Name: Monster Beverage Corp. (NASDAQ:MNST) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Monster Beverage Corp., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	1,630,988)	1,191,624)	1,377,475)	1,409,594)	1,107,835)
Depreciation and amortization	68,898)	61,241)	50,155)	57,030)	60,727)
Non-cash lease expense	9,043)	7,337)	4,107)	3,943)	4,087)
(Gain) loss on disposal of property and equipment	166)	(185)	(1,013)	(350)	(252)
Gain on Bang Transaction	(45,382)	—)	—)	—)	—)
Loss on impairment of intangibles	38,700)	2,200)	—)	8,700)	—)
Loss on impairment of property and equipment	4,336)	—)	—)	—)	—)
Stock-based compensation	68,836)	64,109)	70,483)	70,289)	63,356)
Deferred income taxes	2,040)	48,182)	16,429)	(156,873)	1,263)
Accounts receivable	(163,158)	(128,981)	(254,228)	(119,672)	(59,941)
Inventories	7,898)	(347,712)	(277,793)	30,304)	(85,222)
Prepaid expenses and other assets	(10,215)	(38,268)	(29,341)	1,024)	(13,774)
Prepaid income taxes	(18,833)	(4,439)	(10,919)	5,516)	9,481)
Accounts payable	112,786)	49,765)	114,297)	18,696)	28,832)
Accrued liabilities	(10,393)	(30,419)	71,586)	26,113)	(14,018)
Accrued promotional allowances	8,418)	50,821)	31,498)	13,762)	21,943)
Accrued compensation	13,398)	3,729)	7,950)	7,501)	7,228)
Income taxes payable	1,748)	(16,860)	7,221)	10,422)	8,105)
Other liabilities	22,951)	(4,540)	492)	(356)	(1,030)
Deferred revenue	(24,472)	(19,905)	(22,658)	(21,480)	(24,858)
Effect on cash of changes in operating assets and liabilities	(59,872)	(486,809)	(361,895)	(28,170)	(123,254)
Adjustments to reconcile net income to net cash provided by operating activities	86,765)	(303,925)	(221,734)	(45,431)	5,927)
Net cash provided by operating activities	1,717,753)	887,699)	1,155,741)	1,364,163)	1,113,762)
Sales of available-for-sale investments	2,029,737)	2,252,355)	1,488,599)	920,196)	851,436)
Purchases of available-for-sale investments	(1,620,718)	(1,847,067)	(2,413,143)	(1,299,981)	(1,067,736)
Acquisition of Bang Energy	(363,385)	—)	—)	—)	—)
Acquisition of CANarchy, net of cash	—)	(329,472)	—)	—)	—)
Purchases of property and equipment	(221,428)	(188,726)	(43,868)	(48,722)	(101,661)
Proceeds from sale of property and equipment	2,520)	1,313)	1,328)	993)	1,239)
Additions to intangibles	(13,296)	(23,427)	(13,585)	(18,550)	(8,737)
Increase in other assets	(6,825)	(26,343)	(11,353)	(26,423)	(1,265)
Net cash used in investing activities	(193,395)	(161,367)	(992,022)	(472,487)	(326,724)
Borrowings (payments) on debt	(13,914)	75)	2,928)	(3,086)	(13,569)
Issuance of common stock	130,267)	64,015)	45,723)	72,936)	92,363)
Purchases of common stock held in treasury	(658,952)	(771,028)	(13,830)	(595,918)	(707,300)
Net cash provided by (used in) financing activities	(542,599)	(706,938)	34,821)	(526,068)	(628,506)
Effect of exchange rate changes on cash and cash equivalents	8,775)	(38,715)	(52,491)	16,848)	1,912)
Net increase (decrease) in cash and cash equivalents	990,534)	(19,321)	146,049)	382,456)	160,444)
Cash and cash equivalents, beginning of year	1,307,141)	1,326,462)	1,180,413)	797,957)	637,513)
Cash and cash equivalents, end of year	2,297,675)	1,307,141)	1,326,462)	1,180,413)	797,957)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The financial performance of Monster Beverage Corp. between 2019 and 2023 is characterized by strong operational cash generation, strategic inorganic expansion, and a consistent commitment to shareholder returns through equity repurchases. Net cash provided by operating activities remained robust, peaking in 2023 at approximately 1.72 billion US$, representing a significant recovery from a low of 887.7 million US$ in 2022.

Operating Cash Flow Dynamics: Net income exhibited a generally upward trend, growing from 1.11 billion US$ in 2019 to 1.63 billion US$ in 2023. However, the conversion of net income to operating cash flow was impacted by significant working capital volatility. Specifically, 2021 and 2022 saw substantial cash outflows related to inventories and accounts receivable, with inventory investments peaking at a negative 347.7 million US$ in 2022. By 2023, these pressures eased, as evidenced by a positive inventory adjustment of 7.9 million US$ and a sharp increase in net operating cash flow.
Investment Strategy and Capital Expenditure: Investing activities reflect a dual strategy of liquid asset management and strategic acquisitions. The company actively managed available-for-sale investments, with notable purchases of 2.41 billion US$ in 2021 offset by sales of 2.25 billion US$ in 2022. Capital expenditure on property and equipment trended upward in the latter part of the period, increasing from 43.9 million US$ in 2021 to 221.4 million US$ in 2023. Inorganic growth was highlighted by the acquisition of CANarchy in 2022 for 329.5 million US$ and the acquisition of Bang Energy in 2023 for 363.4 million US$.
Financing Activities and Capital Allocation: The financing profile is dominated by aggressive share buybacks. Excluding 2021, the company consistently spent between 595.9 million US$ and 771.0 million US$ annually on the purchase of common stock held in treasury. This return of capital was partially offset by the issuance of common stock, which reached a period high of 130.3 million US$ in 2023. Debt levels remained minimal, with borrowing and repayments having a negligible impact on the overall cash position.
Liquidity and Cash Position: The overall liquidity position strengthened significantly over the five-year horizon. Cash and cash equivalents grew from 798.0 million US$ at the end of 2019 to 2.30 billion US$ by the end of 2023. The most substantial increase occurred in 2023, where a net increase of 990.5 million US$ in cash was achieved, driven by record operating cash flows and strategic divestments of available-for-sale investments.

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