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Subject:  Hansen Corporation Date:  2/22/2006  9:50 PM
Author:  pencils2 Number:  11 of 23

HANS has been the best-performing stock of the past six years, but I think it can keep going, at least for now. I think that the market they are in is growing at a nice speed, they are a leader, I don't think their great sales will slow down just yet.

The Business

Hubert Hansen and his three sons founded Hansen Natural in 1935. They sold their natural drinks to film studios and retailers under the Hansen name. Then, in the 1970's, Hubert's grandson Tim developed and marketed an array of natural sodas that were shelf-stable and 100% juice. Hansen has been around for more than 70 years; they know what they are doing. This is a classic Tom Gardner stock, IMO, because of the old, experienced business in a growing market. Through its subsidiaries, Hansen engages in the development, marketing, sale, and distribution of beverages in the U.S. and Canada. Hansen markets its products under the names Hansen's, Monster, Blue Sky, and Junior Juice brands. Monster drinks are very addictive and that is Hansen's main product line: Energy drinks. Blue Sky is a leading producer of natural soda, a great company for Hansen to own. The products under the Hansen's name are also natural sodas, many are diet natural sodas. Hansen's owns the leaders, I really think this company will someday be the "Coke" of natural drinks.


Energy Drinks:

Hansen in this market with these brands:


Controlled Label Energy Drinks:


The energy segment makes up 72% of YTD gross sales as of Sep. 30, 2005. Go down to competition to see market share chart.

The energy drink is the fastest-growing segment in the U.S. beverage industry, this gives Hansen a huge opportunity. Lost is the brand that mostly appeals to high school and college students, but Monster is the fastest growing energy drink in the U.S.

Hansen is the category leader in the energy drink segment, this really explains Hansen's great performance over the past 6 years

Natural Sodas:

This is the segment that Hansen really is a leader with less competition, just with these brands:

Blue Sky

Blue Sky is the leading natural soda in the health-food category.
Hansen is the leading natural soda in the U.S.


Junior Juice

Hansen's are first shelf-stable smoothies in the U.S.
Hansen's 64 oz. Apple Juice is the number 1 selling shelf-stable bottled juice in California. Other of their 64 oz. juices are widely known and are best sellers, Hansen Corp. says there are great opportunities in the distribution segment.


Market Cap: 2.01 Billion

Hansen has been making more and more money rapidly, creating a concern when the growth slows down. I think Hansen still has so much more room to grow and expand its product line, there's also talk that PepsiCo, Coca-Cola, or Starbucks might purchase the company. At this time I don't think Hansen's would sell the company, there is so much more opportunity left that it just doesn't make sense to sell now.

Since 2000, Hansen has an annual growth rate compounded through 2004 of 27.5% in gross annual sales. A comparison between the 9 months ending Sep. 30, 2004 and Sep. 30, 2005 show: he business grew from $162.3M to $301.8M dollars in gross sales, 85.9%.

PERIOD ENDING          30-Sep-05  30-Jun-05   31-Mar-05   31-Dec-04 

Current Assets
Cash And Cash Equivalents 41,282 33,428 30,574 20,976
Short Term Investments 8,652 - - -
Net Receivables 39,526 36,272 23,402 16,359
Inventory 28,856 27,801 23,451 22,406
Other Current Assets 4,159 1,111 527 639
Total Current Assets 122,474 98,613 77,955 60,380
Long Term Investments - - - -
Property Plant and Equipment 3,719 3,311 2,799 2,964
Goodwill - - - -
Intangible Assets 18,411 18,324 18,338 18,352
Accumulated Amortization - - - -
Other Assets 736 769 737 326
Deferred Long Term Asset Charges - - - -

Total Assets 145,341 121,017 99,828 82,022

The inventory has been growing steadily, but not rapidly. As long as Hansen keeps increasing cash flow more than inventory, I feel comfortable. I'm not sure how the Fool views this, but obviously you want more inventory if you're product line is selling at a great speed, right? Now lets look into the liabilities, the liabilities, understandably, have grown also. But cash is growing much faster than the liabilities; so this isn't really a problem, of course we need to keep a close eye to make sure the company is paying off debt and making a profit, which Hansen has.
PERIOD ENDING         30-Sep-05   30-Jun-05   31-Mar-05  31-Dec-04 

Current Liabilities

Accounts Payable 34,090 31,141 26,640 18,304
Short/Current Long Term Debt 718 670 355 437
Other Current Liabilities - - - -
Total Current Liabilities 34,808 31,812 26,995 18,741
Long Term Debt 13 165 168 146
Other Liabilities - - - -
Deferred L-T Liability Charges 5,265 4,974 4,755 4,563
Minority Interest - - - -
Negative Goodwill - - - -

Total Liabilities 40,086 36,951 31,918 23,451

For the most recent quarter, Hansen had $49.93 million in cash and only $730.93K in debt, so the cash/debt ratio is definitely not a problem. Hansen has continued to make money and keep the debt down, I would really feel comfortable sleeping at night with this great corporation in my portfolio.


Hansen's insiders own 23.07% of all shares outstanding, institutions 48.7%. While I'd rather have it the other way around, this isn't a "Hidden" company anymore. If institutions owned around 60% of the stock, I would be worried. But 48% really isn't all that bad, because that is between a diversified amount of institutions, so if a shareholder vote came up it wouldn't just be banked on what the institutions wanted. I really don't see this as a problem in my book, but people have their different opinions on share ownership, please comment freely.

Insiders sold less than 1% of their shares over the last six months, again, this isn't really a problem. Insiders want to diversify their portfolios also, so unless there is heavy insider selling I am not worried.


This segment of the analysis is a bit tough to explain in a short overview, but I will do the best I can.

First, let's start with energy drinks market share, here is some table-data with those statistics. This is the market share for the brands, not companies.

Market Share - Energy Drinks, ()=Share Change

Red Bull



No Fear