Mead Johnson Nutrition Company (NYSE: MJN) today announced its
financial results for the quarter and six months ended June 30,
2015. These results were consistent with the preliminary results
released on July 14, 2015.
- Second quarter constant dollar(1) sales
were 3% below the prior year quarter. Including the impact of
foreign currency, reported sales were 7% below the prior year
quarter.
- Sales for the six months ended June 30,
2015 were in line with the prior year on a constant dollar basis
and 4% below on a reported basis.
- Gross margin improved by 390 basis
points to 65.5% from 61.6% in the prior year quarter.
- Non-GAAP(1) EPS for the second quarter
of 2015 was $0.76; GAAP EPS was $0.80.
- Full-year constant dollar sales growth
is expected in the range of 0% to 2% above the prior year.
Including the impact of foreign exchange, full-year reported sales
performance is expected to be 2% to 4% below the prior year.
- Full-year non-GAAP EPS is expected to
be $3.63 to $3.78 and GAAP EPS is expected to be between $3.56 and
$3.71.
“We faced a number of challenges in the second quarter and that
is reflected in our results,” said Kasper Jakobsen, Chief Executive
Officer. “While we are pleased with our strong performance in North
America and Europe, we are determined to improve performance in
specific Asian and Latin American markets. While disappointed with
our overall sales in China in the latest quarter, we are encouraged
by the early trajectory of our new growth initiatives there - and
expect to see a return to sequential quarterly growth within the
year. We remain committed to investing in support of our long term
strategy.”
(1) Constant dollar figures exclude the impact of changes in
foreign currency exchange rates and non-GAAP results exclude
Specified Items. For a description of Specified Items, and a
reconciliation of non-GAAP to GAAP and constant dollar results, see
the schedules titled “Supplemental Financial Information” and
“Reconciliation of Non-GAAP to GAAP Results.”
Second Quarter Company Results
Constant dollar sales were 3% lower than the prior year. Volume
declines in Asia and Latin America were partially offset by
improved pricing and performance in the U.S. business. Foreign
exchange adversely impacted reported second quarter sales which
were $1,032.4 million compared to $1,111.1 million in the same
quarter of the prior year.
Gross margin was 65.5%, up from 61.6% in the second quarter of
2014 mainly due to lower dairy costs which benefited all
segments.
Investment in advertising and promotion was 18.4% of sales,
reflecting the company’s continued commitment to key growth
initiatives, notably in China.
Earnings before interest and income taxes (“EBIT”) totaled
$229.2 million in the second quarter of 2015 compared to the $244.9
million for the prior year quarter. Despite higher gross margin,
EBIT was below the prior year as a result of lower revenue and
increased investment in demand creation.
The company’s effective tax rate (“ETR”) was 24.5% in the second
quarter, compared to 23.3% in the prior year quarter. The higher
ETR reflected a change in geographic earnings mix toward
jurisdictions with higher tax rates.
Net earnings attributable to shareholders were $162.9 million
compared to $171.4 million in the prior year quarter.
Second Quarter Segment Results
North America/Europe
North America/Europe segment sales were 6% higher than the prior
year on a constant dollar basis. On a reported basis, sales were
$320.8 million, up from $311.1 million in the same period a year
ago. Sales growth was mainly driven by improved pricing.
Gross margin in the segment improved compared to the prior year
quarter. Despite strong investment in advertising and promotion,
operating expenses in total were lower as a percentage of sales
which resulted in an EBIT margin improvement of 470 basis points
over the second quarter 2014 to 26.6%. Second quarter EBIT of $85.3
million was 25% higher than the prior year quarter of $68.0
million.
Latin America
Latin America segment sales increased 1% on a constant dollar
basis. Pricing gains in the overall segment more than offset lower
volume caused by competitor’s price-based promotional activity in
the Mexican market and restricted shipments in Venezuela. Foreign
exchange adversely affected reported sales of $198.4 million
compared to $224.4 million in the same period a year ago.
Gross margin improved over the prior year quarter and helped
fund additional investment in demand creation on a constant
currency basis. Operating expenses were slightly higher than the
comparative period due to the absence of a prior year one-time
gain. EBIT was $44.8 million, compared to $53.4 million for the
same quarter of 2014.
Asia
Constant dollar sales in the Asia segment were 10% below the
prior year quarter. On a reported basis, sales were $513.2 million,
compared to $575.6 million in the prior year quarter. Sales were
impacted by competitors’ prevalent priced-based promotional
activity in China and Thailand that resulted in weaker market
shares within the period. In addition, Hong Kong sales remained at
levels below last year’s average.
