Mead Johnson Reports Solid Third Quarter Results; Narrows Full-Year 2009 Guidance to Top End of Range
(1)Mead Johnson, formerly a wholly owned subsidiary
of
“Our solid performance in the third quarter reflects the success of our
global growth strategies,” said Mead Johnson Chief Executive Officer
Stephen W. Golsby. “Our sales performance in constant dollars reflects
continued double-digit growth in
“Our cash balance at the end of September stood at $597 million, up from
$577 million at the end of June,” Golsby added. “The increase was driven
by a combination of strong earnings and good working capital management,
which more than offset the $86 million in dividend payments and pension
plan contributions made in the quarter. Looking at our balance sheet, we
are considering options to refinance approximately $1.75 billion of
debt, which is held by
Third Quarter GAAP Results
Net sales for the third quarter
of 2009 totaled $699.8 million, down 6 percent from $742.8 million a
year-ago. Sales were reduced by 7 percent from volume and 4 percent from
foreign exchange, which offset the 5 percent increase from price.
Earnings before interest and income taxes (EBIT) totaled $159.7 million,
down from $163.7 million a year earlier. Total operating expenses
increased to $295.5 million, up from $291.2 million. EBIT margin
increased 80 basis points to 22.8 percent in the third quarter of 2009,
driven primarily by the effect of lower commodity costs on gross margin,
partially offset by higher expense spending as a percent of sales,
including higher costs of being a public company. Results for 2009
include $15.9 million of costs associated with the IPO, separation from
BMS’s IT systems and other specified costs. Results for 2008 include
$13.8 million of IPO costs. Interest expense in the third quarter of
2009 totaled $23.0 million, compared with $11.9 million a year ago.
Net earnings attributable to shareholders for the third quarter of 2009 totaled $97.6 million, or $0.48 per diluted share, compared with $102.7 million, or $0.61 per diluted share, for the year-ago quarter. The higher earnings per share in 2008 were primarily due to significantly lower interest expense and fewer shares outstanding compared with 2009. There were approximately 204.6 million fully diluted shares outstanding in the third quarter of 2009, compared with 170.0 million shares a year ago.
Third Quarter GAAP Segment Results
The
The
Third Quarter Non-GAAP Results
For the third quarter of
2009, non-GAAP net sales were down 5 percent to $699.8 million from
$735.1 million a year earlier. Sales were down 1 percent, excluding the
impact of foreign exchange. Non-GAAP EBIT was down slightly to $175.6
million in the third quarter of 2009 from $177.2 million. Non-GAAP net
earnings attributable to shareholders increased in the quarter to $107.7
million, or $0.53 per diluted share, up from $102.4 million, or $0.50
per diluted share, for the same quarter a year ago. The non-GAAP
effective tax rate (ETR) in the third quarter of 2009 was 28.6 percent
versus 30.6 percent a year-ago.
Nine Month GAAP Results
For the nine months ended
Net earnings attributable to shareholders for the first nine months of 2009 totaled $335.6 million, compared with $347.5 million, for the same period a year ago. Interest expense in the first nine months of 2009 totaled $75.3 million, compared with $11.9 million the same period a year ago. Results for 2009 benefited from a lower ETR compared with 2008. The ETR for the first nine months of 2009 was 30.1 percent versus 35.5 percent for 2008. Earnings per diluted share for the first nine months of 2009 were $1.68, compared with $2.05 in 2008. The higher earnings per share in 2008 were due to significantly lower interest expense and fewer shares outstanding compared with 2009. There were approximately 199.3 million fully diluted shares outstanding in the first nine months of 2009, compared with 170.0 million shares in 2008.
Nine Month Non-GAAP Results
For the first nine months of
2009, non-GAAP net sales of $2,112.1 million were down 2 percent
compared with 2008. Excluding foreign exchange, sales increased 4
percent. Non-GAAP EBIT increased to $593.5 million in the first nine
months of 2009, up from $573.1 million in the prior year. Non-GAAP net
earnings attributable to shareholders increased to $356.9 million, or
$1.74 per diluted share, up 13 percent from $314.8 million, or $1.54 per
diluted share, for the same period a year ago. The non-GAAP ETR in the
first nine months of 2009 was 29.6 percent, compared with 35.2 percent
for the first nine months a year ago.
