Monster Beverage Corporation (MNST) Q4 2011 Earnings Report, Transcript and Summary

Good day, and welcome to the Monster Beverage Corporation Fourth Quarter and Year-end 2011 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce the host for today's conference, Mr. Rodney Sacks, Chairman and CEO. Sir, please go ahead.

Good afternoon, ladies and gentlemen. Thank you for attending this call. I'm Rodney Sacks; Hilton Schlosberg, our Vice President is with me today; as is Tom Kelly, our Senior Vice President of Finance. Before we begin, I would like to remind listeners that certain statements made during this call may constitute 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; and which are based on currently available information regarding the expectations of management with respect to revenues, profitability, future business, future events, financial performance, and trends. Management cautions that these statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside the control of the company that may cause actual results to differ materially from the forward-looking statements made during this call. Please refer to our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K filed on March 1, 2011, and our most recent quarterly reports on Form 10-Q, including the sections contained therein entitled, Risk Factors and Forward-looking Statements for a discussion on specific risks and uncertainties that may affect our performance. The company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. An explanation of the non-GAAP measure of gross sales and certain expenditures, which may be mentioned during the course of this call, is provided in the notes designated with asterisks in the Condensed Consolidated Statements of Income and Other Information attached to the earnings release dated February 23, 2012. A copy of this information is also available at our website, www.monsterbevcorp.com, in the Financial Information Section. We are pleased to report, yet again, another record fourth quarter with record gross sales up 28.4% to $467.3 million. Record net sales up 28.7% to $410 million and diluted earnings per share increasing 32.6% to $0.35 per share from $0.26 a share in the same quarter of 2010. For the year, we also report gross -- record gross sales up 31% to $1,950,500,000. Record net sales up 30.6% to $1,703,200,000 and diluted earnings per share increasing 34.5% to $1.53 per share from $1.14 in the year ended December 31, 2010. According to the Nielsen reports for the 13 weeks through January 21, 2012, for all outlets combined, namely convenience, grocery, drug and mass merchandisers, excluding Wal-Mart, sales in dollars in the energy drink category, including Shots, increased 16.4% versus the same period a year ago. Sales of Monster grew 23.6% in the 13-week period while sales of Red Bull increased by 18.7%. Sales of Rockstar increased by 19.1% and sales of 5-Hour increased by 14.3%. Sales of Amp decreased 7.2%. Sales of NOS increased 7%, but they're off a small base, and sales of Full Throttle decreased 4.5%. According to Nielsen reports for the 4 weeks ended January 21, 2012, sales of energy drinks in the convenience and gas channel, in dollars, increased by 16.8% over the comparable 4-week period in 2011. Sales of Monster increased by 26.9% over last year, while sales of Red Bull increased by 18.1% over last year. Rockstar was up 18.6% while 5-Hour was up 9.9%. Amp was down 7%. NOS was up 8.3%, again off a small base, and Full Throttle was up 0.9%. According to Nielsen, for the 4 weeks ended January 21, 2012, Monster's market share of the energy drink category in the convenience and gas channel including energy shots, in dollars, improved to 30.3% against Red Bull's share of 32.3%, Rockstar's share of 9.7% and 5-Hour's share of 10.6%. Based on the Nielsen reports, Monster is continuing to close the gap with Red Bull in dollars, while in units, Monster is continuing to increase its lead over Red Bull. According to Nielsen, in the 13 weeks ended January 21, 2012, all outlets combined, sales of energy plus coffee drinks in dollars increased 15.2% over the same period last year. Java Monster was 17% higher than last year and Starbucks Double Shot energy was up 21.3%. Java Monster sales and market share continues to show improvement and Java Monster is still the market leader in this space. We are pleased to report that sales of our new noncarbonated Monster Rehab Tea plus lemonade energy drink with electrolytes, which we launched in the first quarter of 2011 continues to accelerate, and this SKU continues to be one of our top-selling Monster products. Based on Nielsen data for the convenience and gas channel, in the 13 weeks ended January 21, 2012, sales of Rehab are now more than double the sales of the main competitive noncarbonated energy