SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1998 Commission file number 0-18761
HANSEN NATURAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 39-1679918
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2380 Railroad Street, Suite 101,
Corona, California 91720
(Address of principal executive offices) (Zip Code)
(909) 739 - 6200
Registrant's telephone number, including area code:
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
The registrant had 9,296,502 shares of common stock
outstanding as of August 1, 1998
1
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
June 30, 1998
INDEX
Page No.
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, 1998
and December 31, 1997 3
Consolidated Statements of Operations for the
three and six months ended June 30, 1998 and 1997 4
Consolidated Statements of Cash Flows for the
six months ended June 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II. OTHER INFORMATION
Items 1-5. Not Applicable 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 14
2
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1998 1997
ASSETS
CURRENT ASSETS:
Cash $ 2,146,543 $ 395,231
Accounts receivable (net of allowance for doubtful
accounts, sales returns and cash discounts of $464,521
in 1998 and $315,629 in 1997 and promotional allowances
of $1,673,848 in 1998 and $1,067,749 in 1997) 2,873,885 1,533,748
Inventories 3,996,739 3,915,983
Prepaid expenses and other current assets 163,643 214,468
----------- -----------
Total current assets 9,180,810 6,059,430
PROPERTY AND EQUIPMENT, net 622,135 412,496
INTANGIBLE AND OTHER ASSETS:
Trademark license and trademarks (net of accumulated amortization
of $2,538,478 in 1998 and $2,390,878 in 1997) 10,089,733 10,208,116
Notes receivable from officer and director 46,536 68,235
Deposits and other assets 203,297 185,082
----------- -----------
Total intangible and other assets $10,339,566 $10,461,433
=========== ===========
$20,142,511 $16,933,359
=========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,855,444 $ 2,195,200
Accrued liabilities 474,721 444,807
Accrued compensation 447,251 322,114
Current portion of long-term debt 740,660 520,835
Income taxes payable 990,590 81,800
----------- -----------
Total current liabilities 5,508,666 3,564,756
LONG-TERM DEBT, less current portion 2,935,954 3,407,824
SHAREHOLDERS' EQUITY:
Common stock - $.005 par value; 30,000,000 shares authorized; 9,149,191 and
9,130,869 shares issued
and outstanding in 1998 and 1997, respectively 45,746 45,654
Additional paid-in capital 10,858,223 10,858,315
Retained earnings (accumulated deficit) 861,163 (875,949)
Foreign currency translation adjustment (67,241) (67,241)
------------ ------------
Total shareholders' equity 11,697,891 9,960,779
------------ ------------
$20,142,511 $16,933,359
============ ============
3
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
- --------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
NET SALES $13,950,530 $11,496,228 $25,215,385 $18,615,814
COST OF SALES 7,009,343 6,791,491 12,622,771 11,027,737
------------ ------------ ------------ ------------
GROSS PROFIT 6,941,187 4,704,737 12,592,614 7,588,077
OPERATING EXPENSES:
Selling, general and administrative 5,283,867 3,809,192 9,562,351 6,396,957
Amortization of trademark license and trademarks 73,800 73,500 147,600 147,000
Other expenses 15,000 72,991 30,000 147,135
----------- ---------- ------------ ------------
Total operating expenses 5,372,667 3,955,683 9,739,951 6,691,092
----------- ----------- ------------ ------------
OPERATING INCOME 1,568,520 749,054 2,852,663 896,985
NET INTEREST AND FINANCING EXPENSE 102,824 148,691 211,657 273,066
------------ ----------- ----------- ------------
INCOME BEFORE PROVISION
FOR INCOME TAXES 1,465,696 600,363 2,641,006 623,919
PROVISION FOR INCOME TAXES 450,000 37,800 920,123 40,200
------------ ------------ ----------- -----------
NET INCOME $ 1,015,696 $ 562,563 $ 1,720,883 $ 583,719
=========== =========== ============ ===========
NET INCOME PER COMMON SHARE:
Basic $ 0.11 $ 0.06 $ 0.19 $ 0.06
============ =========== ============ ===========
Diluted $ 0.10 $ 0.06 $ 0.17 $ 0.06
============ =========== ============ ===========
