Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
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 | 521,743,612 | |
Entity Central Index Key | 0000865752 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,303,048 | $ 1,326,462 |
Short-term investments | 1,346,781 | 1,749,727 |
Accounts receivable, net | 1,051,642 | 896,658 |
Inventories | 862,977 | 593,357 |
Prepaid expenses and other current assets | 112,294 | 82,668 |
Prepaid income taxes | 19,949 | 33,238 |
Total current assets | 4,696,691 | 4,682,110 |
INVESTMENTS | 72,373 | 99,419 |
PROPERTY AND EQUIPMENT, net | 485,550 | 313,753 |
DEFERRED INCOME TAXES, net | 195,511 | 225,221 |
GOODWILL | 1,412,941 | 1,331,643 |
OTHER INTANGIBLE ASSETS, net | 1,225,826 | 1,072,386 |
OTHER ASSETS | 115,913 | 80,252 |
Total Assets | 8,204,805 | 7,804,784 |
CURRENT LIABILITIES: | ||
Accounts payable | 520,198 | 404,263 |
Accrued liabilities | 198,692 | 210,964 |
Accrued promotional allowances | 281,650 | 211,461 |
Deferred revenue | 42,608 | 42,530 |
Accrued compensation | 61,426 | 65,459 |
Income taxes payable | 17,143 | 30,399 |
Total current liabilities | 1,121,717 | 965,076 |
DEFERRED REVENUE | 226,294 | 243,249 |
OTHER LIABILITIES | 41,034 | 29,508 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
STOCKHOLDERS' EQUITY: | ||
Common stock - $0.005 par value; 1,250,000 shares authorized; 641,245 shares issued and 523,965 shares outstanding as of September 30, 2022; 640,043 shares issued and 529,323 shares outstanding as of December 31, 2021 | 3,206 | 3,200 |
Additional paid-in capital | 4,736,141 | 4,652,620 |
Retained earnings | 8,699,499 | 7,809,549 |
Accumulated other comprehensive loss | (224,455) | (69,165) |
Common stock in treasury, at cost; 117,280 shares and 110,720 shares as of September 30, 2022 and December 31, 2021, respectively | (6,398,631) | (5,829,253) |
Total stockholders' equity | 6,815,760 | 6,566,951 |
Total Liabilities and Stockholders' Equity | $ 8,204,805 | $ 7,804,784 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
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 | 641,245 | 640,043 |
Common stock, shares outstanding | 523,965 | 529,323 |
Common stock in treasury, shares | 117,280 | 110,720 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
NET SALES | $ 1,624,286 | $ 1,410,557 | $ 4,798,119 | $ 4,116,308 |
COST OF SALES | 790,561 | 621,399 | 2,407,867 | 1,775,375 |
GROSS PROFIT | 833,725 | 789,158 | 2,390,252 | 2,340,933 |
OPERATING EXPENSES | 415,795 | 344,694 | 1,199,883 | 956,346 |
OPERATING INCOME | 417,930 | 444,464 | 1,190,369 | 1,384,587 |
INTEREST and OTHER INCOME (EXPENSE), net | 2,149 | (2,290) | (11,932) | (2,179) |
INCOME BEFORE PROVISION FOR INCOME TAXES | 420,079 | 442,174 | 1,178,437 | 1,382,408 |
PROVISION FOR INCOME TAXES | 97,692 | 104,969 | 288,487 | 326,247 |
NET INCOME | $ 322,387 | $ 337,205 | $ 889,950 | $ 1,056,161 |
NET INCOME PER COMMON SHARE: | ||||
Basic | $ 0.61 | $ 0.64 | $ 1.68 | $ 2 |
Diluted | $ 0.60 | $ 0.63 | $ 1.66 | $ 1.97 |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: | ||||
Basic | 526,797 | 528,997 | 528,263 | 528,618 |
Diluted | 533,300 | 535,915 | 534,599 | 535,554 |
U.S. and Canada | ||||
NET SALES | $ 1,060,242 | $ 921,744 | $ 3,110,579 | $ 2,691,313 |
EMEA | ||||
NET SALES | 320,642 | 280,551 | 949,717 | 817,442 |
Asia Pacific | ||||
NET SALES | 109,093 | 126,467 | 350,575 | 367,592 |
Latin America and Caribbean | ||||
NET SALES | 134,309 | 81,795 | 387,248 | 239,961 |
Monster Energy Drinks | ||||
NET SALES | 1,502,219 | 1,329,793 | 4,444,755 | 3,867,162 |
Monster Energy Drinks | U.S. and Canada | ||||
NET SALES | 982,952 | 880,012 | 2,882,306 | 2,548,873 |
Monster Energy Drinks | EMEA | ||||
NET SALES | 288,077 | 252,101 | 857,805 | 741,208 |
Monster Energy Drinks | Asia Pacific | ||||
NET SALES | 100,288 | 120,864 | 327,632 | 346,545 |
Monster Energy Drinks | Latin America and Caribbean | ||||
NET SALES | 130,902 | 76,816 | 377,012 | 230,536 |
Strategic Brands | ||||
NET SALES | 88,802 | 74,449 | 260,536 | 229,193 |
Strategic Brands | U.S. and Canada | ||||
NET SALES | 44,025 | 35,417 | 135,445 | 122,487 |
Strategic Brands | EMEA | ||||
NET SALES | 32,565 | 28,450 | 91,912 | 76,234 |
Strategic Brands | Asia Pacific | ||||
NET SALES | 8,805 | 5,603 | 22,943 | 21,047 |
Strategic Brands | Latin America and Caribbean | ||||
NET SALES | 3,407 | 4,979 | 10,236 | 9,425 |
Other | ||||
NET SALES | 6,447 | 6,315 | 18,356 | 19,953 |
Other | U.S. and Canada | ||||
NET SALES | 6,447 | 6,315 | 18,356 | 19,953 |
Other | EMEA | ||||
NET SALES | 0 | 0 | 0 | 0 |
Other | Asia Pacific | ||||
NET SALES | 0 | 0 | 0 | 0 |
Other | Latin America and Caribbean | ||||
NET SALES | 0 | 0 | 0 | 0 |
Alcohol Brands | ||||
NET SALES | 26,818 | 0 | 74,472 | 0 |
Alcohol Brands | U.S. and Canada | ||||
NET SALES | 26,818 | 0 | 74,472 | 0 |
Alcohol Brands | EMEA | ||||
NET SALES | 0 | 0 | 0 | 0 |
Alcohol Brands | Asia Pacific | ||||
NET SALES | 0 | 0 | 0 | 0 |
Alcohol Brands | Latin America and Caribbean | ||||
NET SALES | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income, as reported | $ 322,387 | $ 337,205 | $ 889,950 | $ 1,056,161 |
Other comprehensive income (loss): | ||||
Change in foreign currency translation adjustment | (68,822) | (26,716) | (147,450) | (46,412) |
Available-for-sale investments: | ||||
Change in net unrealized (losses) gains | (2,675) | 43 | (7,840) | (117) |
Reclassification adjustment for net gains included in net income | 0 | 0 | 0 | 0 |
Net change in available-for-sale investments | (2,675) | 43 | (7,840) | (117) |
Other comprehensive income (loss) | (71,497) | (26,673) | (155,290) | (46,529) |
Comprehensive income | $ 250,890 | $ 310,532 | $ 734,660 | $ 1,009,632 |
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) Income | Treasury stock | Total |
Balance at Dec. 31, 2020 | $ 3,193 | $ 4,537,982 | $ 6,432,074 | $ 3,034 | $ (5,815,423) | $ 5,160,860 |
Balance (in shares) at Dec. 31, 2020 | 638,662 | (110,565) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 17,949 | 17,949 | ||||
Exercise of stock options | $ 3 | 6,758 | 6,761 | |||
Exercise of stock options (in shares) | 492 | |||||
Unrealized gain (loss), net on available-for-sale securities | 24 | 24 | ||||
Repurchase of common stock | $ (13,419) | (13,419) | ||||
Repurchase of common stock (in shares) | (150) | |||||
Foreign currency translation | (27,932) | (27,932) | ||||
Net income | 315,194 | 315,194 | ||||
Balance at Mar. 31, 2021 | $ 3,196 | 4,562,689 | 6,747,268 | (24,874) | $ (5,828,842) | 5,459,437 |
Balance (in shares) at Mar. 31, 2021 | 639,154 | (110,715) | ||||
Balance at Dec. 31, 2020 | $ 3,193 | 4,537,982 | 6,432,074 | 3,034 | $ (5,815,423) | 5,160,860 |
Balance (in shares) at Dec. 31, 2020 | 638,662 | (110,565) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Unrealized gain (loss), net on available-for-sale securities | (117) | |||||
Net income | 1,056,161 | |||||
Balance at Sep. 30, 2021 | $ 3,199 | 4,626,299 | 7,488,235 | (43,495) | $ (5,829,241) | 6,244,997 |
Balance (in shares) at Sep. 30, 2021 | 639,851 | (110,719) | ||||
Balance at Mar. 31, 2021 | $ 3,196 | 4,562,689 | 6,747,268 | (24,874) | $ (5,828,842) | 5,459,437 |
Balance (in shares) at Mar. 31, 2021 | 639,154 | (110,715) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 16,921 | 16,921 | ||||
Exercise of stock options | $ 2 | 17,723 | 17,725 | |||
Exercise of stock options (in shares) | 422 | |||||
Unrealized gain (loss), net on available-for-sale securities | (183) | (183) | ||||
Repurchase of common stock | $ (399) | (399) | ||||
Repurchase of common stock (in shares) | (4) | |||||
Foreign currency translation | 8,235 | 8,235 | ||||
Net income | 403,762 | 403,762 | ||||
Balance at Jun. 30, 2021 | $ 3,198 | 4,597,333 | 7,151,030 | (16,822) | $ (5,829,241) | 5,905,498 |
Balance (in shares) at Jun. 30, 2021 | 639,576 | (110,719) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 16,293 | 16,293 | ||||
Exercise of stock options | $ 1 | 12,673 | 12,674 | |||
Exercise of stock options (in shares) | 275 | |||||
Unrealized gain (loss), net on available-for-sale securities | 43 | 43 | ||||
Foreign currency translation | (26,716) | (26,716) | ||||
Net income | 337,205 | 337,205 | ||||
Balance at Sep. 30, 2021 | $ 3,199 | 4,626,299 | 7,488,235 | (43,495) | $ (5,829,241) | 6,244,997 |
Balance (in shares) at Sep. 30, 2021 | 639,851 | (110,719) | ||||
Balance at Dec. 31, 2021 | $ 3,200 | 4,652,620 | 7,809,549 | (69,165) | $ (5,829,253) | 6,566,951 |
Balance (in shares) at Dec. 31, 2021 | 640,043 | (110,720) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 16,175 | 16,175 | ||||
Exercise of stock options | $ 3 | 4,507 | 4,510 | |||
Exercise of stock options (in shares) | 485 | |||||
Unrealized gain (loss), net on available-for-sale securities | (4,059) | (4,059) | ||||
Repurchase of common stock | $ (12,187) | (12,187) | ||||
Repurchase of common stock (in shares) | (166) | |||||
Foreign currency translation | 1,079 | 1,079 | ||||
Net income | 294,203 | 294,203 | ||||
Balance at Mar. 31, 2022 | $ 3,203 | 4,673,302 | 8,103,752 | (72,145) | $ (5,841,440) | 6,866,672 |
Balance (in shares) at Mar. 31, 2022 | 640,528 | (110,886) | ||||
Balance at Dec. 31, 2021 | $ 3,200 | 4,652,620 | 7,809,549 | (69,165) | $ (5,829,253) | $ 6,566,951 |
Balance (in shares) at Dec. 31, 2021 | 640,043 | (110,720) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options (in shares) | 813 | |||||
Unrealized gain (loss), net on available-for-sale securities | $ (7,840) | |||||
Net income | 889,950 | |||||
Balance at Sep. 30, 2022 | $ 3,206 | 4,736,141 | 8,699,499 | (224,455) | $ (6,398,631) | 6,815,760 |
Balance (in shares) at Sep. 30, 2022 | 641,245 | (117,280) | ||||
Balance at Mar. 31, 2022 | $ 3,203 | 4,673,302 | 8,103,752 | (72,145) | $ (5,841,440) | 6,866,672 |
Balance (in shares) at Mar. 31, 2022 | 640,528 | (110,886) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 16,157 | 16,157 | ||||
Exercise of stock options | $ 2 | 18,110 | 18,112 | |||
Exercise of stock options (in shares) | 416 | |||||
Unrealized gain (loss), net on available-for-sale securities | (1,106) | (1,106) | ||||
Repurchase of common stock | $ (284,311) | (284,311) | ||||
Repurchase of common stock (in shares) | (3,286) | |||||
Foreign currency translation | (79,707) | (79,707) | ||||
Net income | 273,360 | 273,360 | ||||
Balance at Jun. 30, 2022 | $ 3,205 | 4,707,569 | 8,377,112 | (152,958) | $ (6,125,751) | 6,809,177 |
Balance (in shares) at Jun. 30, 2022 | 640,944 | (114,172) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 16,436 | 16,436 | ||||
Exercise of stock options | $ 1 | 12,136 | 12,137 | |||
Exercise of stock options (in shares) | 301 | |||||
Unrealized gain (loss), net on available-for-sale securities | (2,675) | (2,675) | ||||
Repurchase of common stock | $ (272,880) | (272,880) | ||||
Repurchase of common stock (in shares) | (3,108) | |||||
Foreign currency translation | (68,822) | (68,822) | ||||
Net income | 322,387 | 322,387 | ||||
Balance at Sep. 30, 2022 | $ 3,206 | $ 4,736,141 | $ 8,699,499 | $ (224,455) | $ (6,398,631) | $ 6,815,760 |
Balance (in shares) at Sep. 30, 2022 | 641,245 | (117,280) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 889,950 | $ 1,056,161 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 46,040 | 37,854 |
Non-cash lease expense | 5,180 | 2,862 |
Gain on disposal of property and equipment | (253) | (984) |
Stock-based compensation | 49,167 | 52,391 |
Deferred income taxes | 29,710 | 353 |
Effect on cash of changes in operating assets and liabilities net of acquisition: | ||
Accounts receivable | (202,447) | (199,481) |
Inventories | (297,140) | (149,414) |
Prepaid expenses and other assets | (39,204) | (41,162) |
Prepaid income taxes | 7,867 | (7,365) |
Accounts payable | 52,663 | 106,570 |
Accrued liabilities | (2,572) | 39,387 |
Accrued promotional allowances | 89,236 | 51,022 |
Accrued compensation | (6,636) | (2,888) |
Income taxes payable | (12,823) | (114) |
Other liabilities | (3,492) | 574 |
Deferred revenue | (16,060) | (17,784) |
Net cash provided by operating activities | 589,186 | 927,982 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Sales of available-for-sale investments | 1,823,943 | 1,016,556 |
Purchases of available-for-sale investments | (1,393,910) | (1,343,351) |
Acquisition of CANarchy, net of cash | (329,472) | 0 |
Purchases of property and equipment | (136,158) | (28,131) |
Proceeds from sale of property and equipment | 603 | 1,246 |
Additions to intangibles | (3,578) | (5,211) |
Increase in other assets | (19,171) | (22,809) |
Net cash used in investing activities | (57,743) | (381,700) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on debt | (719) | (1,814) |
Issuance of common stock | 34,759 | 37,160 |
Purchases of common stock held in treasury | (493,315) | (13,818) |
Net cash (used in) provided by financing activities | (459,275) | 21,528 |
Effect of exchange rate changes on cash and cash equivalents | (95,582) | (35,552) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (23,414) | 532,258 |
CASH AND CASH EQUIVALENTS, beginning of period | 1,326,462 | 1,180,413 |
CASH AND CASH EQUIVALENTS, end of period | 1,303,048 | 1,712,671 |
Cash paid during the period for: | ||
Interest | 359 | 99 |
Income taxes | $ 297,526 | $ 338,584 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS | ||
Accrued liabilities for intangible assets | $ 14.4 | $ 13 |
Accounts payable for purchases of equipment | 2.6 | 0.5 |
Included in accounts payable related to additions to other intangible assets | $ 2 | |
Accounts payable for purchase of available-for-sale short-term investment | 7.9 | |
Accounts payable for purchases of common stock held in treasury | $ 76.1 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 for a summary of significant accounting policies utilized by the Company and its consolidated subsidiaries and other disclosures, which should be read in conjunction with this Quarterly Report on Form 10-Q (“Form 10-Q”). The Company’s condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and Securities and Exchange Commission (“SEC”) rules and regulations applicable to interim financial reporting. They do not include all the information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP. The information set forth in these interim condensed consolidated financial statements for the three- and nine-months ended September 30, 2022 and 2021, 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 Pronouncements There have been no changes in recently issued or adopted accounting pronouncements that would materially impact the Company from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
ACQUISITIONS | |