drink. During the fourth quarter, we launched 3 line extensions through our successful Monster Rehab energy drink, namely Rojo Tea + Energy, Green Tea + Energy and ProTEAn + Energy. We're in the process of launching a further line extension in the Monster Rehab line namely Tea + Orangeades + Energy and also proceeding with our planned launch of Uber Monster Energy drinks in glass bottles during the first half of 2012. Monster is performing well in Canada. According to Nielsen, in the convenience and gas channel in Canada for the 12 weeks ended January 14, 2012, the energy drink category grew 11%. Monster sales increased 23% and our market share grew 2.3 points to 24.6% over the same period last year. Red Bull sales increased 11% and its market share decreased 0.2 points to 37.4% as compared to the same period last year over 2010. Rockstar sales increased 19%. Its market share increased by 0.9 points to 15%. According to Nielsen, sales in the energy drink category in Mexico grew 11.4% in December 2011 over December 2010. Sales of Monster Energy in Mexico, in December 2011, grew 21.1% over the same month in 2010, while sales of Red Bull were 12.1% lower. Monster's market share in Mexico, December 2011, increased by 2.8 points to 34.2% over the same period in 2010. This excludes Java Monster, bringing it closer to Red Bull's market share in Mexico, which dropped to 9.8 points to 36.8% over the same period. Net sales for the company's DSD segment increased 31.1% to $389.8 million for the 3 months ended December 31, 2011, from $297.5 million in the same period in 2010. And contribution margin increased 24.9% from $103.7 million to $129.6 million. Net sales for the company's Warehouse segment decreased 5.1% to $20.1 million for the 3 months ended December 31, 2011, compared with $21.2 million for the same period in 2010. However, the company achieved a positive contribution of approximately $750,000 in the 3 months ended December 31, 2011, for the Warehouse segment, as compared to a negative contribution of almost $1 million in the comparable period in 2010. Net sales for the company's DSD segment increased 32.6% to $1,608,300,000 for the 12 months ended December 31, 2011, from $1,212,600,000 in the same period in 2010, and contribution margin increased 24.4% from $436.7 million to $543.2 million. Net sales for the company's Warehouse segment increased 4% to $94.9 million for the 12 months ended December 31, 2011, compared with $91.3 million for the same period in 2010. And the Warehouse segment achieved a positive contribution margin of $4.3 million in the 12 months ended December 31, 2011, compared to a negative contribution of almost $0.8 million in 2010. For the 12 months ended December 31, 2011, gross sales to retail groceries, specialty chains and wholesalers represented 4% of gross sales, down from 6% in 2010. Gross sales to club stores, drug chains and mass merchandisers represented 10% of sales, down from 12% in 2010. Gross sales to full-service distributors represented 64% of sales, the same as in 2010. And gross sales, internationally, increased to 20% from 16% in the same period in 2010. Other sales were 2% for the period, the same as in 2010. Gross sales to customers outside the United States in the fourth quarter of 2011 amounted to $88.9 million compared to $66.4 million in the same quarter in 2010, and $116.8 million in the third quarter of 2011. Gross sales to customers outside the United States in the 12 months ended December 31, 2011, amounted to $381 million compared to $240.6 million in 2010. Included in such sales are sales to the company's military customers, which are delivered in the United States and transshipped to their customers overseas. Sales continued to progress well in Europe. Gross sales in EMEA, which is Europe, Middle East and South Africa, were 46.1% higher in the fourth quarter than in the comparable period in 2010. And for the full year, gross sales in Europe were 87.5% higher than in 2010. Sales in Western Europe and in the United Kingdom, in particular, grew faster than in Central and Eastern Europe. And Western Europe is now operating profitably. In South Africa, we made a change to our distribution partner, and in the last quarter of 2011, sales improved substantially. We are continuing with our expansion strategy into new international markets. We launch Monster Energy in Poland in February and are planning new additional launches in Japan, Korea, Hong Kong, Macau, and Taiwan in the first half of 2012. We are also planning additional launches in Central and Eastern Europe, Turkey, the Middle East, Africa, South America, and Asia during the remainder of 2012. Both gross and net sales for the comparable 12-month period ended December 31, 2010 were negatively impacted by advanced purchases made by customers in