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SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2023
SEGMENT INFORMATION  
SEGMENT INFORMATION

17.

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, Monster Tour Water® and Reign Storm® total wellness energy drinks, (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 as well as The Beast UnleashedTM FMBs and (iv) Other segment, which is primarily 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 and gas 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 and gas 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 ready-to-drink canned beers, hard seltzers and FMBs primarily to beer distributors in the United States.

Generally, the Alcohol Brands segment has 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 six-months ended June 30, 2023 and 2022 were as follows:

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Three-Months Ended

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Six-Months Ended

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June 30, 

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June 30, 

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2023

    

2022

    

2023

    

2022

Net sales:

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​

​

​

​

​

​

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Monster Energy® Drinks1

​

$

1,686,887

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$

1,537,690

​

$

3,248,555

​

$

2,942,536

Strategic Brands

​

 

99,690

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79,142

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186,048

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171,735

Alcohol Brands2

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​

61,076

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​

32,447

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​

107,366

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​

47,654

Other

​

 

7,308

​

 

5,981

​

 

11,922

​

 

11,908

Corporate and unallocated

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—

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—

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—

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—

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​

$

1,854,961

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$

1,655,260

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$

3,553,891

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$

3,173,833

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Three-Months Ended

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Six-Months Ended

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June 30, 

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June 30, 

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2023

    

2022

    

2023

    

2022

Operating Income:

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Monster Energy® Drinks1

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$

597,922

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$

441,719

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$

1,158,740

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$

896,282

Strategic Brands

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55,137

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41,500

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106,909

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98,695

Alcohol Brands2

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(6,577)

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(4,657)

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(13,460)

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​

(9,611)

Other

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1,651

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1,034

​

 

1,358

​

 

2,161

Corporate and unallocated

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(124,328)

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(106,645)

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(244,677)

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(215,088)

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$

523,805

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$

372,951

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$

1,008,870

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$

772,439

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Three-Months Ended

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Six-Months Ended

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June 30, 

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June 30, 

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2023

    

2022

    

2023

    

2022

Income before tax:

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​

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​

Monster Energy® Drinks1

​

$

598,656

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$

442,407

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$

1,160,330

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$

897,540

Strategic Brands

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55,149

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41,509

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106,938

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98,763

Alcohol Brands2

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(6,584)

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(3,890)

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(13,451)

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(9,496)

Other

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1,657

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1,025

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1,364

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2,162

Corporate and unallocated

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(109,914)

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(114,881)

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(218,658)

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(230,610)

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$

538,964

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$

366,170

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$

1,036,523

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$

758,359

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(1)Includes $10.0 million and $10.1 million for the three-months ended June 30, 2023 and 2022, respectively, related to the recognition of deferred revenue. Includes $19.9 million and $20.1 million for the six-months ended June 30, 2023 and 2022, respectively, related to the recognition of deferred revenue.
(2)For the six-months ended June 30, 2022, effectively from February 17, 2022 to June 30, 2022.

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Three-Months Ended

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Six-Months Ended

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June 30, 

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June 30, 

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2023

    

2022

    

2023

    

2022

Depreciation and amortization:

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Monster Energy® Drinks

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$

8,817

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$

8,102

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$

17,806

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$

16,262

Strategic Brands

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196

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242

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417

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475

Alcohol Brands

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4,106

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3,683

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8,157

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​

5,966

Other

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51

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1,113

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1,174

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2,224

Corporate and unallocated

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2,406

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2,682

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4,830

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5,505

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$

15,576

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$

15,822

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$

32,384

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$

30,432

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Corporate and unallocated expenses for the three-months ended June 30, 2023 include $82.6 million of payroll costs, of which $18.1 million was attributable to stock-based compensation expenses (see Note 14 “Stock-Based Compensation”), as well as $25.3 million attributable to professional service expenses, including accounting and legal costs, and $16.4 million of other operating expenses.

Corporate and unallocated expenses for the three-months ended June 30, 2022 include $70.0 million of payroll costs, of which $16.0 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $16.9 million attributable to professional service expenses, including accounting and legal costs, and $19.7 million of other operating expenses.

Corporate and unallocated expenses for the six-months ended June 30, 2023 include $162.9 million of payroll costs, of which $33.8 million was attributable to stock-based compensation expenses (see Note 14 “Stock-Based Compensation”), as well as $47.4 million attributable to professional service expenses, including accounting and legal costs, and $34.4 million of other operating expenses.

Corporate and unallocated expenses for the six-months ended June 30, 2022 include $138.1 million of payroll costs, of which $32.2 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $43.3 million attributable to professional service expenses, including accounting and legal costs, and $33.7 million of other operating expenses.

Coca-Cola Europacific Partners accounted for approximately 14% of the Company’s net sales for both the three-months ended June 30, 2023 and 2022. Coca-Cola Europacific Partners accounted for approximately 13% of the Company’s net sales for both the six-months ended June 30, 2023 and 2022.

Coca-Cola Consolidated, Inc. accounted for approximately 10% and 11% of the Company’s net sales for the three-months ended June 30, 2023 and 2022, respectively. Coca-Cola Consolidated, Inc. accounted for approximately 10% of the Company’s net sales for both the six-months ended June 30, 2023 and 2022.

Reyes Holdings, LLC accounted for approximately 10% and 9% of the Company’s net sales for the three-months ended June 30, 2023 and 2022, respectively. Reyes Holdings, LLC accounted for approximately 10% and 9% of the Company’s net sales for the six-months ended June 30, 2023 and 2022, respectively.

Net sales to customers outside the United States amounted to $715.4 million and $649.0 million for the three-months ended June 30, 2023 and 2022, respectively. Such sales were approximately 39% of net sales for both the three-months ended June 30, 2023 and 2022. Net sales to customers outside the United States amounted to $1.34 billion and $1.20 billion for the six-months ended June 30, 2023 and 2022, respectively. Such sales were approximately 38% of net sales for both the six-months ended June 30, 2023 and 2022.

Goodwill and other intangible assets for the Company’s reportable segments as of June 30, 2023 and December 31, 2022 were as follows:

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June 30, 

 

December 31, 

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2023

    

2022

Goodwill and other intangible assets:

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Monster Energy® Drinks

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$

1,431,947

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$

1,424,212

Strategic Brands

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981,570

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979,896

Alcohol Brands

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228,524

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233,140

Other

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—

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1,103

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$

2,642,041

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$

2,638,351

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