ACQUISITIONS | 2. ACQUISITIONS On February 17, 2022, the Company completed its acquisition of CANarchy Craft Brewery Collective LLC (“CANarchy”), a craft beer and hard seltzer company, for $330.4 million in cash, subject to adjustments (the “CANarchy Transaction”). The CANarchy Transaction facilitates the Company’s entry into the alcohol beverage sector and brings the Cigar City TM TM TM TM TM TM TM The Company accounted for the CANarchy Transaction in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations”. The following table summarizes the fair value allocations of the CANarchy Transaction: Identifiable Assets Acquired and Liabilities Consideration Assumed Transferred Intangibles - trademarks (non-amortizing) $ 94,500 $ — Intangibles - customer relationships (amortizing) 54,500 — Intangibles - permits (non-amortizing) 6,000 — Property and equipment, net 81,285 — Inventory 18,300 — Right-of -use assets 12,836 — Operating lease liabilities (12,836) — Working capital (excluding inventory) (5,640) — Other (770) — Goodwill 81,298 — Cash 3,248 332,721 Total $ 332,721 $ 332,721 The Company determined the fair values as follows: ● Trademarks – relief-from-royalty method of the income approach ● Customer relationships – distributor method of the income approach ● Permits – with-and-without method of the income approach ● Property and equipment – cost approach ● Inventory – comparative sales method and replacement cost method The book value of the working capital (excluding inventory) approximates fair value due to the short-term nature of the accounts. The Company has determined goodwill in accordance with ASC 805, which requires the recognition of goodwill for the excess of the aggregate consideration over the net amounts of identifiable assets acquired and liabilities assumed as of the acquisition date. For tax purposes, the CANarchy Transaction was recorded as an asset purchase. As such, the Company received a step-up in tax basis of the CANarchy assets, net, equal to the purchase price. In accordance with Regulation S-X, pro forma unaudited condensed financial information for the CANarchy Transaction has not been provided as the impact of the transaction on the Company’s financial position, results of operations and liquidity was not material. On May 5, 2022, the Company acquired certain real property and equipment in Norwalk, California for a purchase price of $62.5 million. The acquisition was treated as an asset acquisition for accounting purposes. The fair value allocations include $50.6 million for land, $10.0 million for building and $1.9 million for equipment. The Company intends to utilize the property as a manufacturing facility for certain of its products. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION The Company has four operating and reportable 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 ready-to-drink packaged energy drinks 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 Company’s Alcohol Brands segment primarily generates operating revenues by selling kegged and canned beer as well as hard seltzers primarily to distributors in the United States. The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Certain of the Company’s bottlers/distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, control of the Company’s products passes to such bottlers/distributors when they notify the Company that they have taken possession or transferred the relevant portion of the Company’s finished goods. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of September 30, 2022 and December 31, 2021. 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 to TCCC based on the Company’s sales to wholly-owned subsidiaries of TCCC (the “TCCC Subsidiaries”) and/or to TCCC bottlers/distributors 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 deferred revenue and recognized 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 September 30, 2022 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 982,952 $ 288,077 $ 100,288 $ 130,902 $ 1,502,219 Strategic Brands 44,025 32,565 8,805 3,407 88,802 Alcohol Brands 26,818 — — — 26,818 Other 6,447 — — — 6,447 Total Net Sales $ 1,060,242 $ 320,642 $ 109,093 $ 134,309 $ 1,624,286 Three-Months Ended September 30, 2021 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 880,012 $ 252,101 $ 120,864 $ 76,816 $ 1,329,793 Strategic Brands 35,417 28,450 5,603 4,979 74,449 Alcohol Brands — — — — — Other 6,315 — — — 6,315 Total Net Sales $ 921,744 $ 280,551 $ 126,467 $ 81,795 $ 1,410,557 1 Europe, Middle East and Africa (“EMEA”) Nine-Months Ended September 30, 2022 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 2,882,306 $ 857,805 $ 327,632 $ 377,012 $ 4,444,755 Strategic Brands 135,445 91,912 22,943 10,236 260,536 Alcohol Brands 2 74,472 — — — 74,472 Other 18,356 — — — 18,356 Total Net Sales $ 3,110,579 $ 949,717 $ 350,575 $ 387,248 $ 4,798,119 Nine-Months Ended September 30, 2021 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 2,548,873 $ 741,208 $ 346,545 $ 230,536 $ 3,867,162 Strategic Brands 122,487 76,234 21,047 9,425 229,193 Alcohol Brands — — — — — Other 19,953 — — — 19,953 Total Net Sales $ 2,691,313 $ 817,442 $ 367,592 $ 239,961 $ 4,116,308 1 Europe, Middle East and Africa (“EMEA”) 2 Effectively from February 17, 2022 to September 30, 2022 Contract Liabilities Amounts received from certain bottlers/distributors at inception of their distribution contracts or at the inception of certain sales/marketing programs are accounted for as deferred revenue. As of September 30, 2022, the Company had $268.9 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. As of December 31, 2021, the Company had $285.8 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s condensed consolidated balance sheet. During the three-months ended September 30, 2022 and 2021, $10.0 million and $10.4 million, respectively, of deferred revenue was recognized in net sales. See Note 11. During the nine-months ended September 30, 2022 and 2021, $30.0 million and $31.3 million, respectively, of deferred revenue was recognized in net sales. See Note 11. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
LEASES | 4. LEASES The Company leases identified assets comprising of 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 ASC 842, “Leases”. 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 interest and other income (expense), net in the condensed consolidated statement of income. The Company’s leases have remaining lease terms of less than one year to 12 years, some which leases leases The components of lease cost were comprised of the following: Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 Operating lease cost $ 2,306 $ 1,103 $ 6,238 $ 3,348 Short-term lease cost 1,001 1,235 2,870 3,370 Variable lease cost 189 185 567 532 Finance leases: Amortization of ROU assets 140 138 415 394 Interest on lease liabilities 8 6 18 15 Finance lease cost 148 144 433 409 Total lease cost $ 3,644 $ 2,667 $ 10,108 $ 7,659 Supplemental cash flow information for the following periods: Nine-Months Nine-Months Ended September 30, Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 5,859 $ 3,057 Operating cash outflows from finance leases 18 15 Financing cash outflows from finance leases 1,678 1,970 ROU assets obtained in exchange for lease obligations: Finance leases 1,654 2,767 Operating leases 20,093 251 ROU assets for operating and finance leases recognized in the Company’s condensed consolidated balance sheets were comprised of the following at: September 30, 2022 Real Estate Equipment Total Balance Sheet Location Operating leases $ 36,681 $ 404 $ 37,085 Other Assets Finance leases — 1,753 1,753 Property and Equipment, net December 31, 2021 Real Estate Equipment Total Balance Sheet Location Operating leases $ 22,518 $ 639 $ 23,157 Other Assets Finance leases — 2,646 2,646 Property and Equipment, net Operating and finance lease liabilities recognized in the Company’s condensed consolidated balance sheets were as follows at: September 30, 2022 Operating Leases Finance Leases Accrued liabilities $ 7,028 $ 917 Other liabilities 29,265 48 Total $ 36,293 $ 965 December 31, 2021 Operating Leases Finance Leases Accrued liabilities $ 3,990 $ 960 Other liabilities 17,389 41 Total $ 21,379 $ 1,001 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases at September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 Operating Leases Finance Leases Weighted-average remaining lease term (years) 7.1 0.8 Weighted-average discount rate 3.4 % 2.7 % December 31, 2021 Operating Leases Finance Leases Weighted-average remaining lease term (years) 8.1 0.7 Weighted-average discount rate 3.5 % 1.3 % The following table reconciles the undiscounted future lease payments for operating and finance leases to the operating and finance leases recorded in the Company’s condensed consolidated balance sheet at September 30, 2022: Undiscounted Future Lease Payments Operating Leases Finance Leases 2022 (from October 1, 2022 to December 31, 2022) $ 2,038 $ 410 2023 7,829 525 2024 6,473 23 2025 4,808 17 2026 3,895 2 2027 and thereafter 15,974 — Total lease payments 41,017 977 Less imputed interest (4,724) (12) Total $ 36,293 $ 965 As of September 30, 2022, the Company did not have any significant additional operating or finance leases that have not yet commenced. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2022 | |
INVESTMENTS | |
INVESTMENTS | 5. INVESTMENTS The following table summarizes the Company’s investments at: Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 September 30, 2022 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 218,573 $ — $ 7 $ 218,566 $ 7 $ — Certificates of deposit 20,035 — — 20,035 — — Municipal securities 193,567 4 1,142 192,429 1,142 U.S. government agency securities 88,573 — 851 87,722 851 — U.S. treasuries 834,249 — 6,220 828,029 6,220 — Long-term: U.S. treasuries 55,684 — 476 55,208 476 — Municipal securities 5,562 — 35 5,527 35 U.S. government agency securities 11,711 1 74 11,638 74 — Total $ 1,427,954 $ 5 $ 8,805 $ 1,419,154 $ 8,805 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 December 31, 2021 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 334,077 $ — $ — $ 334,077 $ — $ — Certificates of deposit 44,502 — — 44,502 — — Municipal securities 666 — — 666 — — U.S. government agency securities 62,687 — 26 62,661 26 — U.S. treasuries 1,308,536 2 717 1,307,821 717 — Long-term: U.S. government agency securities 12,500 — 24 12,476 24 — U.S. treasuries 87,133 — 190 86,943 190 — Total $ 1,850,101 $ 2 $ 957 $ 1,849,146 $ 957 $ — During the three- and nine-months ended September 30, 2022 and 2021, realized gains or losses recognized on the sale of investments were not significant. The Company’s investments at September 30, 2022 and December 31, 2021 carried investment grade credit ratings. The following table summarizes the underlying contractual maturities of the Company’s investments at: September 30, 2022 December 31, 2021 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 218,573 $ 218,566 $ 334,077 $ 334,077 Municipal securities 193,567 192,429 666 666 U.S. government agency securities 88,573 87,722 62,687 62,661 Certificates of deposit 20,035 20,035 44,502 44,502 U.S. treasuries 834,249 828,029 1,308,536 1,307,821 Due 1 -10 years: Municipal securities 5,562 5,527 — — U.S. treasuries 55,684 55,208 87,133 86,943 U.S. government agency securities 11,711 11,638 12,500 12,476 Total $ 1,427,954 $ 1,419,154 $ 1,850,101 $ 1,849,146 |
FAIR VALUE OF CERTAIN FINANCIAL
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
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, “Fair Value Measurement”, provides a framework for measuring fair value and requires disclosures regarding fair value measurements. ASC 820 defines fair value as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below. ● Level 1: Quoted prices in active markets for identical assets or liabilities. ● Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. ● Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. ASC 820 requires the use of observable market inputs (quoted market prices) when measuring fair value and requires a Level 1 quoted price to be used to measure fair value whenever possible. The following tables present the fair value of the Company’s financial assets and liabilities that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy at: September 30, 2022 Level 1 Level 2 Level 3 Total Cash $ 1,113,207 $ — $ — $ 1,113,207 Money market funds 116,952 — — 116,952 Certificates of deposit — 20,035 — 20,035 Commercial paper — 234,310 — 234,310 Municipal securities — 203,159 — 203,159 U.S. government agency securities — 99,361 — 99,361 U.S. treasuries — 935,178 — 935,178 Foreign currency derivatives — (204) — (204) Total $ 1,230,159 $ 1,491,839 $ — $ 2,721,998 Amounts included in: Cash and cash equivalents $ 1,230,159 $ 72,889 $ — $ 1,303,048 Short-term investments — 1,346,781 — 1,346,781 Accounts receivable, net — 694 — 694 Investments — 72,373 — 72,373 Accrued liabilities — (898) — (898) Total $ 1,230,159 $ 1,491,839 $ — $ 2,721,998 December 31, 2021 Level 1 Level 2 Level 3 Total Cash $ 749,089 $ — $ — $ 749,089 Money market funds 440,826 — — 440,826 Certificates of deposit — 44,502 — 44,502 Commercial paper — 335,477 — 335,477 Municipal securities — 2,428 — 2,428 U.S. government agency securities — 75,137 — 75,137 U.S. treasuries — 1,528,149 — 1,528,149 Foreign currency derivatives — (278) — (278) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 Amounts included in: Cash and cash equivalents $ 1,189,915 $ 136,547 $ — $ 1,326,462 Short-term investments — 1,749,727 — 1,749,727 Accounts receivable, net — 654 — 654 Investments — 99,419 — 99,419 Accrued liabilities — (932) — (932) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 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 is based on quoted market prices in active markets for identical securities. The Company’s valuation of its Level 2 investments is based on other observable inputs, specifically a market approach which utilizes valuation models, pricing systems, mathematical tools and other relevant information for the same or similar securities. The Company’s valuation of its Level 2 foreign currency exchange contracts is based on quoted market prices of the same or similar instruments, adjusted for counterparty risk. There were no transfers between Level 1 and Level 2 measurements during the nine-months ended September 30, 2022, or during the year-ended December 31, 2021, and there were no changes in the Company’s valuation techniques. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2022 | |
