February 5, 2009 - Hansen Natural Corp. (HANS-NASDAQ) through its subsidiaries, develops, markets, sells, and distributes beverages in the United States and internationally. The company offers natural sodas, fruit juices and juice drinks, energy drinks and energy sports drinks, fruit juice smoothies and functional drinks, non-carbonated ready-to-drink iced teas, children's multi-vitamin juice drinks, junior juice juices, junior juice water, and flavored sparkling beverages under the Hansen's brand name.

In addition, the company markets, sells, and distributes the Java Monster line of non-carbonated dairy based coffee drinks; natural sodas, premium natural sodas with supplements, organic natural sodas, seltzer waters, sports drinks and energy drinks under the Blue Sky brand name; and water beverages under the Vidration brand name. Further, its Monster Energy brand energy drinks include Monster Energy drinks, lo-carb Monster Energy drinks, Monster Energy Assault energy drinks, Monster Energy Khaos energy drinks, Monster Energy M-80 energy drinks, Monster Energy Heavy Metal energy drinks, and Monster Energy MIXXD.

The company's customers include retail grocery and specialty chains, wholesalers, club stores, drug chains, mass merchandisers, convenience chains, full service beverage distributors, health food distributors, and food service customers. Hansen Natural Corporation was founded in 1985 and is based in Corona, California.

First quarter results will be out on May 7. You can listen at the Web site (www.hansens.com). It's on at 2 pm PST. Analsyts think the quarter did 37 cents a share, up from 29 cents in the first period of last year. For the second quarter look for 61 cents, up from 51 cents last year. For the full year, analysts see $2.16, up from $1.11 in 2008. Earnings for 2008 finished with the last quarter showing a deficit of 25 cents a share which came from a charge for changing distributors (a total of $118.2 million). That one time event was just that: a one time event. For 2010, expect $2.48.

Earnings are obviously growing nicely, a welcome trait in an economy that isn't. Sales are also ramping. In 2006, they were $606 million, then went to $904 million, followed by $1.034 billion. This year, analysts think revenues will hit $1.13 billion, then in 2010 go to $1.22 billion.

Sales are benefitting from new distribution agreements with Coca-Cola and Anheuser Busch. With their broad channels, Hansen will penetrate new markets. Also, Coke is pushing Hanson's Monster drinks over any of its other energy beverages. With that kind of power behind its drinks, sales should definitely improve. International sales, in particular markets in Sweden and Ireland, are showing increasing sales, which will help push Hansen beyond its current 5% share of the European market.

Look for more growth from the newest offering: Monster Hitman. Launched in September of last year, the new drink contributed 4% or $10.9 million worth of sales in the last quarter. The company is also increasing production of its energy shooters to bolster revenues.

Part of the positive earnings story is lower commodity prices, especially aluminum and sweeteners. Another driver: higher demand for energy drinks, even in a weaker economy. When the economic climate changes for the better, consumers will most likely buy more.

More numbers: Market Cap is $3.7 billion. Forward P/E is 16.5. Price to book is 8.44. Operating margin was 15.81% in the last 12 months and profit margin was 10.45%. Return on Equity was 25.17%. Total cash is $285.95 million with $3.16 per share in cash. Total debt is $959,000. Current ratio is 2.99. Book value per share is 4.83. Beta is .62. Over the last 52 weeks, the stock is higher by 16.86%. There are 90.40 million shares outstanding. Insiders own 17.37%. Institutions own 72.6%. There is no divdend.

Hansen is doing well in a tough economy. Its return on equity is noteworthy and commendable. It has less than 1% debt. Net profit margin is expanding. Costs of commodities are going lower. International markets are opening. There are new distribution agreements in place with very large, successful companies. The only drawback: investors already love the stock. The valuations are relatively high no matter which one you consider.

While the stock dipped to $21 last October/November, along with the rest of the market, it quickly bounced back and is now trading near its 52-week high of $41.63. If the economy falters and consumers tighten even more, Hansen won't be immune. But if the U.S. economy improves, Hansen will be a direct beneficiary. Study this one more carefully if you're looking for a beverage company that seems to be on the move up.

Company Web site: www.hansens.com

- Ted Allrich