amortized Cost | 28,049 | |
Fair Value | 0 | 28,049 |
U.S. treasuries | Less than 1 year | ||
Investments | ||
Amortized Cost | 46,055 | 211,055 |
Fair Value | 46,454 | 211,158 |
U.S. treasuries | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 4,083 | 6,077 |
Fair Value | 4,137 | 6,078 |
Variable rate demand notes | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 3,911 | 3,905 |
Fair Value | 3,911 | 3,905 |
Variable rate demand notes | Due 11 - 20 years | ||
Investments | ||
Amortized Cost | 3,485 | 8,886 |
Fair Value | 3,485 | 8,886 |
Variable rate demand notes | Due 21 - 30 years | ||
Investments | ||
Amortized Cost | 3,217 | 6,885 |
Fair Value | 3,217 | 6,885 |
Variable rate demand notes | Due 31 - 40 years | ||
Investments | ||
Amortized Cost | 2,015 | 2,004 |
Fair Value | $ 2,015 | $ 2,004 |
FAIR VALUE OF CERTAIN FINANCI_3
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Fair value of certain financial assets and liabilities | ||||
Cash and cash equivalents | $ 701,836 | $ 797,957 | $ 618,344 | $ 637,513 |
Short-term investments | 233,513 | 533,063 | ||
Investments | 13,922 | 12,905 | ||
Asset transfers between Level 1 and Level 2 measurements | 0 | 0 | ||
Total fair value | ||||
Fair value of certain financial assets and liabilities | ||||
Cash | 497,556 | 518,178 | ||
Foreign currency derivatives | (301) | |||
Assets measured at fair value | 948,970 | 1,343,238 | ||
Cash and cash equivalents | 701,836 | 797,957 | ||
Short-term investments | 233,513 | 533,063 | ||
Accounts receivable, net | 203 | 329 | ||
Investments | 13,922 | 12,905 | ||
Accrued liabilities | (504) | (1,016) | ||
Foreign currency derivatives | (687) | |||
Total fair value | Money market funds | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 194,560 | 191,131 | ||
Total fair value | Certificates of deposit | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 1,607 | 28,049 | ||
Total fair value | Commercial paper | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 57,107 | 96,867 | ||
Total fair value | Variable rate demand notes | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 12,628 | 21,680 | ||
Total fair value | Municipal securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 106,292 | 167,224 | ||
Total fair value | U.S. government agency securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 28,931 | 73,634 | ||
Total fair value | U.S. treasuries | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 50,590 | 247,162 | ||
Level 1 | ||||
Fair value of certain financial assets and liabilities | ||||
Cash | 497,556 | 518,178 | ||
Assets measured at fair value | 692,116 | 709,309 | ||
Cash and cash equivalents | 692,116 | 709,309 | ||
Level 1 | Money market funds | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 194,560 | 191,131 | ||
Level 2 | ||||
Fair value of certain financial assets and liabilities | ||||
Foreign currency derivatives | (301) | |||
Assets measured at fair value | 256,854 | 633,929 | ||
Cash and cash equivalents | 9,720 | 88,648 | ||
Short-term investments | 233,513 | 533,063 | ||
Accounts receivable, net | 203 | 329 | ||
Investments | 13,922 | 12,905 | ||
Accrued liabilities | (504) | (1,016) | ||
Foreign currency derivatives | (687) | |||
Level 2 | Certificates of deposit | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 1,607 | 28,049 | ||
Level 2 | Commercial paper | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 57,107 | 96,867 | ||
Level 2 | Variable rate demand notes | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 12,628 | 21,680 | ||
Level 2 | Municipal securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 106,292 | 167,224 | ||
Level 2 | U.S. government agency securities | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | 28,931 | 73,634 | ||
Level 2 | U.S. treasuries | ||||
Fair value of certain financial assets and liabilities | ||||
Assets measured at fair value | $ 50,590 | $ 247,162 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Notional Amount and Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
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 RSD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | $ 9,018 | |
Fair Value, Assets | 59 | |
Not designated as hedging instruments | Accounts receivable, net | Receive NOK/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 2,122 | |
Fair Value, Assets | 17 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay SGD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 1,555 | |
Fair Value, Assets | 7 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay GBP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | $ 46,342 | |
Fair Value, Assets | 62 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay AUD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 14,276 | |