EBIT was $156.4 million compared to $195.9 million for the same
quarter a year ago. Higher gross margin was more than offset by
investments in demand-generating activities, mainly in support of
new product introductions in China.
Corporate and Other
Corporate and Other expenses were $57.3 million for the second
quarter of 2015, down from $72.4 million in the second quarter of
2014 mainly due to current year actuarial gains that compared
favorably to prior year actuarial losses related to a pension plan.
Additionally, short-term investment gains recognized in the current
year helped offset the impact of inflation in other operating
expenses.
Six-Month Company Results
Constant dollar sales were in line with the prior year. Sales
for the six months ended June 30, 2015 were $2,126.8 million,
compared to $2,224.4 million a year ago due primarily to adverse
foreign exchange.
Gross margin of 64.7% increased from 62.6% in the prior year as
the business benefited from lower dairy costs and improved
pricing.
During the first half of 2015, investment in advertising and
promotion as a percentage of sales increased by 90 basis points
over the same period of 2014. EBIT totaled $514.4 million, down
from $536.1 million in the first half of 2014.
The effective tax rate for the first half of 2015 was 24.0%
compared to 24.5% a year ago.
Net earnings attributable to shareholders were $370.3 million
compared to $373.8 million in the prior year period.
Six-Month Segment Results
North America/Europe
North America/Europe segment sales increased 5% on a constant
dollar basis. On a reported basis, sales were $629.8 million, up
from $619.3 million in the same period a year ago. Sales growth was
driven by improved pricing and market share gains. Gross margin
improved versus the prior year period mainly due to improved
pricing and lower product costs.
EBIT of $163.6 million increased from $134.1 million in the
first six months of 2014.
Latin America
Latin America segment sales increased 7% on a constant dollar
basis. On a reported basis, sales were $402.8 million versus $436.8
million in the same period a year ago. Reported sales were
adversely impacted by the strengthening dollar. Volume was lower
than the prior year period. Strong growth across the Caribbean and
Andean markets failed to completely offset the impact of relatively
weaker performance in Mexico and Brazil.
Operating expenses were below the prior year period, primarily
due to a favorable impact from foreign currency translation. EBIT
of $102.1 million increased from $100.0 million for the same period
a year ago.
Asia
Asia segment sales decreased 5% compared to the prior year on a
constant dollar basis. On a reported basis sales were $1,094.2
million, compared to $1,168.3 million in the prior year. Solid
performance across several other Asian markets did not fully offset
the effects of lower market share in Thailand, competitors'
increased promotional activities in China and a reduction in cross
border trade from Hong Kong.
Significantly higher investment in demand creation behind growth
initiatives launched in the second quarter resulted in operating
expenses above prior year. EBIT was $387.9 million, compared to
$437.2 million for the same period a year ago.
Corporate and Other
Corporate and Other expenses were $139.2 million for the first
six months of 2015, up from $135.2 million in the first six months
of 2014. A $12 million accrual relating to the previously announced
investigation by the U.S. Securities & Exchange Commission into
certain promotional practices in the company's China subsidiary
more than offset a gain on an actuarial valuation of a pension
fund.
Cash Flow Items
Cash and cash equivalents increased by $177.4 million since
December 31, 2014 and were $1,475.1 million at June 30, 2015.
Long-term debt was $1,506.2 million as of June 30, 2015.
- Operating cash flow was $456.5 million
in the six months ended June 30, 2015 compared to $304.0 million in
the same period last year. Cash flows from operations increased
compared to the prior year period on lower earnings. In 2014, the
company paid $45 million to settle an interest rate swap related to
the company's offering of the 4.60% Notes due in 2044.
Additionally, the timing of receivables and prepaid expenses in the
prior year lowered cash flows in that period.
- Capital spending in the first six
months of 2015 was $80 million. This included investments in
capacity expansion for manufacturing facilities in the U.S. and the
Netherlands.
External Development
During the second quarter the company increased its equity
position in its subsidiary in Argentina to 90%. The company
acquired a majority stake in a market leading Argentine business in
2012 and the business has performed well since the acquisition
despite challenging macroeconomic conditions.
