Mead Johnson Reports Second Quarter Constant Dollar Sales Growth of 10 Percent; Narrows Full-Year EPS Guidance
(1) For the definition of Specified Items and a reconciliation of GAAP and non-GAAP results, see “Non-GAAP Financial Measures” on the schedule titled “Supplemental Financial Information” included in this release.
“We are pleased with our overall performance in the second quarter,”
said Chief Executive Officer Kasper Jakobsen. “Constant dollar sales
grew by double digits again this quarter. Growth in
Second Quarter Results
Sales for the second quarter of 2014 were $1,111.1 million, up five
percent from $1,055.3 million a year ago. Constant dollar sales
increased 10 percent; five percent from volume and five percent from
price. Foreign exchange adversely impacted sales growth by five percent.
Price increases in
The company’s effective tax rate (“ETR”) was 23.3 percent in the second quarter, compared to 26.0 percent in the prior-year quarter. The ETR improvement was primarily due to a change in geographic earnings mix.
Net earnings attributable to shareholders totaled $171.4 million on a GAAP basis, or $0.84 per diluted share, in the second quarter of 2014, compared to $172.0 million, or $0.84 per diluted share, in the prior-year quarter.
On a non-GAAP basis, which excludes Specified Items, net earnings attributable to shareholders totaled $179.2 million, or $0.88 per diluted share, for the second quarter of 2014, up one percent from $177.9 million, or $0.87 per diluted share, for the same quarter a year ago.
Second Quarter Segment Results
The
The
The
Corporate and Other expenses for the second quarter of 2014 were $72.4 million compared to $67.8 million in the second quarter of 2013. The increase in expenses was mainly due to current year actuarial losses compared to prior year actuarial gains related to certain employee pension benefit plans.
Six-Month Results
Sales for the six months ended
The effective tax rate for the first half of 2014 was 24.5 percent as compared to 26.4 percent a year ago. The lower ETR was primarily due to a change in geographic earnings mix.
Net earnings attributable to shareholders for the first six months of 2014 totaled $373.8 million, or $1.84 per diluted share, up from $360.0 million, or $1.77 per diluted share, for the same prior-year period.
On a non-GAAP basis, which excludes Specified Items, net earnings attributable to shareholders totaled $385.3 million, or $1.90 per diluted share, in the first half of 2014, up eight percent from $357.8 million, or $1.76 per diluted share, in the first half of 2013.
Six-Month Segment Results
Sales in the
Sales in the
The
Corporate and Other expenses for the first six months of 2014 were $135.2 million compared to $115.8 million in the first half of 2013. The increase in expenses was mainly due to current year actuarial losses as compared to prior year actuarial gains related to certain employee pension benefit plans.
Cash Related Items
As of
Outlook for 2014
“With our strong sales growth in the first half of 2014, we now anticipate our annual constant dollar sales growth will be no less than nine percent, up from our prior guidance of approximately eight percent,” Mr. Jakobsen said. “We will continue to invest in demand creation in line with our strategy, despite foreign exchange pressure. With strong first half results and higher confidence in our outlook, we have raised the low end of guidance and now expect full-year non-GAAP EPS to be in the range of $3.65 to $3.72 per diluted share.”
Conference Call Scheduled
Mead Johnson will host a conference call at
About Mead Johnson
Mead Johnson, a global leader in pediatric nutrition, develops, manufactures, markets and distributes more than 70 products in over 50 markets worldwide. The company's mission is to nourish the world’s children for the best start in life. The Mead Johnson name has been associated with science-based pediatric nutrition products for over 100 years. The company’s “Enfa” family of brands, including Enfamil® infant formula, is the world's leading brand franchise in pediatric nutrition. For more information, go to www.meadjohnson.com.