NUMBER OF COMMON SHARES USED
IN PER SHARE COMPUTATIONS:
Basic 9,140,948 9,214,962 9,135,936 9,195,639
============= =========== ============ ===========
Diluted 10,361,279 9,219,049 10,391,250 9,219,049
============= =========== ============ ===========
4
HANSEN NATURAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 (Unaudited)
- --------------------------------------------------------------------------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,720,883 $ 583,719
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Amortization of trademark license and trademarks 147,600 147,000
Depreciation and other amortization 100,899 124,034
Compensation expense related to issuance of stock options 16,229
Effect on cash of changes in operating assets and liabilities:
Accounts receivable (1,340,137) (1,079,485)
Inventories (80,756) (38,372)
Prepaid expenses and other current assets 50,825 (320,434)
Accounts payable 660,244 937,861
Accrued liabilities 29,914 (7,629)
Accrued compensation 125,137 (26,972)
Income taxes payable 908,790 81,800
------------ ------------
Net cash provided by operating activities 2,339,628 401,522
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (310,538) (151,592)
Increase in trademark license and trademarks (29,217) (44,750)
Decrease (increase) in notes receivable from officer and director 21,699 (1,169)
Increase in deposits and other assets (18,215) (56,497)
------------- ------------
Net cash used in investing activities (336,271) (254,008)
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in short-term borrowings 6,028
Increase in long-term debt 14,546
Principal payments on long-term debt (252,045) (621)
------------ ------------
Net cash (used in) provided by financing activities (252,045) 19,953
EFFECT OF EXCHANGE RATE CHANGES ON CASH - (66,334)
------------ ------------
NET INCREASE IN CASH 1,751,312 101,133
CASH, beginning of period 395,231 186,931
============ ============
CASH, end of period $ 2,146,543 $ 288,064
============ ============
SUPPLEMENTAL INFORMATION:
Cash paid during the year for:
Interest $ 193,520 $ 225,505
============ ============
Income taxes $ 2,400 $ 2,400
============ ============
5
HANSEN NATURAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
Reference is made to the Notes to Consolidated Financial Statements, in
the Company's Form 10-K for the year ended December 31, 1997, which is
incorporated by reference, for a summary of significant policies
utilized by Hansen Natural Corporation ("Hansen" or "Company") and its
subsidiaries, Hansen Beverage Company ("HBC") and CVI Ventures, Inc.
The information set forth in these interim financial statements is
unaudited and may be subject to normal year-end adjustments. The
information reflects all adjustments, which include only normal
recurring adjustments, which in the opinion of management are necessary
to make the financial statements not misleading. Results of operations
covered by this report may not necessarily be indicative of results of
operations for the full fiscal year.
2. INVENTORIES
Inventories consist of the following at:
June 30, December 31,
1998 1997
------------ ------------
Raw materials $ 1,851,552 $ 388,877
Finished goods 2,145,187 3,527,106
------------ ------------
$ 3,996,739 $3,915,983
============ ============
6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
General
During the three months ended June 30, 1998, the Company continued to
make progress towards achieving its goal of geographically expanding the
Hansen's(R) brand as well as expanding the Hansen's(R) brand product range.
During the three months ended June 30, 1998, the expansion of distribution of
certain of the Company's products into markets outside of California continued
to make good progress. In April 1997, the Company introduced its lightly
carbonated functional energy drink in an 8.2-ounce slim can. Repeat sales of
this product have been encouraging. During the first quarter of 1998, the
Company extended its "functional" beverage product line by introducing three
additional functional drinks in 8.2-ounce slim cans, a ginger flavored d-stress
drink, an orange flavored anti-ox drink and a guarana flavored stamina drink.