Outlook for 2009
The company expects to report non-GAAP EPS
in the range of $2.20 to $2.25 for 2009, which is at the high end of its
previous range of $2.15 to $2.25, up 17 percent from the mid-point
compared with $1.90 per share in 2008. Key assumptions underlying this
non-GAAP estimate include: an increase in net sales of about 4 percent,
excluding the effect of foreign exchange; EBIT margin expansion driven
by higher gross margins, partially offset by greater investment in
demand-generation spending; an ETR of approximately 30 percent; and
204.6 million fully diluted shares outstanding. Compared with the first
three quarters of 2009, the fourth quarter will see significantly higher
operating expense spending, as well as a reduction of distributor
inventories held by BMS in
Conference Call Scheduled
The company will host a conference
call at
Forward-Looking Statements
Certain statements in this news
release are forward looking as defined in the Private Securities
Litigation Reform Act of 1995. These statements, which are identified by
words such as “expects,” “intends” and “believes,” involve certain risks
and uncertainties 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
adverse effect of commodity price increases; (4) increased competition
from branded, private label, store and economy-branded products; (5) the
effect of an economic downturn on consumers’ purchasing behavior and
customers’ ability to pay for product; (6) inventory reductions by
customers; (7) the adverse effect of changes in foreign currency
exchange rates; (8) the possibility of changes in the Women, Infant and
Children (WIC) program, or increases in levels of participation in WIC;
and (9) the ability to develop and market new, innovative products. For
additional information on these and other factors, see the risk factors
identified in the company’s periodic reports, including the annual
report on Form 10-K for 2008, quarterly reports on Form 10-Q and current
reports on Form 8-K, filed or furnished to the
About Mead Johnson
Mead Johnson, a global leader in
pediatric nutrition, develops, manufactures, markets and distributes
more than 70 products in 50 markets worldwide. The company’s mission is
to create nutritional brands and products trusted to give infants and
children 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 meadjohnson.com.
MEAD JOHNSON NUTRITION COMPANY CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and shares in millions, except per share data) (UNAUDITED) |
||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||
NET SALES | $ | 699.8 | $ | 742.8 | $ | 2,112.1 | $ | 2,174.7 | ||||||||||
COST OF PRODUCTS SOLD | 244.6 | 287.9 | 728.3 | 812.0 | ||||||||||||||
GROSS PROFIT | 455.2 | 454.9 | 1,383.8 | 1,362.7 | ||||||||||||||
MARKETING, SELLING AND ADMINISTRATIVE | 164.0 | 173.9 | 482.2 | 465.0 | ||||||||||||||
ADVERTISING AND PRODUCT PROMOTION | 105.2 | 97.0 | 282.7 | 276.3 | ||||||||||||||
RESEARCH AND DEVELOPMENT | 17.6 | 17.8 | 51.3 | 51.5 | ||||||||||||||
OTHER (INCOME)/EXPENSES—NET | 8.7 | 2.5 | 1.0 | 9.1 | ||||||||||||||
EARNINGS BEFORE INTEREST AND INCOME TAXES | 159.7 | 163.7 | 566.6 | 560.8 | ||||||||||||||
INTEREST EXPENSE—NET | 23.0 | 11.9 | 75.3 | 11.9 | ||||||||||||||
EARNINGS BEFORE INCOME TAXES | 136.7 | 151.8 | 491.3 | 548.9 | ||||||||||||||
PROVISION FOR INCOME TAXES | (37.9 | ) | (46.5 | ) | (147.9 | ) | (195.1 | ) | ||||||||||
NET EARNINGS | 98.8 | 105.3 | 343.4 | 353.8 | ||||||||||||||
Less Net Earnings attributable to noncontrolling interests | (1.2 | ) | (2.6 | ) | (7.8 | ) | (6.3 | ) | ||||||||||
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS | $ | 97.6 | $ | 102.7 | $ | 335.6 | $ | 347.5 | ||||||||||
Earnings per Common Share – Basic | ||||||||||||||||||
Net Earnings attributable to shareholders | $ | 0.48 | $ | 0.61 | $ | 1.68 | $ | 2.05 | ||||||||||