Forward-Looking Statements
Certain statements in this news release are forward-looking as defined
in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements may be identified by the fact they use words
such as “should,” “expect,” “anticipate,” “estimate,” “target,” “may,”
“project,” “guidance,” “intend,” “plan,” “believe” and other words and
terms of similar meaning and expression. Such statements are likely to
relate to, among other things, a discussion of goals, plans and
projections regarding financial position, results of operations, cash
flows, market position, product development, product approvals, sales
efforts, expenses, capital expenditures, performance or results of
current and anticipated products and the outcome of contingencies such
as legal proceedings and financial results. Forward-looking statements
can also be identified by the fact that they do not relate strictly to
historical or current facts. Such forward-looking statements are based
on current expectations that involve inherent risks, uncertainties and
assumptions that may cause actual results to differ materially from
expectations as of the date of this news release. These risks include,
but are not limited to: (1) the ability to sustain brand strength,
particularly the Enfa family of brands; (2) the effect on the company’s
reputation of real or perceived quality issues; (3) the effect of
regulatory restrictions related to the company's products; (4) the
adverse effect of commodity costs; (5) increased competition from
branded, private label, store and economy-branded products; (6) the
effect of an economic downturn on consumers’ purchasing behavior and
customers’ ability to pay for product; (7) inventory reductions by
customers; (8) the adverse effect of changes in foreign currency
exchange rates; (9) the effect of changes in economic, political and
social conditions in the markets where we operate; (10) changing
consumer preferences; (11) the possibility of changes in the WIC (3)
program, or participation in WIC; (12) legislative, regulatory or
judicial action that may adversely affect the company’s ability to
advertise its products or maintain product margins; and (13) the ability
to develop and market new, innovative products. For additional
information regarding these and other factors, see the company’s filings
with the
(3)
MEAD JOHNSON NUTRITION COMPANY |
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CONSOLIDATED STATEMENTS OF EARNINGS |
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(Dollars and shares in millions, except per share data) |
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(UNAUDITED) |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013(a) | 2014 | 2013(a) | ||||||||||||
NET SALES | $ | 1,111.1 | $ | 1,055.3 | $ | 2,224.4 | $ | 2,093.2 | |||||||
Cost of Products Sold | 426.8 | 382.0 | 832.5 | 767.0 | |||||||||||
GROSS PROFIT | 684.3 | 673.3 | 1,391.9 | 1,326.2 | |||||||||||
Operating Expenses: | |||||||||||||||
Selling, General and Administrative | 242.3 | 223.4 | 475.2 | 430.5 | |||||||||||
Advertising and Promotion | 174.6 | 167.6 | 330.3 | 312.1 | |||||||||||
Research and Development | 26.7 | 24.8 | 53.8 | 47.3 | |||||||||||
Other (Income)/Expense – net | (4.2 | ) | 10.7 | (3.5 | ) | 16.0 | |||||||||
EARNINGS BEFORE INTEREST AND INCOME TAXES | 244.9 | 246.8 | 536.1 | 520.3 | |||||||||||
Interest Expense – net | 15.3 | 12.4 | 27.7 | 26.6 | |||||||||||
EARNINGS BEFORE INCOME TAXES | 229.6 | 234.4 | 508.4 | 493.7 | |||||||||||
Provision for Income Taxes | 53.5 | 61.0 | 124.5 | 130.3 | |||||||||||
NET EARNINGS | 176.1 | 173.4 | 383.9 | 363.4 | |||||||||||
Less Net Earnings Attributable to Noncontrolling Interests | 4.7 | 1.4 | 10.1 | 3.4 | |||||||||||
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS | $ | 171.4 | $ | 172.0 | $ | 373.8 | $ | 360.0 | |||||||
Earnings per Share*– Basic | |||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.85 | $ | 0.85 | $ | 1.85 | $ | 1.77 | |||||||
Earnings per Share*– Diluted | |||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.84 | $ | 0.84 | $ | 1.84 | $ | 1.77 | |||||||
Weighted Average Shares – Diluted | 202.7 | 203.2 | 202.5 | 203.2 | |||||||||||
Dividends Declared per Share | $ | 0.375 | $ | 0.340 | $ | 0.750 | $ | 0.680 |
(a) See the company's Form 10-Q for the second quarter of 2014 for details regarding the impact of changes to pension accounting.
*The numerator for basic and diluted earnings per share is net earnings attributable to shareholders reduced by dividends and undistributed earnings attributable to unvested shares. The denominator for basic earnings per share is the weighted-average shares outstanding during the period. The denominator for diluted earnings per share is the weighted-average shares outstanding adjusted for the effect of dilutive stock options and performance share awards.