During the second quarter of 1998, the Company launched its new Healthy
Start(TM) line of juices with DynaJuice(TM), a shelf stable 100% juice blend
with 15 vitamins and minerals. Also during the quarter, the Company introduced
two new 100% juice blends, Hansen's (R) Natural Apple Strawberry and Apple Grape
juices, both of which contain vitamin C. The Company intends to introduce
additional functional drinks and a new line of premium functional Smoothies
later in 1998. Other new product developments include additional Healthy
Start(TM) juices as well as new lines of premium natural sodas and premium
functional iced teas in proprietary glass bottles, which the Company intends to
introduce later in 1998 or in 1999. The Company continues to incur expenditures
in connection with the development and introduction of new products and flavors.
The increase in net sales and profitability in the second quarter of
1998 was primarily attributable to increased sales of the Company's functional
energy drink and sales of the Company's three new functional drinks in 8.2-ounce
slim cans and, to a lesser extent, to sales of the Company's newly introduced
DynaJuice(TM) and apple juice blends.
The increase in sales of functional drinks was attributable to the fact
the Company only launched its functional energy drink in April 1997, and also to
the fact that during the comparable period in 1997, the Company did not have any
sales of the three new functional drinks which were only introduced in the first
quarter of 1998. Portion of the sales of the three new functional drinks during
the second quarter of 1998 were attributable to opening orders from distributors
prior to their launching such products in their respective territories.
Consequently, sales of the three new functional drinks during the second quarter
of 1998 may not be indicative of sales that will be achieved in subsequent
periods.
The increase in net sales and profitability in the second quarter of
1998 was partially offset by a slight decrease in sales of soda and lower sales
of apple juice. For the second quarter of 1998, sales of Smoothies, iced teas
lemonades and juice cocktails, were about the same as in the second quarter of
1997.
7
Results of Operations For The Three-Months Ended June 30, 1998 Compared to the
Three-Months Ended June 30, 1997
Net Sales. For the three-months ended June 30, 1998, net sales were
approximately $14.0 million, an increase of $2.5 million or 21.3% over the $11.5
million net sales for the three-months ended June 30, 1997. The increase in net
sales was primarily attributable to increased sales of the Company's functional
energy drink which was introduced in the second quarter of 1997, sales of the
Company's three new functional drinks which were introduced in the first quarter
of 1998 and, to a lesser extent, sales of DynaJuice(TM) and apple juice blends.
The increase in net sales was partially offset by decreased sales of soda and
apple juice. Sales of Smoothies, iced teas lemonades and juice cocktails, were
about the same as in the comparable period in 1997.
Gross Profit. Gross profit was $6.9 million for the three-months ended
June 30, 1998, an increase of $2.2 million or 47.5% over the $4.7 million gross
profit for the three-months ended June 30, 1997. Gross profit as a percentage of
net sales increased to 49.8% for the three-months ended June 30, 1998 from 40.9%
for the three-months ended June 30, 1997. The increase in gross profit was
primarily attributable to increased net sales and higher margins achieved. The
increase in gross profit as a percentage of net sales was primarily attributable
to higher margins achieved as a result of a change in the Company's product mix.
Total Operating Expenses. Total operating expenses were $5.4 million
for the three-months ended June 30, 1998, an increase of $1.4 million or 35.8%
over total operating expenses of $4 million for the three-months ended June 30,
1997. Total operating expenses as a percentage of net sales increased to 38.5%
for the three-months ended June 30, 1998 from 34.4% for the three-months ended
June 30, 1997. The increase in total operating expenses was primarily
attributable to increased selling, general and administrative expenses which was
partially offset by a decrease in other expenses. The increase in total
operating expenses as a percentage of net sales was primarily attributable to an
increase in selling, general and administrative expenses and the comparatively
smaller increase in net sales from the comparable period in 1997.