Outlook for 2015
The company revised its outlook for full-year 2015 on July 14,
2015 and now expects constant dollar revenue growth over the prior
year in the range of 0% to 2%. Foreign exchange is assumed to
adversely affect translation into U.S. dollars, resulting in
estimated reported sales of 2% to 4% below the prior year.
“We now expect constant dollar revenue in line or slightly above
the prior year and non-GAAP EPS between $3.63 and $3.78. We are
encouraged by both our performance in North America and the early
trajectory of our new growth initiatives in China. However, I
emphasize that the wider than normal EPS range reflected in our
latest guidance is due to recent pricing volatility in the China
market. Despite this we will continue to invest in our long term
growth strategy,” said Kasper Jakobsen, Chief Executive
Officer.
Specified Items are expected to be $0.07 per share excluding any
further mark-to-market pension adjustments. As a result, full-year
GAAP EPS is expected to be in the range of $3.56 to $3.71.
Conference Call Scheduled
Mead Johnson will host a conference call at 8:30 a.m. CDT today,
during which company executives will review second quarter and
first-half 2015 financial results and respond to questions from
analysts and investors. The call will be broadcast over the
Internet at http://investors.meadjohnson.com.
Security analysts and investors wishing to participate by
telephone should call (877) 359-9508, pass code: Mead
Johnson. Callers outside of North America should call
+1-224-357-2393 to be connected. A replay of the conference call
will be available through 11:00 p.m. CDT Monday, September 7, 2015,
by calling (855) 859-2056 or outside of North America by calling
+1-404-537-3406, pass code: 72439803. The replay will also be
available at http://investors.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(2) program,
or participation in WIC; (12) legislative, regulatory or judicial
action that may adversely affect the company’s ability to advertise
its products, maintain product margins, or negatively impact the
company’s reputation or result in fines or penalties that decrease
earnings; 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 United States
Securities and Exchange Commission (the “SEC”), including its most
recent Annual Report on Form 10-K, which filings are available upon
request from the SEC or at www.meadjohnson.com. The company cautions readers
not to place undue reliance on any forward-looking statements,
which speak only as of the date made. The company undertakes no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or
otherwise.
(2) The Special Supplemental Nutrition Program for Women,
Infants and Children (WIC) is a federal assistance program of the
Food and Nutrition Services (FNS) of the United States Department
of Agriculture (USDA).
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.
MEAD JOHNSON NUTRITION COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(Dollars and shares in millions, except
per share data)
(UNAUDITED)
Three Months Ended June
30, Six Months Ended June 30, 2015
2014 2015 2014 NET SALES $ 1,032.4 $
1,111.1 $ 2,126.8 $ 2,224.4 Cost of Products Sold 356.4
426.8 749.9 832.5 GROSS PROFIT 676.0 684.3
1,376.9 1,391.9 Operating Expenses: Selling, General and
Administrative 230.2 242.3 463.4 475.2 Advertising and Promotion
190.2 174.6 334.6 330.3 Research and Development 27.7 26.7 53.6
53.8 Other (Income)/Expenses – net (1.3 ) (4.2 ) 10.9 (3.5 )
EARNINGS BEFORE INTEREST AND INCOME TAXES 229.2 244.9 514.4 536.1
Interest Expense—net 13.9 15.3 27.7
27.7 EARNINGS BEFORE INCOME TAXES 215.3 229.6 486.7 508.4
Provision for Income Taxes 52.7 53.5 117.0
124.5 NET EARNINGS 162.6 176.1 369.7 383.9 Less Net
Earnings/(Loss) Attributable to Noncontrolling Interests (0.3 ) 4.7
(0.6 ) 10.1 NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS
$ 162.9 $ 171.4 $ 370.3 $ 373.8
Earnings per Share(a)– Basic Net Earnings Attributable to