the 2009 fourth quarter. If the sales attributable to the 2009 fourth quarter buy were being included in the 2010 first quarter in which the company previously estimated 4% to 6% of the 2009 fourth quarter growth sales, such sales would have had the effect of increasing the sales achieved in the 12 months ended December 31, 2010 by approximately 1%. The buying had no effect on 2011 sales in which we are now reporting. Sales of Peace Tea ready-to-drink iced tea continue to meet our expectations. In 2011, gross sales of Peace Tea increased 37.1% over 2010. We're in the process of launching 3 new line extensions, namely Cranberry Tea, Pink Lemonade + Tea and Texas Style Sweet Tea, which will replace the Ceylon Tea, Unsweetened Tea and Green Tea variants -- Dark Green Tea variants, sorry. We are continuing to build distribution for Worx Energy. In 2012, we intend to bring our advertising expenditure for Worx Energy into line with Worx sales levels. We plan to introduce an additional extra strength version later 2012. Gross profit margins achieved in the fourth quarter of 2011 was 52.3% versus 51.6% in the comparable quarter in 2010. The increase in our overall gross margin percentage was largely due to a higher proportion of sales within the DSD segment of products in North America, which have a higher gross profit margin; increased sales of DSD products as compared to Warehouse products; product mix, which was partially offset by international sales where we achieved lower gross margin than in North America; and to a lesser extent to lower off-invoice and promotional allowances. We have covered a large portion of our anticipated requirements for aluminum cans in 2012, as well as a portion of our anticipated requirements for apple juice and sugar. In the light of the volatility of both commodities in world markets, we anticipate some increase in raw material costs in 2012. We do not believe that, at current levels, raw material cost increases will have a material negative effect on our margins. Distribution expenses as a percentage of net sales in the fourth quarter was a slightly higher than the same period in 2010. Selling expenses as a percentage of net sales increased to 12.5% from 12.2% in the same period in 2010. The increase in selling expenses was primarily attributable to increases in commissions and royalty payments, premiums, advertising, and sponsorship and endorsement costs in the fourth quarter as compared to the same quarter in 2010. The increased cost for sampling teams, as well as trade development personnel, particularly in Europe, also contributed to the increase in selling expenses. We are continuing to invest in the Monster brand internationally, particularly in Central and Eastern Europe, Australia and South America. Such trade development programs supplement our distribution partners respective sales forces to service and merchandise small independent stores. We believe that such activities play an important role in the establishment and development of our brand overseas. The cost of product sampling teams and trade development personnel are included as part of our selling expenses and do not form part of our payroll cost. General and administrative costs, although higher in dollars, decreased marginally as a percentage of net sales in the quarter. The increase in general and administrative cost was primarily attributable to increased payroll expenses, and in particular, increased costs of stock-based compensation. For the 12 months ended December 31, 2011, selling expenses as a percentage of net sales increased to 12.9% from 11.5% in 2010. Sponsorship and endorsement costs were approximately $13.6 million higher than in 2010, but were lower as a percentage of net sales. Selling expenses for the 12 months ended December 31, 2011 was also higher than in 2010 primarily due to increased expenditures for advertising, which was largely for the Worx Energy Shots, trade development costs, commissions and royalties, premiums and merchandise displays which was mainly coolers. In 2011, cost of goods as well as selling, general and administrative expenses in Western Europe were lower on a per case basis in local currencies than in 2010. In 2011, we invested extensively in Central and Eastern Europe, and more particularly, in newer markets in that region. Selling, general and administrative expenses in that region were higher on a per case basis in local currency in part due to lower case sales than planned. We are holding discussions with our distributor in Central Eastern Europe to more equitably allocate the value chain between us. We believe that such discussions, combined with reduced operating costs per case, will enable us to achieve improved operating results in 2012, in Central and Eastern Europe. We incurred higher promotional and