MEAD JOHNSON NUTRITION COMPANY |
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CONSOLIDATED BALANCE SHEETS |
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(Dollars and shares in millions, except per share data) |
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(UNAUDITED) |
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June 30, 2014 | December 31, 2013 (a) | |||||||
CURRENT ASSETS: | ||||||||
Cash and Cash Equivalents | $ | 1,586.3 | $ | 1,050.8 | ||||
Receivables – net of allowances of $11.5 and $6.5, respectively | 418.2 | 384.4 | ||||||
Inventories | 574.7 | 534.8 | ||||||
Deferred Income Taxes – net of valuation allowance | 87.6 | 75.3 | ||||||
Income Taxes Receivable | 33.8 | 15.9 | ||||||
Prepaid Expenses and Other Assets | 71.6 | 56.9 | ||||||
Total Current Assets | 2,772.2 | 2,118.1 | ||||||
Property, Plant, and Equipment – net | 884.7 | 867.5 | ||||||
Goodwill | 175.4 | 196.8 | ||||||
Other Intangible Assets – net | 82.4 | 97.5 | ||||||
Deferred Income Taxes – net of valuation allowance | 54.2 | 37.0 | ||||||
Other Assets | 143.6 | 157.2 | ||||||
TOTAL | $ | 4,112.5 | $ | 3,474.1 | ||||
LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term Borrowings | $ | 3.5 | $ | 2.0 | ||||
Accounts Payable | 543.0 | 566.8 | ||||||
Dividends Payable | 76.5 | 69.3 | ||||||
Current Portion of Long-Term Debt | 502.2 | 505.6 | ||||||
Accrued Expenses | 203.2 | 220.0 | ||||||
Accrued Rebates and Returns | 333.5 | 314.9 | ||||||
Deferred Income – current | 11.9 | 46.6 | ||||||
Income Taxes – payable and deferred | 69.9 | 56.1 | ||||||
Total Current Liabilities | 1,743.7 | 1,781.3 | ||||||
Long-Term Debt | 1,502.1 | 1,009.1 | ||||||
Deferred Income Taxes – noncurrent | 13.0 | 15.3 | ||||||
Pension and Other Post-employment Liabilities | 170.7 | 161.8 | ||||||
Other Liabilities | 178.8 | 156.4 | ||||||
Total Liabilities | 3,608.3 | 3,123.9 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
REDEEMABLE NONCONTROLLING INTEREST | 56.5 | 49.7 | ||||||
EQUITY | ||||||||
Shareholders’ Equity | ||||||||
Common Stock, $0.01 par value: 3,000 authorized, 207.5 and 206.8 issued, respectively | 2.1 | 2.1 | ||||||
Additional Paid-in/(Distributed) Capital | (686.1 | ) | (721.5 | ) | ||||
Retained Earnings | 1,641.9 | 1,432.3 | ||||||
Treasury Stock – at cost | (388.7 | ) | (351.9 | ) | ||||
Accumulated Other Comprehensive Loss | (135.1 | ) | (69.2 | ) | ||||
Total Shareholders’ Equity | 434.1 | 291.8 | ||||||
Noncontrolling Interests | 13.6 | 8.7 | ||||||
Total Equity | 447.7 | 300.5 | ||||||
TOTAL | $ | 4,112.5 | $ | 3,474.1 |
(a) See the company's Form 10-Q for the second quarter of 2014 for details regarding the impact of changes to pension accounting.