Earnings per Common Share – Diluted | ||||||||||||||||||
Net Earnings attributable to shareholders | $ | 0.48 | $ | 0.61 | $ | 1.68 | $ | 2.05 | ||||||||||
Weighted Average Common Shares Outstanding | ||||||||||||||||||
Basic | 204.5 | 170.0 | 199.3 | 170.0 | ||||||||||||||
Diluted | 204.6 | 170.0 | 199.3 | 170.0 | ||||||||||||||
Dividends declared per Common Share | $ | 0.20 | $ | — | $ | 0.50 | $ | — | ||||||||||
MEAD JOHNSON NUTRITION COMPANY SELECTED FINANCIAL STATEMENT INFORMATION (Dollars in millions) (UNAUDITED) |
|||||||
September 30, | December 31, | ||||||
2009 | 2008 | ||||||
Cash and Cash Equivalents | $ | 597.4 | $ | — | |||
Receivables—net of allowances of $6.3 and $7.0, respectively | 269.3 | 262.7 | |||||
Inventories | 318.3 | 354.3 | |||||
Accounts Payable | 229.4 | 198.5 | |||||
Related-Party Debt and Lease | 1,785.8 | 2,000.0 | |||||
Nine Months Ended September 30, | |||||||
2009 | 2008 | ||||||
Depreciation and Amortization | $ | 43.9 | $ | 38.1 | |||
Payments for Capital Expenditures | 59.3 | 50.7 | |||||
Factors Affecting Comparability – Adjusted Non-GAAP Financial Measures
This
news release contains adjusted non-GAAP (non-GAAP) financial measures,
including non-GAAP net sales, EBIT, earnings and earnings per share
information, adjusted for factors that affect comparability due to the
impact of the company’s IPO. The items included in GAAP measures, but
excluded for the purpose of determining non-GAAP net sales, EBIT,
earnings and earnings per share, are the impact of operating model
adjustments and specified IPO and other costs. In addition, other
adjusted items include interest expense due to changes in the capital
structure, the ETR due to the impact of specified IPO and other costs on
the tax rate, and the number of shares outstanding to reflect the
increase in shares due to the IPO. Non-GAAP net sales, EBIT, earnings
and earnings per share information adjusting for these items is an
indication of the company’s underlying operating results and 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. The tables that reconcile GAAP to non-
GAAP disclosure and the accompanying footnotes follow:
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||||||
ADJUSTED NON-GAAP OPERATING RESULTS | |||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 and 2008 | |||||||||||||||||||||
(Dollars and shares in millions, except per share data) | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
2009 | 2008 | % Change Due to | |||||||||||||||||||
Adjusted | Adjusted | Foreign | |||||||||||||||||||
Non-GAAP | Non-GAAP | % Change | Volume | Price | Exchange | ||||||||||||||||
Net Sales | |||||||||||||||||||||
Asia/Latin America | $ | 413.8 | $ | 394.4 | 4.9 | % | 3.3 | % | 8.3 | % | -6.7 | % | |||||||||
North America/Europe | 286.0 | 340.7 | -16.1 | % | -15.6 | % | 1.1 | % | -1.5 | % | |||||||||||
Total | $ | 699.8 | $ | 735.1 | -4.8 | % | -5.5 | % | 5.0 | % | -4.3 | % | |||||||||
Earnings Before Interest and Income Taxes | |||||||||||||||||||||
Asia/Latin America | $ | 143.7 | $ | 108.9 | |||||||||||||||||
North America/Europe | 90.3 | 114.6 | |||||||||||||||||||
Corporate and Other | (58.4 | ) | (46.3 | ) | |||||||||||||||||
Total | $ | 175.6 | $ | 177.2 | |||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 107.7 | $ | 102.4 | |||||||||||||||||
Earnings Per Common Share - Diluted: | |||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 204.6 | 204.5 | |||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.53 | $ | 0.50 | |||||||||||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | |||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 | |||||||||||||||||
(Dollars and shares in millions, except per share data) | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
