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SEGMENT INFORMATION | 9 Months Ended
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Sep. 30, 2022
SEGMENT INFORMATION |
SEGMENT INFORMATION |
18. | SEGMENT INFORMATION
The Company has four operating and reportable segments: (i) Monster Energy® Drinks segment, which is primarily comprised of the Company’s Monster Energy® drinks, Reign Total Body Fuel® high performance energy drinks and True North® Pure Energy Seltzers, (ii) Strategic Brands segment, which is primarily comprised of the various energy drink brands acquired from TCCC in 2015 as well as the Company’s affordable energy brands, (iii) Alcohol Brands segment, which is primarily comprised of the various craft beers and hard seltzers purchased as part of the CANarchy Transaction on February 17, 2022 and (iv) Other segment, which is comprised of the AFF Third-Party Products. 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® Drinks1 | ​ | $ | 1,502,219 | ​ | $ | 1,329,793 | ​ | $ | 4,444,755 | ​ | $ | 3,867,162
Strategic Brands | ​ |  | 88,802 | ​ |  | 74,449 | ​ |  | 260,536 | ​ |  | 229,193
Alcohol Brands2 | ​ | ​ | 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® Drinks1 | ​ | $ | 492,534 | ​ | $ | 500,641 | ​ | $ | 1,388,815 | ​ | $ | 1,512,633
Strategic Brands | ​ |  | 47,282 | ​ |  | 40,184 | ​ |  | 145,977 | ​ |  | 139,398
Alcohol Brands2 | ​ | ​ | (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® Drinks1 | ​ | $ | 493,486 | ​ | $ | 500,929 | ​ | $ | 1,391,026 | ​ | $ | 1,513,421
Strategic Brands | ​ |  | 47,319 | ​ |  | 40,198 | ​ |  | 146,082 | ​ |  | 139,419
Alcohol Brands2 | ​ | ​ | (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
​

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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