Fair Value, Assets | 60 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay NZD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 1,812 | |
Fair Value, Assets | 35 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay COP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 4,174 | |
Fair Value, Assets | 14 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay SEK | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 2,160 | |
Fair Value, Assets | 12 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay ZAR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 910 | |
Fair Value, Assets | 9 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/ pay NOK | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 1,008 | |
Fair Value, Assets | 6 | |
Not designated as hedging instruments | Accounts receivable, net | Receive USD/pay DKK | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 1,304 | |
Fair Value, Assets | 4 | |
Not designated as hedging instruments | Accounts receivable, net | Receive SGD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 914 | |
Fair Value, Assets | 1 | |
Not designated as hedging instruments | Accounts receivable, net | Receive EUR/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 26,731 | |
Fair Value, Assets | 246 | |
Not designated as hedging instruments | Accrued liabilities | Receive RSD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 11,530 | |
Fair Value, Liabilities | (85) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay GBP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 38,406 | |
Fair Value, Liabilities | (695) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay AUD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 12,819 | |
Fair Value, Liabilities | (172) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay NZD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 3,071 | |
Fair Value, Liabilities | (33) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay COP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 3,793 | |
Fair Value, Liabilities | (18) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay ZAR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 3,349 | |
Fair Value, Liabilities | (32) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay DKK | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 1,283 | |
Fair Value, Liabilities | (11) | |
Not designated as hedging instruments | Accrued liabilities | Receive EUR/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 34,987 | |
Fair Value, Liabilities | (272) | |
Not designated as hedging instruments | Accrued liabilities | Receive USD/pay RUB | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 11,840 | 12,777 |
Fair Value, Liabilities | $ (147) | $ (55) |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Nonhedging Designation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Not designated as hedging instruments | Foreign currency exchange contracts | Interest and other income, net | ||
Net gains (loss) on derivative instruments | ||
Amount of gain (loss) recognized in income on derivatives | $ 6,292 | $ (1,087) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
INVENTORIES | ||
Raw materials | $ 140,990 | $ 134,885 |
Finished goods | 211,315 | 225,846 |
Inventories | $ 352,305 | $ 360,731 |
PROPERTY AND EQUIPMENT, Net (De
PROPERTY AND EQUIPMENT, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Property and equipment, net | |||
Property and equipment, gross | $ 509,274 | $ 506,074 | |
Less: accumulated depreciation and amortization | (213,704) | (207,434) | |
Property and equipment, net | 295,570 | 298,640 | |
Total depreciation and amortization expense | 12,400 | $ 12,000 | |
Land | |||
Property and equipment, net | |||
Property and equipment, gross | 78,275 | 78,275 | |
Leasehold improvements | |||
Property and equipment, net | |||
Property and equipment, gross | 11,517 | 10,417 | |
Furniture and fixtures | |||
Property and equipment, net | |||
Property and equipment, gross | 8,272 | 8,426 | |
Office and computer equipment | |||
Property and equipment, net | |||
Property and equipment, gross | 22,578 | 22,766 | |
Computer software | |||
Property and equipment, net | |||
Property and equipment, gross | 4,788 | 4,450 | |
Equipment | |||
Property and equipment, net | |||
Property and equipment, gross | 216,125 | 214,293 | |
Buildings | |||
Property and equipment, net | |||
Property and equipment, gross | 126,755 | 126,338 | |
Vehicles | |||
Property and equipment, net | |||
Property and equipment, gross | $ 40,964 | $ 41,109 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
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 | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Intangible assets | |||
Amortizing intangibles | $ 66,954 | $ 66,949 | |
Accumulated amortization | (52,021) | (49,128) | |
Amortizing intangibles, net | 14,933 | 17,821 | |
