HANSEN NATURAL CORPORATION 2009 ANNUAL REPORT HANSEN NATURAL CORPORATION • 550 Monica Circle, Ste.201 • Corona, CA 92880 • Tel: 951.739.6200 • Fax: 951.739.6210 Board of Directors & Officers Registrar and Transfer Agent American Stock Transfer & Trust Company Rodney C. Sacks Benjamin M. Polk Brooklyn, New York Chairman of the Board and Director, Partner, Chief Executive Officer Schulte Roth & Zabel LLP Independent Auditors Hilton H. Schlosberg Norman C. Epstein Deloitte & Touche LLP Vice Chairman of the Board, Director, Former Managing Director Costa Mesa, California President, Chief Operating Officer, Cheval Property Finance, PLC Chief Financial Officer and Secretary General Counsel Mark S. Vidergauz Schulte Roth & Zabel LLP Harold C. Taber, Jr Director, Chief Executive Officer, New York, New York Director, Former President, The Sage Group, LLC Table of Contents Hansen Beverage Company Letter to Stockholders....1 Sydney Selati Common Stock Director, Former President The Company’s common stock is traded on the Form 10-K....3 a n d C h a i r m a n o f t h e B o a r d NASDAQ Global Select Market system under Report of Independent Registered Public The Galore Group (U.S.A.), Inc. the symbol HANS Accounting Firm....71 Form 10K Consolidated Financial Statements....72 Interested stockholders may obtain without Corporate Directory....109 charge a copy of the Company’s Form 10-K, as filed with the Securities and Exchange Commission, upon written request to the Annual Meeting Company’s corporate offices. The annual meeting of stockholders will be held at 3:00 pm on Thursday, June 10, 2010 at the Ayres Suites, Corona West, 1900 W. Frontage Rd., Corona, CA 92882 109 TO OUR STOCKHOLDERS I am pleased to report that in 2009 we were able to deliver our 17th consecutive year of record revenues while we continued to innovate and introduce new cutting edge beverages. We were successful in expanding distribution of our Monster Energy® brand into new international markets and Monster Energy® is now available in 46 markets and territories, outside of the United States. We introduced the following new beverages during the year: Monster Energy® Import energy drinks, packaged in 550 ml aluminum cans, with patented resealable ends, that are manufactured in Europe and imported into the United States (May 2009). X-Presso Monster™-Hammer, a non-carbonated espresso energy drink, packaged in 6.75- ounce aluminum cans, infused with nitrous oxide, that are manufactured in Europe and imported into the United States (June 2009). Nitrous™ Monster Energy®, a line of carbonated energy drinks which contain nitrous oxide, that are packaged in re-sealable 12-ounce sleek aluminum “cap-cans,” in three variants (July 2009). Monster Energy® “Dub Edition” energy drink, packaged in 32-ounce aluminum cans (October 2009). Hansen’s® Natural Lo-Cal, a line of all natural, low calorie 64-ounce juice cocktails in four flavors (September 2009). The Lo-Cal juice cocktails are sweetened with Truvia™ brand stevia extract, an all natural sweetener. Blue Sky® Free Sodas, a new line of all natural, zero calorie sodas, sweetened with Truvia™ brand stevia extract, an all natural sweetener (September 2009). Peace Tea™, a new line of ready-to-drink iced teas in 23-ounce aluminum cans (December 2009). The inclusion of nitrous oxide in both X-Presso Monster™ and the Nitrous™ Monster Energy® line of energy drinks, delivers a smooth texture and unique flavor, which distinguishes both products from competitors’ offerings. The 2009 year was important in the transition of Monster Energy® from a domestic North American brand into a truly international brand. In 2009 we launched Monster Energy® drinks through Coca-Cola Enterprises in the United Kingdom, France, Belgium, Holland, Luxembourg and Monaco (we began selling Monster Energy® drinks in the United Kingdom in 2008 through a previous distributor), and through independent distributors in Spain and Italy. We also commenced distribution of Monster Energy® drinks in Australia and New Zealand in 2009. We recently commenced distribution and sales of Monster Energy® drinks in Brazil after experiencing delays in obtaining the necessary governmental approvals. We are currently in the process of expanding distribution and sales of Monster Energy® drinks in additional countries in Central and Eastern Europe, namely Hungary, the Czech Republic and Slovakia and are evaluating the possible launch of Monster Energy® in Germany and in additional countries later in the year or early next year. 2009 was an extremely difficult year for the beverage industry as a whole and for the convenience and gas channel in particular, which is by far the largest retail sector for energy drinks. In fact, the energy drink category in the United States experienced negative growth for the first time from May until September 2009. In the last quarter of 2009, the category returned to positive but moderate growth and has continued to grow moderately through the first quarter of 2010. We achieved record gross sales of $1,309.3 million for the year ended December 31, 2009, primarily attributable to increased sales of Monster Energy® drinks. At the beginning of January we transitioned our North American operations to the SAP Enterprise Resource Planning (“ERP”) system. We are fortunate that the transition was implemented in a relatively seamless manner, after almost a year-long planning process. However, we did experience some delays in certain product deliveries. We are addressing these issues as and when they arise and are confident that we will be able to achieve reliable operation of the system by the end of the second quarter of 2010. We intend to continue to innovate and introduce new Monster Energy® drinks as well as other beverages in 2010 with an added emphasis on lower calorie drinks to meet the increasing awareness of and demand by consumers for such products. The realignment of our distribution partners in the United States primarily to Anheuser-Busch distributors and Coca-Cola bottlers, has continued to benefit the Company. We believe that these arrangements should be instrumental in securing attractive long-term growth for the Monster Energy® brand. We plan to continue the international expansion of our Monster Energy® drinks in 2010, with a view to achieving our goal of making Monster Energy® a truly global brand. The Warehouse Division, which comprises the Company’s products other than Monster Energy® and Peace Tea™, achieved considerably improved results in 2009 over the prior year. We are continuing to develop the Hansen’s® and Blue Sky® brands and to launch new and unique products in this division as well. While there is positive talk of an improvement in the global economic environment, the United States economy and, in particular, large markets such as California, continue to be negatively affected by tough economic conditions and high unemployment. Despite these factors, we are optimistic as to our continued ability to continue to grow the Monster Energy® brand and achieve increased sales in 2010. Once again, I would like to express my gratitude for the support afforded to the Company by Mr. Hilton Schlosberg, our President and Chief Operating Officer, and Mr. Mark Hall, President of our Monster Beverage Division. I would also like to express my personal thanks to our consumers, stockholders, customers, distributors, and suppliers for their continued support. To all of our management and employees, my sincere thanks and appreciation for all their efforts, which are evidenced by the continued success of our Company. To our shareholders, thank you for the trust you have placed in our management team. Sincerely, Rodney C. Sacks Chairman and Chief Executive Officer UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) [ X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2009 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number 0-18761 HANSEN NATURAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 39-1679918 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 550 Monica Circle, Suite 201, Corona, California 92880 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (951) 739 - 6200 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of each exchange on which registered Common Stock, $.005 par value per share Nasdaq Global Select Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No! Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes! No Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ! Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ! No ! Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.