Natural products group Hansen Natural Corp. reported record sales for its second quarter ended June 30, 2001, supported by strong growth in functional drinks lines and new products. Net sales for the second quarter increased 13.4 percent to $25.7m (Euro29.2m) from $22.7m (Euro25.6m) a year earlier. Operating income for the quarter was $2.0m (Euro2.25m) compared with $2.8m (Euro3.16m) a year ago. Net income for same period was $1.1m (Euro1.24m), or $0.11 per diluted share, compared with $1.7m (Euro1.92m), or $0.16 per diluted share, in the comparable period in 2000. Rodney C. Sacks, chairman and chief executive officer said, "Our record sales performance for the second quarter of 2001 reflects continued strength from Hansen's® core beverage lines, namely Functional Drinks, Natural Sodas, Apple Juice, Juice Blends and Smoothies in cans. We are particularly pleased that sales of Functional Drinks were marginally higher than last year, notwithstanding the recent introduction by many of the major beverage companies of competitive energy drinks." The increase in sales was, however, partially offset by decreases in sales of Smoothies in glass and PET bottles, teas, lemonades and juice cocktails and Signature Sodas and Healthy Start(TM) juices in glass and PET bottles. Sacks noted that although the company's gross profit, as a percentage of net sales ("gross margin"), decreased to 45.4 percent in the quarter from 47.2 per cent a year earlier, the gross margin had increased over the 44.0 percent gross margin reported in the first quarter of 2001. He attributed the gross margin decrease primarily to changes in the company's product mix. Hansen is currently in the process of launching its new E20 Energy Water line in 24-ounce PET bottles as well as Energade, a new non-carbonated energy sports drink in 23.5-ounce cans. The company is planning to launch its new lines of premium sodas in 1-liter proprietary glass bottles and Soy-Smoothies, during the second half of 2001.