SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 1998 Commission file number 0-18761 HANSEN NATURAL CORPORATION (Exact name of Registrant as specified in its charter) Delaware 39-1679918 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2380 Railroad Street, Suite 101, Corona, California 91720 (Address of principal executive offices) (Zip Code) (909) 739 - 6200 Registrant's telephone number, including area code: Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No The registrant had 9,296,502 shares of common stock outstanding as of August 1, 1998 1
HANSEN NATURAL CORPORATION AND SUBSIDIARIES June 30, 1998 INDEX Page No. Part I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997 3 Consolidated Statements of Operations for the three and six months ended June 30, 1998 and 1997 4 Consolidated Statements of Cash Flows for the six months ended June 30, 1998 and 1997 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. OTHER INFORMATION Items 1-5. Not Applicable 14 Item 6. Exhibits and Reports on Form 8-K 14 Signatures 14 2
HANSEN NATURAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) <TABLE> <CAPTION> - --------------------------------------------------------------------------------------------------------------------------------- June 30, December 31, 1998 1997 <S> <C> <C> ASSETS CURRENT ASSETS: Cash $ 2,146,543 $ 395,231 Accounts receivable (net of allowance for doubtful accounts, sales returns and cash discounts of $464,521 in 1998 and $315,629 in 1997 and promotional allowances of $1,673,848 in 1998 and $1,067,749 in 1997) 2,873,885 1,533,748 Inventories 3,996,739 3,915,983 Prepaid expenses and other current assets 163,643 214,468 ----------- ----------- Total current assets 9,180,810 6,059,430 PROPERTY AND EQUIPMENT, net 622,135 412,496 INTANGIBLE AND OTHER ASSETS: Trademark license and trademarks (net of accumulated amortization of $2,538,478 in 1998 and $2,390,878 in 1997) 10,089,733 10,208,116 Notes receivable from officer and director 46,536 68,235 Deposits and other assets 203,297 185,082 ----------- ----------- Total intangible and other assets $10,339,566 $10,461,433 =========== =========== $20,142,511 $16,933,359 =========== =========== LIABILITIES & SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 2,855,444 $ 2,195,200 Accrued liabilities 474,721 444,807 Accrued compensation 447,251 322,114 Current portion of long-term debt 740,660 520,835 Income taxes payable 990,590 81,800 ----------- ----------- Total current liabilities 5,508,666 3,564,756 LONG-TERM DEBT, less current portion 2,935,954 3,407,824 SHAREHOLDERS' EQUITY: Common stock - $.005 par value; 30,000,000 shares authorized; 9,149,191 and 9,130,869 shares issued and outstanding in 1998 and 1997, respectively 45,746 45,654 Additional paid-in capital 10,858,223 10,858,315 Retained earnings (accumulated deficit) 861,163 (875,949) Foreign currency translation adjustment (67,241) (67,241) ------------ ------------ Total shareholders' equity 11,697,891 9,960,779 ------------ ------------ $20,142,511 $16,933,359 ============ ============ </TABLE> 3
HANSEN NATURAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - -------------------------------------------------------------------------------- <TABLE> <CAPTION> <S> <C> <C> <C> <C> Three Months Ended Six Months Ended June 30, June 30, --------------------------- ---------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------ NET SALES $13,950,530 $11,496,228 $25,215,385 $18,615,814 COST OF SALES 7,009,343 6,791,491 12,622,771 11,027,737 ------------ ------------ ------------ ------------ GROSS PROFIT 6,941,187 4,704,737 12,592,614 7,588,077 OPERATING EXPENSES: Selling, general and administrative 5,283,867 3,809,192 9,562,351 6,396,957 Amortization of trademark license and trademarks 73,800 73,500 147,600 147,000 Other expenses 15,000 72,991 30,000 147,135 ----------- ---------- ------------ ------------ Total operating expenses 5,372,667 3,955,683 9,739,951 6,691,092 ----------- ----------- ------------ ------------ OPERATING INCOME 1,568,520 749,054 2,852,663 896,985 NET INTEREST AND FINANCING EXPENSE 102,824 148,691 211,657 273,066 ------------ ----------- ----------- ------------ INCOME BEFORE PROVISION FOR INCOME TAXES 1,465,696 600,363 2,641,006 623,919 PROVISION FOR INCOME TAXES 450,000 37,800 920,123 40,200 ------------ ------------ ----------- ----------- NET INCOME $ 1,015,696 $ 562,563 $ 1,720,883 $ 583,719 =========== =========== ============ =========== NET INCOME PER COMMON SHARE: Basic $ 0.11 $ 0.06 $ 0.19 $ 0.06 ============ =========== ============ =========== Diluted $ 0.10 $ 0.06 $ 0.17 $ 0.06 ============ =========== ============ =========== NUMBER OF COMMON SHARES USED IN PER SHARE COMPUTATIONS: Basic 9,140,948 9,214,962 9,135,936 9,195,639 ============= =========== ============ =========== Diluted 10,361,279 9,219,049 10,391,250 9,219,049 ============= =========== ============ =========== </TABLE> 4