MEAD JOHNSON NUTRITION COMPANY |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(Dollars in millions) |
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(UNAUDITED) |
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Six Months Ended June 30, | ||||||||
2014 | 2013(a) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net Earnings | $ | 383.9 | $ | 363.4 | ||||
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: | ||||||||
Depreciation and Amortization | 44.2 | 41.7 | ||||||
Other | 26.7 | 43.6 | ||||||
Changes in Assets and Liabilities | (103.7 | ) | (46.0 | ) | ||||
Payments for Settlement of Interest Rate Forward Swaps | (45.0 | ) | — | |||||
Pension and Other Post-employment Benefits Contributions | (2.1 | ) | (2.9 | ) | ||||
Net Cash Provided by Operating Activities | 304.0 | 399.8 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
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Payments for Capital Expenditures | (94.8 | ) | (117.0 | ) | ||||
Proceeds from Sale of Property, Plant and Equipment | 0.3 | 1.6 | ||||||
Proceeds from/(Investment in) Other Companies | 4.0 | (1.3 | ) | |||||
Net Cash Used in Investing Activities | (90.5 | ) | (116.7 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from Short-term Borrowings | 3.2 | 5.3 | ||||||
Repayments of Short-term Borrowings | (1.3 | ) | (128.1 | ) | ||||
Repayments of Notes Payable |
— |
(10.8 | ) | |||||
Payments of Dividends | (144.7 | ) | (129.9 | ) | ||||
Stock-based-compensation-related Proceeds and Excess Tax Benefits | 20.3 | 18.8 | ||||||
Purchases of Treasury Stock | (34.6 | ) | (60.6 | ) | ||||
Long-term Debt Borrowings, net of original issue discount and expenses paid | 492.3 | — | ||||||
Distributions to Noncontrolling Interests | (4.4 | ) | (4.9 | ) | ||||
Net Cash Used in Financing Activities | 330.8 | (310.2 | ) | |||||
Effects of Changes in Exchange Rates on Cash and Cash Equivalents | (8.8 | ) | (11.1 | ) | ||||
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 535.5 | (38.2 | ) | |||||
CASH AND CASH EQUIVALENTS: | ||||||||
Beginning of Period | 1,050.8 | 1,042.1 | ||||||
End of Period | $ | 1,586.3 | $ | 1,003.9 |
(a) See the company's Form 10-Q for the second quarter of 2014 for details regarding the impact of changes to pension accounting.
MEAD JOHNSON NUTRITION COMPANY |
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SUPPLEMENTAL FINANCIAL INFORMATION |
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(Dollars in millions) |
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(UNAUDITED) |
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Three Months Ended June 30, | % Change | % Change Due to | |||||||||||||||||||||||||
% of | % of | Constant | Foreign | ||||||||||||||||||||||||
Net Sales | 2014 | Total | 2013 | Total | Reported | Dollar | Volume | Price/Mix | Exchange | ||||||||||||||||||
Asia | $ | 575.6 | 52% | $ | 534.2 | 51% | 8 | % | 11 | % | 6 | % | 5 | % | (3 | )% | |||||||||||
Latin America | 224.4 | 20% | 223.2 | 21% | 1 | % | 14 | % | 6 | % | 8 | % | (13 | )% | |||||||||||||
North America/Europe | 311.1 | 28% | 297.9 | 28% | 4 | % | 4 | % | 1 | % | 3 | % | — | % | |||||||||||||
Net Sales | $ | 1,111.1 | 100% | $ | 1,055.3 | 100% | 5 | % | 10 | % | 5 | % | 5 | % | (5 | )% | |||||||||||
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EBIT | EBIT | ||||||||||||||||||||||||||
