SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 20, 2000
HANSEN NATURAL CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 0-18761 39-1679918
(State or other jurisdiction of (Commission (IRS employer
incorporation) file number) identification no.)
1010 Railroad Street 92882
Corona, California (Zip Code)
(Address of principal executive offices)
(909) 739-6200
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 4, 2000, Hansen Natural Corporation ( the
"Company" or "Registrant") filed a Current Report on Form 8-K
to report that on September 20, 2000 the Company acquired,
through its indirect subsidiary Blue Sky Natural Beverage Co.,
a Delaware corporation ("BSNBC"), certain assets of Blue Sky
Natural Beverage Co., a New Mexico corporation ("BSNB-NM"),
including its natural carbonated sodas and seltzer business,
for a purchase price of $6.5 million (the "Acquisition").
Pursuant to Item 7 of Form 8-K, the Company indicated that it
would file certain financial information no later than the
date required by Item 7 of Form 8-K. This Form 8-K/A is being
filed to provide the required financial information.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
The financial statements of BSNB-NM required by Item
7 of Form 8-K are included herein as exhibits 99.1 and 99.2.
(b) Pro Forma Financial Information
The pro forma financial statements required by
paragraphs (b)(2) and (a)(4) of Item 7 of Form 8-K are
included herein.
Unaudited pro forma combined statement of income for
the year ended December 31, 1999;
Unaudited pro forma combined statement of income for
the nine-months ended September 30, 2000;
Unaudited pro forma combined condensed balance sheet
data as of September 30, 2000;
and Note to unaudited pro forma combined statements
of income and combined condensed balance sheet data.
The following unaudited pro forma combined financial
statements are presented for information purposes only in
response to Securities and Exchange Commission ("SEC")
requirements and are not necessarily indicative of the
combined financial position or results of operations for
future periods or the financial position or results of
operations that would actually have been realized had the
Company and BSNB-NM been a combined company during the
specified periods. The unaudited pro forma combined financial
statements, including the related note, are qualified in their
entirety by reference to, and should be read in conjunction
with, the historical consolidated financial statements and
related notes thereto of the Company, included in its Form
10-K and Form 10-Q, filed with the SEC on March 30, 2000 and
November 9, 2000, respectively; and BSNB-NM's audited
financial statements and related notes thereto for 1999 and
its unaudited balance sheet and statement of operations for
the nine-month period ending September 30, 2000, each of which
are included in this Form 8-K/A.
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The following unaudited pro forma combined financial
statements give effect to the Acquisition using the purchase
method of accounting. The pro forma combined financial
statements are based on the respective historical audited and
unaudited consolidated financial statements and related notes
of the Company and BSNB-NM, respectively. The pro forma
adjustments are preliminary and are based on management's
estimates of the value of the tangible and intangible assets
acquired.
The pro forma combined statement of income for the
year ended December 31, 1999 assumes that the Acquisition took
place as of January 1, 1999 and combines the Company's audited
consolidated statement of income for the year ended December
31, 1999 with BSNB-NM's audited statement of operations for
the year ended December 31, 1999. The pro forma combined
statement of income for the nine months ended September 30,
2000 assumes that the Acquisition took place as of January 1,
2000 and combines the Company's unaudited consolidated
statement of income for the nine months ended September 30,
2000 with BSNB-NM's unaudited statement of operations for the
nine months ended September 30, 2000. The operating results of
the acquired business since the date of the Acquisition are
included in the Company's unaudited consolidated statement of
income for the nine-months ended September 30, 2000.
The pro forma historical condensed balance sheet data
of the Company and BSNB-NM as of September 30, 2000 have been
adjusted to eliminate the effects of the Acquisition. The pro
forma adjustments to the historical condensed balance sheet
data of the Company and BSNB-NM as of September 30, 2000 gives
effect to the Acquisition. The combined condensed balance
sheet data reports the actual balances of the Company as
reported in the Company's Form 10-Q for the period ended
September 30, 2000.