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 nine-months ended September 30, 2022 and the year-ended December 31, 2021, the Company entered into forward currency exchange contracts with financial institutions to create an economic hedge to specifically manage a portion of the foreign exchange risk exposure associated with certain consolidated subsidiaries’ non-functional currency denominated assets and liabilities. All foreign currency exchange contracts of the Company that were outstanding as of September 30, 2022 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, “Derivatives and Hedging”. Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in interest and other income (expense), 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 Company’s condensed consolidated balance sheets consist of the following at: September 30, 2022 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive USD/pay COP $ 11,264 $ 298 Accounts receivable, net Receive USD/pay CLP 42,139 250 Accounts receivable, net Receive USD/pay NZD 3,614 81 Accounts receivable, net Receive USD/pay ZAR 3,172 41 Accounts receivable, net Receive RSD/pay USD 1,809 16 Accounts receivable, net Receive USD/pay AUD 520 8 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 12,492 $ (308) Accrued liabilities Receive CAD/pay USD 20,757 (277) Accrued liabilities Receive USD/pay CNY 11,877 (141) Accrued liabilities Receive USD/pay EUR 16,703 (82) Accrued liabilities Receive SGD/pay USD 16,969 (47) Accrued liabilities Receive USD/pay MXN 20,673 (34) Accrued liabilities Receive USD/pay DKK 1,893 (9) Accrued liabilities December 31, 2021 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD 16,544 297 Accounts receivable, net Receive USD/pay COP 9,754 296 Accounts receivable, net Receive RSD/pay USD 9,837 46 Accounts receivable, net Receive USD/pay RUB 7,175 15 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 29,929 $ (666) Accrued liabilities Receive USD/pay AUD 2,602 (88) Accrued liabilities Receive USD/pay CNY 12,230 (74) Accrued liabilities Receive USD/pay NZD 2,693 (45) Accrued liabilities Receive USD/pay EUR 3,045 (29) Accrued liabilities Receive USD/pay ZAR 4,140 (21) Accrued liabilities Receive USD/pay DKK 1,461 (9) 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 Three-months ended Derivatives not designated as Location of gain (loss) hedging instruments under recognized in income on September 30, September 30, ASC 815 derivatives 2022 2021 Foreign currency exchange contracts Interest and other income (expense), net $ 4,631 $ (308) Amount of gain (loss) recognized in income on derivatives Nine-months ended Derivatives not designated as Location of gain (loss) hedging instruments under recognized in income on September 30, September 30, ASC 815 derivatives 2022 2021 Foreign currency exchange contracts Interest and other income (expense), net $ 1,355 $ (5,706) |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2022 | |
INVENTORIES | |
INVENTORIES | 8. INVENTORIES Inventories consist of the following at: September 30, December 31, 2022 2021 Raw materials $ 450,097 $ 349,865 Work in process 1,574 — Finished goods 411,306 243,492 $ 862,977 $ 593,357 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 9. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following at: September 30, December 31, 2022 2021 Land $ 139,248 $ 85,455 Leasehold improvements 30,710 11,795 Furniture and fixtures 9,175 8,274 Office and computer equipment 22,642 21,601 Computer software 6,496 7,409 Equipment 253,057 189,820 Buildings 162,034 148,971 Vehicles 46,715 45,088 Assets under construction 58,791 20,125 728,868 538,538 Less: accumulated depreciation and amortization (243,318) (224,785) $ 485,550 $ 313,753 Total depreciation and amortization expense recorded was $13.6 million and $11.3 million for the three-months ended September 30, 2022 and 2021, respectively. Total depreciation and amortization expense recorded was $40.5 million and $34.5 million for the nine-months ended September 30, 2022 and 2021, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. The following is a roll-forward of goodwill for the nine-months ended September 30, 2022 and 2021 by reportable segment: Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — 81,298 — 81,298 Balance at September 30, 2022 $ 693,644 $ 637,999 $ 81,298 $ — $ 1,412,941 Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2020 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — — — — Balance at September 30, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Intangible assets consist of the following at: September 30, December 31, 2022 2021 Amortizing intangibles $ 121,372 $ 66,872 Accumulated amortization (66,781) (61,227) 54,591 5,645 Non-amortizing intangibles 1,171,235 1,066,741 $ 1,225,826 $ 1,072,386 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 September 30, 2022: 2022 (from October 1, 2022 to December 31, 2022) $ 2,010 2023 4,745 2024 3,647 2025 3,647 2026 3,646 2027 and thereafter 36,896 $ 54,591 |
DISTRIBUTION AGREEMENTS
DISTRIBUTION AGREEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
DISTRIBUTION AGREEMENTS | |
DISTRIBUTION AGREEMENTS | 11 DISTRIBUTION AGREEMENTS 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, or at the inception of certain sales/marketing programs are accounted for as deferred revenue and are recognized as revenue ratably over the anticipated life of the respective agreement, generally 20 years or program duration, as the case may be. Revenue recognized was $10.0 million and $10.4 million for the three-months ended September 30, 2022 and 2021, respectively. Revenue recognized was $30.0 million and $31.3 million for the nine-months ended September 30, 2022 and 2021, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES The Company had purchase commitments aggregating approximately $275.5 million at September 30, 2022, 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 $338.9 million at September 30, 2022, which related primarily to sponsorships and other marketing activities. The Company has a credit facility with HSBC Bank (China) Company Limited, Shanghai Branch, of $15.0 million. At September 30, 2022, the interest rate on borrowings under the line of credit was 5.5%. As of September 30, 2022, $6.3 million was outstanding on this line of credit. Litigation 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, and any related insurance reimbursements. As of September 30, 2022, no loss contingencies were included in the Company’s condensed consolidated balance sheet. On September 29, 2022, a jury in the U.S. District Court for the Central District of California awarded Monster Energy Company (“MEC”) approximately $293 million in damages in its false advertising and trade secrets case against Vital Pharmaceuticals, Inc. (“VPX”), the maker of Bang Energy. The jury found VPX and its chief executive officer to have falsely advertised the “super creatine” ingredient of Bang Energy and to have acted willfully and deliberately in violating the federal Lanham Act. The jury also found that VPX stole trade secrets and interfered with the Company’s contracts over shelf space with certain key vendors. VPX may also be liable for enhanced and punitive damages as will be determined by the judge presiding over the case at a later date. In April 2022, MEC and Orange Bang, Inc. (“Orange Bang”) filed a joint motion in the United States District Court for the Central District of California to confirm a final arbitration award against VPX that awarded MEC and Orange Bang $175.0 million and a 5% royalty on all future sales of VPX’s Bang Energy drink and other Bang-branded products as well as certain fees and costs. Pursuant to the terms of the agreement between MEC and Orange Bang, the award and future royalties will be shared equally between MEC and Orange Bang. The arbitration arose from a settlement agreement that VPX entered into in 2010 with Orange Bang, a family-owned beverage business. Pursuant to the terms of that agreement, VPX is only permitted to use the Bang mark on “creatine-based” products or on Bang products that are marketed and sold only in the vitamin and dietary supplement sections of stores. On September 29, 2022, the United States District Court for the Central District of California entered final judgment confirming the award. On October 28, 2022, VPX filed a notice of appeal of the District Court’s final judgement confirming the award. On October 10, 2022, VPX, along with certain of its domestic subsidiaries and affiliates, filed for protection under Chapter 11 of the Bankruptcy Code in the Southern District of Florida. Per ASC 450 “Contingencies”, the Company will not recognize the September 2022 jury award or April 2022 arbitration award until the awards are realized or realizable. As of November 4, 2022, the proceedings have yet to progress to a stage where there is sufficient information for an accurate timeline of when the awards will be realized or realizable, if at all. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 13. ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in accumulated other comprehensive loss by component, after tax, for the nine-months ended September 30, 2022 and 2021 are as follows: Unrealized Currency Losses on Translation Available-for- Losses Sale Securities Total Balance at December 31, 2021 $ (68,209) $ (956) $ (69,165) Other comprehensive (loss) income before reclassifications (147,450) (7,840) (155,290) Amounts reclassified from accumulated other comprehensive (loss) income — — — Net current-period other comprehensive (loss) income (147,450) (7,840) (155,290) Balance at September 30, 2022 $ (215,659) $ (8,796) $ (224,455) Unrealized Currency Gains (Losses) Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2020 $ 2,950 $ 84 $ 3,034 Other comprehensive (loss) income before reclassifications (46,412) (117) (46,529) Amounts reclassified from accumulated other comprehensive (loss) income — — — Net current-period other comprehensive (loss) income (46,412) (117) (46,529) Balance at September 30, 2021 $ (43,462) $ (33) $ (43,495) |
TREASURY STOCK
TREASURY STOCK | 9 Months Ended |
Sep. 30, 2022 | |
TREASURY STOCK | |
TREASURY STOCK | 14. TREASURY STOCK On March 13, 2020, 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 “March 2020 Repurchase Plan”). During the three-months ended September 30, 2022, the Company purchased approximately 1.8 million shares of common stock at an average purchase price of $87.55 per share, for a total amount of approximately $157.4 million (excluding broker commissions), which exhausted the availability under the March 2020 Repurchase Plan. Such shares are included in the common stock in treasury in the accompanying condensed balance sheet at September 30, 2022. On June 14, 2022, the Company’s Board of Directors authorized a share repurchase program for the purchase of up to an additional $500.0 million of the Company’s outstanding common stock (the “June 2022 Repurchase Plan”). During the three-months ended September 30, 2022, the Company purchased approximately 1.3 million shares of common stock at an average purchase price of $88.11 per share, for a total amount of approximately $115.5 million (excluding broker commissions), under the June 2022 Repurchase Plan. As of November 4, 2022, $182.8 million remained available for repurchase under the June 2022 Repurchase Plan. During the three-months ended September 30, 2022, no shares of common stock were purchased from employees in lieu of cash payments for options exercised or withholding taxes due. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 15. STOCK-BASED COMPENSATION The Company has two stock-based compensation plans under which shares were available for grant at September 30, 2022: (i) the Monster Beverage Corporation 2020 Omnibus Incentive Plan, including the Monster Beverage Corporation Deferred Compensation Plan as a sub-plan thereunder, and (ii) the Monster Beverage Corporation 2017 Compensation Plan for Non-Employee Directors as Amended and Restated on February 23, 2022, including the Monster Beverage Corporation Deferred Compensation Plan for Non-Employee Directors as a sub-plan thereunder. The Company recorded $16.6 million and $16.7 million of compensation expense relating to outstanding options, restricted stock units, performance share units and other share-based awards during the three-months ended September 30, 2022 and 2021, respectively. The Company recorded $49.2 million and $52.4 million of compensation expense relating to outstanding options, restricted stock units, performance share units and other share-based awards during the nine-months ended September 30, 2022 and 2021, 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 September 30, 2022 and 2021 was $2.0 million and $2.0 million, respectively. The tax benefit for tax deductions from non-qualified stock option exercises, disqualifying dispositions of incentive stock options and vesting of restricted stock units and performance share units for the nine-months ended September 30, 2022 and 2021 was $4.6 million and $6.1 million, respectively. Stock Options Under the Company’s stock-based compensation plans, all stock options granted as of September 30, 2022 were granted at prices based on the fair value of the Company’s common stock on the date of grant. The Company records compensation expense for stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes-Merton option pricing formula with the assumptions included in the table below. The Company uses historical data to determine the exercise behavior, volatility and forfeiture rate of the options. The following weighted-average assumptions were used to estimate the fair value of options granted during: Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Expected volatility 27.6 % 28.3 % 27.7 % 28.9 % Risk-free interest rate 2.8 % 0.7 % 2.1 % 0.8 % Expected term 6.2 years 5.8 years 6.1 years 5.8 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 Price Per Term Aggregate Options (in thousands) Share (in years) Intrinsic Value Outstanding at January 1, 2022 13,860 $ 48.19 5.1 $ 663,148 Granted 01/01/22 - 03/31/22 2,489 $ 73.96 Granted 04/01/22 - 06/30/22 8 $ 88.05 Granted 07/01/22 - 09/30/22 34 $ 95.72 Exercised (813) $ 42.74 Cancelled or forfeited (143) $ 72.26 Outstanding at September 30, 2022 15,435 $ 52.54 5.2 $ 533,680 Vested and expected to vest in the future at September 30, 2022 15,043 $ 51.97 5.1 $ 528,586 Exercisable at September 30, 2022 10,287 $ 43.06 3.7 $ 451,963 The weighted-average grant-date fair value of options granted during the three-months ended September 30, 2022 and 2021 was $31.94 per share and $26.90 per share, respectively. The weighted-average grant-date fair value of options granted during the nine-months ended September 30, 2022 and 2021 was $23.35 per share and $25.81 per share, respectively. The total intrinsic value of options exercised during the three-months ended September 30, 2022 and 2021 was $15.3 million and $14.0 million, respectively. The total intrinsic value of options exercised during the nine-months ended September 30, 2022 and 2021 was $38.2 million and $42.2 million, respectively. Cash received from option exercises under all plans for the three-months ended September 30, 2022 and 2021 was $12.1 million and $12.7 million, respectively. Cash received from option exercises under all plans for the nine-months ended September 30, 2022 and 2021 was $34.8 million and $37.2 million, respectively. At September 30, 2022, there was $77.5 million of total unrecognized compensation expense related to non-vested options granted to employees under the Company’s stock-based compensation plans. That cost is expected to be recognized over a weighted-average period of 2.9 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, 2022 910 $ 69.02 Granted 01/01/22 - 03/31/22 1 484 $ 71.88 Granted 04/01/22 - 06/30/22 15 $ 87.52 Granted 07/01/22 - 09/30/22 6 $ 95.17 Vested (388) $ 64.56 Forfeited/cancelled (13) $ 68.77 Non-vested at September 30, 2022 1,014 $ 72.52 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 depending on the achievement of pre-established performance goals. The weighted-average grant-date fair value of restricted stock units and/or performance share units granted during the three-months ended September 30, 2022 and 2021 was $95.17 and $89.84 per share, respectively. The weighted-average grant-date fair value of restricted stock units and/or performance share units granted during the nine-months ended September 30, 2022 and 2021 was $74.23 and $89.12 per share, respectively. As of September 30, 2022, 1.0 million of restricted stock units and performance share units are expected to vest over their respective terms. At September 30, 2022, total unrecognized compensation expense relating to non-vested restricted stock units and performance share units was $43.8 million, which is expected to be recognized over a weighted-average period of 1.9 years. Other Share-Based Awards The Company has granted other share-based awards to certain employees that are payable in cash. These awards are classified as liabilities and are valued based on the fair value of the award at the grant date and are remeasured at each reporting date until settlement, with compensation expense being recognized in proportion to the completed requisite service period up until date of settlement. At September 30, 2022, other share-based awards outstanding included grants that vest over three years payable in the first quarters of 2023, 2024 and 2025. At September 30, 2022, there was $0.2 million of total unrecognized compensation expense related to nonvested other share-based awards granted to employees under the Company’s stock-based compensation plans. That cost is expected to be recognized over a weighted-average period of 0.3 years. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
INCOME TAXES | |
INCOME TAXES | 16. INCOME TAXES The following is a roll-forward of the Company’s total gross unrecognized tax benefits, not including interest and penalties, for the nine-months ended September 30, 2022: Gross Unrecognized Tax Benefits Balance at December 31, 2021 $ — Additions for tax positions related to the current year — Additions for tax positions related to the prior years 2,008 Increases for tax positions related to the prior years — Balance at September 30, 2022 $ 2,008 The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s condensed consolidated financial statements. As of September 30, 2022, 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. The Company’s 2018 through 2021 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 2017 through 2021 tax years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 17. EARNINGS PER SHARE A reconciliation of the weighted-average shares used in the basic and diluted earnings per common share computations is presented below (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Weighted-average shares outstanding: Basic 526,797 528,997 528,263 528,618 Dilutive 6,503 6,918 6,336 6,936 Diluted 533,300 535,915 534,599 535,554 For the three-months ended September 30, 2022 and 2021, options and awards outstanding totaling 3.5 million shares and 1.0 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive. For the nine-months ended September 30, 2022 and 2021, options and awards outstanding totaling 2.9 million shares and 0.8 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 18. SEGMENT INFORMATION The Company has four operating and reportable 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 ready-to-drink packaged drinks 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. The Company’s Alcohol Brands segment primarily generates operating revenues by selling kegged and canned beer as well as hard seltzers primarily to distributors in the United States. Generally, the Alcohol Brands segment will have lower gross profit margin percentages than the Monster Energy® Drinks segment. Corporate and unallocated amounts that do not relate to a reportable segment have been allocated to “Corporate & Unallocated.” No asset information, other than goodwill and other intangible assets, has been provided in the Company’s reportable segments, as management does not measure or allocate such assets on a segment basis. The net revenues derived from the Company’s reportable segments and other financial information related thereto for the three- and nine-months ended September 30, 2022 and 2021 are as follows: Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Net sales: Monster Energy® Drinks 1 $ 1,502,219 $ 1,329,793 $ 4,444,755 $ 3,867,162 Strategic Brands 88,802 74,449 260,536 229,193 Alcohol Brands 2 26,818 — 74,472 — Other 6,447 6,315 18,356 19,953 Corporate and unallocated — — — — $ 1,624,286 $ 1,410,557 $ 4,798,119 $ 4,116,308 Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Operating Income: Monster Energy® Drinks 1 $ 492,534 $ 500,641 $ 1,388,815 $ 1,512,633 Strategic Brands 47,282 40,184 145,977 139,398 Alcohol Brands 2 (10,262) — (19,873) — Other 977 1,146 3,138 5,266 Corporate and unallocated (112,601) (97,507) (327,688) (272,710) $ 417,930 $ 444,464 $ 1,190,369 $ 1,384,587 Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Income before tax: Monster Energy® Drinks 1 $ 493,486 $ 500,929 $ 1,391,026 $ 1,513,421 Strategic Brands 47,319 40,198 146,082 139,419 Alcohol Brands 2 (10,124) — (19,620) — Other 977 1,144 3,139 5,264 Corporate and unallocated (111,579) (100,097) (342,190) (275,696) $ 420,079 $ 442,174 $ 1,178,437 $ 1,382,408 (1) Includes $10.0 million and $10.4 million for the three-months ended September 30, 2022 and 2021, respectively, related to the recognition of deferred revenue. Includes $30.0 million and $31.3 million for the nine-months ended September 30, 2022 and 2021, respectively, related to the recognition of deferred revenue. (2) Nine-Months ended September 30, 2022 - effectively from February 17, 2022 to September 30, 2022. Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Depreciation and amortization: Monster Energy® Drinks $ 7,773 $ 8,477 $ 24,035 $ 26,315 Strategic Brands 234 283 709 832 Alcohol Brands 3,713 — 9,679 — Other 1,121 1,122 3,345 3,373 Corporate and unallocated 2,768 2,474 8,272 7,334 $ 15,609 $ 12,356 $ 46,040 $ 37,854 Corporate and unallocated expenses for the three-months ended September 30, 2022 include $69.4 million of payroll costs, of which $16.2 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $26.0 million attributable to professional service expenses, including accounting and legal costs, and $17.2 million of other operating expenses. Corporate and unallocated expenses for the three-months ended September 30, 2021 include $63.4 million of payroll costs, of which $16.7 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $19.3 million attributable to professional service expenses, including accounting and legal costs, and $14.8 million of other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2022 include $207.6 million of payroll costs, of which $48.5 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $69.3 million attributable to professional service expenses, including accounting and legal costs, and $50.8 million of other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2021 include $189.7 million of payroll costs, of which $52.2 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $60.6 million attributable to professional service expenses, including accounting and legal costs, and $22.4 million of other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2021, were partially offset by $16.9 million due to the reversal of amounts previously accrued in connection with an intellectual property claim. Coca-Cola Europacific Partners (formerly Coca-Cola European Partners) accounted for approximately 12% of the Company’s net sales for both the three-months ended September 30, 2022 and 2021. Coca-Cola Europacific Partners accounted for approximately 13% and 12% of the Company’s net sales for the nine-months ended September 30, 2022 and 2021, respectively. Coca-Cola Consolidated, Inc. accounted for approximately 11% of the Company’s net sales for both the three-months ended September 30, 2022 and 2021. Coca-Cola Consolidated, Inc. accounted for approximately 10% and 11% of the Company’s net sales for the nine-months ended September 30, 2022 and 2021, respectively. Reyes Coca-Cola Bottling, LLC accounted for approximately 10% of the Company’s net sales for both the three-months ended September 30, 2022 and 2021. Reyes Coca-Cola Bottling, LLC accounted for approximately 10% of the Company’s net sales for both the nine-months ended September 30, 2022 and 2021. Net sales to customers outside the United States amounted to $610.6 million and $527.4 million for the three-months ended September 30, 2022 and 2021, respectively. Such sales were approximately 38% and 37% of net sales for the three-months ended September 30, 2022 and 2021, respectively. Net sales to customers outside the United States amounted to $1.81 billion and $1.53 billion for the nine-months ended September 30, 2022 and 2021, respectively. Such sales were approximately 38% and 37% of net sales for the nine-months ended September 30, 2022 and 2021, respectively. Goodwill and other intangible assets for the Company’s reportable segments as of September 30, 2022 and December 31, 2021 are as follows: September 30, December 31, 2022 2021 Goodwill and other intangible assets: Monster Energy® Drinks $ 1,424,667 $ 1,420,503 Strategic Brands 977,851 978,032 Alcohol Brands 234,049 — Other 2,200 5,494 Corporate and unallocated — — $ 2,638,767 $ 2,404,029 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS TCCC controls approximately 19.6% 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 $12.8 million and $23.6 million for the three-months ended September 30, 2022 and 2021, respectively, and are included as a reduction to net sales. TCCC commissions, based on sales to the TCCC Subsidiaries and the TCCC Related Parties, were $41.3 million and $59.9 million for the nine-months ended September 30, 2022 and 2021, respectively, and are included as a reduction to net sales. TCCC commissions, based on sales to TCCC independent bottlers/distributors, were $5.5 million and $9.1 million for the three-months ended September 30, 2022 and 2021, respectively, and are included in operating expenses. TCCC commissions, based on sales to TCCC independent bottlers/distributors, were $24.4 million and $22.6 million for the nine-months ended September 30, 2022 and 2021, respectively, and are included in operating expenses. Net sales to the TCCC Subsidiaries for the three-months ended September 30, 2022 and 2021 were $36.6 million and $30.3 million, respectively. Net sales to the TCCC Subsidiaries for the nine-months ended September 30, 2022 and 2021 were $95.0 million and $84.4 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 $6.5 million and $7.1 million for the three-months ended September 30, 2022 and 2021, respectively. Concentrate purchases from TCCC were $21.5 million and $21.3 million for the nine-months ended September 30, 2022 and 2021, respectively. Certain TCCC Subsidiaries also contract manufacture certain of the Company’s energy drinks. Such contract manufacturing expenses were $9.1 million and $6.8 million for the three-months ended September 30, 2022 and 2021, respectively. Such contract manufacturing expenses were $23.1 million and $20.8 million for the nine-months ended September 30, 2022 and 2021, respectively. Accounts receivable, accounts payable, accrued promotional allowances and accrued liabilities related to the TCCC Subsidiaries are as follows at: September 30, December 31, 2022 2021 Accounts receivable, net $ 86,180 $ 94,647 Accounts payable $ (37,613) $ (35,248) Accrued promotional allowances $ (5,308) $ (4,536) Accrued liabilities $ (40,117) $ (26,616) In 2021, TCCC exercised its contract rights for a third-party public accounting firm to conduct an examination relating to commissions and fees payable to TCCC and marketing contributions payable to the Company, for the years ended December 31, 2015 through December 31, 2020. During the three-months ended September 30, 2022, the Company was informed by TCCC that there would be no material adjustments as a result of this examination. One director of the Company through certain trusts, and a family member of one director are the principal owners of a company that provides promotional materials to the Company. Expenses incurred with such company in connection with promotional materials purchased during the three-months ended September 30, 2022 and 2021 were $1.3 million and $1.0 million, respectively. Expenses incurred with such company in connection with promotional materials purchased during the nine-months ended September 30, 2022 and 2021 were $4.7 million and $2.7 million, respectively. During the nine-months ended September 30, 2022, the Company occasionally chartered a private aircraft that is indirectly owned by Mr. Rodney C. Sacks, Co-Chief Executive Officer and Chairman of the Board of Directors. On certain occasions, Mr. Sacks was accompanied by guests and other Company personnel when using such aircraft for business travel. During the nine-months ended September 30, 2022, the Company incurred costs of $0.08 million, amounts the Company believes are commensurate with market rates for comparable travel. No amounts were incurred by the Company during the three-months ended September 30, 2022. 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. This partnership meets the definition of a Variable Interest Entity (“VIE”) for which the Company has determined that it is the primary beneficiary. Therefore, the Company consolidates the VIE in the accompanying condensed consolidated financial statements. The aggregate carrying values of the VIE’s assets and liabilities, after elimination of any intercompany transactions and balances, as well as the results of operations for all periods presented, are not material to the Company’s condensed consolidated financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS On November 2, 2022, the Company’s Board of Directors authorized a new share repurchase program for the purchase of up to an additional $500.0 million of the Company’s outstanding common stock. As a result, the aggregate amount available to repurchase the Company’s common stock as of November 4, 2022 is $682.8 million. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