marketing costs on a per case basis in Australia, in 2011, implementing our strategy to increase market share, which was achieved. We are working with our distributor in Australia to increase their contribution towards promotional costs going forward and have also taken steps to reduce our cost of goods and overall operating cost in Australia. We believe that these measures will enable us to achieve improved results in Australia in 2012. Operating income was negatively affected by combined operating losses of $15.4 million for the year ended December 31, 2011, from our operations in Europe, the Middle East, Africa, Australasia and, South America. These operating losses negatively affected our reported income for the 2011 year, and obviously, should be bore in mind in our evaluating results. Our effective tax rate in the 2011 fourth quarter was 38.3% compared to 38.7% in the 2010 fourth quarter. The decrease in the 2011 fourth quarter effective tax rate was primarily the result of a lower effective combined state tax rate, which was partially offset by an increase in the reserve for certain, uncertain tax benefits. Our effective tax rate for the year ended December 31, 2011, was 37.4% compared to 39.3% for the year ended December 31, 2010. The decrease in the effective tax rate for the year was primarily the result of a lower effective combined state tax rate this year and the establishment, in 2010, of a full valuation allowance against the deferred tax assets of a foreign subsidiary. The decrease in the annual effective tax rate was also partially offset by the increase in the reserve for certain, uncertain tax benefits. Turning to the balance sheet. Cash and cash equivalents amounted to $359.3 million compared to $354.8 million at December 31, 2010. Short-term investments were $411.3 million compared to $244.6 million at December 31, 2010. Long-term investments decreased from $44.2 million at December 31, 2010 to $23.2 million. Included in short and long-term investments are auction rate securities of $35.9 million. Trade account receivables are now presented on a gross basis, as our promotional allowances owed to those customers that the company does not allow net settlement, such as our full-service distributors. We continue to present that portion of the promotional allowances owed to those customers that the company allows net settlement on a net basis. On such basis, trade account receivables increased to $218.1 million from $166 million at December 31, 2010. Days outstanding for receivables, consistent with the above treatment, were 42.4 days at December 31, 2011, compared to 41.3 days at December 31, 2010. If trade account receivables had been presented on a net basis, days outstanding would have been 26.2 days at December 31, 2011, compared to 27.7 days at December 31, 2010. In the future, the company will only report days outstanding for receivables calculated on a basis consistent with the above new treatment. As sales outside the United States continue to increase as a proportion of our overall sales, days outstanding for receivables are expected to increase due to the different terms generally granted to customers internationally in accordance with local practices in their respective countries. Inventories increased to $155.6 million from $153.2 million at December 31, 2010. Average days of inventory was 72 days at December 31, 2011, which is lower than the 89 days of inventory at December 31, 2010. At December 31, 2011, the company held auction rate securities with a face value of $44.8 million, originally it was $79.6 million at December 31, 2010, with an amortized cost basis of $35.9 million. During the 2011 fourth quarter, the company purchased approximately 0.7 million shares of its common stock at an average purchase price of $39.78 per share, pursuant to the share repurchase program previously authorized by the Board of Directors in March 2010. These purchases exhausted the availability under the 2010 share repurchase program. In the fourth quarter, the Board of Directors authorized a new share repurchase plan for the repurchase of up to $250 million out of the company's shares. No shares have been purchased, as yet, under this authorization. Gross sales in January 2012 were approximately 34% higher than in January 2011. While we are encouraged by the continuing strong sales that have been experienced by the company, we caution, again, that sales in a single month and over a short period are often disproportionately impacted by various factors such as, for example, selling days of the week in which holidays fall at the timing of promotions in retail stores, and should not necessarily be imputed to or regarded as indicative of results for the full quarter or any future period. I would like to open the floor to questions. Thank you.