HANSEN NATURAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 (Unaudited) - -------------------------------------------------------------------------------- <TABLE> <CAPTION> 1998 1997 <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,720,883 $ 583,719 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Amortization of trademark license and trademarks 147,600 147,000 Depreciation and other amortization 100,899 124,034 Compensation expense related to issuance of stock options 16,229 Effect on cash of changes in operating assets and liabilities: Accounts receivable (1,340,137) (1,079,485) Inventories (80,756) (38,372) Prepaid expenses and other current assets 50,825 (320,434) Accounts payable 660,244 937,861 Accrued liabilities 29,914 (7,629) Accrued compensation 125,137 (26,972) Income taxes payable 908,790 81,800 ------------ ------------ Net cash provided by operating activities 2,339,628 401,522 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (310,538) (151,592) Increase in trademark license and trademarks (29,217) (44,750) Decrease (increase) in notes receivable from officer and director 21,699 (1,169) Increase in deposits and other assets (18,215) (56,497) ------------- ------------ Net cash used in investing activities (336,271) (254,008) CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in short-term borrowings 6,028 Increase in long-term debt 14,546 Principal payments on long-term debt (252,045) (621) ------------ ------------ Net cash (used in) provided by financing activities (252,045) 19,953 EFFECT OF EXCHANGE RATE CHANGES ON CASH - (66,334) ------------ ------------ NET INCREASE IN CASH 1,751,312 101,133 CASH, beginning of period 395,231 186,931 ============ ============ CASH, end of period $ 2,146,543 $ 288,064 ============ ============ SUPPLEMENTAL INFORMATION: Cash paid during the year for: Interest $ 193,520 $ 225,505 ============ ============ Income taxes $ 2,400 $ 2,400 ============ ============ </TABLE> 5
HANSEN NATURAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ 1. BASIS OF PRESENTATION Reference is made to the Notes to Consolidated Financial Statements, in the Company's Form 10-K for the year ended December 31, 1997, which is incorporated by reference, for a summary of significant policies utilized by Hansen Natural Corporation ("Hansen" or "Company") and its subsidiaries, Hansen Beverage Company ("HBC") and CVI Ventures, Inc. The information set forth in these interim financial statements is unaudited and may be subject to normal year-end adjustments. The information reflects all adjustments, which include only normal recurring adjustments, which in the opinion of management are necessary to make the financial statements not misleading. Results of operations covered by this report may not necessarily be indicative of results of operations for the full fiscal year. 2. INVENTORIES Inventories consist of the following at: June 30, December 31, 1998 1997 ------------ ------------ Raw materials $ 1,851,552 $ 388,877 Finished goods 2,145,187 3,527,106 ------------ ------------ $ 3,996,739 $3,915,983 ============ ============ 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- General During the three months ended June 30, 1998, the Company continued to make progress towards achieving its goal of geographically expanding the Hansen's(R) brand as well as expanding the Hansen's(R) brand product range. During the three months ended June 30, 1998, the expansion of distribution of certain of the Company's products into markets outside of California continued to make good progress. In April 1997, the Company introduced its lightly carbonated functional energy drink in an 8.2-ounce slim can. Repeat sales of this product have been encouraging. During the first quarter of 1998, the Company extended its "functional" beverage product line by introducing three additional functional drinks in 8.2-ounce slim cans, a ginger flavored d-stress drink, an orange flavored anti-ox drink and a guarana flavored stamina drink. During the second quarter of 1998, the Company launched its new Healthy Start(TM) line of juices with DynaJuice(TM), a shelf stable 100% juice blend with 15 vitamins and minerals. Also during the quarter, the Company introduced two new 100% juice blends, Hansen's (R) Natural Apple Strawberry and Apple Grape juices, both of which contain vitamin C. The Company intends to introduce additional functional drinks and a new line of premium functional Smoothies later in 1998. Other new product developments include additional Healthy Start(TM) juices as well as new lines of premium natural sodas and premium functional iced teas in proprietary glass bottles, which the Company intends to introduce later in 1998 or in 1999. The Company continues to incur expenditures in connection with the development and introduction of new products and