BASIS OF PRESENTATION | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There have been no changes in recently issued or adopted accounting pronouncements that would materially impact the Company from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
ACQUISITIONS | |
Summary the fair value allocations of the CANarchy Transaction | Identifiable Assets Acquired and Liabilities Consideration Assumed Transferred Intangibles - trademarks (non-amortizing) $ 94,500 $ — Intangibles - customer relationships (amortizing) 54,500 — Intangibles - permits (non-amortizing) 6,000 — Property and equipment, net 81,285 — Inventory 18,300 — Right-of -use assets 12,836 — Operating lease liabilities (12,836) — Working capital (excluding inventory) (5,640) — Other (770) — Goodwill 81,298 — Cash 3,248 332,721 Total $ 332,721 $ 332,721 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue by geographical markets | Three-Months Ended September 30, 2022 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 982,952 $ 288,077 $ 100,288 $ 130,902 $ 1,502,219 Strategic Brands 44,025 32,565 8,805 3,407 88,802 Alcohol Brands 26,818 — — — 26,818 Other 6,447 — — — 6,447 Total Net Sales $ 1,060,242 $ 320,642 $ 109,093 $ 134,309 $ 1,624,286 Three-Months Ended September 30, 2021 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 880,012 $ 252,101 $ 120,864 $ 76,816 $ 1,329,793 Strategic Brands 35,417 28,450 5,603 4,979 74,449 Alcohol Brands — — — — — Other 6,315 — — — 6,315 Total Net Sales $ 921,744 $ 280,551 $ 126,467 $ 81,795 $ 1,410,557 1 Europe, Middle East and Africa (“EMEA”) Nine-Months Ended September 30, 2022 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 2,882,306 $ 857,805 $ 327,632 $ 377,012 $ 4,444,755 Strategic Brands 135,445 91,912 22,943 10,236 260,536 Alcohol Brands 2 74,472 — — — 74,472 Other 18,356 — — — 18,356 Total Net Sales $ 3,110,579 $ 949,717 $ 350,575 $ 387,248 $ 4,798,119 Nine-Months Ended September 30, 2021 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 2,548,873 $ 741,208 $ 346,545 $ 230,536 $ 3,867,162 Strategic Brands 122,487 76,234 21,047 9,425 229,193 Alcohol Brands — — — — — Other 19,953 — — — 19,953 Total Net Sales $ 2,691,313 $ 817,442 $ 367,592 $ 239,961 $ 4,116,308 1 Europe, Middle East and Africa (“EMEA”) 2 Effectively from February 17, 2022 to September 30, 2022 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
LEASES | |
Schedule of lease cost | Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2022 2021 2022 2021 Operating lease cost $ 2,306 $ 1,103 $ 6,238 $ 3,348 Short-term lease cost 1,001 1,235 2,870 3,370 Variable lease cost 189 185 567 532 Finance leases: Amortization of ROU assets 140 138 415 394 Interest on lease liabilities 8 6 18 15 Finance lease cost 148 144 433 409 Total lease cost $ 3,644 $ 2,667 $ 10,108 $ 7,659 |
Schedule of supplemental cash flow information for leases | Nine-Months Nine-Months Ended September 30, Ended September 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 5,859 $ 3,057 Operating cash outflows from finance leases 18 15 Financing cash outflows from finance leases 1,678 1,970 ROU assets obtained in exchange for lease obligations: Finance leases 1,654 2,767 Operating leases 20,093 251 |
Schedule of ROU assets for operating and finance leases | September 30, 2022 Real Estate Equipment Total Balance Sheet Location Operating leases $ 36,681 $ 404 $ 37,085 Other Assets Finance leases — 1,753 1,753 Property and Equipment, net December 31, 2021 Real Estate Equipment Total Balance Sheet Location Operating leases $ 22,518 $ 639 $ 23,157 Other Assets Finance leases — 2,646 2,646 Property and Equipment, net |
Summary of operating and finance lease liabilities recognized in the condensed consolidated balance sheets | September 30, 2022 Operating Leases Finance Leases Accrued liabilities $ 7,028 $ 917 Other liabilities 29,265 48 Total $ 36,293 $ 965 December 31, 2021 Operating Leases Finance Leases Accrued liabilities $ 3,990 $ 960 Other liabilities 17,389 41 Total $ 21,379 $ 1,001 |
Schedule of weighted-average remaining lease term and weighted-average discount rate | September 30, 2022 Operating Leases Finance Leases Weighted-average remaining lease term (years) 7.1 0.8 Weighted-average discount rate 3.4 % 2.7 % December 31, 2021 Operating Leases Finance Leases Weighted-average remaining lease term (years) 8.1 0.7 Weighted-average discount rate 3.5 % 1.3 % |
Schedule of reconciliation of undiscounted future lease payments for operating and finance leases | Undiscounted Future Lease Payments Operating Leases Finance Leases 2022 (from October 1, 2022 to December 31, 2022) $ 2,038 $ 410 2023 7,829 525 2024 6,473 23 2025 4,808 17 2026 3,895 2 2027 and thereafter 15,974 — Total lease payments 41,017 977 Less imputed interest (4,724) (12) Total $ 36,293 $ 965 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
INVESTMENTS | |
Summary of investments in available-for-sale | Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 September 30, 2022 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 218,573 $ — $ 7 $ 218,566 $ 7 $ — Certificates of deposit 20,035 — — 20,035 — — Municipal securities 193,567 4 1,142 192,429 1,142 U.S. government agency securities 88,573 — 851 87,722 851 — U.S. treasuries 834,249 — 6,220 828,029 6,220 — Long-term: U.S. treasuries 55,684 — 476 55,208 476 — Municipal securities 5,562 — 35 5,527 35 U.S. government agency securities 11,711 1 74 11,638 74 — Total $ 1,427,954 $ 5 $ 8,805 $ 1,419,154 $ 8,805 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than 12 December 31, 2021 Cost Gains Losses Value Months Months Available-for-sale Short-term: Commercial paper $ 334,077 $ — $ — $ 334,077 $ — $ — Certificates of deposit 44,502 — — 44,502 — — Municipal securities 666 — — 666 — — U.S. government agency securities 62,687 — 26 62,661 26 — U.S. treasuries 1,308,536 2 717 1,307,821 717 — Long-term: U.S. government agency securities 12,500 — 24 12,476 24 — U.S. treasuries 87,133 — 190 86,943 190 — Total $ 1,850,101 $ 2 $ 957 $ 1,849,146 $ 957 $ — |
Summary of the underlying contractual maturities of investments | September 30, 2022 December 31, 2021 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 218,573 $ 218,566 $ 334,077 $ 334,077 Municipal securities 193,567 192,429 666 666 U.S. government agency securities 88,573 87,722 62,687 62,661 Certificates of deposit 20,035 20,035 44,502 44,502 U.S. treasuries 834,249 828,029 1,308,536 1,307,821 Due 1 -10 years: Municipal securities 5,562 5,527 — — U.S. treasuries 55,684 55,208 87,133 86,943 U.S. government agency securities 11,711 11,638 12,500 12,476 Total $ 1,427,954 $ 1,419,154 $ 1,850,101 $ 1,849,146 |
FAIR VALUE OF CERTAIN FINANCI_2
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | |
Schedule of financial assets and liabilities recorded at fair value on a recurring basis | September 30, 2022 Level 1 Level 2 Level 3 Total Cash $ 1,113,207 $ — $ — $ 1,113,207 Money market funds 116,952 — — 116,952 Certificates of deposit — 20,035 — 20,035 Commercial paper — 234,310 — 234,310 Municipal securities — 203,159 — 203,159 U.S. government agency securities — 99,361 — 99,361 U.S. treasuries — 935,178 — 935,178 Foreign currency derivatives — (204) — (204) Total $ 1,230,159 $ 1,491,839 $ — $ 2,721,998 Amounts included in: Cash and cash equivalents $ 1,230,159 $ 72,889 $ — $ 1,303,048 Short-term investments — 1,346,781 — 1,346,781 Accounts receivable, net — 694 — 694 Investments — 72,373 — 72,373 Accrued liabilities — (898) — (898) Total $ 1,230,159 $ 1,491,839 $ — $ 2,721,998 December 31, 2021 Level 1 Level 2 Level 3 Total Cash $ 749,089 $ — $ — $ 749,089 Money market funds 440,826 — — 440,826 Certificates of deposit — 44,502 — 44,502 Commercial paper — 335,477 — 335,477 Municipal securities — 2,428 — 2,428 U.S. government agency securities — 75,137 — 75,137 U.S. treasuries — 1,528,149 — 1,528,149 Foreign currency derivatives — (278) — (278) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 Amounts included in: Cash and cash equivalents $ 1,189,915 $ 136,547 $ — $ 1,326,462 Short-term investments — 1,749,727 — 1,749,727 Accounts receivable, net — 654 — 654 Investments — 99,419 — 99,419 Accrued liabilities — (932) — (932) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 | September 30, 2022 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive USD/pay COP $ 11,264 $ 298 Accounts receivable, net Receive USD/pay CLP 42,139 250 Accounts receivable, net Receive USD/pay NZD 3,614 81 Accounts receivable, net Receive USD/pay ZAR 3,172 41 Accounts receivable, net Receive RSD/pay USD 1,809 16 Accounts receivable, net Receive USD/pay AUD 520 8 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 12,492 $ (308) Accrued liabilities Receive CAD/pay USD 20,757 (277) Accrued liabilities Receive USD/pay CNY 11,877 (141) Accrued liabilities Receive USD/pay EUR 16,703 (82) Accrued liabilities Receive SGD/pay USD 16,969 (47) Accrued liabilities Receive USD/pay MXN 20,673 (34) Accrued liabilities Receive USD/pay DKK 1,893 (9) Accrued liabilities December 31, 2021 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD 16,544 297 Accounts receivable, net Receive USD/pay COP 9,754 296 Accounts receivable, net Receive RSD/pay USD 9,837 46 Accounts receivable, net Receive USD/pay RUB 7,175 15 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 29,929 $ (666) Accrued liabilities Receive USD/pay AUD 2,602 (88) Accrued liabilities Receive USD/pay CNY 12,230 (74) Accrued liabilities Receive USD/pay NZD 2,693 (45) Accrued liabilities Receive USD/pay EUR 3,045 (29) Accrued liabilities Receive USD/pay ZAR 4,140 (21) Accrued liabilities Receive USD/pay DKK 1,461 (9) Accrued liabilities |
Schedule of net (losses) gains on derivative instruments in the condensed consolidated statements of income | 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 Three-months ended Derivatives not designated as Location of gain (loss) hedging instruments under recognized in income on September 30, September 30, ASC 815 derivatives 2022 2021 Foreign currency exchange contracts Interest and other income (expense), net $ 4,631 $ (308) Amount of gain (loss) recognized in income on derivatives Nine-months ended Derivatives not designated as Location of gain (loss) hedging instruments under recognized in income on September 30, September 30, ASC 815 derivatives 2022 2021 Foreign currency exchange contracts Interest and other income (expense), net $ 1,355 $ (5,706) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
INVENTORIES | |
Schedule of inventories | September 30, December 31, 2022 2021 Raw materials $ 450,097 $ 349,865 Work in process 1,574 — Finished goods 411,306 243,492 $ 862,977 $ 593,357 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | September 30, December 31, 2022 2021 Land $ 139,248 $ 85,455 Leasehold improvements 30,710 11,795 Furniture and fixtures 9,175 8,274 Office and computer equipment 22,642 21,601 Computer software 6,496 7,409 Equipment 253,057 189,820 Buildings 162,034 148,971 Vehicles 46,715 45,088 Assets under construction 58,791 20,125 728,868 538,538 Less: accumulated depreciation and amortization (243,318) (224,785) $ 485,550 $ 313,753 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill | Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — 81,298 — 81,298 Balance at September 30, 2022 $ 693,644 $ 637,999 $ 81,298 $ — $ 1,412,941 Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2020 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — — — — Balance at September 30, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 |
Schedule of intangible assets | September 30, December 31, 2022 2021 Amortizing intangibles $ 121,372 $ 66,872 Accumulated amortization (66,781) (61,227) 54,591 5,645 Non-amortizing intangibles 1,171,235 1,066,741 $ 1,225,826 $ 1,072,386 |
Schedule of future estimated amortization expense related to amortizing intangibles | 2022 (from October 1, 2022 to December 31, 2022) $ 2,010 2023 4,745 2024 3,647 2025 3,647 2026 3,646 2027 and thereafter 36,896 $ 54,591 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Schedule of components of accumulated other comprehensive loss | Unrealized Currency Losses on Translation Available-for- Losses Sale Securities Total Balance at December 31, 2021 $ (68,209) $ (956) $ (69,165) Other comprehensive (loss) income before reclassifications (147,450) (7,840) (155,290) Amounts reclassified from accumulated other comprehensive (loss) income — — — Net current-period other comprehensive (loss) income (147,450) (7,840) (155,290) Balance at September 30, 2022 $ (215,659) $ (8,796) $ (224,455) Unrealized Currency Gains (Losses) Translation on Available-for- Losses Sale Securities Total Balance at December 31, 2020 $ 2,950 $ 84 $ 3,034 Other comprehensive (loss) income before reclassifications (46,412) (117) (46,529) Amounts reclassified from accumulated other comprehensive (loss) income — — — Net current-period other comprehensive (loss) income (46,412) (117) (46,529) Balance at September 30, 2021 $ (43,462) $ (33) $ (43,495) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
STOCK-BASED COMPENSATION | |
Schedule of weighted-average assumptions used to estimate the fair value of options granted | Three-Months Ended September 30, Nine-Months Ended September 30, 2022 2021 2022 2021 Dividend yield 0.0 % 0.0 % 0.0 % 0.0 % Expected volatility 27.6 % 28.3 % 27.7 % 28.9 % Risk-free interest rate 2.8 % 0.7 % 2.1 % 0.8 % Expected term 6.2 years 5.8 years 6.1 years 5.8 years |