Shareholders $ 0.80 $ 0.85 $ 1.83 $ 1.85
Earnings per Share(a)– Diluted Net Earnings Attributable to
Shareholders $ 0.80 $ 0.84 $ 1.82 $ 1.84
Weighted Average Shares – Diluted 203.1 202.7 203.1
202.5 Dividends Declared per Share $ 0.4125 $ 0.3750 $ 0.8250 $
0.7500
(a) 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
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars and shares in millions, except
per share data)
(UNAUDITED)
June 30, 2015 December
31, 2014 ASSETS CURRENT ASSETS: Cash and Cash
Equivalents $ 1,475.1 $ 1,297.7 Receivables—net of allowances of
$6.9 and $9.6 respectively 367.3 387.8 Inventories 573.3 555.5
Deferred Income Taxes—net of valuation allowance 77.4 86.8 Income
Taxes Receivable 23.5 7.7 Prepaid Expenses and Other Assets 100.1
82.6 Total Current Assets 2,616.7 2,418.1 Property,
Plant, and Equipment—net 908.2 912.7 Goodwill 154.9 162.7 Other
Intangible Assets—net 68.3 75.4 Deferred Income Taxes—net of
valuation allowance 67.8 65.1 Other Assets 143.2 142.5
TOTAL $ 3,959.1 $ 3,776.5
LIABILITIES AND
EQUITY CURRENT LIABILITIES: Short-term Borrowings $ 1.0 $ 4.1
Accounts Payable 521.7 512.3 Dividends Payable 84.4 76.6 Accrued
Expenses and Other Liabilities 209.8 203.7 Accrued Rebates and
Returns 351.9 329.1 Deferred Income—current 13.2 34.3 Income
Taxes—payable and deferred 47.7 46.4 Total Current
Liabilities 1,229.7 1,206.5 Long-Term Debt 1,506.2 1,503.9 Deferred
Income Taxes—noncurrent 10.8 12.4 Pension and Other Post-employment
Liabilities 209.7 211.1 Other Liabilities - noncurrent 204.6
192.8 Total Liabilities 3,161.0 3,126.7 COMMITMENTS AND
CONTINGENCIES REDEEMABLE NONCONTROLLING INTEREST — 66.0
EQUITY Shareholders’ Equity Common Stock, $0.01 par value:
3,000 authorized, 207.7 and 207.2 issued, respectively 2.1 2.1
Additional Paid-in/(Distributed) Capital (580.9 ) (641.3 ) Retained
Earnings 1,954.6 1,775.0 Treasury Stock—at cost (362.6 ) (362.6 )
Accumulated Other Comprehensive Loss (256.1 ) (198.9 ) Total
Shareholders’ Equity 757.1 574.3 Noncontrolling Interests 41.0
9.5 Total Equity 798.1 583.8 TOTAL $
3,959.1 $ 3,776.5
MEAD JOHNSON NUTRITION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Dollars in millions)
(UNAUDITED)
Six Months Ended June 30, 2015
2014 CASH FLOWS FROM OPERATING ACTIVITIES: Net
Earnings $ 369.7 $ 383.9 Adjustments to Reconcile Net Earnings to
Net Cash Provided by Operating Activities: Depreciation and
Amortization 48.8 44.2 Other 26.3 26.7 Changes in Assets and
Liabilities 14.2 (103.7 ) Payments for Settlement of Interest Rate
Forward Swaps — (45.0 ) Pension and Other Post-employment Benefits
Contributions (2.5 ) (2.1 )
Net Cash Provided by Operating
Activities
456.5 304.0 CASH FLOWS FROM INVESTING ACTIVITIES: Capital
Expenditures (80.0 ) (94.8 ) Sale of Property, Plant and Equipment
0.4 0.3 Proceeds from/(Investment in) Other Companies — 4.0
Net Cash Used in Investing Activities (79.6 ) (90.5 ) CASH
FLOWS FROM FINANCING ACTIVITIES: Proceeds from Short-term
Borrowings 1.0 3.2 Repayments of Short-term Borrowings (4.0 ) (1.3
) Payments of Dividends (159.8 ) (144.7 ) Stock-Based Compensation
Related Proceeds and Excess Tax Benefits 19.7 20.3 Purchases of
Treasury Stock — (26.8 ) Stock-Based Compensation Tax Withholdings
(10.3 ) (7.8 ) Long-term Debt Borrowings, net of original issue
discount and expenses paid — 492.3 Purchase of Trading Security
(16.2 ) — Purchase of Redeemable Shares (5.1 ) — Distributions to
Noncontrolling Interests (6.9 ) (4.4 ) Net Cash Used in Financing
Activities (181.6 ) 330.8 Effects of Changes in Exchange Rates on
Cash and Cash Equivalents (17.9 ) (8.8 ) NET INCREASE IN CASH AND
CASH EQUIVALENTS 177.4 535.5 CASH AND CASH EQUIVALENTS: Beginning
of Period 1,297.7 1,050.8 End of Period $ 1,475.1
$ 1,586.3
MEAD JOHNSON NUTRITION COMPANY
SUPPLEMENTAL FINANCIAL
INFORMATION
(Dollars in millions)
(UNAUDITED)
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
(income)/expenses 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.
