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SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2014
SEGMENT INFORMATION  
SEGMENT INFORMATION

16.        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 March 31, 2014

 

 

DSD

 

Warehouse

 

Corporate and
Unallocated

 

Total

Net sales

 

$

514,355

 

 

$

21,774

 

 

$

-

 

 

$

536,129

 

Contribution margin

 

186,468

 

 

296

 

 

-

 

 

186,764

 

Corporate and unallocated expenses

 

-

 

 

-

 

 

(37,901

)

 

(37,901

)

Operating income

 

 

 

 

 

 

 

 

 

 

148,863

 

Other income (expense)

 

26

 

 

-

 

 

128

 

 

154

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

149,017

 

Depreciation and amortization

 

(4,944

)

 

(81

)

 

(1,428

)

 

(6,453

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-Months Ended March 31, 2013

 

 

DSD

 

Warehouse

 

Corporate and
Unallocated

 

Total

Net sales

 

$

460,175

 

 

$

24,048

 

 

$

-

 

 

$

484,223

 

Contribution margin

 

138,974

 

 

382

 

 

-

 

 

139,356

 

Corporate and unallocated expenses

 

-

 

 

-

 

 

(32,050

)

 

(32,050

)

Operating income

 

 

 

 

 

 

 

 

 

 

107,306

 

Other income (expense)

 

188

 

 

-

 

 

(2,090

)

 

(1,902

)

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

105,404

 

Depreciation and amortization

 

(4,421

)

 

(58

)

 

(581

)

 

(5,060

)

 

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 $37.9 million for the three-months ended March 31, 2014 and included $21.1 million of payroll costs, of which $7.0 million was attributable to stock-based compensation expense (see Note 13, “Stock-Based Compensation”), $10.1 million attributable to professional service expenses, including accounting and legal costs and $6.7 million of other operating expenses.  Corporate and unallocated expenses were $32.0 million for the three-months ended March 31, 2013 and included $19.4 million of payroll costs, of which $7.0 million was attributable to stock-based compensation expense (see Note 13, “Stock-Based Compensation”), $7.6 million attributable to professional service expenses, including accounting and legal costs and $5.0 million attributable to other operating expenses.

 

Coca-Cola Refreshments USA Inc. (“CCR”), a customer of the DSD segment, accounted for approximately 31% and 30% of the Company’s net sales for the three-months ended March 31, 2014 and 2013, respectively.

 

Net sales to customers outside the United States amounted to $115.8 million and $106.3 million for the three-months ended March 31, 2014 and 2013, respectively.

 

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

 

 

 

Three-Months Ended

 

 

March 31,

Product Line

 

2014

 

 

2013

 

Energy drinks

 

$

499,013

 

 

$

446,026

 

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

 

26,446

 

 

27,972

 

Carbonated (primarily soda beverages)

 

7,014

 

 

6,401

 

Other

 

3,656

 

 

3,824

 

 

 

$

536,129

 

 

$

484,223