GAAP |
Specified |
Tax (4) |
Adjusted |
||||||||||||||
Net Sales | $ | 699.8 | $ | 699.8 | |||||||||||||
Cost of Products Sold | 244.6 | 244.6 | |||||||||||||||
Gross Profit | 455.2 | 455.2 | |||||||||||||||
Marketing, Selling and Administrative | 164.0 | (12.5 | ) | 151.5 | |||||||||||||
Advertising and Product Promotion | 105.2 | 105.2 | |||||||||||||||
Research and Development | 17.6 | 17.6 | |||||||||||||||
Other Expenses - net | 8.7 | (3.4 | ) | 5.3 | |||||||||||||
Earnings Before Interest and Income Taxes | $ | 159.7 | $ | 15.9 | $ | 175.6 | |||||||||||
Interest Expense | (23.0 | ) | (23.0 | ) | |||||||||||||
Provision for Income Taxes | (37.9 | ) | $ | (5.8 | ) | (43.7 | ) | ||||||||||
Net Earnings | $ | 98.8 | $ | 108.9 | |||||||||||||
Less: Net Earnings Attributable to Noncontrolling Interest | (1.2 | ) | (1.2 | ) | |||||||||||||
Net Earnings Attributable to Shareholders | $ | 97.6 | $ | 107.7 | |||||||||||||
Earnings Per Common Share - Diluted: | |||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 204.6 | 204.6 | |||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.48 | $ | 0.53 | |||||||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | ||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 | ||||||||||||||||||||||||
(Dollars and shares in millions, except per share data) | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
GAAP |
Operating |
Specified |
Interest |
Tax (4) |
Adjusted |
|||||||||||||||||||
Net Sales | $ | 742.8 | (7.7 | ) | $ | 735.1 | ||||||||||||||||||
Cost of Products Sold | 287.9 | (3.7 | ) | 284.2 | ||||||||||||||||||||
Gross Profit | 454.9 | (4.0 | ) | 450.9 | ||||||||||||||||||||
Marketing, Selling and Administrative | 173.9 | (1.7 | ) | (13.8 | ) | 158.4 | ||||||||||||||||||
Advertising and Product Promotion | 97.0 | (1.1 | ) | 95.9 | ||||||||||||||||||||
Research and Development | 17.8 | 17.8 | ||||||||||||||||||||||
Other Expenses - net | 2.5 | (0.9 | ) | 1.6 | ||||||||||||||||||||
Earnings Before Interest and Income Taxes | $ | 163.7 | $ | (0.3 | ) | $ | 13.8 | $ | 177.2 | |||||||||||||||
Interest Expense | (11.9 | ) | $ | (14.0 | ) | (25.9 | ) | |||||||||||||||||
Provision for Income Taxes | (46.5 | ) | $ | 0.2 | (46.3 | ) | ||||||||||||||||||
Net Earnings | $ | 105.3 | $ | 105.0 | ||||||||||||||||||||
Less: Net Earnings Attributable to Noncontrolling Interest | (2.6 | ) | (2.6 | ) | ||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 102.7 | $ | 102.4 | ||||||||||||||||||||
Earnings Per Common Share - Diluted: (5) | ||||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 170.0 | 204.5 | ||||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 0.61 | $ | 0.50 | ||||||||||||||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | |||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | ||||||||||||||||||
GAAP |
Adjusted |
GAAP |
Specified |
Adjusted |
|||||||||||||||
Asia/Latin America | $ | 413.8 | $ | 413.8 | $ | 143.7 |
$ |
- |
$ | 143.7 | |||||||||
North America/Europe | 286.0 | 286.0 | 90.3 |
|
- |
$ | 90.3 | ||||||||||||
Corporate and Other | (74.3 | ) | 15.9 | (58.4 | ) | ||||||||||||||
Total | $ | 699.8 | $ | 699.8 | $ | 159.7 |
$ |
15.9 | $ | 175.6 | |||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | |||||||||||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 | |||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | ||||||||||||||||||||||||||
GAAP |
Operating |
Adjusted |
GAAP |
Operating |
Specified |
Adjusted |
|||||||||||||||||||||
Asia/Latin America | $ | 400.1 | $ | (5.7 | ) | $ | 394.4 | $ | 108.2 | $ | 0.7 | $ |
- |
$ | 108.9 | ||||||||||||
North America/Europe | 342.7 | (2.0 | ) | 340.7 | 115.6 | (1.0 | ) | - | 114.6 | ||||||||||||||||||
Corporate and Other | (60.1 | ) | 13.8 | (46.3 | ) | ||||||||||||||||||||||