flavors. The increase in net sales and profitability in the second quarter of 1998 was primarily attributable to increased sales of the Company's functional energy drink and sales of the Company's three new functional drinks in 8.2-ounce slim cans and, to a lesser extent, to sales of the Company's newly introduced DynaJuice(TM) and apple juice blends. The increase in sales of functional drinks was attributable to the fact the Company only launched its functional energy drink in April 1997, and also to the fact that during the comparable period in 1997, the Company did not have any sales of the three new functional drinks which were only introduced in the first quarter of 1998. Portion of the sales of the three new functional drinks during the second quarter of 1998 were attributable to opening orders from distributors prior to their launching such products in their respective territories. Consequently, sales of the three new functional drinks during the second quarter of 1998 may not be indicative of sales that will be achieved in subsequent periods. The increase in net sales and profitability in the second quarter of 1998 was partially offset by a slight decrease in sales of soda and lower sales of apple juice. For the second quarter of 1998, sales of Smoothies, iced teas lemonades and juice cocktails, were about the same as in the second quarter of 1997. 7
Results of Operations For The Three-Months Ended June 30, 1998 Compared to the Three-Months Ended June 30, 1997 Net Sales. For the three-months ended June 30, 1998, net sales were approximately $14.0 million, an increase of $2.5 million or 21.3% over the $11.5 million net sales for the three-months ended June 30, 1997. The increase in net sales was primarily attributable to increased sales of the Company's functional energy drink which was introduced in the second quarter of 1997, sales of the Company's three new functional drinks which were introduced in the first quarter of 1998 and, to a lesser extent, sales of DynaJuice(TM) and apple juice blends. The increase in net sales was partially offset by decreased sales of soda and apple juice. Sales of Smoothies, iced teas lemonades and juice cocktails, were about the same as in the comparable period in 1997. Gross Profit. Gross profit was $6.9 million for the three-months ended June 30, 1998, an increase of $2.2 million or 47.5% over the $4.7 million gross profit for the three-months ended June 30, 1997. Gross profit as a percentage of net sales increased to 49.8% for the three-months ended June 30, 1998 from 40.9% for the three-months ended June 30, 1997. The increase in gross profit was primarily attributable to increased net sales and higher margins achieved. The increase in gross profit as a percentage of net sales was primarily attributable to higher margins achieved as a result of a change in the Company's product mix. Total Operating Expenses. Total operating expenses were $5.4 million for the three-months ended June 30, 1998, an increase of $1.4 million or 35.8% over total operating expenses of $4 million for the three-months ended June 30, 1997. Total operating expenses as a percentage of net sales increased to 38.5% for the three-months ended June 30, 1998 from 34.4% for the three-months ended June 30, 1997. The increase in total operating expenses was primarily attributable to increased selling, general and administrative expenses which was partially offset by a decrease in other expenses. The increase in total operating expenses as a percentage of net sales was primarily attributable to an increase in selling, general and administrative expenses and the comparatively smaller increase in net sales from the comparable period in 1997. Selling, general and administrative expenses were $5.3 million for the three-months ended June 30, 1998, an increase of $1.5 million or 38.7% over selling, general and administrative expenses of $3.8 million for the three-months ended June 30, 1997. Selling, general and administrative expenses as a percentage of net sales increased to 37.9% for the three-months ended June 30, 1998 from 33.1% for the three-months ended June 30, 1997. The increase in selling expenses was primarily attributable to increases in promotional expenditures and allowances, costs of promotional materials, advertising and distribution costs. The increase in general and administrative expenses was primarily attributable to increased payroll and other costs in connection with the Company's expansion activities into additional states and operating activities to support the increase in net sales. 8