[Operator Instructions] We have a question from Kaumil Gajrawala with UBS.

One quick clarification. When you were going through the numbers at the beginning, did you say that it was Central and Eastern Europe that went to profitability or were you talking about total Europe?

No. Western Europe, which includes the U.K., are more established markets, and by further bulk in that area, was profitable. It's the newer markets, and a lot of them are smaller countries in Central and Eastern Europe, that aren't profitable. A lot of that, as I indicated, and also just been more difficult because of startup costs in different countries, different languages. And just have overhead structures in each of those countries, which we have to establish and that Central and Eastern Europe has been the issue.

Okay, got it. And then was there anything timing related? Sounds like in January you were up 54, that's significantly different with how the quarter was going. Anything that we should know about timing wise, that would explain that?

I'm not sure I follow that. I mean, the sales were up. The Nielsens, which were indicated with, for the last 4 weeks, were up in the high 20s. Our sales and ourselves as a company, which includes international is up 34% in January. So I'm not sure where that was...

Okay. I just misheard you towards the end of that one.

To clarify, 3 4.

3 4, got it.

Yes.

And then the final thing is how far along are you in some of the international markets where you're close to profitability? Is there a certain size in terms of revenues, a certain area all of a sudden scale starts to kick in?

I think there is a clear correlation between the size of the market and our profitability. In most of the Western European countries, we're already at a size where we are profitable in each of those countries, individually, as well as in aggregate for the region. In Central and Eastern Europe, there are certain countries in that region where we have reached a level of profitability already, even though those are much newer markets, and those are the markets that are bigger. It's just much harder to get going in small market where you may have 100,000 cases or 120,000 cases in your second year to be profitable. Where you've got a country manager, you have a sampling team, a truck and marketing people. You do need to get up to a certain scale and be -- it's just been harder in Central and Eastern Europe because the energy category in those countries is smaller and it's just taking a little longer to get up to that mass. But it is going in the right direction.

Okay. And then just my final question is with very impressive growth despite the fact that the economy had not turned around, maybe at the pace which we would have preferred. Do you feel that maybe you're starting to see a bit of a cyclical benefit, that maybe the macro-environment is getting a little bit better for your core consumer?

I think it's been very much, much less -- I mean, a lot of our core consumers are still struggling. And for example, in California, where the housing market hasn't come back yet. So we've not seen a big change that sort been -- materially, in anyway. I mean, the results of just the been -- continue to be good. The category is still growing and a lot of that we ascribe to the broadening demographic. And we've been fortunate to see growth even though we've -- obviously, we're having tough economic times, generally, in the U.S. and elsewhere. But we don't see a big change.

Your next question is from Judy Hong with Goldman Sachs.

Rodney, I think I missed your answer to Kaumil's question. But the January sales, you said up 54 or 34?

No, 34. 3 4, 34%.

34%. Okay, got it. And then maybe just -- if you can help us understand the Rehab performance. How big is that brand now as a percent of your business? And as you build out traditional SKUs, I think you were hoping that you can get into tea doors and how successful are you in that endeavor?

