Monster Beverage Corp., Corona, Calif., reported a more than 10 percent increase in gross sales to nearly $614 million in the first quarter of 2014, which ended March 31. Net sales in the term also increased by more than 10 percent to $536 million, and gross profit reached 53.5 percent of net sales.
Operating expenses in the quarter decreased to $138 million, or approximately 26 percent of net sales, from about $145 million in the same quarter last year. Distribution costs as a percentage of net sales were nearly 5 percent; selling expenses were nearly 11 percent; general and administrative expenses were about 10 percent; and distributor termination expenses were $10,000.
Operating income for the first quarter of 2014 increased nearly 39 percent to approximately $149 million, while net income for the period increased 50 percent to about $95 million. In addition, net sales for the company's direct-store-distribution segment increased nearly 12 percent to more than $514 million in the period, and gross sales to consumers outside of the United States rose to more than $144 million.
"We are pleased to report yet another quarter of continuing sales growth in both our domestic and international markets,” said Chairman and Chief Executive Officer Rodney Sacks in a statement. “We launched two new Monster Energy brand energy drinks in the quarter — Punch Monster Baller's Blend and Punch Monster Mad Dog — …[and] we successfully commenced production in Japan, which marks our 10th co-packing facility for Monster Energy brand energy drinks outside the United States. We also are proceeding with our plans to introduce Monster Energy brand energy drinks in additional international markets.
"We reiterate that our energy drinks are safe, based on both our and the industry's long track record and the scientific evidence supporting the safety of our ingredients,” he continued. “More than 50 billion cans of energy drinks have been sold and safely consumed worldwide over the past 25 years, including more than 10 billion Monster Energy brand energy drinks over the past 12 years.”
Results for the quarter continue to be impacted by professional service costs related to regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sale of the Monster Energy drinks, the company says. Professional service costs related to regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sale of the energy drinks were $5 million, compared with $3 million in the prior-year period.