Other expenses were approximately $15,000 for the three months ended June 30, 1998 compared to $73,000 for the three months ended June 30, 1997. The decrease in other expenses was primarily attributable to the expiration of certain consulting agreements entered into in connection with the acquisition of the Hansen business. The decrease was partially offset by a new consulting agreement entered into with the former president of HBC in June 1997. Operating Income. Operating income was $1,569,000 for the three-months ended June 30, 1998, an increase of $820,000 or 109.4% over operating income of $749,000 for the three- months ended June 30, 1997. Operating income as a percentage of net sales increased to 11.2% for the three-months ended June 30, 1998 from 6.5% in the comparable period in 1997. The increase in operating income was attributable to a $2.2 million increase in gross profit which was partially offset by an increase of $1.4 million in operating expenses. Net Interest and Financing Expense. Net interest and financing expense was $103,000 for the three-months ended June 30, 1998, a decrease of $46,000 from net interest and financing expense of $149,000 for the three-months ended June 30, 1997. The decrease in net interest and financing expense was primarily attributable to the fact that during the three-months ended June 30, 1998, no amounts were outstanding on the Company's revolving line of credit, and the principal amounts outstanding on the Company's term loan were lower than during the comparable period in 1997. Interest income of $6,000 for the three-months ended June 30, 1998, as compared to no interest income during the comparable period in 1997, is included in net interest and financing expense. Provision for Income Taxes. Provision for income taxes was $450,000, an increase of $412,000 over the provision for income taxes of $38,000 for the comparable period in 1997. During the first and second quarters of 1997, the provision for income taxes was reduced by a reduction in the valuation allowance which was applied against certain tax benefits. During the first and second quarters of 1998, the provision for income taxes was not reduced to the same extent as in 1997 as the valuation allowance was fully reduced during the first and second quarters of 1998. Net Income. Net income was $1,016,000 for the three-months ended June 30, 1998, compared to net income of $563,000 for the three-months ended June 30, 1997. The $453,000 increase in net income consists of an increase in operating income of $820,000 and a decrease of $46,000 in net interest and financing expense which was partially offset by a $412,000 increase in provision for income taxes. 9
Results of Operations For The Six-months Ended June 30, 1998 Compared to The Six-months Ended June 30, 1997 Net Sales. For the six-months ended June 30, 1998, net sales were approximately $25.2 million, an increase of $6.6 million or 35.5% over the $18.6 million net sales for the six-months ended June 30, 1997. The increase in net sales was primarily attributable to increased sales of the Company's functional energy drink which was introduced in the second quarter of 1997 and sales of the Company's three new functional drinks which were introduced in the first quarter of 1998 and, to a lesser extent, to increased sales of Smoothies, soda, iced teas lemonades and juice cocktails, and sales of DynaJuice(TM) and apple juice blends. The increase in net sales was partially offset by decreased sales of apple juice. Gross Profit. Gross profit was $12.6 million for the six-months ended June 30, 1998, an increase of $5 million or 66% over the $7.6 million gross profit for the six-months ended June 30, 1997. Gross profit as a percentage of net sales increased to 49.9% for the six-months ended June 30, 1998 from 40.8% for the six-months ended June 30, 1997. The increase in gross profit was primarily attributable to increased net sales and higher margins achieved. The increase in gross profit as a percentage of net sales was primarily attributable to higher margins achieved as a result of a change in the Company's product mix. Total Operating Expenses. Total operating expenses were $9.7 million for the six-months ended June 30, 1998, an increase of $3.0 million or 45.6% over total operating expenses of $6.7 million for the six-months ended June 30, 1997. Total operating expenses as a percentage of net sales increased to 38.6% for the six-months ended June 30, 1998 from 35.9% for the six-months ended June 30, 1997. The increase in total operating expenses were primarily attributable to increased selling, general and administrative expenses which was partially offset by a decrease in other expenses. The increase in total operating expenses as a percentage of net sales was primarily attributable to the increase in operating expenses and the comparatively smaller increase in net sales from the comparable period in 1997. Selling, general and administrative expenses were $9.6 million for the six-months ended June 30, 1998, an increase of $3.2 million or 49.5% over selling, general and administrative expenses of $6.4 million for the six-months ended June 30, 1997. Selling, general and