Total | $ | 742.8 | $ | (7.7 | ) | $ | 735.1 | $ | 163.7 | $ | (0.3 | ) | $ | 13.8 | $ | 177.2 | |||||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||||||
ADJUSTED NON-GAAP OPERATING RESULTS | |||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 and 2008 | |||||||||||||||||||||
(Dollars and shares in millions, except per share data) | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
2009 | 2008 | % Change Due to | |||||||||||||||||||
Adjusted | Adjusted | Foreign | |||||||||||||||||||
Non-GAAP | Non-GAAP | % Change | Volume | Price | Exchange | ||||||||||||||||
Net Sales | |||||||||||||||||||||
Asia/Latin America | $ | 1,200.1 | $ | 1,119.6 | 7.2 | % | 5.3 | % | 10.8 | % | -8.9 | % | |||||||||
North America/Europe | 912.0 | 1,029.8 | -11.4 | % | -8.6 | % | 0.0 | % | -2.8 | % | |||||||||||
Total | $ | 2,112.1 | $ | 2,149.4 | -1.7 | % | -1.4 | % | 5.6 | % | -6.0 | % | |||||||||
Earnings Before Interest and Income Taxes | |||||||||||||||||||||
Asia/Latin America | $ | 438.5 | $ | 360.6 | |||||||||||||||||
North America/Europe | 310.5 | 354.7 | |||||||||||||||||||
Corporate and Other | (155.5 | ) | (142.2 | ) | |||||||||||||||||
Total | $ | 593.5 | $ | 573.1 | |||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 356.9 | $ | 314.8 | |||||||||||||||||
Earnings Per Common Share - Diluted: | |||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 204.6 | 204.5 | |||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 1.74 | $ | 1.54 | |||||||||||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | |||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 | |||||||||||||||||
(Dollars and shares in millions, except per share data) | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
GAAP |
Specified |
Tax (4) |
Adjusted |
||||||||||||||
Net Sales | $ | 2,112.1 | $ | 2,112.1 | |||||||||||||
Cost of Products Sold | 728.3 | 728.3 | |||||||||||||||
Gross Profit | 1,383.8 | 1,383.8 | |||||||||||||||
Marketing, Selling and Administrative | 482.2 | (36.6 | ) | 445.6 | |||||||||||||
Advertising and Product Promotion | 282.7 | 282.7 | |||||||||||||||
Research and Development | 51.3 | 51.3 | |||||||||||||||
Other Expenses - net | 1.0 | 9.7 | 10.7 | ||||||||||||||
Earnings Before Interest and Income Taxes | $ | 566.6 | $ | 26.9 | $ | 593.5 | |||||||||||
Interest Expense | (75.3 | ) | (75.3 | ) | |||||||||||||
Provision for Income Taxes | (147.9 | ) | $ | (5.6 | ) | (153.5 | ) | ||||||||||
Net Earnings | $ | 343.4 | $ | 364.7 | |||||||||||||
Less: Net Earnings Attributable to Noncontrolling Interest | (7.8 | ) | (7.8 | ) | |||||||||||||
Net Earnings Attributable to Shareholders | $ | 335.6 | $ | 356.9 | |||||||||||||
Earnings Per Common Share - Diluted: (5) | |||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 199.3 | 204.6 | |||||||||||||||
Net Earnings Attributable to Shareholders | $ | 1.68 | $ | 1.74 | |||||||||||||
MEAD JOHNSON NUTRITION COMPANY | ||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS OF OPERATIONS | ||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 | ||||||||||||||||||||||||
(Dollars and shares in millions, except per share data) | ||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||
GAAP |
Operating |
Specified |
Interest |
Tax (4) |
Adjusted |
|||||||||||||||||||
Net Sales | $ | 2,174.7 | (25.3 | ) | $ | 2,149.4 | ||||||||||||||||||
Cost of Products Sold | 812.0 | (10.8 | ) | 801.2 | ||||||||||||||||||||
Gross Profit | 1,362.7 | (14.5 | ) | 1,348.2 | ||||||||||||||||||||
Marketing, Selling and Administrative | 465.0 | (5.5 | ) | (14.0 | ) | 445.5 | ||||||||||||||||||
Advertising and Product Promotion | 276.3 | (5.3 | ) | 271.0 | ||||||||||||||||||||
Research and Development | 51.5 | 51.5 | ||||||||||||||||||||||
Other Expenses - net | 9.1 | (2.0 | ) | 7.1 | ||||||||||||||||||||