Rehab in -- this is January, I'm trying to get you some figures. In January, Rehab is -- January and February, Rehab has been about between 5% and 6%, that's just the original Rehab. Between 5% and 6% of our sales. And we're rolling off the Red and the Green Tea Rehab and the others, and so that is a little bit distorted in January and February because a lot of that is part 4. But in the quarter, the fourth quarter, Rehab's sales were about -- gross sales, I don't have a net number, Judy, gross sales were about $47 million. So that, you can see is quite a big number, it's -- of our total net sales, were about -- I'm sorry, that's gross. Our total gross sales in the quarter was about -- adjusted, it was about -- in that division was about $467 million. So the company is $467 million. So you can see -- which is 10% of our sales. And if you go to the -- and in the convenience and gas -- basically in the convenience and gas channel, if you take our leading Green product, which is the main product, our sales that were -- the retail sales, $118 million for the 13 weeks ending January 21. Rehab, it -- growing up to about $23.5 million. If you bear that in mind Absolutely Zero is off to another year -- being in the market for 1 3/4 year, that's $27.4 million and our low carb is about $39 million. So those are the -- sort of the -- that's sort of positioning of it our mix.

And your success in terms of getting additional -- in your entry into tea door, which we have now [ without ] additional SKUs. Are you able to get more shelf spaces and get into tea door now?

Get into? We're right in the middle of getting sets, resets, and not able to -- we're getting immediate acceptance for all of our additional SKUs. But I'm not aware of exactly how, what proportion of our sales are going into the energy door or actually being successful in transitioning into the tea door. It's premature for me, both.

Okay. And then just in terms of your G&A expenses in the quarter, just to the sequential step up. I think in Q3, if you take out the options expense, it's just up by about $3 million just quarter-to-quarter. So is that just adding more people in some of the international markets? What drove that sequential pickup in terms of the actual dollar increase in G&A?

I think one of the things that was up was stock-based compensation. And then we are also up with additional people. I mean, as we've continued to expand the rollout into -- and planning for -- our launches took place earlier this month. The launch that is coming up quite quickly in Korea. In Japan, we've led to take on additional staff, and so we are gearing to do the same thing in South America. So we certainly have had an increase in staffing and we have taken on a new Senior Vice President, Don Blaustein, who was previously President of Heineken to head up our international operations in Asia and South America regions, and Lat-Am regions. He's come on board. But he won't have affected these figures because he's come on board only in the last few weeks. But we are obviously, looking to step up our personnel to basically be able to handle the increased expansion, the bigger volume that we're now dealing with as we continue to move forward.

And our next question comes from Bill Chappell with SunTrust.

Just a couple of quick questions around gross margin, kind of looking at a pretty strong gross margin in the fourth quarter. Trying to understand if that's more mix or if that's the benefit of the hedges and how we should look at that if that's kind of the base we should look at going forward into 2012?

I think that's more of a mix issue. I think the Rehab is continuing to increase as a proportion and the margins on the Rehab brand are better than some of the juice products, the coffee product, some of the bigger can sizes. So I think that is primarily a mix result.

Okay. And then looking to 2012. I know you said that commodities shouldn't be a negative for gross margin, how about the entry into a lot of the Asian, Eastern Europe countries in the first half. Should they have any material impact on that gross margin or should be at least flat look ahead?

I think that, as we've indicated, the overseas business, generally, gross margins are not as good as we've been achieving in the North American markets. So as we continue to grow sales in those markets, we're obviously trying to improve our efficiencies and our cost. But the gross margins are, as a general rule, not -- there are some exceptions, but as a general rule, will be less. But again, the impact that those additional markets will have on the company, we believe will be small. The issue, which we don't know a lot about is as we continue to expand, again, is what will happen to cost like the bigger cost that we have, our apple juice and sugar, which are quite big components, as we've indicated -- as indicated earlier. We've largely covered our aluminum can side. But we do have -- we've got a reasonable proportion of our juice and sugar cost all uncovered. So those may go up as we see the year. But we don't think that the increase -- there'll be an increase but we don't think it'll be material.

And our next question is from Caroline Levy with CLSA.

This is a Michael Lavery on behalf of Caroline. Just looking at the International business. Could you talk a little bit about how, where you are now compared to where you hope to be, and I know you mentioned expanding into Poland. But you've had a lot of quarters with a long list of countries that you've started into. And so what's left? I know you've got some moves in Asia coming, but are you getting a good read just compared to where you expect to be? Is it just a question of those markets maturing more now and developing or -- what's the right way to think about the trajectory there?

