Hansen Natural Corporation (Nasdaq:HANS) today reported record sales and net income for the three months ended September 30, 2000.

Net sales for third quarter increased 10.8 percent to $22.7 million from $20.5 million a year earlier.

Operating income for the quarter rose 3.9 percent to $2.3 million from $2.2 million a year ago. Net income for the same period climbed 2.1 percent to $1.4 million, or $0.13 per diluted share, from $1.3 million, or $0.13 per diluted share, in the comparable period in 1999.

For the nine months ended September 30, 2000, net sales increased 11.8 percent to $61.3 million from $54.9 million in 1999. Operating income for the nine months was $6.3 million compared with $6.2 million a year ago. Net income for the same period was $3.7 million, or $0.35 per diluted share, compared with net income of $3.7 million, or $0.35 per diluted share, a year ago.

Rodney C. Sacks, Hansen's chairman and chief executive officer, stated, "Despite a difficult first quarter and slow July, we were able to achieve satisfactory results. This achievement is largely attributed to the substantial growth in sales of our functional drinks in 8.2-oz. slim cans, as well as increased sales of apple juice and our children's multi-vitamin juice drinks in 8.4-oz. aseptic packages."

He noted that during the third quarter the company commenced sales of its gourmet GMO-free functional cereals, as well as its new line of functional fruit and grain energy bars, both under the Hansen's(R) brand name. Sacks added that the company has rescheduled its launch of a new line of premium alternative healthy iced teas and drinks to the beginning of 2001.

At the end of the third quarter, the company's subsidiary, Hard e Beverage Company, commenced limited sales of its malt-based drink called "Hard e" which contains five percent alcohol. The Hard e product is not being marketed under the Hansen's name.

Sacks noted that the increase in sales for the third quarter was partially offset by a decrease in sales of Healthy Start(TM) Juices in multi-serve PET bottles, which are currently being repositioned under the Silver Foxes brand, and by decreased sales of certain other product lines.

In addition, Sacks remarked that the average gross margin achieved by the company in the third quarter improved to 48.4 percent from 47.2 percent in the second quarter. The favorable gross margin was, however, offset by increased promotional allowances, increased freight and storage costs, in advance of the company's relocation to a new facility, and increased payroll, in part due to new staff hires in anticipation of new and current product launches.

Sacks said that the company intended to focus on establishing its new functional cereals and fruit and grain energy bars in the fourth quarter. The company's subsidiary, Hard e Beverage Company, will focus on Hard e in the fourth quarter.

As previously announced, the company completed its acquisition in September of the Blue Sky Natural Beverage business. Results for the third quarter include sales of Blue Sky products for the last ten days of the quarter. The Blue Sky Natural Beverage business has been seamlessly rationalized into the Hansen's Beverage business. Management believes that the acquisition of the Blue Sky Natural Beverage business will further solidify the company's position as a leader in the natural soda category in the United States and will give the company clear leadership of the natural soda category in the growing health food market.

Hansen Natural Corporation markets and distributes Hansen's(R) Natural Sodas, Signature Sodas, Fruit Juice Smoothies, Functional Drinks, Multi-Vitamin Juice products in aseptic packaging, Silver Foxes (TM) (Healthy Start) 100% Juices, Iced Teas, Lemonades and Juice Cocktails, Old Fashioned Apple Juice, Cider and Juice blends, as well as Cereals and Bars and Blue Sky brand carbonated beverages. The company's subsidiary, Hard e Beverage Company, markets and distributes Hard e malt beverages. Hansen's can be found on the Web at www.hansens.com.
Consolidated Statements of Operations (Unaudited)

Three Months Nine Months
Ended Ended
Sept. 30, Sept. 30,
2000 1999 2000 1999

NET SALES $22,701,624 $20,491,265 $61,346,401 $54,862,616
COST OF SALES 11,723,298 11,060,928 32,472,187 29,044,061
GROSS PROFIT 10,978,326 9,430,337 28,874,214 25,818,555

general and
administrative 8,576,155 7,121,372 22,322,793 19,373,804
Amortization of
license 82,638 76,604 247,935 224,900
Other expenses --- --- --- 30,000
Total operating
expenses 8,658,793 7,197,976 22,570,728 19,628,704

INCOME 2,319,533 2,232,361 6,303,486 6,189,851

Interest and
financing expense 76,873 34,651 169,059 137,763
Interest income (2,917) (40,758) (11,467) (90,781)

Net nonoperating
expense (income) 73,956 (6,107) 157,592 46,982
INCOME TAXES 2,245,577 2,238,468 6,145,894 6,142,869
INCOME TAXES 880,389 901,700 2,440,516 2,457,000
NET INCOME $1,365,188 $1,336,768 $3,705,378 $3,685,869

Basic $ 0.14 $ 0.13 $ 0.37 $ 0.37
Diluted $ 0.13 $ 0.13 $ 0.35 $ 0.35

Basic 9,937,509 9,975,976 9,959,592 9,950,566
Diluted 10,467,662 10,625,105 10,440,377 10,544,156