Earnings Before Interest and Income Taxes | $ | 560.8 | $ | (1.7 | ) | $ | 14.0 | $ | 573.1 | |||||||||||||||
Interest Expense | (11.9 | ) | $ | (65.9 | ) | (77.8 | ) | |||||||||||||||||
Provision for Income Taxes | (195.1 | ) | $ | 20.9 | (174.2 | ) | ||||||||||||||||||
Net Earnings | $ | 353.8 | $ | 321.1 | ||||||||||||||||||||
Less: Net Earnings Attributable to Noncontrolling Interest | (6.3 | ) | (6.3 | ) | ||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 347.5 | $ | 314.8 | ||||||||||||||||||||
Earnings Per Common Share - Diluted: (5) | ||||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 170.0 | 204.5 | ||||||||||||||||||||||
Net Earnings Attributable to Shareholders | $ | 2.05 | $ | 1.54 | ||||||||||||||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | |||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | ||||||||||||||||||
GAAP |
Adjusted |
GAAP |
Specified |
Adjusted |
|||||||||||||||
Asia/Latin America | $ | 1,200.1 | $ | 1,200.1 | $ | 438.5 | $ | - | $ | 438.5 | |||||||||
North America/Europe | 912.0 | 912.0 | 310.5 |
- |
310.5 | ||||||||||||||
Corporate and Other | (182.4 | ) | 26.9 | (155.5 | ) | ||||||||||||||
Total | $ | 2,112.1 | $ | 2,112.1 | $ | 566.6 | $ | 26.9 | $ | 593.5 | |||||||||
MEAD JOHNSON NUTRITION COMPANY | |||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NON-GAAP SEGMENT REPORTING | |||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 | |||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||
Net Sales | Earnings Before Interest and Income Taxes | ||||||||||||||||||||||||||
GAAP |
Operating |
Adjusted |
GAAP |
Operating |
Specified |
Adjusted |
|||||||||||||||||||||
Asia/Latin America | $ | 1,138.7 | $ | (19.0 | ) | $ | 1,119.7 | $ | 359.4 |
$ |
1.2 |
$ |
- | $ | 360.6 | ||||||||||||
North America/Europe | 1,036.0 | (6.3 | ) | 1,029.7 | 357.6 | (2.9 | ) | - | 354.7 | ||||||||||||||||||
Corporate and Other | (156.2 | ) | 14.0 | (142.2 | ) | ||||||||||||||||||||||
Total | $ | 2,174.7 | $ | (25.3 | ) | $ | 2,149.4 | $ | 560.8 | $ | (1.7 | ) | $ | 14.0 | $ | 573.1 | |||||||||||
Notes to Tables Reconciling GAAP and Non-GAAP Results
(1) Operating Model Adjustments for 2008
In
(2) Specified IPO and Other Costs
Results for the third
quarter of 2009 include $2.1 million of IPO costs, $5.1 million of IT
separation costs and $8.7 million of other specified costs. Results for
the first nine months of 2009 include $21.9 million of IPO, $9.4 million
of IT separation costs and $17.5 million of other specified costs,
offset by a $10.0 million patent settlement and an $11.9 million gain on
an asset sale. Included in other specified costs for the third quarter
and first nine months of 2009 are litigation expenses for costs
associated with the defense of a lawsuit filed against the company’s
subsidiary,
(3) Interest Expense
The company had interest expense of
$23.0 million and $75.3 million for the third quarter and first nine
months of 2009, respectively. The company had $11.9 million of interest
expense in the third quarter and first nine months of 2008.
(4) Effective Tax Rate
The company’s effective tax rate
(ETR) for the third quarters of 2009 and 2008 was 27.7 percent and 30.6
percent, respectively. Adjusting for the non-deductibility of certain
IPO costs, the non-GAAP ETR for the third quarters of 2009 and 2008 was
28.6 percent and 30.6 percent, respectively. The company’s ETR for the
first nine months of 2009 and 2008 was 30.1 percent and 35.5 percent,
respectively. Adjusting for the non-deductibility of certain IPO costs,
the non-GAAP ETR for the first nine months of 2009 and 2008 was 29.6
percent and 35.2 percent, respectively.
5) Shares Outstanding
Prior to
Source:
Mead Johnson Nutrition Company
Investors:
Kathryn
Chieger, 847-832-2419
kathryn.chieger@mjn.com
or
Media:
Christopher
Perille, 847-832-2178
chris.perille@mjn.com
10/22/2009