An investigation on behalf of investors in Hansen Natural Corporation (Public, NASDAQ:HANS), who purchased their shares as early as October 2008, over possible violations of securities laws by Hansen Natural Corporation was announced.
According to the investigation by a law firm the investigation focuses on announcements made by Hansen Natural Corp. on and after October 06, 2008.
On October 6, 2008, Hansen Natural Corp. announced in a press release, that Hansen Natural Corporation (NASDAQ:HANS), The Coca-Cola Company (NYSE:KO) and Coca-Cola Enterprises, Inc. (NYSE:CCE) have completed agreements for distribution of the category-leading Monster Energy drinks line in six Western European countries, Canada and selected territories in the U.S. According to a Stifel Nicolaus analyst the deal was expected to enhance annual distribution and to give the company an immediate presence in Europe.
Specifically, Hansen Natural said: We believe the relationship with the Coca-Cola Company and Coca-Cola Enterprises will enable us to build on the success of our Monster Energy brand in North America and expand into new international markets.
On November 6, 2008 during the Q3 2008 earnings call, Hansen Natural Corp. indicated, so the investigation, that distribution pursuant to the agreement with The Coca-Cola Company and Coca-Cola Enterprises was to go into effect within days: These arrangements are scheduled to commence on November 10, 2008. Consequently during the third quarter, Coca-Cola bottlers  purchased substantial products to ensure that the will have sufficient inventory in their warehouses and at distribution points around the territory for which they have been appointed when they commence sales. Then on February 26, 2009, after the close of the market, Hansen Natural reported its Q4 2008 earnings and although Hansen Natural reported some disruption due to the transition under the new distribution agreement, CEO Rodney Sacks made the following statement indicating that the transition was relatively smooth: While we are satisfied with the relatively smooth transition that we achieved over the past few months, as with any transition there are bound to be hiccups.
Some of the new bottlers and branches were able to integrate the Monster brand readily, while others encountered challenges. We are working through the issues. On February 27, 2009, the first trading day after the announcement, Hansens publicly traded common stock increased by $2.27, more than 7%, to close at $33.28. On May 5, 2009, so the investigation, during the Q1 2009 earnings call, CEO Rodney Sacks said: [W]e believe that most of the issues that arose during the transition have now been resolved.
But then on June 5, 2009, so the investigation an Associated Press article reporting on Hansen Naturals annual shareholders meeting the prior day disclosed that Hansen Natural had reported disappointing sales and that Hansen Natural was having continued problems adjusting to the new drinks distribution system. The same day shares of Hansen Natural declined by $4.19, about 11.5%, to close at $32.36 on June 05, 2009.
Hansen Natural Corporation, located in Corona, CA is a holding company and carries no operating business except through its direct wholly owned subsidiaries, Hansen Beverage Company. Shares of Hansen Natural Corporation (NASDAQ:HANS) traded recently at $30.17 per share, down from a 52weekHigh of $44.02 per share and $67.86 per share in 2007. Hansen Natural reported Total Revenue of $904.47million with a net income of $149.41million in 2007 and Total Revenue of $1.03378billion with net income of $108.03million in 2008.