Good day, ladies and gentlemen, and welcome to the Monster Beverage Corporation's First Quarter 2015 Financial Results. [Operator Instructions] As a reminder, this call will be recorded. I would now like to introduce your host for today's conference, Mr. Rodney Sacks, Chairman and CEO. Please go ahead.

Good afternoon, ladies and gentlemen. Thank you for attending this call. I'm Rodney Sacks. Hilton Schlosberg, our Vice Chairman and 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 March 2, 2015, 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 May 7, 2015. A copy of this information is also available on our website at monsterbevcorp.com in the Financial Information section. As previously disclosed, in August 2014, Monster Beverage Corporation and…

[Operator Instructions] And our first question comes from Judy Hong from Goldman Sachs.

So I guess just first in terms of the 84% of the volume that you've transitioned to the Coke distribution, just give us a little bit of kind of what you're seeing as you've transitioned. I know you called out some of the disruptions, but are you starting to see some changes in terms of what's happening on the shelves? And you've obviously highlighted the opportunity in the vending and specialty channels. Can we see those channels getting more traction more quickly? And then in international market, it sounds like the disruptions related to just the pending transition is perhaps a little bit more pronounced maybe than the U.S. markets. So can you verify if that is the appropriate reads that we should think about at this point? And are there any sort of any big markets? You're seeing a little bit more of the transition disruption in those international markets?

Judy, with your second question first. I think you are correct in that assumption. I think international markets have just been a little more affected. I think there's just a little more skepticism amongst the distributors and anticipation of what the future will be and whether they will continue to be -- distribute the brand. And I think that has affected their investment in the brand, investment in securing distribution and sales and, in general approach, I think in attitude. With regard to the transition to the U.S., we think that the transition has gone relatively smoothly from a retailer point of view. There were a few disruptions, minor where retailers hadn't -- weren't able in time to make changes or the distributor to make changes, so that, in some cases, products being taken into stores were still being shown as being supplied by the previous vendors, so there were some issues. But generally, we thought that the transition went well. But again, a lot of that will only come through to us with time. We've heard of small -- a few instances, but obviously, we don't hear of everything, certainly not in the first few weeks of it taking place. So I think that even to really understand the issues and the opportunities, is going to take some months to pan out and be -- for us to be able to really make more sense of it. Just to comment on any doubtful things, I think would not be sensible and not accurate enough.

Our next question comes from Mark Astrachan from Stifel. Mark S. Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division: The first question, the price increase, should we think about that as sort of in line with the mid-single-digit price increase that Red Bull took?

I think it's probably going to be similar, yes. I just think that having seen how they've managed this and the effect and the response from the trade and consumers, we think that's probably what we are likely to do. We'll finalize the actual numbers a little later, but we'll do that. We're looking to try and do that early in the fall. Mark S. Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay, great. And then the tax rates, so should we expect also that to go back to where it was trending over the last year or so following this quarter? And then just one sort of broader question...

Yes. It's hard for us to determine what the tax rate would be. But we -- there was a -- there was this factor. This was quite a large stock option exercise that might've -- there maybe some that flow through. But then eventually, on a longer-term basis, those will ameliorate quite substantially. That will affect the tax rate. And I think as we continue to settle down and grow international business, both for our own brand as well as the brand, the KO acquired brands, we think that the tax rate will be positively affected. But we -- at this point, we just -- there's too many uncertainties for us to try and point to exactly where that will end up. But we do think we will be able to make some headway in lowering the rate. Mark S. Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division: Great. And then just lastly, how are you envisioning international distribution in terms of percent of volume in the Coke system and away from the Coke system? I know it's early, but just sort of how do you think about that?

Again, I think that's been really difficult to give you an answer on because it's just taken time to get to meet the international bottlers around the world to assess their appetite, where we will be with them, what their appetite is for the brand. And there are also, obviously, economic issues and factors as to whether we are happy making the change, if -- based on margin requirements and cost requirements. So there are a number of factors, and we are working through those. But the U.S. was an easier transition in -- to do in mass clearly and was the main focus for us to get done. The other focuses, we've been -- to visit them, we've traveled around them, we're starting negotiations with them. But many of them are -- don't know Monster, don't know the system. And it's -- and each negotiation takes on its own course because of different factors that apply in each of these different countries. And this quite varies. There isn't a one formula fits all for the different countries. So that is taking a bit more time, and we're going to have to work our way through it. Obviously, we are looking at that as -- on a positive point of view, we would like to transition substantial amount of that distribution, but that will pan out later in the year over the next 3 to 6 months.

Our next question comes from Kevin Grundy with Jefferies.

Question on G&A. So OpEx in the quarter was a little bit higher than we had modeled, and I understand there's some noise in there, regulatory professional services, et cetera. Should that normalize? I guess the thinking was you'd get better SG&A leverage, particularly with the top line pretty resilient. Should we be expecting G&A to sort of normalize for the balance of the year? And then with respect to FX, perhaps you could give us a little guidance there. I guess it was about a 2 point headwind in the top line. What are you expecting for the balance of the year?