Earnings Before Interest and | % of | % of | |||||||||||||||||||||||||
Income Taxes (EBIT) | 2014 | Sales |
2013(a) |
Sales |
% Change |
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Asia | $ | 195.9 | 34% | $ | 192.0 | 36% | 2 | % | |||||||||||||||||||
Latin America | 53.4 | 24% | 47.6 | 21% | 12 | % | |||||||||||||||||||||
North America/Europe | 68.0 | 22% | 75.0 | 25% | (9 | )% | |||||||||||||||||||||
Corporate and Other | (72.4 | ) | (67.8 | ) | (7 | )% | |||||||||||||||||||||
EBIT | $ | 244.9 | 22% | $ | 246.8 | 23% | (1 | )% |
Six Months Ended June 30, | % Change | % Change Due to | |||||||||||||||||||||||||||
% of | % of | Constant | Foreign | ||||||||||||||||||||||||||
Net Sales | 2014 | Total | 2013 | Total | Reported | Dollar | Volume | Price/Mix | Exchange | ||||||||||||||||||||
Asia | $ | 1,168.3 | 52 | % | $ | 1,088.4 | 52 | % | 7 | % | 10 | % | 6 | % | 4 | % | (3 | )% | |||||||||||
Latin America | 436.8 | 20 | % | 424.3 | 20 | % | 3 | % | 17 | % | 7 | % | 10 | % | (14 | )% | |||||||||||||
North America/Europe | 619.3 | 28 | % | 580.5 | 28 | % | 7 | % | 7 | % | 4 | % | 3 | % | — | % | |||||||||||||
Net Sales | $ | 2,224.4 | 100 | % | $ | 2,093.2 | 100 | % | 6 | % | 11 | % | 6 | % | 5 | % | (5 | )% | |||||||||||
EBIT | EBIT | ||||||||||||||||||||||||||||
Earnings Before Interest and | % of | % of | |||||||||||||||||||||||||||
Income Taxes (EBIT) | 2014 | Sales |
2013(a) |
Sales | % Change | ||||||||||||||||||||||||
Asia | $ | 437.2 | 37 | % | $ | 413.6 | 38 | % | 6 | % | |||||||||||||||||||
Latin America | 100.0 | 23 | % | 94.6 | 22 | % | 6 | % | |||||||||||||||||||||
North America/Europe | 134.1 | 22 | % | 127.9 | 22 | % | 5 | % | |||||||||||||||||||||
Corporate and Other | (135.2 | ) | (115.8 | ) | (17 | )% | |||||||||||||||||||||||
EBIT | $ | 536.1 | 24 | % | $ | 520.3 | 25 | % | 3 | % |
(a) See the company's Form 10-Q for the second quarter of 2014 for details regarding the impact of changes to pension accounting.
Non-GAAP Financial Measures
This news release contains non-GAAP financial measures, which may include non-GAAP net sales, gross profit, certain components of operating expenses including selling, general and administrative, research and development and other expenses/(income)-net, EBIT, earnings and earnings per share information. The items included in GAAP measures, but excluded for the purpose of determining the above listed non-GAAP financial measures, include significant income/expenses not indicative of underlying operating results, including the related tax effect. The above listed non-GAAP measures represent an indication of the company’s underlying operating results and are intended to enhance an investor’s overall understanding of the company’s financial performance. In addition, this information is among the primary indicators the company uses as a basis for evaluating company performance, setting incentive compensation targets and planning and forecasting of future periods. This information is not intended to be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Tables that reconcile non-GAAP to GAAP disclosure follow:
MEAD JOHNSON NUTRITION COMPANY |
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RECONCILIATION OF NON-GAAP TO GAAP RESULTS |
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(Dollars in millions, except per share data) |