administrative expenses as a percentage of net sales increased to 37.9% for the six-months ended June 30, 1998 from 34.4% for the comparable period in 1997. The increase in selling expenses was primarily attributable to increases in promotional expenditures and allowances, costs of promotional materials, advertising and distribution costs. The increase in general and administrative expenses was primarily attributable to increased payroll and other costs in connection with the Company's expansion activities into additional states and operating activities to support the increase in net sales. Other expenses were approximately $30,000 for the six months ended June 30, 1998 compared to $147,000 for the three months ended June 30, 1997. The decrease in other expenses was primarily attributable to the expiration of certain consulting agreements entered into in connection with the acquisition of the Hansen business. The decrease was partially offset by a new consulting agreement entered into with the former president of HBC in June 1997. 10
Operating Income. Operating income was $2,853,000 for the six-months ended June 30, 1998, an increase of $1,956,000 or 218.0% over operating income of $897,000 for the six- months ended June 30, 1997. Operating income as a percentage of net sales increased to 11.3% for the six-months ended June 30, 1998 from 4.8% in the comparable period in 1997. The increase in operating income was attributable to a $5 million increase in gross profit which was partially offset by an increase of $3 million in operating expenses. Net Interest and Financing Expense. Net interest and financing expense was $212,000 for the six-months ended June 30, 1998, a decrease of $61,000 from net interest and financing expense of $273,000 for the six-months ended June 30, 1997. The decrease in net interest and financing expense was attributable to the fact that during the six-months ended June 30, 1998, no amounts were outstanding on the Company's revolving line of credit and the principal amounts outstanding on the Company's term loan were lower than during the comparable period in 1997. Interest income of $7,000 for the six-months ended June 30, 1998, as compared to no interest income during the comparable period in 1997, is included in net interest and financing expense. Provision for Income Taxes. Provision for income taxes was $920,000, an increase of $880,000 over the provision for income taxes of $40,000 for the comparable period in 1997. During the first and second quarters of 1997, the provision for income taxes was reduced by a reduction in the valuation allowance which was applied against certain tax benefits. During the first and second quarters of 1998, the provision for income taxes was not reduced to the same extent as in 1997 as the valuation allowance was fully reduced during the first and second quarters of 1998. Net Income. Net income was $1,721,000 for the six-months ended June 30, 1998 compared to net income of $584,000 for the six-months ended June 30, 1997. The $1,137,000 increase in net income consists of an increase in operating income of $1,956,000 and a decrease of $61,000 in net interest and financing expenses which was partially offset by a $880,000 increase in provision for income taxes. Liquidity and Capital Resources As of June 30, 1998, the Company had working capital of $3,672,000 compared to working capital of $2,495,000 as of December 31, 1997. Net cash provided by operating activities increased to $2,340,000 for the six months ended June 30, 1998 as compared to $402,000 for the comparable period in 1997. The increase in working capital and net cash provided by operating activities was primarily attributable to net income earned after adjustments for certain noncash expenses, primarily amortization of trademark license and trademarks and depreciation and other amortization, during the six-months ended June 30, 1998. Management believes that cash generated from operations and its cash resources and amounts available under HBC's revolving line of credit, will be sufficient to meet its operating cash requirements in the foreseeable future, including purchase commitments for raw materials, debt servicing, expansion and development needs as well as any purchases of capital assets or equipment. 11