Selling, general and administrative expenses were $5.3 million for the
three-months ended June 30, 1998, an increase of $1.5 million or 38.7% over
selling, general and administrative expenses of $3.8 million for the
three-months ended June 30, 1997. Selling, general and administrative expenses
as a percentage of net sales increased to 37.9% for the three-months ended June
30, 1998 from 33.1% for the three-months ended June 30, 1997. The increase in
selling expenses was primarily attributable to increases in promotional
expenditures and allowances, costs of promotional materials, advertising and
distribution costs. The increase in general and administrative expenses was
primarily attributable to increased payroll and other costs in connection with
the Company's expansion activities into additional states and operating
activities to support the increase in net sales.
8
Other expenses were approximately $15,000 for the three months ended
June 30, 1998 compared to $73,000 for the three months ended June 30, 1997. The
decrease in other expenses was primarily attributable to the expiration of
certain consulting agreements entered into in connection with the acquisition of
the Hansen business. The decrease was partially offset by a new consulting
agreement entered into with the former president of HBC in June 1997.
Operating Income. Operating income was $1,569,000 for the three-months
ended June 30, 1998, an increase of $820,000 or 109.4% over operating income of
$749,000 for the three- months ended June 30, 1997. Operating income as a
percentage of net sales increased to 11.2% for the three-months ended June 30,
1998 from 6.5% in the comparable period in 1997. The increase in operating
income was attributable to a $2.2 million increase in gross profit which was
partially offset by an increase of $1.4 million in operating expenses.
Net Interest and Financing Expense. Net interest and financing expense
was $103,000 for the three-months ended June 30, 1998, a decrease of $46,000
from net interest and financing expense of $149,000 for the three-months ended
June 30, 1997. The decrease in net interest and financing expense was primarily
attributable to the fact that during the three-months ended June 30, 1998, no
amounts were outstanding on the Company's revolving line of credit, and the
principal amounts outstanding on the Company's term loan were lower than during
the comparable period in 1997. Interest income of $6,000 for the three-months
ended June 30, 1998, as compared to no interest income during the comparable
period in 1997, is included in net interest and financing expense.
Provision for Income Taxes. Provision for income taxes was $450,000, an
increase of $412,000 over the provision for income taxes of $38,000 for the
comparable period in 1997. During the first and second quarters of 1997, the
provision for income taxes was reduced by a reduction in the valuation allowance
which was applied against certain tax benefits. During the first and second
quarters of 1998, the provision for income taxes was not reduced to the same
extent as in 1997 as the valuation allowance was fully reduced during the first
and second quarters of 1998.
Net Income. Net income was $1,016,000 for the three-months ended June
30, 1998, compared to net income of $563,000 for the three-months ended June 30,
1997. The $453,000 increase in net income consists of an increase in operating
income of $820,000 and a decrease of $46,000 in net interest and financing
expense which was partially offset by a $412,000 increase in provision for
income taxes.
9
Results of Operations For The Six-months Ended June 30, 1998 Compared to The
Six-months Ended June 30, 1997
Net Sales. For the six-months ended June 30, 1998, net sales were
approximately $25.2 million, an increase of $6.6 million or 35.5% over the $18.6
million net sales for the six-months ended June 30, 1997. The increase in net
sales was primarily attributable to increased sales of the Company's functional
energy drink which was introduced in the second quarter of 1997 and sales of the
Company's three new functional drinks which were introduced in the first quarter
of 1998 and, to a lesser extent, to increased sales of Smoothies, soda, iced
teas lemonades and juice cocktails, and sales of DynaJuice(TM) and apple juice
blends. The increase in net sales was partially offset by decreased sales of
apple juice.
Gross Profit. Gross profit was $12.6 million for the six-months ended
June 30, 1998, an increase of $5 million or 66% over the $7.6 million gross
profit for the six-months ended June 30, 1997. Gross profit as a percentage of
net sales increased to 49.9% for the six-months ended June 30, 1998 from 40.8%
for the six-months ended June 30, 1997. The increase in gross profit was
primarily attributable to increased net sales and higher margins achieved. The
increase in gross profit as a percentage of net sales was primarily attributable
to higher margins achieved as a result of a change in the Company's product mix.