Summary of activities with respect to its stock option plans | Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Shares Price Per Term Aggregate Options (in thousands) Share (in years) Intrinsic Value Outstanding at January 1, 2022 13,860 $ 48.19 5.1 $ 663,148 Granted 01/01/22 - 03/31/22 2,489 $ 73.96 Granted 04/01/22 - 06/30/22 8 $ 88.05 Granted 07/01/22 - 09/30/22 34 $ 95.72 Exercised (813) $ 42.74 Cancelled or forfeited (143) $ 72.26 Outstanding at September 30, 2022 15,435 $ 52.54 5.2 $ 533,680 Vested and expected to vest in the future at September 30, 2022 15,043 $ 51.97 5.1 $ 528,586 Exercisable at September 30, 2022 10,287 $ 43.06 3.7 $ 451,963 |
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, 2022 910 $ 69.02 Granted 01/01/22 - 03/31/22 1 484 $ 71.88 Granted 04/01/22 - 06/30/22 15 $ 87.52 Granted 07/01/22 - 09/30/22 6 $ 95.17 Vested (388) $ 64.56 Forfeited/cancelled (13) $ 68.77 Non-vested at September 30, 2022 1,014 $ 72.52 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 depending on the achievement of pre-established performance goals. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 $ — Additions for tax positions related to the current year — Additions for tax positions related to the prior years 2,008 Increases for tax positions related to the prior years — Balance at September 30, 2022 $ 2,008 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations | A reconciliation of the weighted-average shares used in the basic and diluted earnings per common share computations is presented below (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Weighted-average shares outstanding: Basic 526,797 528,997 528,263 528,618 Dilutive 6,503 6,918 6,336 6,936 Diluted 533,300 535,915 534,599 535,554 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
SEGMENT INFORMATION | |
Schedule of net revenues and other financial information by segment | Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Net sales: Monster Energy® Drinks 1 $ 1,502,219 $ 1,329,793 $ 4,444,755 $ 3,867,162 Strategic Brands 88,802 74,449 260,536 229,193 Alcohol Brands 2 26,818 — 74,472 — Other 6,447 6,315 18,356 19,953 Corporate and unallocated — — — — $ 1,624,286 $ 1,410,557 $ 4,798,119 $ 4,116,308 Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Operating Income: Monster Energy® Drinks 1 $ 492,534 $ 500,641 $ 1,388,815 $ 1,512,633 Strategic Brands 47,282 40,184 145,977 139,398 Alcohol Brands 2 (10,262) — (19,873) — Other 977 1,146 3,138 5,266 Corporate and unallocated (112,601) (97,507) (327,688) (272,710) $ 417,930 $ 444,464 $ 1,190,369 $ 1,384,587 Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Income before tax: Monster Energy® Drinks 1 $ 493,486 $ 500,929 $ 1,391,026 $ 1,513,421 Strategic Brands 47,319 40,198 146,082 139,419 Alcohol Brands 2 (10,124) — (19,620) — Other 977 1,144 3,139 5,264 Corporate and unallocated (111,579) (100,097) (342,190) (275,696) $ 420,079 $ 442,174 $ 1,178,437 $ 1,382,408 (1) Includes $10.0 million and $10.4 million for the three-months ended September 30, 2022 and 2021, respectively, related to the recognition of deferred revenue. Includes $30.0 million and $31.3 million for the nine-months ended September 30, 2022 and 2021, respectively, related to the recognition of deferred revenue. (2) Nine-Months ended September 30, 2022 - effectively from February 17, 2022 to September 30, 2022. Three-Months Ended Nine-Months Ended September 30, September 30, 2022 2021 2022 2021 Depreciation and amortization: Monster Energy® Drinks $ 7,773 $ 8,477 $ 24,035 $ 26,315 Strategic Brands 234 283 709 832 Alcohol Brands 3,713 — 9,679 — Other 1,121 1,122 3,345 3,373 Corporate and unallocated 2,768 2,474 8,272 7,334 $ 15,609 $ 12,356 $ 46,040 $ 37,854 |
Schedule of goodwill and other intangible assets for the reportable segments | September 30, December 31, 2022 2021 Goodwill and other intangible assets: Monster Energy® Drinks $ 1,424,667 $ 1,420,503 Strategic Brands 977,851 978,032 Alcohol Brands 234,049 — Other 2,200 5,494 Corporate and unallocated — — $ 2,638,767 $ 2,404,029 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party transactions | September 30, December 31, 2022 2021 Accounts receivable, net $ 86,180 $ 94,647 Accounts payable $ (37,613) $ (35,248) Accrued promotional allowances $ (5,308) $ (4,536) Accrued liabilities $ (40,117) $ (26,616) |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - CANarchy $ in Thousands | Feb. 17, 2022 USD ($) |
ACQUISITIONS | |
Business combination consideration including adjustments transferred | $ 330,400 |
Consideration Transferred | |
Cash | 332,721 |
Total | 332,721 |
Identifiable Assets Acquired and Liabilities Assumed | |
Intangibles - trademarks (non-amortizing) | 94,500 |
Intangibles - customer relationships (amortizing) | 54,500 |
Intangibles - permits (non-amortizing) | 6,000 |
Property and equipment, net | 81,285 |
Inventory | 18,300 |
Right-of -use assets | 12,836 |
Operating lease liabilities | (12,836) |
Working capital (excluding inventory) | (5,640) |
Other | (770) |
Goodwill | 81,298 |
Cash | 3,248 |
Total | $ 332,721 |
ACQUISITIONS - Additional infor
ACQUISITIONS - Additional information (Details) - Real property and equipment in Norwalk $ in Millions | May 05, 2022 USD ($) |
ACQUISITIONS | |
Purchase price | $ 62.5 |
Land | |
ACQUISITIONS | |
Purchase price | 50.6 |
Buildings | |
ACQUISITIONS | |
Purchase price | 10 |
Equipment | |
ACQUISITIONS | |
Purchase price | $ 1.9 |
REVENUE RECOGNITION - (Details)
REVENUE RECOGNITION - (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
REVENUE RECOGNITION | |
Number of operating segments | 4 |
Number of reportable segments | 4 |
Distribution agreement, revenue recognition period | 20 years |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total Net Sales | $ 1,624,286 | $ 1,410,557 | $ 4,798,119 | $ 4,116,308 |
U.S. and Canada | ||||
Total Net Sales | 1,060,242 | 921,744 | 3,110,579 | 2,691,313 |
EMEA | ||||
Total Net Sales | 320,642 | 280,551 | 949,717 | 817,442 |
Asia Pacific | ||||
Total Net Sales | 109,093 | 126,467 | 350,575 | 367,592 |
Latin America and Caribbean | ||||
Total Net Sales | 134,309 | 81,795 | 387,248 | 239,961 |
Monster Energy Drinks | ||||
Total Net Sales | 1,502,219 | 1,329,793 | 4,444,755 | 3,867,162 |
Monster Energy Drinks | U.S. and Canada | ||||
Total Net Sales | 982,952 | 880,012 | 2,882,306 | 2,548,873 |
Monster Energy Drinks | EMEA | ||||
Total Net Sales | 288,077 | 252,101 | 857,805 | 741,208 |
Monster Energy Drinks | Asia Pacific | ||||
Total Net Sales | 100,288 | 120,864 | 327,632 | 346,545 |
Monster Energy Drinks | Latin America and Caribbean | ||||
Total Net Sales | 130,902 | 76,816 | 377,012 | 230,536 |
Strategic Brands | ||||
Total Net Sales | 88,802 | 74,449 | 260,536 | 229,193 |
Strategic Brands | U.S. and Canada | ||||
Total Net Sales | 44,025 | 35,417 | 135,445 | 122,487 |
Strategic Brands | EMEA | ||||
Total Net Sales | 32,565 | 28,450 | 91,912 | 76,234 |
Strategic Brands | Asia Pacific | ||||
Total Net Sales | 8,805 | 5,603 | 22,943 | 21,047 |
Strategic Brands | Latin America and Caribbean | ||||
Total Net Sales | 3,407 | 4,979 | 10,236 | 9,425 |
Other | ||||
Total Net Sales | 6,447 | 6,315 | 18,356 | 19,953 |
Other | U.S. and Canada | ||||
Total Net Sales | 6,447 | 6,315 | 18,356 | 19,953 |
Other | EMEA | ||||
Total Net Sales | 0 | 0 | 0 | 0 |
Other | Asia Pacific | ||||
Total Net Sales | 0 | 0 | 0 | 0 |
Other | Latin America and Caribbean | ||||
Total Net Sales | 0 | 0 | 0 | 0 |
Alcohol Brands | ||||
Total Net Sales | 26,818 | 0 | 74,472 | 0 |
Alcohol Brands | U.S. and Canada | ||||
Total Net Sales | 26,818 | 0 | 74,472 | 0 |
Alcohol Brands | EMEA | ||||
Total Net Sales | 0 | 0 | 0 | 0 |
Alcohol Brands | Asia Pacific | ||||
Total Net Sales | 0 | 0 | 0 | 0 |
Alcohol Brands | Latin America and Caribbean | ||||
Total Net Sales | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Contract Liabilities | |||||
Deferred revenue | $ 268.9 | $ 268.9 | $ 285.8 | ||
Deferred revenue recognized in net sales | $ 10 | $ 10.4 | $ 30 | $ 31.3 |
LEASES - Lease Terms (Details)
LEASES - Lease Terms (Details) | 9 Months Ended |
Sep. 30, 2022 | |
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) | 12 years |
Finance leases, lease term (in years) | 12 years |
Operating leases, renewal lease term (in years) | 5 years |
Finance leases, renewal lease term (in years) | 5 years |
Operating leases, termination period (in years) | 1 year |
Finance leases, termination period (in years) | 1 year |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
LEASES | ||||
Operating lease cost | $ 2,306 | $ 1,103 | $ 6,238 | $ 3,348 |
Short-term lease cost | 1,001 | 1,235 | 2,870 | 3,370 |
Variable lease cost | 189 | 185 | 567 | 532 |
Finance leases: | ||||
Amortization of ROU assets | 140 | 138 | 415 | 394 |
Interest on lease liabilities | 8 | 6 | 18 | 15 |
Finance lease cost | 148 | 144 | 433 | 409 |
Total lease cost | $ 3,644 | $ 2,667 | $ 10,108 | $ 7,659 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows from operating leases | $ 5,859 | $ 3,057 |
Operating cash outflows from finance leases | 18 | 15 |
Financing cash outflows from finance leases | 1,678 | 1,970 |
ROU assets obtained in exchange for lease obligations: | ||
Finance leases | 1,654 | 2,767 |
Operating leases | $ 20,093 | $ 251 |
LEASES - ROU assets for operati
LEASES - ROU assets for operating and finance leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ROU assets for operating and finance leases | ||
Operating leases | $ 37,085 | $ 23,157 |
Finance leases | $ 1,753 | $ 2,646 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Real Estate | ||
ROU assets for operating and finance leases | ||
Operating leases | $ 36,681 | $ 22,518 |
Finance leases | 0 | 0 |
Equipment Lease | ||
ROU assets for operating and finance leases | ||
Operating leases | 404 | 639 |
Finance leases | $ 1,753 | $ 2,646 |
LEASES - Operating and finance
LEASES - Operating and finance leases liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Operating Leases | $ 36,293 | $ 21,379 |
Finance Leases | 965 | 1,001 |
Accrued liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases | 7,028 | 3,990 |
Finance Leases | $ 917 | $ 960 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Other Liabilities | ||
Lessee, Lease, Description [Line Items] | ||
Operating Leases | $ 29,265 | $ 17,389 |
Finance Leases | $ 48 | $ 41 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
LEASES - Weighted-average remai
LEASES - Weighted-average remaining lease term and weighted-average discount rate (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
LEASES | ||
Weighted-average remaining lease term (years), Operating Leases | 7 years 1 month 6 days | 8 years 1 month 6 days |
Weighted-average remaining lease term (years), Finance Leases | 9 months 18 days | 8 months 12 days |
Weighted-average discount rate, Operating Leases | 3.40% | 3.50% |
Weighted-average discount rate, Finance Leases | 2.70% | 1.30% |
LEASES - Undiscounted future le
LEASES - Undiscounted future lease payments for operating and finance leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2022 (from October 1, 2022 to December 31, 2022) | $ 2,038 | |
2023 | 7,829 | |
2024 | 6,473 | |
2025 | 4,808 | |
2026 | 3,895 | |
2027 and thereafter | 15,974 | |
Total lease payments | 41,017 | |
Less imputed interest | (4,724) | |
Total | 36,293 | $ 21,379 |
Finance Leases | ||
2022 (excluding the nine-months ended September 30, 2022) | 410 | |
2023 | 525 | |
2024 | 23 | |
2025 | 17 | |
2026 | 2 | |
2027 and thereafter | 0 | |
Total lease payments | 977 | |
Less imputed interest | (12) | |
Total | $ 965 | $ 1,001 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Available-for-sale | ||
Amortized Cost | $ 1,427,954 | $ 1,850,101 |
Gross Unrealized Holding Gains | 5 | 2 |
Gross Unrealized Holding Losses | 8,805 | 957 |
Fair Value | 1,419,154 | 1,849,146 |
Continuous Unrealized Loss Position less than 12 Months | 8,805 | 957 |
Short-term | Commercial paper | ||
Available-for-sale | ||
Amortized Cost | 218,573 | 334,077 |
Gross Unrealized Holding Losses | 7 | |
Fair Value | 218,566 | 334,077 |
Continuous Unrealized Loss Position less than 12 Months | 7 | |
Short-term | Certificates of deposit | ||
Available-for-sale | ||
Amortized Cost | 20,035 | 44,502 |
Fair Value | 20,035 | 44,502 |
Short-term | Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 193,567 | 666 |
Gross Unrealized Holding Gains | 4 | |
Gross Unrealized Holding Losses | 1,142 | |
Fair Value | 192,429 | 666 |
Continuous Unrealized Loss Position less than 12 Months | 1,142 | |
Short-term | U.S. government agency securities | ||
Available-for-sale | ||
Amortized Cost | 88,573 | 62,687 |
Gross Unrealized Holding Losses | 851 | 26 |
Fair Value | 87,722 | 62,661 |
Continuous Unrealized Loss Position less than 12 Months | 851 | 26 |
Short-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 834,249 | 1,308,536 |
Gross Unrealized Holding Gains | 2 | |
Gross Unrealized Holding Losses | 6,220 | 717 |
Fair Value | 828,029 | 1,307,821 |
Continuous Unrealized Loss Position less than 12 Months | 6,220 | 717 |
Long-term | Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 5,562 | |
Gross Unrealized Holding Losses | 35 | |
Fair Value | 5,527 | |
Continuous Unrealized Loss Position less than 12 Months | 35 | |
Long-term | U.S. government agency securities | ||
Available-for-sale | ||
Amortized Cost | 11,711 | 12,500 |
Gross Unrealized Holding Gains | 1 | |
Gross Unrealized Holding Losses | 74 | 24 |
Fair Value | 11,638 | 12,476 |
Continuous Unrealized Loss Position less than 12 Months | 74 | 24 |
Long-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 55,684 | 87,133 |
Gross Unrealized Holding Losses | 476 | 190 |
Fair Value | 55,208 | 86,943 |
Continuous Unrealized Loss Position less than 12 Months | $ 476 | $ 190 |
INVESTMENTS - Maturity Period (
INVESTMENTS - Maturity Period (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investments | ||
Amortized Cost | $ 1,427,954 | $ 1,850,101 |
Fair Value | 1,419,154 | 1,849,146 |
Commercial paper | Less than 1 year | ||
Investments | ||
Amortized Cost | 218,573 | 334,077 |
Fair Value | 218,566 | 334,077 |
Municipal securities | Less than 1 year | ||
Investments | ||
Amortized Cost | 193,567 | 666 |
Fair Value | 192,429 | 666 |
Municipal securities | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 5,562 | 0 |
Fair Value | 5,527 | 0 |
U.S. government agency securities | Less than 1 year | ||
Investments | ||
Amortized Cost | 88,573 | 62,687 |
Fair Value | 87,722 | 62,661 |
U.S. government agency securities | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 11,711 | 12,500 |
Fair Value | 11,638 | 12,476 |
Certificates of deposit | Less than 1 year | ||
Investments | ||
Amortized Cost | 20,035 | 44,502 |
Fair Value | 20,035 | 44,502 |
U.S. treasuries | Less than 1 year | ||
Investments | ||
Amortized Cost | 834,249 | 1,308,536 |
Fair Value | 828,029 | 1,307,821 |
U.S. treasuries | Due 1 - 10 years | ||
Investments | ||