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HANSEN NATURAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED:
- --------------------------------------------------------------------------------
December 31, 1999
----------------------------------------------------------------------
Historical Pro forma
-------------------------------- -----------------------------------
Company BSNB-NM Adjustments Combined
-------------- --------------- --------------- ---------------
NET SALES $ 72,303,186 $ 6,417,295 $ $ 78,720,481
COST OF SALES 38,776,532 4,570,070 43,346,602
-------------- --------------- --------------- ---------------
GROSS PROFIT 33,526,654 1,847,225 35,373,879
OPERATING EXPENSES:
Selling, general and administrative 25,337,374 1,661,929 26,999,303
Amortization of trademark license and trademarks 307,823 162,500 (1) 470,323
Other expenses 380,378 380,378
-------------- --------------- --------------- ---------------
Total operating expenses 26,025,575 1,661,929 162,500 27,850,004
-------------- --------------- --------------- ---------------
OPERATING INCOME 7,501,079 185,296 (162,500) 7,523,875
NONOPERATING EXPENSE (INCOME)
Interest and financing expense 170,506 148,971 588,110 (2) 907,587
Interest income (118,413) (6,749) (125,162)
Gain on sale
-------------- --------------- --------------- ---------------
Net nonoperating expense (income) 52,093 142,222 588,110 782,425
INCOME BEFORE PROVISION
FOR INCOME TAXES 7,448,986 43,074 (750,610) 6,741,450
PROVISION FOR INCOME TAXES 2,971,118 (300,244)(4) 2,670,874
-------------- --------------- --------------- ---------------
NET INCOME $ 4,477,868 $ 43,074 $ (450,366) $ 4,070,576
============== =============== =============== ===============
NET INCOME PER COMMON SHARE:
Basic $ 0.45 $ 0.41
============== ===============
Diluted $ 0.43 $ 0.39
============== ===============
NUMBER OF COMMON SHARES USED
IN PER SHARE COMPUTATIONS:
Basic 9,964,778 9,964,778
============== ===============
Diluted 10,510,604 10,510,604
============== ===============
See accompanying note to unaudited pro forma combined statements of income and combined condensed balance sheet data.
4
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE NINE-MONTHS ENDED:
- --------------------------------------------------------------------------------
September 30, 2000
----------------------------------------------------------------------
Historical Pro forma
-------------------------------- -----------------------------------
Company BSNB-NM Adjustments Combined
-------------- --------------- --------------- ---------------
NET SALES $ 61,346,401 $ 5,156,185 $ $ 66,502,586
COST OF SALES 32,472,187 3,643,876 36,116,063
-------------- --------------- --------------- ---------------
GROSS PROFIT 28,874,214 1,512,309 30,386,523
OPERATING EXPENSES:
Selling, general and administrative 22,322,793 1,603,561 23,926,354
Amortization of trademark license and trademarks 247,935 121,875 (1) 369,810
Other expenses
-------------- --------------- --------------- ---------------
Total operating expenses 22,570,728 1,603,561 121,875 24,296,164
-------------- --------------- --------------- ---------------
OPERATING INCOME 6,303,486 (91,252) (121,875) 6,090,359
NONOPERATING EXPENSE (INCOME)
Interest and financing expense 169,059 101,646 447,222 (2) 717,927
Interest income and other (11,467) (314,335) (325,802)
Gain on sale of assets (6,402,838) 6,402,838 (3) -
-------------- --------------- --------------- ---------------
Net nonoperating expense (income) 157,592 (6,615,527) 6,850,060 392,125
INCOME BEFORE PROVISION
FOR INCOME TAXES 6,145,894 6,524,275 (6,971,935) 5,698,234
PROVISION FOR INCOME TAXES 2,440,516 (227,639)(4) 2,212,877
-------------- --------------- --------------- ---------------
NET INCOME $ 3,705,378 $ 6,524,275 $ (6,744,296) $ 3,485,357
============== =============== =============== ===============
NET INCOME PER COMMON SHARE:
Basic $ 0.37 $ 0.35
============== ===============
Diluted $ 0.35 $ 0.33
============== ===============
NUMBER OF COMMON SHARES USED
IN PER SHARE COMPUTATIONS:
Basic 9,959,592 9,959,592
============== ===============
Diluted 10,440,377 10,440,377
============== ===============
See accompanying note to unaudited pro forma combined statements of income and combined condensed balance sheet data.
5
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DATA
- --------------------------------------------------------------------------------
September 30, 2000
--------------------------------------------------------------------
Pro forma
------------------------------------------------
Company (7) BSNB-NM (7) Adjustments Combined
-------------- --------------- --------------- ---------------
Working Capital $ 12,654,561 $ (595,300) $ 648,300 (5) $ 12,707,561
Net trade accounts receivable 7,361,309 221,678 (221,678)(6) 7,361,309
Inventories 10,737,659 40,000 10,777,659
Total assets 32,669,002 484,598 6,058,451 (5) 39,212,051
Long-term debt 2,303,671 1,612,790 4,887,210 (5) 8,803,671
Deferred income tax liability 1,225,271 1,225,271
Shareholders' equity (deficit) 21,857,395 (1,784,872) 1,784,872 (6) 21,857,395
See accompanying note to unaudited pro forma combined statements of income and combined condensed balance sheet data.