So if we take Europe -- generally, Western Europe, we pretty much have full distribution. We think that we're looking at making, relooking at the Italian market. We think there's lot of opportunity. I think we're underrepresented in the Italian market. We have opportunity there. Some of the markets are starting to grow very nicely. We think we have a lot of growth left in markets like Spain, Germany and the U.K. where the brand is doing very, very nicely and in France, for that matter. Those are pretty big markets. In Central and Eastern Europe, we are looking at some additional markets which are quite large. Poland is probably the second largest market in Central and Eastern Europe. And in fact if you exclude Russia, it's the largest market, but certainly just after Russia. And that is a very big market in relation to some of the other smaller markets that we have gone into. Hungary was a nice market but they imposed a tax on energy drinks and anything with sugar. And that really has completely disrupted that market. So that is part of the sort of challenges we had this year. And the fall off in the fourth quarter was largely attributable to -- in sales in that area was attributable to that issue. But the Czech market is doing very nicely. So there are markets that are doing very nicely and will continue to grow. We think that we do have some expansion there. The Asian markets, we are looking at some pretty nice sized market in Korea and Japan. There are a couple of the smaller ones, that I indicated, which will be our smaller markets. And we're continuing to expand. We believe, that we have a lot of upside and the Brazilian market, particularly in the other markets in South America where we're at -- we're pretty far advanced in having our products approved through -- meeting the regulatory requirements and in having planning -- launches planned. We've already started trade in Colombia very nicely and we're looking at Peru, Ecuador, Chile, and Argentina. So we believe those will also come on stream in the foreseeable future. And each of these markets just basically have their own maturity as you get to a certain size in the market, you're able to actually profitably support the infrastructure we need in these markets. The way we do business going into markets with a lot of support for sampling and for those sort of local marketing activities. And so once we get over the initial hump, the markets start becoming more profitable quite quickly and you know we've just paid our dues in a lot of the Central and Eastern European markets and we are hopeful that we will continue to get better results in those countries this year.

Well, that's very helpful, thanks. And one last one, I'm sorry if I might have missed you say that, I just didn't catch it. But how are you tracking quarter-to-date on shipments so far? Because I know you've got a funny comparison with last year. What does that look like through the first few weeks, first half of the quarter?

Well, we have indicated the figure was, in January, was 34% higher.

And that's on a shipment basis?

That's on a shipment basis, correct. And we're still in the middle of Feb. It's moving in the right and it's on a good trajectory but it's very early in the month.

That's the Q&A portion for the conference. I'll like turn the call back over to Rodney Sacks, Chairman and CEO for closing comments.

Thank you very much. Thanks very much. I know that our conference call seems to have interfered with the CAGNY conference. But thanks very much for taking the time to attend the call. We're pretty excited by the results that we've continued to be able to achieve with the brand, the continued expansion of the brand, increase of sales and profitability in the U.S. and North American markets. And the overseas markets have taken a little bit of time to get going but they are starting to put into place now. We are seeing some really nice increases in market share and results coming out of Western Europe. And so we are pretty encouraged by that factor. You just got to have a bit of patience. Things don't happen in a day. But we really are excited, going forward, by the gross sales that we've achieved in January. And I'll repeat that we are very, very encouraged by our Rehab brand. The whole line is going very well. It's been very well received by buyers and customers, as well as the consumer feedback we've heard is very, very positive for that line. So we're looking forward to having a good year this year and thank you for your support. Thank you.

Ladies and gentlemen, thank you for your participation in the Monster Beverage Corporation Fourth Quarter and Year-end 2011 Financial Results Conference Call. This does conclude the program. And you may now disconnect. Thank you and have a wonderful day.