Total Operating Expenses. Total operating expenses were $9.7 million
for the six-months ended June 30, 1998, an increase of $3.0 million or 45.6%
over total operating expenses of $6.7 million for the six-months ended June 30,
1997. Total operating expenses as a percentage of net sales increased to 38.6%
for the six-months ended June 30, 1998 from 35.9% for the six-months ended June
30, 1997. The increase in total operating expenses were primarily attributable
to increased selling, general and administrative expenses which was partially
offset by a decrease in other expenses. The increase in total operating expenses
as a percentage of net sales was primarily attributable to the increase in
operating expenses and the comparatively smaller increase in net sales from the
comparable period in 1997.
Selling, general and administrative expenses were $9.6 million for the
six-months ended June 30, 1998, an increase of $3.2 million or 49.5% over
selling, general and administrative expenses of $6.4 million for the six-months
ended June 30, 1997. Selling, general and administrative expenses as a
percentage of net sales increased to 37.9% for the six-months ended June 30,
1998 from 34.4% for the comparable period in 1997. The increase in selling
expenses was primarily attributable to increases in promotional expenditures and
allowances, costs of promotional materials, advertising and distribution costs.
The increase in general and administrative expenses was primarily attributable
to increased payroll and other costs in connection with the Company's expansion
activities into additional states and operating activities to support the
increase in net sales.
Other expenses were approximately $30,000 for the six months ended
June 30, 1998 compared to $147,000 for the three months ended June 30, 1997. The
decrease in other expenses was primarily attributable to the expiration of
certain consulting agreements entered into in connection with the acquisition of
the Hansen business. The decrease was partially offset by a new consulting
agreement entered into with the former president of HBC in June 1997.
10
Operating Income. Operating income was $2,853,000 for the six-months
ended June 30, 1998, an increase of $1,956,000 or 218.0% over operating income
of $897,000 for the six- months ended June 30, 1997. Operating income as a
percentage of net sales increased to 11.3% for the six-months ended June 30,
1998 from 4.8% in the comparable period in 1997. The increase in operating
income was attributable to a $5 million increase in gross profit which was
partially offset by an increase of $3 million in operating expenses.
Net Interest and Financing Expense. Net interest and financing expense
was $212,000 for the six-months ended June 30, 1998, a decrease of $61,000 from
net interest and financing expense of $273,000 for the six-months ended June 30,
1997. The decrease in net interest and financing expense was attributable to the
fact that during the six-months ended June 30, 1998, no amounts were outstanding
on the Company's revolving line of credit and the principal amounts outstanding
on the Company's term loan were lower than during the comparable period in 1997.
Interest income of $7,000 for the six-months ended June 30, 1998, as compared to
no interest income during the comparable period in 1997, is included in net
interest and financing expense.
Provision for Income Taxes. Provision for income taxes was $920,000, an
increase of $880,000 over the provision for income taxes of $40,000 for the
comparable period in 1997. During the first and second quarters of 1997, the
provision for income taxes was reduced by a reduction in the valuation allowance
which was applied against certain tax benefits. During the first and second
quarters of 1998, the provision for income taxes was not reduced to the same
extent as in 1997 as the valuation allowance was fully reduced during the first
and second quarters of 1998.
Net Income. Net income was $1,721,000 for the six-months ended June 30,
1998 compared to net income of $584,000 for the six-months ended June 30, 1997.
The $1,137,000 increase in net income consists of an increase in operating
income of $1,956,000 and a decrease of $61,000 in net interest and financing
expenses which was partially offset by a $880,000 increase in provision for
income taxes.
Liquidity and Capital Resources
As of June 30, 1998, the Company had working capital of $3,672,000
compared to working capital of $2,495,000 as of December 31, 1997. Net cash
provided by operating activities increased to $2,340,000 for the six months
ended June 30, 1998 as compared to $402,000 for the comparable period in 1997.