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(UNAUDITED) |
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Three Months Ended June 30, 2014 | Three Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||
Specified Items (b) | Specified Items (b) | |||||||||||||||||||||||||||||||||||||||||||
GAAP | Mark-to-Market Pension | Legal, Settlement and Related Costs | Severance and Other Costs | Non-GAAP | GAAP (a) | Mark-to-Market Pension | Admin Penalty (China) | Legal, Settlement and Related Costs | Severance and Other Costs | Non-GAAP (a) | ||||||||||||||||||||||||||||||||||
NET SALES | $ | 1,111.1 | $ | 1,111.1 | $ | 1,055.3 | $ | 1,055.3 | ||||||||||||||||||||||||||||||||||||
Cost of Products Sold | 426.8 | (2.5 | ) | — | — | 424.3 | 382.0 | 1.6 |
— |
— | — | 383.6 | ||||||||||||||||||||||||||||||||
GROSS PROFIT | 684.3 | 2.5 | — | — | 686.8 | 673.3 | (1.6 | ) |
— |
— | — | 671.7 | ||||||||||||||||||||||||||||||||
GROSS MARGIN % | 61.6 | % | 0.2 |
% |
— |
% |
— |
% |
61.8 | % | 63.8 | % | (0.1 | )% |
— |
% |
— |
% |
— |
% |
63.7 | % | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
Selling, General and Administrative | 242.3 | (3.9 | ) | (4.4 | ) | (0.2 | ) | 233.8 | 223.4 | 2.5 | (0.2 | ) | — | (0.6 | ) | 225.1 | ||||||||||||||||||||||||||||
Advertising and Promotion | 174.6 | — | — | — | 174.6 | 167.6 | — |
— |
— | — | 167.6 | |||||||||||||||||||||||||||||||||
Research and Development | 26.7 | (0.7 | ) | — | — | 26.0 | 24.8 | 0.6 |
— |
— | — | 25.4 | ||||||||||||||||||||||||||||||||
Other (Income)/Expenses – net |
(4.2 | ) | — | — | — | (4.2 | ) | 10.7 | — | (7.2 | ) | — | — | 3.5 | ||||||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND INCOME TAXES | 244.9 | 7.1 | 4.4 | 0.2 | 256.6 | 246.8 | (4.7 | ) | 7.4 | — | 0.6 | 250.1 | ||||||||||||||||||||||||||||||||
EBIT as a % of Sales | 22.0 | % | 0.6 | % | 0.4 | % | — | % | 23.1 | % | 23.4 | % | (0.4 | )% | 0.7 | % | — | % | 0.1 | % | 23.7 | % | ||||||||||||||||||||||
Interest Expense – net | 15.3 | — | — | — | 15.3 | 12.4 | — | — | — | — | 12.4 | |||||||||||||||||||||||||||||||||
EARNINGS BEFORE INCOME TAXES | 229.6 | 7.1 | 4.4 | 0.2 | 241.3 | 234.4 | (4.7 | ) | 7.4 | — | 0.6 | 237.7 | ||||||||||||||||||||||||||||||||
Provision for Income Taxes | 53.5 | 2.4 | 1.4 | 0.1 | 57.4 | 61.0 | (1.8 | ) | (0.9 | ) | — | 0.1 | 58.4 | |||||||||||||||||||||||||||||||
Effective Tax Rate | 23.3 | % | 0.3 | % | 0.2 | % | — | % | 23.8 | % | 26.0 | % | (0.2 | )% | (1.2 | )% | — | % | — | 24.6 | % | |||||||||||||||||||||||
NET EARNINGS | 176.1 | 4.7 | 3.0 | 0.1 | 183.9 | 173.4 | (2.9 | ) | 8.3 | — | 0.5 | 179.3 | ||||||||||||||||||||||||||||||||
Less Net Earnings Attributable to Noncontrolling Interests | 4.7 | — | — | — | 4.7 | 1.4 | — | — | — | — | 1.4 | |||||||||||||||||||||||||||||||||
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS | $ | 171.4 | $ | 4.7 | $ | 3.0 | $ | 0.1 | $ | 179.2 | $ | 172.0 | $ | (2.9 | ) | $ | 8.3 | $ | — | $ | 0.5 | $ | 177.9 | |||||||||||||||||||||
Earnings per Share– Diluted | ||||||||||||||||||||||||||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.84 | $ | 0.02 | $ | 0.02 | $ | — | $ | 0.88 | $ | 0.84 | $ | (0.01 | ) | $ | 0.04 | $ | — | $ | — | $ | 0.87 |
(a) See the company's Form 10-Q for the second
quarter of 2014 for details regarding the impact of changes to pension
accounting.
(b) All Specified Items are
included in Corporate and Other.
