Monster Beverage Corporation reported financial results for the three- and twelve-months ended December 31, 2021.

The company achieved record fourth quarter and full-year net sales, with annual net sales exceeding the $5.5 billion mark for the first time in the company’s history, notwithstanding the impact of the COVID-19 pandemic on the company.

Despite certain challenges in the 2021 fourth quarter, the company achieved solid results overall. The comparative 2020 fourth quarter included a non-recurring tax benefit of $165.1 million (the “Non-Recurring Tax Benefit”), as well as reduced marketing, sponsorships and certain other operating expenses, largely as a consequence of the COVID-19 pandemic. 

During the 2021 fourth quarter, the company continued to procure additional quantities of aluminium cans from suppliers in the United States and abroad in response to increased consumer demand.

In addition, the company continued to experience additional global supply chain challenges, including, freight inefficiencies, shortages of shipping containers, port of entry congestion, and delays in the receipt of certain ingredients, some of which are likely to be transitory. 

In the United States, the company lacked sufficient co-packing capacity to meet increased demand for certain of its products. 

As a result, the company was not able to fully satisfy increased demand for its products in a number of markets in the 2021 fourth quarter.

During the 2021 fourth quarter, the company experienced increased aluminium can costs attributable to higher aluminium commodity pricing, as well as the costs of importing aluminium cans. 

In addition, the company experienced increased ingredient and other input costs, including shipping and freight, labor, trucking, fuel, co-packing fees, secondary packaging materials, increased outbound freight costs and production inefficiencies, which resulted in increased costs of sales and increased operating costs.

As of December 31, 2021, the company had $1.33 billion in cash and cash equivalents, $1.75 billion in short-term investments and $99.4 million in long-term investments. Based on currently available information, the Company does not expect the ongoing COVID-19 pandemic to have a material impact on its liquidity.

Fourth Quarter Results

Net sales for the 2021 fourth quarter increased 19.1% to $1.43 billion from $1.20 billion in the comparable period last year. Net changes in foreign currency exchange rates had an unfavourable impact on net sales for the 2021 fourth quarter of $2.4 million.

Net sales for the Company’s Monster Energy Drinks segment which primarily includes the Company’s Monster Energy drinks, Reign Total Body Fuel high performance energy drinks and True North® Pure Energy Seltzers, increased 20.7% to $1.35 billion for the 2021 fourth quarter, from $1.12 billion for the 2020 fourth quarter.  

2021 Full-Year Results

The comparative 2020 full-year results included the Non-Recurring Tax Benefit of $165.1 million, as well as reduced marketing, sponsorships and certain other operating expenses, largely as a consequence of the COVID-19 pandemic. These items should be taken into consideration when evaluating comparative performance over the 2020 full-year.

Net sales for the twelve-months ended December 31, 2021 increased 20.5% to $5.54 billion, from $4.60 billion in the comparable period last year.  Net changes in foreign currency exchange rates had a favourable impact on net sales for the twelve-months ended December 31, 2021 of $61.9 million.

Gross profit, as a percentage of net sales, for the twelve-months ended December 31, 2021 was 56.1%, compared with 59.2% in the comparable period last year. 

The decrease in gross profit as a percentage of net sales for the year ended December 31, 2021 was primarily the result of increased aluminium can costs attributable to higher aluminium commodity pricing, increased costs of certain other raw materials and ingredients, increased freight-in costs and geographical sales mix.

Net income for the twelve-months ended December 31, 2021 decreased 2.3% to $1.38 billion, from $1.41 billion in the comparable period last year.