The increase in working capital and net cash provided by operating activities
was primarily attributable to net income earned after adjustments for certain
noncash expenses, primarily amortization of trademark license and trademarks and
depreciation and other amortization, during the six-months ended June 30, 1998.
Management believes that cash generated from operations and its cash
resources and amounts available under HBC's revolving line of credit, will be
sufficient to meet its operating cash requirements in the foreseeable future,
including purchase commitments for raw materials, debt servicing, expansion and
development needs as well as any purchases of capital assets or equipment.
11
Net cash used in investing activities increased to $336,000 for the
six-months ended June 30, 1998 as compared to $254,000 for the comparable period
in 1997. The increase in net cash used in investing activities was primarily
attributable to purchases of property and equipment to support the Company's
expansion and development plans. Although the Company has no current plans to
incur any material capital expenditures, management, from time to time,
considers the acquisition of capital equipment, particularly coolers and vans,
and businesses compatible with the image of the Hansen's(R) brand as well as the
introduction of new product lines. The Company may require additional capital
resources in the event of any such transaction, depending upon the cash
requirements relating thereto. Any such transaction will also be subject to the
terms and restrictions of HBC's credit facilities.
Net cash used in financing activities increased to $252,000 for the six
months ended June 30, 1998 as compared to net cash provided by financing
activities of $20,000 for the comparable period in 1997. The increase in net
cash used in financing activities was primarily attributable to the fact that
during the six-months ended June 30, 1998, principal payments of $252,000 were
made in reduction of HBC's term loan. As of June 30, 1998, the sum of $3,667,000
was outstanding under the term loan.
The revolving line of credit is renewable on September 1, 1998. HBC has
received a written proposal from its bank to renew its revolving line of credit
for a period of two years. In terms of such proposal, HBC's effective borrowing
rate under the revolving line of credit would be reduced from prime plus 1% to
prime plus 1/4%. The Company anticipates that such line will be renewed by this
date; however, there can be no assurance that it will, in fact, be renewed or,
if renewed, that the terms of such renewal will not be disadvantageous to HBC
and its business.
Year 2000 Compliance
Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries or be modified in some fashion to
distinguish 21st century dates from 20th century dates. This problem could force
computers to either shut down or provide incorrect data. As a result, in less
than two years, computer systems and software used by many companies may need to
be upgraded to comply with such "Year 2000" requirements. The Company has
examined its internal computer systems and contacted its software providers to
determine whether the Company's software applications are compliant with the
Year 2000. While the Company believes that its internal systems are fully Year
2000 compliant, the Company intends to continue to review its internal systems
for any problems as well as monitor its key customers and suppliers for any
impact that the Year 2000 may have on their information systems which in turn
could impact the Company. While it is difficult to quantify the total cost to
the Company of the Year 2000 compliance activities, the Company does not expect
the cost to be material.
12
Forward Looking Statements
Certain statements made in this Report, including certain statements
made in this Management's Discussion and Analysis, contain "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,
profitability, adequacy of funds from operations and the Company's existing
credit facility, among other things.
Management cautions that these statements are qualified by their terms
and/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 pressures,
changes in the price of the raw materials for the Company's beverage products,
the marketing efforts of the distributors of the Company's products, most of
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 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.
Inflation
The Company does not believe that inflation has a significant impact on
the Company's results of operations for the periods presented.
13
PART II - OTHER INFORMATION
Items 1 - 5. Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Exhibit Index
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HANSEN NATURAL CORPORATION
Registrant
Date: August 14, 1998
/s/ RODNEY C. SACKS
Rodney C. Sacks
Chairman of the Board
and Chief Executive Officer
Date: August 14, 1998
/s/ HILTON H. SCHLOSBERG
Hilton H. Schlosberg
Vice Chairman of the Board,
President, Chief Operating Officer,
Chief Financial Officer and Secretary
14
EXHIBIT INDEX
Exhibit 10 (ddd) Warrant Agreement dated as of April 23, 1998
between Hansen Natural Corporation and Rick Dees
Exhibit 27 Financial Data Schedule
15