Non-amortizing intangibles | 1,038,174 | 1,034,284 | |
Intangibles, net | 1,053,107 | $ 1,052,105 | |
Amortization expense | 2,900 | $ 2,900 | |
Impairment charge of Strategic Brand trademark | $ 3,000 | ||
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 | Mar. 31, 2020 | Dec. 31, 2019 |
Future estimated amortization expense related to amortizing intangibles | ||
2020 (excluding the three-months ended March 31, 2020) | $ 4,783 | |
2021 | 4,429 | |
2022 | 4,404 | |
2023 | 1,111 | |
2024 | 13 | |
2025 and thereafter | 193 | |
Amortizing intangibles, net | $ 14,933 | $ 17,821 |
DISTRIBUTION AGREEMENTS (Detail
DISTRIBUTION AGREEMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
DISTRIBUTION AGREEMENTS | ||
Termination costs | $ 40 | $ 10,700 |
Distribution agreement (in years) | 20 years | |
Revenue recognized | $ 10,600 | $ 14,200 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Feb. 28, 2018 | Jan. 31, 2018 | |
Purchase Commitments | |||
Contractual Obligation | $ 200.5 | ||
Line of credit | |||
Purchase Commitments | |||
Maximum borrowing capacity | $ 15 | $ 9 | |
Interest rate (as a percent) | 5.50% | ||
Amount outstanding | $ 0 | ||
Raw materials | |||
Purchase Commitments | |||
Purchase commitments | $ 70.5 | ||
Obligation term ( in years) | 1 year |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Litigation (Details) $ in Millions | Mar. 31, 2020USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Accrued loss contingencies | $ 15.6 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | $ 32,387 | $ 32,864 |
Other comprehensive loss (income) before reclassifications | 30,295 | 1,261 |
Net current-period other comprehensive loss (income) | 30,295 | 1,261 |
Balance at the end of the period | 62,682 | 34,125 |
Currency Translation Losses | ||
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | 32,581 | 32,775 |
Other comprehensive loss (income) before reclassifications | 30,599 | 1,381 |
Net current-period other comprehensive loss (income) | 30,599 | 1,381 |
Balance at the end of the period | 63,180 | 34,156 |
Unrealized (Gains) Losses on Available-for-Sale Securities | ||
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | (194) | 89 |
Other comprehensive loss (income) before reclassifications | (304) | (120) |
Net current-period other comprehensive loss (income) | (304) | (120) |
Balance at the end of the period | $ (498) | $ (31) |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 13, 2020 | Nov. 06, 2019 | Feb. 26, 2019 | |
Treasury Stock Purchase | |||||
Number of shares repurchased of common stock from employees in lieu of cash or withholding taxes due | 11,007 | ||||
Common stock repurchased | $ 579,948 | $ 222,792 | |||
Cash payment for repurchase of common stock from employees in lieu of cash or withholding taxes due | $ 600 | ||||
February 2019 Repurchase Plan | |||||
Treasury Stock Purchase | |||||
Share repurchase program, authorized amount | $ 500,000 | ||||
Common stock repurchased (in shares) | 600,000 | ||||
Average purchase price (in dollars per share) | $ 58.16 | ||||
Common stock repurchased | $ 36,600 | ||||
November 2019 Repurchase Plan | |||||
Treasury Stock Purchase | |||||
Common stock repurchased (in shares) | 9.1 | ||||
Average purchase price (in dollars per share) | $ 54.86 | ||||
Common stock repurchased | $ 499,900 | ||||
November 2019 Repurchase Plan | Maximum | |||||
Treasury Stock Purchase | |||||
Share repurchase program, authorized amount | $ 500,000 | ||||
March 2020 Repurchase Plan | |||||
Treasury Stock Purchase | |||||
Share repurchase program, authorized amount | $ 500,000 | ||||
Common stock repurchased (in shares) | 800,000 | ||||
Average purchase price (in dollars per share) | $ 57.01 | ||||
Common stock repurchased | $ 42,900 | ||||
Share repurchase program, authorized remaining amount | $ 441,500 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plans (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)plan | Mar. 31, 2019USD ($) | |
STOCK-BASED COMPENSATION | ||
Stock-based compensation plans | plan | 2 | |
Compensation expense on share-based plans | $ 17.1 | $ 15.3 |
Excess tax benefit realized for tax deductions from non-qualified stock option exercises and disqualifying dispositions of incentive stock options | $ 1.7 | $ 22.4 |
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 | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Weighted-average assumptions used to estimate the fair value of options granted | |||
Dividend yield (as a percent) | 0.00% | 0.00% | |
Expected volatility (as a percent) | 30.50% | 30.20% | |
Risk-free interest rate (as a percent) | 0.70% | 2.40% | |
Expected term | 5 years 9 months 18 days | 6 years | |
Stock options, Number of Shares | |||
Balance at the beginning of the period (in shares) | 14,941 | ||
Granted (in shares) | 1,027 | ||