Three Months Ended June
30, % Change % Change Due to Net Sales
2015 % of Total 2014 %
of Total Reported Constant Dollar
Volume Price/Mix
ForeignExchange Asia $ 513.2 50 % $ 575.6 52 % (11 )%
(10 )% (9 )% (1 )% (1 )% Latin America 198.4 19 % 224.4 20 % (12 )%
1 % (5 )% 6 % (13 )% North America/Europe 320.8 31 % 311.1
28 % 3 % 6 % 1 % 5 % (3 )% Net Sales $ 1,032.4 100 %
$ 1,111.1 100 % (7 )% (3 )% (5 )% 2 % (4 )%
Earnings Before Interest and Income Taxes (EBIT) 2015
EBIT % of Sales 2014 EBIT % of Sales %
Change Asia $ 156.4 30 % $ 195.9 34 % (20 )% Latin America 44.8
23 % 53.4 24 % (16 )% North America/Europe 85.3 27 % 68.0 22 % 25 %
Corporate and Other (57.3 ) (72.4 ) 21 % EBIT $ 229.2 22 % $
244.9 22 % (6 )%
Six Months Ended June
30, % Change % Change Due to Net Sales
2015 % of Total 2014 % of Total
Reported Constant Dollar Volume
Price/Mix ForeignExchange Asia $ 1,094.2 51% $
1,168.3 52 % (6 )% (5 )% (5 )% — % (1 )% Latin America 402.8 19%
436.8 20 % (8 )% 7 % (1 )% 8 % (15 )% North America/Europe 629.8
30% 619.3 28 % 2 % 5 % 1 % 4 % (3 )% Net Sales $
2,126.8 100% $ 2,224.4 100 % (4 )% — % (3 )% 3 % (4
)%
Earnings Before Interest and Income Taxes
(EBIT) 2015 EBIT % of Sales 2014 EBIT %
of Sales % Change Asia $ 387.9 35 % $ 437.2 37 % (11 )%
Latin America 102.1 25 % $ 100.0 23 % 2 % North America/Europe
163.6 26 % $ 134.1 22 % 22 % Corporate and Other (139.2 ) $ (135.2
) (3 )% EBIT $ 514.4 24 % $ 536.1 24 % (4 )%
MEAD JOHNSON NUTRITION COMPANY
RECONCILIATION OF NON-GAAP TO GAAP
RESULTS
(Dollars in millions, except per share
data)
(UNAUDITED)
Three Months Ended June 30, 2015
Three Months Ended June 30, 2014 Specified
Items (a) Specified Items
(a) GAAP
Mark-to-Market Pension
All
Other(b)
Non-GAAP GAAP
Mark-to-Market Pension
All
Other(b)
Non-GAAP NET SALES $ 1,032.4 $ —
$
—
$ 1,032.4 $ 1,111.1 $ — $ — $ 1,111.1 Cost of Products Sold 356.4
0.5 — 356.9 426.8 (2.5 )
— 424.3 GROSS PROFIT 676.0 (0.5 ) — 675.5 684.3 2.5 —
686.8 GROSS MARGIN % 65.5 % (0.1 )% — % 65.4 % 61.6 % 0.2 % — %
61.8 % Operating Expenses: Selling, General and
Administrative 230.2 0.8 (0.5 ) 230.5 242.3 (3.9 ) (4.6 ) 233.8
Advertising and Promotion 190.2 — — 190.2 174.6 — — 174.6 Research
and Development 27.7 0.2 — 27.9 26.7 (0.7 ) — 26.0
Other (Income)/Expenses – net
(1.3 ) — 6.2 4.9 (4.2 ) — —
(4.2 ) EARNINGS BEFORE INTEREST AND INCOME TAXES 229.2 (1.5
) (5.7 ) 222.0 244.9 7.1 4.6 256.6 EBIT as a % of Sales 22.2 % (0.1
)% (0.6 )% 21.5 % 22.0 % 0.6 % 0.4 % 23.1 % Interest Expense
– net 13.9 — — 13.9 15.3
— — 15.3 EARNINGS BEFORE INCOME TAXES 215.3
(1.5 ) (5.7 ) 208.1 229.6 7.1 4.6 241.3 Provision for Income
Taxes 52.7 (0.5 ) 1.1 53.3 53.5
2.4 1.5 57.4 Effective Tax Rate 24.5 % (0.1 )%
1.2 % 25.6 % 23.3 % 0.3 % 0.2 % 23.8 % NET EARNINGS 162.6
(1.0 ) (6.8 ) 154.8 176.1 4.7 3.1 183.9
Less Net Earnings/(Loss) Attributable to
Noncontrolling Interests
(0.3 ) — — (0.3 ) 4.7 — —
4.7 NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS $ 162.9
$ (1.0 )
$
(6.8
) $ 155.1 $ 171.4 $ 4.7 $ 3.1 $ 179.2
Earnings per Share– Diluted Net Earnings Attributable to
Shareholders $ 0.80 $ —
$
(0.04 ) $ 0.76 $ 0.84 $ 0.02 $ 0.02 $
0.88
Certain figures do not sum due to
rounding.
