Hansen Natural Corporation Reports Record Second Quarter Sales and Profits

CORONA, Calif.-(BUSINESS WIRE)-Aug. 14, 2003- Net Sales Increase 12.6 Percent for Six Months; Net Income Increases 55.2 Percent

Hansen Natural Corporation (Nasdaq:HANS) today reported record sales and profits for the second quarter ended June 30, 2003, reflecting continued sales growth in core beverage lines as well as from new product introductions.

Gross sales for the second quarter increased 7.3% to $35.1 million from $32.7 million a year earlier. Net sales for the second quarter increased 8.2% to $28.4 million from $26.3 million a year ago.

Operating income for the second quarter advanced 52.2% to $3.3 million, from $2.2 million a year ago. Net income for the second quarter increased 55.6% to $2.0 million, equal to $.19 per diluted share, from $1.3 million, or $.12 per diluted share, last year.

Gross sales for the six months ended June 30, 2003 increased 13.7% to $62.8 million from $55.2 million a year earlier. Net sales for the six months ended June 30, 2003 increased 12.6% to $50.5 million from $44.9 million a year ago.

Operating income for the six months ended June 30, 2003 advanced 49.9% to $4.4 million, from $3.0 million a year ago. Net income for the six months ended June 30, 2003 increased 55.2% to $2.6 million, equal to $.25 per diluted share, from $1.7 million, or $.16 per diluted share, last year.

Rodney C. Sacks, chairman and chief executive officer, said, “Our record sales and profit performance in the second quarter of 2003 reflect the strength of the Hansen’s brand as well as the company’s new Monster Energy(TM) drinks.

“Sales of Monster Energy(TM) drinks and Diet Red Energy drinks, as well as increased sales of natural sodas in cans and Junior Juice, were the principal contributors to the improved sales performance.”

Sacks noted that the sales increase was partially offset by lower sales of functional drinks, E2O Energy Water, soy smoothies, smoothies in cans and bottles, and Energade(R) energy sports drinks.

Gross profit as a percentage of net sales for the second quarter rose to 40.3% from 37.4% a year ago. Gross profit as a percentage of net sales for the six months ended June 30, 2003 rose to 39.1% from 37.1% a year ago.

Sacks said that sales of the company’s new Monster Energy(TM) drinks were ahead of plan and that the company continued to be optimistic about this new product line. He added that the Company is currently launching a low carbohydrate (“low-carb”) version of its Monster Energy(TM) drinks, as well as a new 16 oz. energy drink under the Hansen’s energy(R) Deuce(TM) brand name, in order to take advantage of the increase in popularity of low-carb beverages and foods and the increased demand for energy drinks in general.

Hansen Natural Corporation markets and distributes Hansen’s(R) Natural Sodas, Signature Sodas, fruit juice and soy Smoothies, Energy drinks, Energade(R) energy sports drinks, E20 Energy Water(R), functional drinks, Sparkling Lemonades and Orangeades, multi-vitamin juice drinks in aseptic packaging, Junior Juice(R) juice, iced teas, lemonades and juice cocktails, old fashioned apple juice, cider and juice blends, as well as nutritional bars, Blue Sky(R) brand carbonated beverages and Monster Energy(TM) brand energy drinks. The company’s subsidiary Hard e Beverage Co. markets and distributes Hard e malt beverages. Hansen can be found on the Web at www.hansens.com.

Certain statements made in this announcement may constitute “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the expectations of management with respect to revenues and profitability and optimism about continued growth of new product lines. Management cautions that these statements are qualified by their terms/or important factors, many of which are outside of the control of the company, that could cause actual results and events to differ materially from the statements made herein, including, but not limited to, the following: Changes in consumer preferences, changes in demand that are weather related, particularly in areas outside of California, competitive pricing pressures, changes in the price and/or availability of raw materials for the company’s products, the availability of production and/or suitable facilities, the marketing efforts of the distributors of the company’s products, most of which distribute products that are competitive with the products of the company, the introduction of new products, as well as unilateral decisions that may be made by grocery chain stores, specialty chain stores, club stores and other customers to discontinue carrying all or any of the company’s products that they are carrying at any time. Management further notes that the company’s plans and results may be affected by any change in the availability of the company’s credit facilities and the actions of its creditors. -0-

 
 
              HANSEN NATURAL CORPORATION AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
      FOR THE THREE- AND SIX-MONTHS ENDED JUNE 30, 2003 AND 2002
                              (Unaudited)
 
                       Three Months Ended        Six Months Ended
                           June 30,                 June 30,
                       2003        2002         2003         2002
                       ----        ----         ----         ----
 
GROSS SALES        $35,059,970  $32,666,950  $62,755,845  $55,173,560
 
LESS: Discounts,
 allowances
  and promotional
   payments          6,650,832    6,402,162   12,260,359   10,316,378
 
NET SALES           28,409,138   26,264,788   50,495,486   44,857,182
 
COST OF SALES       16,960,573   16,430,951   30,747,100   28,213,264
 
GROSS PROFIT        11,448,565    9,833,837   19,748,386   16,643,918
 
OPERATING EXPENSES:
Selling, general and
 administrative      8,100,030    7,628,446   15,292,217   13,660,310
Amortization of
 trademark license
  and trademarks        10,817       12,896       21,233       25,672
 
     Total operating
      expenses       8,110,847    7,641,342   15,313,450   13,685,982
 
OPERATING INCOME     3,337,718    2,192,495    4,434,936    2,957,936
 
NET NON-OPERATING
 EXPENSE                14,723       56,211       47,954      131,503
 
INCOME BEFORE PROVISION
 FOR INCOME TAXES    3,322,995    2,136,284    4,386,982    2,826,433
 
PROVISION FOR
 INCOME TAXES        1,345,811      865,201    1,776,727    1,144,705
 
NET INCOME          $1,977,184   $1,271,083   $2,610,255   $1,681,728
 
NET INCOME PER COMMON SHARE:
     Basic               $0.19        $0.13        $0.26        $0.17
     Diluted             $0.19        $0.12        $0.25        $0.16
 
NUMBER OF COMMON SHARES USED
 IN PER SHARE COMPUTATIONS:
     Basic          10,253,203   10,053,003   10,221,700   10,051,948
     Diluted        10,454,084   10,337,861   10,445,069   10,338,797

CONTACT: Hansen Natural Corporation Rodney C. Sacks, Chairman and Chief Executive Officer Hilton H. Schlosberg, Vice Chairman 909-739-6200 or PondelWilkinson MS&L Roger S. Pondel, 323-866-6060.