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SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 2012
SEGMENT INFORMATION  
SEGMENT INFORMATION

15.                            SEGMENT INFORMATION

 

The Company has two reportable segments, namely Direct Store Delivery (“DSD”), whose principal products comprise energy drinks, and Warehouse (“Warehouse”), whose principal products comprise juice-based and soda beverages.  The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily direct to retailers. Corporate and unallocated amounts that do not relate to DSD or Warehouse segments have been allocated to “Corporate & Unallocated.”

 

The net revenues derived from the DSD and Warehouse segments and other financial information related thereto are as follows:

 

 

 

Three-Months Ended September 30, 2012

 

 

 

DSD

 

Warehouse

 

Corporate and
Unallocated

 

Total

 

Net sales

 

  $

516,268

 

 

  $

25,672

 

 

  $

-

 

 

  $

541,940

 

 

Contribution margin

 

170,096

 

 

41

 

 

-

 

 

170,137

 

 

Corporate and unallocated expenses

 

-

 

 

-

 

 

(29,452

)

 

(29,452

)

 

Operating income

 

 

 

 

 

 

 

 

 

 

140,685

 

 

Other income (expense)

 

147

 

 

-

 

 

406

 

 

553

 

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

141,238

 

 

Depreciation and amortization

 

(3,884

)

 

(38

)

 

(1,233

)

 

(5,155

)

 

Trademark amortization

 

-

 

 

(11

)

 

(1

)

 

(12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-Months Ended September 30, 2011

 

 

 

DSD

 

Warehouse

 

Corporate and
Unallocated

 

Total

 

Net sales

 

  $

447,113

 

 

  $

27,596

 

 

  $

-

 

 

  $

474,709

 

 

Contribution margin

 

153,098

 

 

2,482

 

 

-

 

 

155,580

 

 

Corporate and unallocated expenses

 

-

 

 

-

 

 

(23,490

)

 

(23,490

)

 

Operating income

 

 

 

 

 

 

 

 

 

 

132,090

 

 

Other income (expense)

 

(73

)

 

-

 

 

(789

)

 

(862

)

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

131,228

 

 

Depreciation and amortization

 

(3,358

)

 

(25

)

 

(1,101

)

 

(4,484

)

 

Trademark amortization

 

-

 

 

(11

)

 

(5

)

 

(16

)

 

 

Revenue is derived from sales to external customers.  Operating expenses that pertain to each segment are allocated to the appropriate segment.

 

Corporate and unallocated expenses were $29.5 million for the three-months ended September 30, 2012 and included $19.8 million of payroll costs, of which $7.9 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $4.5 million attributable to professional service expenses, including accounting and legal costs, $1.2 million of depreciation and $4.0 million of other operating expenses.  Corporate and unallocated expenses were $23.5 million for the three-months ended September 30, 2011 and included $14.1 million of payroll costs, of which $4.9 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $4.5 million attributable to professional service expenses, including accounting and legal costs, and $4.9 million of other operating expenses. Certain items, including operating assets and income taxes, are not allocated to individual segments and therefore are not presented above.

 

Coca-Cola Refreshments USA Inc. (“CCR”), a customer of the DSD segment, accounted for approximately 28% and 29% of the Company’s net sales for the three-months ended September 30, 2012 and 2011, respectively.

 

Net sales to customers outside the United States amounted to $114.5 million and $92.5 million for the three-months ended September 30, 2012 and 2011, respectively. Such sales were approximately 21.1% and 19.5% of net sales for the three-months ended September 30, 2012 and 2011, respectively.

 

The net revenues derived from the DSD and Warehouse segments and other financial information related thereto are as follows:

 

 

 

Nine-Months Ended September 30, 2012

 

 

DSD

 

 

Warehouse

 

 

Corporate and
Unallocated

 

 

Total

 

Net sales

 

  $

1,515,476

 

 

  $

73,709

 

 

  $

-

 

 

  $

1,589,185

 

Contribution margin

 

515,010

 

 

3,817

 

 

-

 

 

518,827

 

Corporate and unallocated expenses

 

-

 

 

-

 

 

(82,085

)

 

(82,085

)

Operating income

 

 

 

 

 

 

 

 

 

 

436,742

 

Other income (expense)

 

414

 

 

-

 

 

426

 

 

840

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

437,582

 

Depreciation and amortization

 

(11,577

)

 

(93

)

 

(3,558

)

 

(15,228

)

Trademark amortization

 

-

 

 

(33

)

 

(3

)

 

(36

)

 

 

 

 

Nine-Months Ended September 30, 2011

 

 

DSD

 

 

Warehouse

 

 

Corporate and
Unallocated

 

 

Total

 

Net sales

 

  $

1,218,491

 

 

  $

74,782

 

 

  $

-

 

 

  $

1,293,273

 

Contribution margin

 

413,629

 

 

3,545

 

 

-

 

 

417,174

 

Corporate and unallocated expenses

 

-

 

 

-

 

 

(64,148

)

 

(64,148

)

Operating income

 

 

 

 

 

 

 

 

 

 

353,026

 

Other income (expense)

 

(81

)

 

-

 

 

(205

)

 

(286

)

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

352,740

 

Depreciation and amortization

 

(8,975

)

 

(61

)

 

(3,116

)

 

(12,152

)

Trademark amortization

 

-

 

 

(33

)

 

(6

)

 

(39

)

 

Revenue is derived from sales to external customers.  Operating expenses that pertain to each segment are allocated to the appropriate segment.

 

Corporate and unallocated expenses were $82.1 million for the nine-months ended September 30, 2012 and included $55.4 million of payroll costs, of which $21.6 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $11.6 million attributable to professional service expenses, including accounting and legal costs, $3.6 million of depreciation and $11.5 million of other operating expenses.  Corporate and unallocated expenses were $64.1 million for the nine-months ended September 30, 2011 and included $39.1 million of payroll costs, of which $12.8 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $13.1 million attributable to professional service expenses, including accounting and legal costs, and $11.9 million of other operating expenses. Certain items, including operating assets and income taxes, are not allocated to individual segments and therefore are not presented above.

 

CCR, a customer of the DSD segment, accounted for approximately 29% of the Company’s net sales for both the nine-months ended September 30, 2012 and 2011.

 

Net sales to customers outside the United States amounted to $318.0 million and $226.0 million for the nine-months ended September 30, 2012 and 2011, respectively. Such sales were approximately 20.0% and 17.5% of net sales for the nine-months ended September 30, 2012 and 2011, respectively.

 

The Company’s net sales by product line were as follows:

 

 

 

Three-Months Ended

 

Nine-Months Ended

 

 

September 30,

 

September 30,

Product Line

 

2012

 

 

2011

 

 

2012

 

 

2011

 

Energy drinks

 

  $

498,563

 

 

  $

434,038

 

 

  $

1,468,036

 

 

  $

1,186,739

 

Non-carbonated (primarily juice based beverages and Peace Tea® iced teas)

 

32,453

 

 

27,404

 

 

86,737

 

 

71,882

 

Carbonated (primarily soda beverages)

 

8,018

 

 

10,339

 

 

24,445

 

 

26,225

 

Other

 

2,906

 

 

2,928

 

 

9,967

 

 

8,427

 

 

 

  $

541,940

 

 

  $

474,709

 

 

  $

1,589,185

 

 

  $

1,293,273