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HANSEN NATURAL CORPORATION AND SUBSIDIARIES
NOTE TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
AND COMBINED CONDENSED BALANCE SHEET DATA
On September 20, 2000, the Company acquired , through
its indirect subsidiary Blue Sky Natural Beverage Co., a
Delaware corporation ("BSNBC"), certain assets of Blue Sky
Natural Beverage Co., a New Mexico corporation ("BSNB-NM"),
including the Blue Sky trademarks and certain other assets for
a purchase price of $6.5 million (the "Acquisition"). The Blue
Sky(R) products include a range of all-natural carbonated
sodas and seltzers that are marketed throughout the United
States and in certain international markets, principally to
the health food trade. The Acquisition has been accounted for
as a purchase in accordance with Accounting Principles Board
Opinion No. 16, "Business Combinations." Accordingly, the
purchase price inclusive of certain acquisition costs, was
allocated to the tangible and intangible assets acquired based
on their respective fair values at the date of the
Acquisition. The purchase price, inclusive of certain
acquisition costs, was financed through the Company's modified
line of credit.
The purchase price was allocated as follows:
Cash paid to BSNB-NM $6,500,000
Additional costs 43,049
----------
Total purchase price $6,543,049
==========
Trademarks $6,478,049
Inventories 40,000
Prepaid expenses 13,000
Fixed assets 12,000
----------
Net assets acquired $6,543,049
==========
Trademarks acquired will be amortized on a
straight-line basis over forty years. The operating results of
BSNBC since the date of the Acquisition are included in the
Company's results of operations.
The unaudited pro forma combined statements of income
give effect to the Acquisition as if it had occurred at the
beginning of the period presented.
The following adjustments have been reflected in the
unaudited pro forma combined statements of income and
unaudited pro forma condensed balance sheet data:
(1) To record additional amortization of trademarks and
trademark license of $162,500 and $121,875 for the
twelve-months and nine-months presented, respectively.
(2) To record additional interest expense of $588,110
and $447,222 for the twelve-months and nine-months
presented, respectively, in respect of the increase in
total debt incurred in connection with the Acquisition.
(3) To record elimination of gain realized by BSNB-NM in
connection with the Acquisition.
(4) To record tax effect of pro forma adjustments.
(5) To record acquisition of BSNB-NM's business and certain
assets and related increase in long-term debt.
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HANSEN NATURAL CORPORATION AND SUBSIDIARIES
NOTE TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
AND COMBINED CONDENSED BALANCE SHEET DATA
(6) To record the elimination of certain assets,
liabilities and shareholders' equity not acquired from
BSNB-NM.
(7) The historical condensed balance sheet data presented
are based of the balance sheets of the Company and
BSNB-NM at September 30, 2000 adjusted to eliminate the
effects of the Acquisition.
In 1997, the Company's wholly-owned subsidiary,
Hansen Beverage Company, obtained a credit facility from
Comerica-Bank California ("Comerica"), consisting of a
revolving line of credit of up to $3 million in the aggregate
at any time outstanding and a term loan of $4 million (the
"Credit Facility"). The Credit Facility was subsequently
modified from time to time. In the third quarter ended
September 30, 2000, the Company entered into a modification
agreement with Comerica to further amend the Credit Facility
in order to finance the Acquisition, payoff the term loan, and
provide additional working capital (the "Modification
Agreement"). Pursuant to the Modification Agreement, the
revolving line of credit was increased to $12.0 million,
reducing to $6.0 million by September 2004. The revolving line
of credit remains in full force and effect through September
2005. Further, the rate of interest payable by the Company on
advances under the line of credit are based on the bank's base
(prime) rate, plus an additional amount of up to .5% or the
bank's LIBOR rate, plus an additional amount of up to 2.5%,
depending upon certain financial ratios of the Company from
time to time.
The initial use of proceeds under the Modification
Agreement was to pay $6.5 million to BSNB-NM in connection
with the Acquisition, to payoff the remaining $807,000 balance
due under the term loan and to finance working capital. The
Company's borrowings on the line of credit at September 30,
2000 were $8,286,000.
The Modification Agreement contains financial
covenants that require the Company to maintain certain
financial ratios and achieve certain levels of annual income.
The Modification Agreement also contains certain non-financial
covenants. At September 30, 2000, the Company was in
compliance with all covenants.
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(c) Exhibits
Exhibit Number Description
-------------- -----------
99.1 Audited Financial Statements of Blue
Sky Natural Beverage, a New Mexico
corporation ("BSNB-NM") for 1999 and
1998.
99.2 Unaudited Balance Sheet at September
30, 2000 for BSNB-NM and Unaudited
Statement of Operations for the
nine-months then ended.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: December 4, 2000
HANSEN NATURAL CORPORATION
By: /s/ Rodney C. Sacks
Rodney C. Sacks
Chairman of the Board
and Chief Executive Officer
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