Just on the G&A, I think that the regulatory side will eventually go, but it is there. We're going to see that for a little while still until we resolve some of these -- the pending regulatory matters. With regard to the payroll taxes, again, we think that there may be 1 or 2 quarters, but that generally will also I think regulate -- might disappear and become much more normalized. One of the other costs that we -- or a couple of the other costs that I would just mention, that I did mention, the premiums was high this quarter. What happened was we took premiums into our books in the first quarter. A lot of it designed or earmarked for second quarter premiums. So there was a slight switch in when you're going to see the benefit of it, but is this the right -- we needed to account with an accordance with our policies. Also, in the -- in sponsorships, there was a -- there was an increase, which we think will level out over the year. What -- in certain types of sponsorships, we had allocated these sponsorships over the period of the actual events due to certain changes in the way we -- our contracts with the -- particular events. Now we are amortizing those more spread over the 12-month period. So that had a bit of an effect of increasing costs in the first quarter because a lot of the events start towards -- the annual events start towards the second quarter or earlier than that -- end of the first quarter. We also had an increase in -- we signed an agreement, a sort of major sponsorship with UFC this year, which had the effect of also increasing and coming into the first quarter. So those -- again, we think those will normalize somewhat and probably get us more in line with what we've been going in the future. What we don't know is how those effects will -- those will all be effective once we obviously bring in the KO brands with -- because the whole model for the KO brands will be a concentrate model. There'd be different cost criteria, and that may change things up a little bit.

And one thing we didn't actually address is the professional services costs related to the Coca-Cola transaction. And of course, that should wind down when the transaction closes.

Yes. Absolutely. And then ForEx, perhaps if you'd like to comment on, the floor is yours. Your thoughts on that, Hilton?

Yes. ForEx, in the quarter, we commented that gross sales we believe were affected by about USD 15 million and the net sales by USD 12 million. And depending on what happens in the subsequent quarters, it's difficult to comment on what those numbers will look like going forward.

Our next question comes from Amit Sharma from EMO Capital Markets (sic) [BMO Capital Markets].

Rodney, if we look like 12 to 18 months in the future and then you look at your international business, what are some of the key markets that you're focusing on? And as we look at the time line of getting traction in those markets, should we assume a normalized time line or a little bit accelerated now that you have a partner of large scale in some of those markets?

Well, the major international markets that we sort of already are in the with large enough, and I'd say, major sort of Energy Drink markets are U.K. and Europe, Germany, where we're in now, Spain, so we are -- we're continuing to focus in those markets. Those markets won't -- obviously GB and Spain are with the same Coca-Cola Bottlers. We -- obviously, Germany isn't at the moment, and that will be a decision on -- if and when we change in Germany, which is likely and imminent. The opportunities also in the other big markets, which are sort of -- as a market but we don't know the size of the Energy category for probably premium. The market is very big for -- in Energy, for example, in China, which we've mentioned before, is a really big -- we think is a big future opportunity. But it's in a lower-priced product at the moment. And so whether the premium section and how, where we want to position our brand is still uncertain and we've not come to a final decision. But clearly, that is a market we're going to focus on. We do believe there's good opportunity to grow much more than we have in a market like Brazil, which is also a big market. Obviously Japan, we're doing nicely. And so we're going to try and focus on the larger markets where we're already there. And then obviously, newer markets, we will be -- we will go into, but it wouldn't be as much authority, probably other than China, which we do regard as a priority for us. And we are looking at that and taking steps to actively look at the market and ascertain when we can get into that market. So I think that we will…

I mean, that was one of the reasons why we did this transaction was to be able to capitalize on the opportunities that Coca-Cola presents to us through international distribution.

Our next question comes from Steve Powers with UBS.

I guess, maybe a follow-up on that just with regards to your progress moving to local production in overseas markets. We've talked a lot about it, and you just mentioned it there. I just was wondering if there's any update to your thinking just given the Coke deal is pending. I guess, specifically, are you now holding back on that transition anywhere where you instead anticipate a move to local production via the Coke system instead of your current...

No. It's -- again, it's a mixed bag, and there are clearly more opportunities to get local production through the Coke bottlers that we have talked to and we anticipate talking to. In some countries, we were very advanced in discussions with independent Coke packers to actually pack our products. And in some cases, we need to and we will continue with those arrangements and implement them because a, it'll help secure local production on a -- at a quicker date because it does take some time to get a Coke-packing plant up to speed and to make certain equipment changes that might be necessary or was usually necessary in order to run our products. And in some case in countries, there may well be a need for backup or 2 production plants. So again, it depends on the country. It depends on the circumstances, but there is a really good appetite from the Coke bottlers who are enthusiastic about wanting to do production and -- which is very beneficial for us. So we are reviewing and running down dual policies in some countries where 2 -- the independent packers that we already started on, plus Coke packers, and then in other countries, just looking -- starting from a fresh with Coke -- with the Coke packers or Coke bottlers.

I'm showing no further questions in the queue. I would now like to turn the call back to Mr. Rodney Sacks for any closing remarks.

Thank you. On behalf of Monster, I would like to thank everyone for their continued interest in our company. We continue to believe in the company and our growth strategy and remain committed to continue to develop and differentiate our brands and to expand the company, both at home and abroad. We are particularly excited by the new opportunities that we are -- that we have going forward with a robust portfolio of Energy Drink products comprised of our Monster Energy Drink line, together with The Coca-Cola Company's energy brands throughout the world. We believe that our agreement with The Coca-Cola Company will enable us to focus on our core Energy business while leveraging the strength of The Coca-Cola Company's powerful distribution and bottling system on a worldwide scale. Thank you very much for your attendance.