Amortized Cost | 55,684 | 87,133 |
Fair Value | $ 55,208 | $ 86,943 |
FAIR VALUE OF CERTAIN FINANCI_3
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair value of certain financial assets and liabilities | ||
Cash and cash equivalents | $ 1,303,048 | $ 1,326,462 |
Short-term investments | 1,346,781 | 1,749,727 |
Investments | 72,373 | 99,419 |
Asset transfers between Level 1 and Level 2 measurements | 0 | 0 |
Total fair value | ||
Fair value of certain financial assets and liabilities | ||
Cash | 1,113,207 | 749,089 |
Foreign currency derivatives | (204) | (278) |
Assets measured at fair value | 2,721,998 | 3,175,330 |
Cash and cash equivalents | 1,303,048 | 1,326,462 |
Short-term investments | 1,346,781 | 1,749,727 |
Accounts receivable, net | 694 | 654 |
Investments | 72,373 | 99,419 |
Accrued liabilities | (898) | (932) |
Total fair value | Money market funds | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 116,952 | 440,826 |
Total fair value | Certificates of deposit | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 20,035 | 44,502 |
Total fair value | Commercial paper | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 234,310 | 335,477 |
Total fair value | Municipal securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 203,159 | 2,428 |
Total fair value | U.S. government agency securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 99,361 | 75,137 |
Total fair value | U.S. treasuries | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 935,178 | 1,528,149 |
Level 1 | ||
Fair value of certain financial assets and liabilities | ||
Cash | 1,113,207 | 749,089 |
Foreign currency derivatives | 0 | 0 |
Assets measured at fair value | 1,230,159 | 1,189,915 |
Cash and cash equivalents | 1,230,159 | 1,189,915 |
Short-term investments | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Investments | 0 | 0 |
Accrued liabilities | 0 | 0 |
Level 1 | Money market funds | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 116,952 | 440,826 |
Level 1 | Certificates of deposit | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 1 | Commercial paper | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 1 | Municipal securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 1 | U.S. government agency securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 1 | U.S. treasuries | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 2 | ||
Fair value of certain financial assets and liabilities | ||
Cash | 0 | 0 |
Foreign currency derivatives | (204) | (278) |
Assets measured at fair value | 1,491,839 | 1,985,415 |
Cash and cash equivalents | 72,889 | 136,547 |
Short-term investments | 1,346,781 | 1,749,727 |
Accounts receivable, net | 694 | 654 |
Investments | 72,373 | 99,419 |
Accrued liabilities | (898) | (932) |
Level 2 | Money market funds | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 2 | Certificates of deposit | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 20,035 | 44,502 |
Level 2 | Commercial paper | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 234,310 | 335,477 |
Level 2 | Municipal securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 203,159 | 2,428 |
Level 2 | U.S. government agency securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 99,361 | 75,137 |
Level 2 | U.S. treasuries | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 935,178 | 1,528,149 |
Level 3 | ||
Fair value of certain financial assets and liabilities | ||
Cash | 0 | 0 |
Foreign currency derivatives | 0 | 0 |
Assets measured at fair value | 0 | 0 |
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Accounts receivable, net | 0 | 0 |
Investments | 0 | 0 |
Accrued liabilities | 0 | 0 |
Level 3 | Money market funds | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 3 | Certificates of deposit | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 3 | Commercial paper | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 3 | Municipal securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 3 | U.S. government agency securities | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | 0 | 0 |
Level 3 | U.S. treasuries | ||
Fair value of certain financial assets and liabilities | ||
Assets measured at fair value | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Notional Amount and Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Foreign currency exchange contracts | Maximum | ||
Derivative Instruments and Hedging Activities | ||
Term of derivative instrument | 1 month | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive SGD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | $ 16,544 | |
Fair Value, Assets | 297 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay COP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | $ 42,139 | 9,754 |
Fair Value, Assets | 250 | 296 |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive RSD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 9,837 | |
Fair Value, Assets | 46 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay RUB | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 7,175 | |
Fair Value, Assets | 15 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay GBP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 3,172 | |
Fair Value, Assets | 41 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay NZD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 1,809 | |
Fair Value, Assets | 16 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay EUR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 11,264 | |
Fair Value, Assets | 298 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay ZAR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 3,614 | |
Fair Value, Assets | 81 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay DKK | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Assets | 520 | |
Fair Value, Assets | 8 | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive SGD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 16,969 | |
Fair Value, Liabilities | (47) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive RSD/pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 11,877 | |
Fair Value, Liabilities | (141) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay GBP | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 29,929 | |
Fair Value, Liabilities | (666) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay AUD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 2,602 | |
Fair Value, Liabilities | (88) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay CNY | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 20,757 | 12,230 |
Fair Value, Liabilities | (277) | (74) |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay NZD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 2,693 | |
Fair Value, Liabilities | (45) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay EUR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 16,703 | 3,045 |
Fair Value, Liabilities | (82) | (29) |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay ZAR | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 4,140 | |
Fair Value, Liabilities | (21) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay DKK | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 1,893 | 1,461 |
Fair Value, Liabilities | (9) | $ (9) |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay MXN | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 20,673 | |
Fair Value, Liabilities | (34) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive CAD Pay USD | ||
Derivative Instruments and Hedging Activities | ||
Notional amount, Liabilities | 12,492 | |
Fair Value, Liabilities | $ (308) |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Nonhedging Designation (Details) - Derivatives not designated as hedging instruments - Foreign currency exchange contracts - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net gains on derivative instruments | ||||
Amount of loss recognized in income on derivatives | $ 4,631 | $ (308) | $ 1,355 | $ (5,706) |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
INVENTORIES | ||
Raw materials | $ 450,097 | $ 349,865 |
Work in process | 1,574 | 0 |
Finished goods | 411,306 | 243,492 |
Inventories | $ 862,977 | $ 593,357 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property and equipment, net | |||||
Property and equipment, gross | $ 728,868 | $ 728,868 | $ 538,538 | ||
Less: accumulated depreciation and amortization | (243,318) | (243,318) | (224,785) | ||
Property and equipment, net | 485,550 | 485,550 | 313,753 | ||
Total depreciation and amortization expense | 13,600 | $ 11,300 | 40,500 | $ 34,500 | |
Land | |||||
Property and equipment, net | |||||
Property and equipment, gross | 139,248 | 139,248 | 85,455 | ||
Leasehold improvements | |||||
Property and equipment, net | |||||
Property and equipment, gross | 30,710 | 30,710 | 11,795 | ||
Furniture and fixtures | |||||
Property and equipment, net | |||||
Property and equipment, gross | 9,175 | 9,175 | 8,274 | ||
Office and computer equipment | |||||
Property and equipment, net | |||||
Property and equipment, gross | 22,642 | 22,642 | 21,601 | ||
Computer software | |||||
Property and equipment, net | |||||
Property and equipment, gross | 6,496 | 6,496 | 7,409 | ||
Equipment | |||||
Property and equipment, net | |||||
Property and equipment, gross | 253,057 | 253,057 | 189,820 | ||
Buildings | |||||
Property and equipment, net | |||||
Property and equipment, gross | 162,034 | 162,034 | 148,971 | ||
Vehicles | |||||
Property and equipment, net | |||||
Property and equipment, gross | 46,715 | 46,715 | 45,088 | ||
Assets under construction | |||||
Property and equipment, net | |||||
Property and equipment, gross | $ 58,791 | $ 58,791 | $ 20,125 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill | ||
Goodwill, Beginning Balance | $ 1,331,643 | $ 1,331,643 |
Acquisitions | 81,298 | 0 |
Goodwill, Ending Balance | 1,412,941 | 1,331,643 |
Monster Energy Drinks | ||
Goodwill | ||
Goodwill, Beginning Balance | 693,644 | 693,644 |
Acquisitions | 0 | 0 |
Goodwill, Ending Balance | 693,644 | 693,644 |
Strategic Brands | ||
Goodwill | ||
Goodwill, Beginning Balance | 637,999 | 637,999 |
Acquisitions | 0 | 0 |
Goodwill, Ending Balance | 637,999 | 637,999 |
Alcohol Brands | ||
Goodwill | ||
Goodwill, Beginning Balance | 0 | 0 |
Acquisitions | 81,298 | 0 |
Goodwill, Ending Balance | 81,298 | 0 |
Other | ||
Goodwill | ||
Goodwill, Beginning Balance | 0 | 0 |
Acquisitions | 0 | 0 |
Goodwill, Ending Balance | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Intangible assets | |||||
Amortizing intangibles | $ 121,372 | $ 121,372 | $ 66,872 | ||
Accumulated amortization | (66,781) | (66,781) | (61,227) | ||
Amortizing intangibles, net | 54,591 | 54,591 | 5,645 | ||
Non-amortizing intangibles | 1,171,235 | 1,171,235 | 1,066,741 | ||
Intangibles, net | 1,225,826 | 1,225,826 | $ 1,072,386 | ||
Amortization expense | $ 2,000 | $ 1,100 | $ 5,600 | $ 3,300 | |
Minimum | |||||
Intangible assets | |||||
Useful life of intangible assets | 5 years | ||||
Maximum | |||||
Intangible assets | |||||
Useful life of intangible assets | 15 years |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Future estimated amortization expense related to amortizing intangibles | ||
2022 (from October 1, 2022 to December 31, 2022) | $ 2,010 | |
2023 | 4,745 | |
2024 | 3,647 | |
2025 | 3,647 | |
2026 | 3,646 | |
2027 and thereafter | 36,896 | |
Amortizing intangibles, net | $ 54,591 | $ 5,645 |
DISTRIBUTION AGREEMENTS (Detail
DISTRIBUTION AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
DISTRIBUTION AGREEMENTS | ||||
Distribution agreement (in years) | 20 years | |||
Revenue recognized | $ 10 | $ 10.4 | $ 30 | $ 31.3 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Purchase Commitments | |
Aggregate contractual obligations | $ 338.9 |
Line of credit | |
Purchase Commitments | |
Maximum borrowing capacity | $ 15 |
Interest rate (as a percent) | 5.50% |
Amount outstanding | $ 6.3 |
Raw material items | |
Purchase Commitments | |
Purchase commitments | $ 275.5 |
Obligation term ( in years) | 1 year |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Litigation (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Sep. 29, 2022 | Apr. 30, 2022 | Sep. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |||
Loss contingencies | $ 0 | ||
Amount awarded | $ 293 | ||
Amount awarded to the company | $ 175 | ||
Percentage of royalty awarded by the court on sales | 5% |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | $ (69,165) | $ (3,034) |
Other comprehensive (loss) income before reclassifications | (155,290) | (46,529) |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 |
Net current-period other comprehensive (loss) income | (155,290) | (46,529) |
Balance at the end of the period | (224,455) | 43,495 |
Currency Translation Losses | ||
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | (68,209) | 2,950 |
Other comprehensive (loss) income before reclassifications | (147,450) | (46,412) |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 |
Net current-period other comprehensive (loss) income | (147,450) | (46,412) |
Balance at the end of the period | (215,659) | (43,462) |
Unrealized Gains (Losses) on Available-for-Sale Securities | ||
Components of accumulated other comprehensive loss: | ||
Balance at the beginning of the period | (956) | 84 |
Other comprehensive (loss) income before reclassifications | (7,840) | (117) |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 |
Net current-period other comprehensive (loss) income | (7,840) | (117) |
Balance at the end of the period | $ (8,796) | $ (33) |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||||
Nov. 04, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 14, 2022 | Mar. 31, 2020 | |
Treasury Stock Purchase | ||||||||
Number of shares repurchased of common stock from employees in lieu of cash or withholding taxes due | 0 | |||||||
Amount of shares purchased | $ 272,880 | $ 284,311 | $ 12,187 | $ 399 | $ 13,419 | |||
March 2020 Repurchase Plan | ||||||||
Treasury Stock Purchase | ||||||||
Repurchase of common stock (in shares) | 1,800,000 | |||||||
Average purchase price (in dollars per share) | $ 87.55 | |||||||
Amount of shares purchased | $ 157,400 | |||||||
March 2020 Repurchase Plan | Maximum | ||||||||
Treasury Stock Purchase | ||||||||
Share repurchase program, authorized amount | $ 500,000 | |||||||
June 2022 Repurchase Plan | ||||||||
Treasury Stock Purchase | ||||||||
Amount of shares purchased | $ 115,500 | |||||||
Repurchase price of stock | $ 182,800 | |||||||
June 2022 Repurchase Plan | Maximum | ||||||||
Treasury Stock Purchase | ||||||||
Share repurchase program, authorized amount | $ 500,000 | |||||||
