CONTACTS: Rodney C. Sacks
Chairman and Chief Executive Officer
(951) 739-6200
Hilton H. Schlosberg
Vice Chairman
(951) 739-6200
Roger S. Pondel
PondelWilkinson Inc.
(310) 279-5980
Hansen Natural Responds
To Certain Unfounded Speculation
Corona, CA-August 12, 2005--Hansen Natural Corporation (NASDAQ: HANS) today
stated that it is not company policy to comment on speculative remarks or press
reports. However, management believes that it is desirable to respond to certain
unfounded speculation recently disseminated without the company's knowledge or
approval, which may have caused some confusion to some investors and to set the
record straight.
In the investor conference call conducted by the company on August 9, 2005,
management indicated that the increased level of accounts receivable at June 30,
2005 was primarily attributable to the substantial increase in sales, together
with the substantial increased percentage of its sales to bottlers/distributors
that have different payment terms than warehouse division customers.
The large customer group referred to in the company's Form 10Q is the Dr.
Pepper/Seven-Up Bottling Group, Inc. Members of this group are long-standing
customers and primarily distribute Monster Energy(tm) drinks, Lost(r) Energy(tm)
drinks and certain other Hansen's(r) Natural products to retail customers in a
significant portion of the country. The level of business conducted with this
customer group has increased substantially, primarily due to increased sales
velocity of Monster Energy(tm) drinks throughout the year, combined with
increased territory allocated to this customer group from time to time.
The company did not extend to this customer group or to any of its
customers, either return rights or other incentives out of the ordinary and
regular course of business and rejects any suggestion that this customer group
or indeed any other customers were persuaded or encouraged to purchase more
product than they may have under normal circumstances. No extended or different
credit terms were granted to this customer group. Any assertion or innuendo to
the contrary is untrue. The company has always followed and will continue to
follow appropriate accounting and business practices, and its recently filed
Form 10Q conforms with generally accepted accounting principles.
Promotional expenditures incurred in the quarter were deemed appropriate by
management given prevailing market conditions and the competitive environment.
Promotional expenditures were planned in advance of the quarter based on
anticipated sales levels and promotions that the company was able to negotiate
with retail chains. As evidenced by the results, sales were substantially above
expectations. Accordingly, promotional expenditure levels were lower as a
percentage of sales than had originally been budgeted, although the actual
amounts expended were substantially higher than in the previous quarter and in
the comparable quarter of 2004.
In the ordinary course of its business, the company incurs and will
continue to incur promotional expenditures that it believes are appropriate in
the circumstances based on market conditions and the anticipated actions of
competitors, without regard to the possible impact thereof on quarterly
reporting.
Hansen Natural Corporation markets and distributes Hansen's(r) Natural
Sodas, Signature Sodas, fruit juice Smoothies, Energy drinks, Energade(r) energy
sports drinks, E20 Energy Water(r), functional drinks, Sparkling Lemonades and
Orangeades, multi-vitamin juice drinks in aseptic packaging, Junior Juice(r)
juice, iced teas, lemonades and juice cocktails, apple juice, cider and juice
blends, Blue Sky(r) brand carbonated beverages, Monster Energy(tm) brand energy
drinks, Lost(r) Energy(tm) brand energy drinks, Rumba(tm) brand energy juice and
Joker(tm) brand energy drinks. Hansen can be found on the Web at
www.hansens.com.
Certain statements made in this announcement may constitute "forward
looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding the expectations of management with respect to revenues and
profitability. Management cautions that these statements are qualified by their
terms/or important factors, many of which are outside of the control of the
company, that could cause actual results and events to differ materially from
the statements made herein, including, but not limited to, the following:
Changes in consumer preferences, changes in demand that are weather related,
particularly in areas outside of California, competitive pricing and/or
marketing pressures, changes in the price and/or availability of raw materials
for the company's products, the availability of production and/or suitable
facilities, the marketing efforts of the distributors of the company's products,
most of (more) which distribute products that are competitive with the products
of the company, the introduction of new products, as well as unilateral
decisions that may be made by convenience and/or grocery chain stores, specialty
chain stores, club stores and other customers to discontinue carrying all or any
of the company's products that they are carrying at any time. Management further
notes that the company's plans and results may be affected by any change in the
availability of the company's credit facilities and the actions of its
creditors.
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