MEAD JOHNSON NUTRITION COMPANY |
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RECONCILIATION OF NON-GAAP TO GAAP RESULTS |
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(Dollars in millions, except per share data) |
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(UNAUDITED) |
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Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||
Specified Items (b) | Specified Items (b) | |||||||||||||||||||||||||||||||||||||||||||
GAAP | Mark-to-Market Pension | Legal, Settlement and Related Costs | Severance and Other Costs | Non-GAAP | GAAP (a) | Mark-to-Market Pension | Admin Penalty (China) | Legal, Settlement and Related Costs | Severance and Other Costs | Non-GAAP (a) | ||||||||||||||||||||||||||||||||||
NET SALES | $ | 2,224.4 | $ | 2,224.4 | $ | 2,093.2 | $ | 2,093.2 | ||||||||||||||||||||||||||||||||||||
Cost of Products Sold | 832.5 | (2.5 | ) | — | — | 830.0 | 767.0 | 6.8 | — | — | — | 773.8 | ||||||||||||||||||||||||||||||||
GROSS PROFIT | 1,391.9 | 2.5 | — | — | 1,394.4 | 1,326.2 | (6.8 | ) | — | — | — | 1,319.4 | ||||||||||||||||||||||||||||||||
GROSS MARGIN % | 62.6 | % | 0.1 | % |
— |
% | — | % | 62.7 | % | 63.4 | % | (0.4 | )% | — | % | — | % | — | % | 63.0 | % | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
Selling, General and Administrative | 475.2 | (3.9 | ) | (10.1 | ) | (0.3 | ) | 460.9 | 430.5 | 11.0 | (0.2 | ) | — | (2.0 | ) | 439.3 | ||||||||||||||||||||||||||||
Advertising and Promotion | 330.3 | — | — | — | 330.3 | 312.1 | — | — | — | — | 312.1 | |||||||||||||||||||||||||||||||||
Research and Development | 53.8 | (0.7 | ) | — | — | 53.1 | 47.3 | 2.1 | — | — | — | 49.4 | ||||||||||||||||||||||||||||||||
Other (Income)/Expenses – net |
(3.5 | ) | — | — | — | (3.5 | ) | 16.0 | — | (7.2 | ) | (0.2 | ) | — | 8.6 | |||||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND INCOME TAXES | 536.1 | 7.1 | 10.1 | 0.3 | 553.6 | 520.3 | (19.9 | ) | 7.4 | 0.2 | 2.0 | 510.0 | ||||||||||||||||||||||||||||||||
EBIT as a % of Sales | 24.1 | % | 0.3 | % | 1.5 | % | — | % | 24.9 | % | 24.9 | % | (1.0 | )% | 0.4 | % | — | % | 0.1 | % | 24.4 | % | ||||||||||||||||||||||
Interest Expense – net | 27.7 | — | — | — | 27.7 | 26.6 | — | — | — | — | 26.6 | |||||||||||||||||||||||||||||||||
EARNINGS BEFORE INCOME TAXES | 508.4 | 7.1 | 10.1 | 0.3 | 525.9 | 493.7 | (19.9 | ) | 7.4 | 0.2 | 2.0 | 483.4 | ||||||||||||||||||||||||||||||||
Provision for Income Taxes | 124.5 | 2.4 | 3.5 | 0.1 | 130.5 | 130.3 | (7.4 | ) | (0.9 | ) | — | 0.2 | 122.2 | |||||||||||||||||||||||||||||||
Effective Tax Rate | 24.5 | % | 0.1 | % | 0.2 | % | — | % | 24.8 | % | 26.4 | % | (0.5 | )% | (0.5 | )% | (0.1 | )% | — | % | 25.3 | % | ||||||||||||||||||||||
NET EARNINGS | 383.9 | 4.7 | 6.6 | 0.2 | 395.4 | 363.4 | (12.5 | ) | 8.3 | 0.2 | 1.8 | 361.2 | ||||||||||||||||||||||||||||||||
Less Net Earnings Attributable to Noncontrolling Interests | 10.1 | — | — | — | 10.1 | 3.4 | — | — | — | — | 3.4 | |||||||||||||||||||||||||||||||||
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS | $ | 373.8 | $ | 4.7 | $ | 6.6 | $ | 0.2 | $ | 385.3 | $ | 360.0 | $ | (12.5 | ) | $ | 8.3 | $ | 0.2 | $ | 1.8 | $ | 357.8 | |||||||||||||||||||||
Earnings per Share– Diluted | ||||||||||||||||||||||||||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 1.84 | $ | 0.02 | $ | 0.04 | $ | — | $ | 1.90 | $ | 1.77 | $ | (0.06 | ) | $ | 0.04 | $ | — | $ | 0.01 | $ | 1.76 |
(a) See the company's Form 10-Q for the second
quarter of 2014 for details regarding the impact of changes to pension
accounting.
(b) All Specified Items are
included in Corporate and Other.
Source:
Mead Johnson Nutrition Company
Investors:
Kathy
MacDonald, (847) 832-2182
kathy.macdonald@mjn.com
or
Media:
Christopher
Perille, (847) 832-2178
chris.perille@mjn.com
or
Address:
2701
Patriot Boulevard
Glenview, Illinois 60026
7/22/2014