Monster Beverage Corporation reported unaudited consolidated earnings results for the first quarter ended March 31, 2013. For the first quarter, the company's net sales were $484,223,000 a increase of 6.5% against $454,605,000 for the same period a year ago. Operating income was $107,306,000 a decrease of 15% against $126,285,000 for the same period a year ago. Income before provision for income taxes was $105,404,000 against $126,631,000 for the same period a year ago. Net income was $63,496,000 a decrease of 16.6% against $76,099,000 for the same period a year ago. Net income per diluted share was $0.37 against $0.41 per diluted share for the same period a year ago. Operating income was negatively affected by combined operating losses of $2,100,000 from the company operations in Europe, the Middle East, Africa, Australia, South America and Asia, as compared to operating losses of $4,300,000 for the same period last year.

San Francisco City Attorney Dennis Herrera sued Monster Beverage Corporation for violating California law with its marketing of highly-caffeinated energy drinks to children as young as six-years-old, despite scientific findings that such products may cause 'significant morbidity in adolescents' from elevated blood pressure, brain seizures, and severe cardiac events. The lawsuit filed in San Francisco Superior Court this morning comes just one week after Monster pre-emptively sued Herrera in an extraordinary legal attempt to halt his office's months-long investigation into the marketing and sales practices of large energy drink manufacturer. The FDA has received numerous adverse event reports allegedly related to consumption of Monster Energy drinks, including five deaths and multiple reported instances of illness, injury and hospitalizations. The alleged wrongful death of a 14-year-old Maryland girl from cardiac arrhythmia due to caffeine toxicity after drinking two 24-ounce servings of Monster Energy is the subject of high-profile private litigation currently pending against the company. Herrera's complaint alleges that Monster Beverage Corporation's business and marketing practices violate California's Unfair Competition Law and Sherman Food, Drug and Cosmetic Law. If San Francisco's lawsuit is successful, Monster Energy could be enjoined from continuing illegal conduct deemed harmful to consumers and competitors, and forced to pay significant civil penalties and restitution as a result of its unfair business practices.

Monster Beverage Corporation, Q1 2013 Earnings Call, May 08, 2013