(a) All Specified Items are included in
Corporate and Other.
(b) See the company's form 10-Q for the
second quarter for details on Specified Items.
MEAD JOHNSON NUTRITION COMPANY
RECONCILIATION OF NON-GAAP TO GAAP
RESULTS
(Dollars in millions, except per share
data)
(UNAUDITED)
Six Months Ended June 30, 2015 Six
Months Ended June 30, 2014 Specified Items
(a) Specified Items (a)
GAAP
Mark-to-Market Pension
Investigation Accrual
All
Other(b)
Non-GAAP GAAP
Mark-to-Market Pension
All
Other(b)
Non-GAAP NET SALES $ 2,126.8 $ — $ — $ — $ 2,126.8 $ 2,224.4
$ — $ — $ 2,224.4 Cost of Products Sold 749.9 0.5 —
— 750.4 832.5 (2.5 ) — 830.0
GROSS PROFIT 1,376.9 (0.5 ) — — 1,376.4 1,391.9 2.5 —
1,394.4 GROSS MARGIN % 64.7 % — % — % — % 64.7 % 62.6 % 0.1 % — %
62.7 % Operating Expenses: Selling, General and
Administrative 463.4 0.8 — (1.3 ) 462.9 475.2 (3.9 ) (10.4 ) 460.9
Advertising and Promotion 334.6 — — — 334.6 330.3 — — 330.3
Research and Development 53.6 0.2 — — 53.8 53.8 (0.7 ) — 53.1 Other
(Income)/Expenses – net 10.9 — (12.0 ) 4.0 2.9
(3.5 ) — — (3.5 ) EARNINGS BEFORE INTEREST AND
INCOME TAXES 514.4 (1.5 ) 12.0 (2.7 ) 522.2 536.1 7.1 10.4 553.6
EBIT as a % of Sales 24.2 % (0.1 )% 0.6 % (0.1 )% 24.6 % 24.1 % 0.3
% 0.5 % 24.9 % Interest Expense – net 27.7 — —
— 27.7 27.7 — — 27.7
EARNINGS BEFORE INCOME TAXES 486.7 (1.5 ) 12.0 (2.7 ) 494.5
508.4 7.1 10.4 525.9 Provision for Income Taxes 117.0
(0.5 ) 3.1 (1.8 ) 117.8 124.5 2.4 3.6
130.5 Effective Tax Rate 24.0 % — % 0.1 % (0.3 )%
23.8 % 24.5 % 0.1 % 0.2 % 24.8 % NET EARNINGS 369.7 (1.0 )
8.9 (0.9 ) 376.7 383.9 4.7 6.8 395.4
Less Net Earnings/(Loss) Attributable to
Noncontrolling Interests
(0.6 ) — — — (0.6 ) 10.1 — —
10.1 NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS $
370.3 $ (1.0 ) $ 8.9 $ (0.9 ) $ 377.3 $ 373.8
$ 4.7 $ 6.8 $ 385.3 Earnings per Share–
Diluted Net Earnings Attributable to Shareholders $ 1.82 $
(0.01
)
$ 0.04 $
—
$ 1.85 $ 1.84 $ 0.02 $ 0.04 $ 1.90
Certain figures do not sum due to
rounding.
(a) All Specified Items are included in
Corporate and Other.
(b) See the company's form 10-Q for the
second quarter for details on Specified Items.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150723005596/en/
Mead Johnson Nutrition CompanyInvestors:Kathy MacDonald(847)
832-2182kathy.macdonald@mjn.comorMedia:Christopher Perille(847)
832-2178chris.perille@mjn.com
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