Exercised (in shares) | (372) | ||
Cancelled or forfeited (in shares) | (33) | ||
Balance at the end of the period (in shares) | 15,563 | 14,941 | |
Vested and expected to vest in the future at the end of the period (in shares) | 14,755 | ||
Exercisable at the end of the period (in shares) | 9,301 | ||
Stock options, Weighted-Average Exercise Price Per Share | |||
Balance at the beginning of the period (in dollars per share) | $ 42.88 | ||
Granted (in dollars per share) | 62.45 | ||
Exercised (in dollars per share) | 37.52 | ||
Cancelled or forfeited (in dollars per share) | 52.50 | ||
Balance at the end of the period (in dollars per share) | 44.28 | $ 42.88 | |
Vested and expected to vest in the future at the end of the period (in dollars per share) | 43.58 | ||
Exercisable at the end of the period (in dollars per share) | $ 36.98 | ||
Weighted-Average Remaining Contractual Term (in years) | |||
Weighted-Average Remaining Contractual Terms (in years) | 6 years 4 months 24 days | 6 years 3 months 18 days | |
Vested and expected to vest in the future at the end of the period | 6 years 2 months 12 days | ||
Exercisable at the end of the period | 5 years 2 months 12 days | ||
Aggregate Intrinsic Value | |||
Balance at the beginning of the period | $ 308,884 | ||
Balance at the end of the period | 204,418 | $ 308,884 | |
Vested and expected to vest in the future at the end of the period | 202,679 | ||
Exercisable at the end of the period | $ 182,359 |
STOCK-BASED COMPENSATION - Equi
STOCK-BASED COMPENSATION - Equity Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Compensation cost charged against income | ||
Total employee and non-employee share-based compensation expense included in income, before income tax | $ 17,098 | $ 15,324 |
Stock Options | ||
STOCK-BASED COMPENSATION | ||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ 18.78 | $ 20.30 |
Total intrinsic value of options exercised | $ 10,900 | $ 178,500 |
Cash received from option exercises | 14,000 | $ 35,200 |
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 86,800 | |
Cost expected to be recognized over a weighted-average period | 2 years 8 months 12 days | |
Stock units expected to vest (in shares) | 14,755 | |
Restricted Stock Units and Performance Share Units | ||
STOCK-BASED COMPENSATION | ||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 47,200 | |
Cost expected to be recognized over a weighted-average period | 2 years 10 months 24 days | |
Stock units expected to vest (in shares) | 800 | |
Number of Shares | ||
Non-vested at the beginning of the period (in shares) | 825 | |
Granted (in shares) | 392 | |
Vested (in shares) | (271) | |
Forfeited/cancelled (in shares) | (1) | |
Non-vested at the end of the period (in shares) | 945 | |
Weighted Average Grant-Date Fair Value | ||
Non-vested at the beginning of the period (in dollars per share) | $ 57.62 | |
Granted (in dollars per share) | 62.39 | $ 59.66 |
Vested (in dollars per share) | 55.53 | |
Forfeited/cancelled (in dollars per share) | 59.67 | |
Non-vested at the end of the period (in dollars per share) | $ 60.21 | |
Performance Share Units | ||
STOCK-BASED COMPENSATION | ||
Percentage of Target Performance Level | 100.00% | |
Number of Shares | ||
Granted (in shares) | 0 | |
Performance Share Units | Maximum | ||
STOCK-BASED COMPENSATION | ||
Percentage of Target Performance Level | 200.00% | |
Performance Share Units | Minimum | ||
STOCK-BASED COMPENSATION | ||
Percentage of Target Performance Level | 0.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Gross unrecognized tax benefits, roll forward | |
Balance at the beginning of the period | $ 2,993 |
Additions for tax positions related to the current year | 0 |
Additions for tax positions related to the prior years | 0 |
Decreases related to settlement with taxing authority | 0 |
Balance at the end of the period | 2,993 |
Accrued interest and penalties related to unrecognized tax benefits | $ 400 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Weighted-average shares outstanding: | ||
Basic | 536,061 | 542,768 |
Dilutive securities | 4,457 | 5,505 |
Diluted | 540,518 | 548,273 |
Options and awards outstanding excluded from the calculations as their effect would have been antidilutive (in shares) | 4,800 | 4,300 |
SEGMENT INFORMATION - Net Reven
SEGMENT INFORMATION - Net Revenues (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment information | ||
Number of reportable segments | segment | 3 | |
Number of operating segments | segment | 3 | |
Total Net Sales | $ 1,062,097,000 | $ 945,991,000 |
Operating income | 364,988,000 | 311,461,000 |
Income before tax | 365,860,000 | 314,203,000 |
Recognition of deferred revenue | 10,600,000 | 14,200,000 |
Corporate and unallocated | ||
Segment information | ||
Operating income | (83,659,000) | (78,021,000) |