September 2022 Repurchase | ||||||||
Treasury Stock Purchase | ||||||||
Repurchase of common stock (in shares) | 1,300,000 | |||||||
Average purchase price (in dollars per share) | $ 88.11 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plans (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) plan | Sep. 30, 2021 USD ($) | |
STOCK-BASED COMPENSATION | ||||
Stock-based compensation plans | plan | 2 | |||
Compensation expense on share-based plans | $ 16.6 | $ 16.7 | $ 49.2 | $ 52.4 |
Excess tax benefit realized for tax deductions from non-qualified stock option exercises and disqualifying dispositions of incentive stock options | $ 2 | $ 2 | $ 4.6 | $ 6.1 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value Assumptions (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Stock options, Number of Shares | |||||||
Balance at the beginning of the period (in shares) | 13,860 | 13,860 | |||||
Exercised (in shares) | (813) | ||||||
Cancelled or forfeited (in shares) | (143) | ||||||
Balance at the end of the period (in shares) | 15,435 | 15,435 | 13,860 | ||||
Vested and expected to vest in the future at the end of the period (in shares) | 15,043 | 15,043 | |||||
Exercisable at the end of the period (in shares) | 10,287 | 10,287 | |||||
Stock options, Weighted-Average Exercise Price Per Share | |||||||
Balance at the beginning of the period (in dollars per share) | $ 48.19 | $ 48.19 | |||||
Exercised (in dollars per share) | 42.74 | ||||||
Cancelled or forfeited (in dollars per share) | 72.26 | ||||||
Balance at the end of the period (in dollars per share) | $ 52.54 | 52.54 | $ 48.19 | ||||
Vested and expected to vest in the future at the end of the period (in dollars per share) | 51.97 | 51.97 | |||||
Exercisable at the end of the period (in dollars per share) | $ 43.06 | $ 43.06 | |||||
Weighted-Average Remaining Contractual Term (in years) | |||||||
Weighted-Average Remaining Contractual Terms (in years) | 5 years 2 months 12 days | 5 years 1 month 6 days | |||||
Vested and expected to vest in the future at the end of the period | 5 years 1 month 6 days | ||||||
Exercisable at the end of the period | 3 years 8 months 12 days | ||||||
Aggregate Intrinsic Value | |||||||
Balance at the beginning of the period | $ 663,148 | $ 663,148 | |||||
Balance at the end of the period | $ 533,680 | 533,680 | $ 663,148 | ||||
Vested and expected to vest in the future at the end of the period | 528,586 | 528,586 | |||||
Exercisable at the end of the period | $ 451,963 | $ 451,963 | |||||
Granted 01/01/22 - 03/31/22 | |||||||
Stock options, Number of Shares | |||||||
Granted (in shares) | 2,489 | ||||||
Stock options, Weighted-Average Exercise Price Per Share | |||||||
Granted (in dollars per share) | $ 73.96 | ||||||
Granted 04/01/22 - 06/30/22 | |||||||
Stock options, Number of Shares | |||||||
Granted (in shares) | 8 | ||||||
Stock options, Weighted-Average Exercise Price Per Share | |||||||
Granted (in dollars per share) | $ 88.05 | ||||||
Granted 07/01/22 - 09/30/22 | |||||||
Stock options, Number of Shares | |||||||
Granted (in shares) | 34 | ||||||
Stock options, Weighted-Average Exercise Price Per Share | |||||||
Granted (in dollars per share) | $ 95.72 | ||||||
Stock options | |||||||
Weighted-average assumptions used to estimate the fair value of options granted | |||||||
Dividend yield (as a percent) | 0% | 0% | 0% | 0% | |||
Expected volatility (as a percent) | 27.60% | 28.30% | 27.70% | 28.90% | |||
Risk-free interest rate (as a percent) | 2.80% | 0.70% | 2.10% | 0.80% | |||
Expected term | 6 years 2 months 12 days | 5 years 9 months 18 days | 6 years 1 month 6 days | 5 years 9 months 18 days |
STOCK-BASED COMPENSATION - Equi
STOCK-BASED COMPENSATION - Equity Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
STOCK-BASED COMPENSATION | ||||||
Stock units expected to vest (in shares) | 15,043 | 15,043 | ||||
Total employee and non-employee share-based compensation expense included in income, before income tax | $ 49,167 | $ 52,391 | ||||
Stock options | ||||||
STOCK-BASED COMPENSATION | ||||||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ 31.94 | $ 26.90 | $ 23.35 | $ 25.81 | ||
Total intrinsic value of options exercised | $ 15,300 | $ 14,000 | $ 38,200 | $ 42,200 | ||
Cash received from option exercises | 12,100 | $ 12,700 | 34,800 | $ 37,200 | ||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 77,500 | $ 77,500 | ||||
Cost expected to be recognized over a weighted-average period | 2 years 10 months 24 days | |||||
Restricted stock units | ||||||
STOCK-BASED COMPENSATION | ||||||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ 95.17 | $ 89.84 | ||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 74.23 | $ 89.12 | ||||
Restricted Stock Units and Performance Share Units | ||||||
STOCK-BASED COMPENSATION | ||||||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 43,800 | $ 43,800 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 10 months 24 days | |||||
Stock units expected to vest (in shares) | 1,000 | 1,000 | ||||
Number of Shares | ||||||
Non-vested at the beginning of the period (in shares) | 910 | 910 | ||||
Vested (in shares) | (388) | |||||
Forfeited/cancelled (in shares) | (13) | |||||
Non-vested at the end of the period (in shares) | 1,014 | 1,014 | ||||
Weighted Average Grant-Date Fair Value | ||||||
Non-vested at the beginning of the period (in dollars per share) | $ 69.02 | $ 69.02 | ||||
Vested (in dollars per share) | 64.56 | |||||
Forfeited/cancelled (in dollars per share) | 68.77 | |||||
Non-vested at the end of the period (in dollars per share) | $ 72.52 | $ 72.52 | ||||
Restricted Stock Units and Performance Share Units | Granted 01/01/22 - 03/31/22 | ||||||
Number of Shares | ||||||
Granted (in shares) | 484 | |||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 71.88 | |||||
Restricted Stock Units and Performance Share Units | Granted 04/01/22 - 06/30/22 | ||||||
Number of Shares | ||||||
Granted (in shares) | 15 | |||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 87.52 | |||||
Restricted Stock Units and Performance Share Units | Granted 07/01/22 - 09/30/22 | ||||||
Number of Shares | ||||||
Granted (in shares) | 6 | |||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 95.17 | |||||
Performance Share Units | ||||||
STOCK-BASED COMPENSATION | ||||||
Percentage of target performance | 100% | |||||
Performance Share Units | Maximum | ||||||
STOCK-BASED COMPENSATION | ||||||
Percentage of target performance | 200% | |||||
Performance Share Units | Minimum | ||||||
STOCK-BASED COMPENSATION | ||||||
Percentage of target performance | 0% | |||||
Other share-based awards | ||||||
STOCK-BASED COMPENSATION | ||||||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 200 | $ 200 | ||||
Cost expected to be recognized over a weighted-average period | 3 months 18 days |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefit Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Gross unrecognized tax benefits, roll forward | |
Balance at the beginning of the period | $ 0 |
Additions for tax positions related to the current year | 0 |
Additions for tax positions related to the prior years | 2,008 |
Decreases for tax positions related to prior years | 0 |
Balance at the end of the period | 2,008 |
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 | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Weighted-average shares outstanding: | ||||
Basic | 526,797 | 528,997 | 528,263 | 528,618 |
Dilutive | 6,503 | 6,918 | 6,336 | 6,936 |
Diluted | 533,300 | 535,915 | 534,599 | 535,554 |
Options and awards outstanding excluded from the calculations as their effect would have been antidilutive (in shares) | 3,500 | 1,000 | 2,900 | 800 |
SEGMENT INFORMATION - Net Reven
SEGMENT INFORMATION - Net Revenues (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment information | ||||
Number of reportable segments | segment | 4 | |||
Number of operating segments | segment | 4 | |||
Total Net Sales | $ 1,624,286 | $ 1,410,557 | $ 4,798,119 | $ 4,116,308 |
Operating income | 417,930 | 444,464 | 1,190,369 | 1,384,587 |
Income before tax | 420,079 | 442,174 | 1,178,437 | 1,382,408 |
Recognition of deferred revenue | 10,000 | 10,400 | 30,000 | 31,300 |
Corporate and Unallocated | ||||
Segment information | ||||
Total Net Sales | 0 | 0 | 0 | 0 |
Operating income | (112,601) | (97,507) | (327,688) | (272,710) |
Income before tax | (111,579) | (100,097) | (342,190) | (275,696) |
Monster Energy Drinks | ||||
Segment information | ||||
Total Net Sales | 1,502,219 | 1,329,793 | 4,444,755 | 3,867,162 |
Monster Energy Drinks | Operating segment | ||||
Segment information | ||||
Total Net Sales | 1,502,219 | 1,329,793 | 4,444,755 | 3,867,162 |
Operating income | 492,534 | 500,641 | 1,388,815 | 1,512,633 |
Income before tax | 493,486 | 500,929 | 1,391,026 | 1,513,421 |
Recognition of deferred revenue | 10,000 | 10,400 | ||
Strategic Brands | ||||
Segment information | ||||
Total Net Sales | 88,802 | 74,449 | 260,536 | 229,193 |
Strategic Brands | Operating segment | ||||
Segment information | ||||
Total Net Sales | 88,802 | 74,449 | 260,536 | 229,193 |
Operating income | 47,282 | 40,184 | 145,977 | 139,398 |
Income before tax | 47,319 | 40,198 | 146,082 | 139,419 |
Alcohol Brands | ||||
Segment information | ||||
Total Net Sales | 26,818 | 0 | 74,472 | 0 |
Alcohol Brands | Operating segment | ||||
Segment information | ||||
Total Net Sales | 26,818 | 0 | 74,472 | 0 |
Operating income | (10,262) | 0 | (19,873) | 0 |
Income before tax | (10,124) | 0 | (19,620) | 0 |
Other | ||||
Segment information | ||||
Total Net Sales | 6,447 | 6,315 | 18,356 | 19,953 |
Other | Operating segment | ||||
Segment information | ||||
Total Net Sales | 6,447 | 6,315 | 18,356 | 19,953 |
Operating income | 977 | 1,146 | 3,138 | 5,266 |
Income before tax | $ 977 | $ 1,144 | $ 3,139 | $ 5,264 |
SEGMENT INFORMATION - Depreciat
SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment information | ||||
Depreciation and amortization | $ 15,609 | $ 12,356 | $ 46,040 | $ 37,854 |
Corporate and Unallocated | ||||
Segment information | ||||
Depreciation and amortization | 2,768 | 2,474 | 8,272 | 7,334 |
Monster Energy Drinks | Operating segment | ||||
Segment information | ||||
Depreciation and amortization | 7,773 | 8,477 | 24,035 | 26,315 |
Strategic Brands | Operating segment | ||||
Segment information | ||||
Depreciation and amortization | 234 | 283 | 709 | 832 |
Alcohol Brands | Operating segment | ||||
Segment information | ||||
Depreciation and amortization | 3,713 | 0 | 9,679 | 0 |
Other | Operating segment | ||||
Segment information | ||||
Depreciation and amortization | $ 1,121 | $ 1,122 | $ 3,345 | $ 3,373 |
SEGMENT INFORMATION - Expenses
SEGMENT INFORMATION - Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment information | ||||
Stock-based compensation expense | $ 16.6 | $ 16.7 | $ 49.2 | $ 52.4 |
Corporate and Unallocated | ||||
Segment information | ||||
Payroll costs | 69.4 | 63.4 | 207.6 | 189.7 |
Stock-based compensation expense | 16.2 | 16.7 | 48.5 | 52.2 |
Professional service expenses | 26 | 19.3 | 69.3 | 60.6 |
Intellectual property claim | 16.9 | |||
Other operating expenses | $ 17.2 | $ 14.8 | $ 50.8 | $ 22.4 |
SEGMENT INFORMATION - Concentra
SEGMENT INFORMATION - Concentration Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment information | ||||
Total Net Sales | $ 1,624,286 | $ 1,410,557 | $ 4,798,119 | $ 4,116,308 |
Sales | Outside United States | ||||
Segment information | ||||
Total Net Sales | $ 610,600 | $ 527,400 | $ 1,810,000 | $ 1,530,000 |
Sales | Customer concentration | Outside United States | ||||
Segment information | ||||
Percentage of net sales | 38% | 37% | 38% | 37% |
Coca-Cola Consolidated, Inc | Sales | Customer concentration | ||||
Segment information | ||||
Percentage of net sales | 11% | 11% | 10% | 11% |
Reyes Coca-Cola Bottling | Sales | Customer concentration | ||||
Segment information | ||||
Percentage of net sales | 10% | 10% | 10% | 10% |
Coca-Cola European Partners | Sales | Customer concentration | ||||
Segment information | ||||
Percentage of net sales | 12% | 13% | 12% |
SEGMENT INFORMATION - Goodwill
SEGMENT INFORMATION - Goodwill and other intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Segment information | ||
Goodwill and other intangible assets | $ 2,638,767 | $ 2,404,029 |
Corporate and Unallocated | ||
Segment information | ||
Goodwill and other intangible assets | 0 | 0 |
Monster Energy Drinks | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | 1,424,667 | 1,420,503 |
Strategic Brands | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | 977,851 | 978,032 |
Alcohol Brands | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | 234,049 | 0 |
Other | Operating segment | ||
Segment information | ||
Goodwill and other intangible assets | $ 2,200 | $ 5,494 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) director | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
TCCC | |||||
Related party transactions | |||||
Net sales | $ 36,600 | $ 30,300 | $ 95,000 | $ 84,400 | |
Purchases from related party | 6,500 | 7,100 | $ 21,500 | 21,300 | |
Additional commissions and fees | $ 0 | ||||
TCCC | Voting interests | |||||
Related party transactions | |||||
Related Party Ownership Interest (as a percent) | 19.60% | 19.60% | |||
TCCC Subsidiaries and TCCC Related parties | |||||
Related party transactions | |||||
Commission expenses | $ 12,800 | 23,600 | $ 41,300 | 59,900 | |
TCCC Subsidiaries and TCCC Related parties | Monster Energy Drinks | |||||
Related party transactions | |||||
Contract manufacturing expenses | 9,100 | 6,800 | 23,100 | 20,800 | |
TCCC Related parties and TCCC Independent Bottlers | Operating expense | |||||
Related party transactions | |||||
Commission expenses | 5,500 | 9,100 | 24,400 | 22,600 | |
TCCC Subsidiaries | |||||
Related party transactions | |||||
Accounts receivable, net | 86,180 | 86,180 | $ 94,647 | ||
Accounts payable | (37,613) | (37,613) | (35,248) | ||
Accrued promotional allowances | (5,308) | (5,308) | (4,536) | ||
Accrued liabilities | (40,117) | $ (40,117) | $ (26,616) | ||
Principal owners | |||||
Related party transactions | |||||
Number of directors | director | 1 | ||||
Expenses incurred in connection with materials or services provided by a related party | 1,300 | $ 1,000 | $ 4,700 | $ 2,700 | |
Business Travelling Expenses | $ 0 | $ 80 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event - Common stock $ in Millions | Nov. 02, 2022 USD ($) |
Subsequent Event [Line Items] | |
Share repurchase program, authorized amount | $ 682.8 |
Board of Directors | |
Subsequent Event [Line Items] | |
Share repurchase program, authorized remaining amount | $ 500 |