Net cash used in investing activities increased to $336,000 for the six-months ended June 30, 1998 as compared to $254,000 for the comparable period in 1997. The increase in net cash used in investing activities was primarily attributable to purchases of property and equipment to support the Company's expansion and development plans. Although the Company has no current plans to incur any material capital expenditures, management, from time to time, considers the acquisition of capital equipment, particularly coolers and vans, and businesses compatible with the image of the Hansen's(R) brand as well as the introduction of new product lines. The Company may require additional capital resources in the event of any such transaction, depending upon the cash requirements relating thereto. Any such transaction will also be subject to the terms and restrictions of HBC's credit facilities. Net cash used in financing activities increased to $252,000 for the six months ended June 30, 1998 as compared to net cash provided by financing activities of $20,000 for the comparable period in 1997. The increase in net cash used in financing activities was primarily attributable to the fact that during the six-months ended June 30, 1998, principal payments of $252,000 were made in reduction of HBC's term loan. As of June 30, 1998, the sum of $3,667,000 was outstanding under the term loan. The revolving line of credit is renewable on September 1, 1998. HBC has received a written proposal from its bank to renew its revolving line of credit for a period of two years. In terms of such proposal, HBC's effective borrowing rate under the revolving line of credit would be reduced from prime plus 1% to prime plus 1/4%. The Company anticipates that such line will be renewed by this date; however, there can be no assurance that it will, in fact, be renewed or, if renewed, that the terms of such renewal will not be disadvantageous to HBC and its business. Year 2000 Compliance Many currently installed computer systems and software products are coded to accept only two digit entries in the date code field. These date code fields will need to accept four digit entries or be modified in some fashion to distinguish 21st century dates from 20th century dates. This problem could force computers to either shut down or provide incorrect data. As a result, in less than two years, computer systems and software used by many companies may need to be upgraded to comply with such "Year 2000" requirements. The Company has examined its internal computer systems and contacted its software providers to determine whether the Company's software applications are compliant with the Year 2000. While the Company believes that its internal systems are fully Year 2000 compliant, the Company intends to continue to review its internal systems for any problems as well as monitor its key customers and suppliers for any impact that the Year 2000 may have on their information systems which in turn could impact the Company. While it is difficult to quantify the total cost to the Company of the Year 2000 compliance activities, the Company does not expect the cost to be material. 12
Forward Looking Statements Certain statements made in this Report, including certain statements made in this Management's Discussion and Analysis, contain "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the expectations of management with respect to revenues, profitability, adequacy of funds from operations and the Company's existing credit facility, among other things. Management cautions that these statements are qualified by their terms and/or important factors, many of which are outside of the control of the Company, that could cause actual results and events to differ materially from the statements made herein, including, but not limited to, the following: changes in consumer preferences, changes in demand that are weather related, particularly in areas outside of California, competitive pricing pressures, changes in the price of the raw materials for the Company's beverage products, the marketing efforts of the distributors of the Company's products, most of which distribute products that are competitive with the products of the Company, the introduction of new products, as well as unilateral decisions that may be made by grocery chain stores, specialty chain stores, club stores and other customers to discontinue carrying all or any of the Company's products that they are carrying at any time. Management further notes that the Company's plans and results may be affected by any change in the availability of the Company's credit facilities and the actions of its creditors. Inflation The Company does not believe that inflation has a significant impact on the Company's results of operations for the periods presented. 13
PART II - OTHER INFORMATION Items 1 - 5. Not Applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - See Exhibit Index (b) Reports on Form 8-K - None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HANSEN NATURAL CORPORATION Registrant Date: August 14, 1998 /s/ RODNEY C. SACKS Rodney C. Sacks Chairman of the Board and Chief Executive Officer Date: August 14, 1998 /s/ HILTON H. SCHLOSBERG Hilton H. Schlosberg Vice Chairman of the Board, President, Chief Operating Officer, Chief Financial Officer and Secretary 14
EXHIBIT INDEX Exhibit 10 (ddd) Warrant Agreement dated as of April 23, 1998 between Hansen Natural Corporation and Rick Dees Exhibit 27 Financial Data Schedule 15