Income before tax | (82,824,000) | (75,292,000) |
Monster Energy Drinks | ||
Segment information | ||
Total Net Sales | 992,454,000 | 870,384,000 |
Monster Energy Drinks | Operating segment | ||
Segment information | ||
Total Net Sales | 992,454,000 | 870,384,000 |
Operating income | 411,141,000 | 342,999,000 |
Income before tax | 411,178,000 | 343,016,000 |
Recognition of deferred revenue | 10,600,000 | 14,200,000 |
Distribution Agreements Termination Cost | 40,000 | 10,700,000 |
Strategic Brands | ||
Segment information | ||
Total Net Sales | 64,538,000 | 70,286,000 |
Strategic Brands | Operating segment | ||
Segment information | ||
Total Net Sales | 64,538,000 | 70,286,000 |
Operating income | 36,719,000 | 45,581,000 |
Income before tax | 36,719,000 | 45,577,000 |
Other | ||
Segment information | ||
Total Net Sales | 5,105,000 | 5,321,000 |
Other | Operating segment | ||
Segment information | ||
Total Net Sales | 5,105,000 | 5,321,000 |
Operating income | 787,000 | 902,000 |
Income before tax | $ 787,000 | $ 902,000 |
SEGMENT INFORMATION - Depreciat
SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment information | ||
Depreciation and amortization | $ 16,546 | $ 14,870 |
Depreciation and amortization | 15,325 | |
Corporate and unallocated | ||
Segment information | ||
Depreciation and amortization | 2,479 | 1,954 |
Monster Energy Drinks | Operating segment | ||
Segment information | ||
Depreciation and amortization | 9,651 | 9,798 |
Strategic Brands | Operating segment | ||
Segment information | ||
Depreciation and amortization | 2,030 | 1,963 |
Other | Operating segment | ||
Segment information | ||
Depreciation and amortization | $ 1,165 | $ 1,155 |
SEGMENT INFORMATION - Expenses
SEGMENT INFORMATION - Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment information | ||
Stock-based compensation expense | $ 17.1 | $ 15.3 |
Corporate and unallocated | ||
Segment information | ||
Payroll costs | 55.3 | 50.4 |
Stock-based compensation expense | 17.1 | 15.3 |
Professional service expenses | 16.3 | 17.5 |
Other operating expenses | $ 12.1 | $ 10.1 |
SEGMENT INFORMATION - Concentra
SEGMENT INFORMATION - Concentration Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment information | ||
Total Net Sales | $ 1,062,097 | $ 945,991 |
Net Sales | Outside United States | ||
Segment information | ||
Percentage of net sales | 34.00% | 30.00% |
Total Net Sales | $ 356,800 | $ 284,100 |
Coca-Cola Consolidated, Inc | Net Sales | Customer concentration | ||
Segment information | ||
Percentage of net sales | 12.00% | 13.00% |
Reyes Coca-Cola Bottling | Net Sales | Customer concentration | ||
Segment information | ||
Percentage of net sales | 11.00% | 12.00% |
Coca-Cola European Partners | Net Sales | Customer concentration | ||
Segment information | ||
Percentage of net sales | 10.00% | 9.00% |
SEGMENT INFORMATION - Goodwill
SEGMENT INFORMATION - Goodwill and other intangible assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Segment information | ||
Goodwill and other intangible assets | $ 2,384,750 | $ 2,383,748 |
Monster Energy Drinks | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | 1,391,507 | 1,384,940 |
Strategic Brands | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | 979,963 | 984,393 |
Other | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | $ 13,280 | $ 14,415 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($)director | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Related party transactions | ||||
Capital contribution | $ 0 | |||
Equity loss | $ (3,870,946) | $ (3,698,820) | $ (4,171,281) | $ (3,610,901) |
TCCC | ||||
Related party transactions | ||||
Related Party Ownership Interest (as a percent) | 19.40% | |||
Net sales | $ 19,500 | 17,300 | ||
Purchases from related party | 4,200 | 6,600 | ||
TCCC Subsidiaries and TCCC Related parties | ||||
Related party transactions | ||||
Commission expenses | 10,900 | 12,100 | ||
TCCC Related parties and TCCC Independent Bottlers | Operating expense | ||||
Related party transactions | ||||
Commission expenses | 4,400 | 3,800 | ||
TCCC Subsidiaries | ||||
Related party transactions | ||||
Accounts receivable, net | 49,289 | 21,670 | ||
Accounts payable | (18,356) | (18,217) | ||
Accrued promotional allowances | (6,007) | $ (5,321) | ||
Accrued liabilities | (14,451) | |||
TCCC Subsidiaries | Monster Energy Drinks | ||||
Related party transactions | ||||
Contract manufacturing expenses | $ 4,000 | 4,500 | ||
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 | $ 700 | $ 300 | ||
Director | ||||
Related party transactions | ||||
Ownership percentage | 50.00% | |||
Partnership contribution | 1,800 | $ 1,900 | ||
Equity loss | $ 30 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | Apr. 30, 2020USD ($) |
Subsequent event | |
Subsequent Events | |
Agreed amount for acquisition of building | $ 10 |