MEAD JOHNSON NUTRITI (MJN, Financial) filed Quarterly Report for the period ended 2009-06-30.
Mead Johnson Nutrition Company is a pediatric nutrition company. It manufactures distributes and sells infant formulas and other nutritional products worldwide primarily under the `Enfa` family of brands. The Company\'s Enfa family of brands including Enfamil infant formula is a global brand franchise in pediatric nutrition. The company\'s products include routine and specialty infant formulas children\'s milks and milk modifiers pediatric vitamins dietary supplements for pregnant and breastfeeding mothers and products for metabolic disorders. It also launched Nutramigen AA an amino acid infant formula for infants with severe protein allergies. The company a subsidiary of Bristol-Myers Squibb Company and headquartered in Evansville Indiana offers its products in North America Europe Asia and Latin America. MEAD JOHNSON NUTRITI has a market cap of $2.99 billion; its shares were traded at around $38.9 with and P/S ratio of 1.1. The dividend yield of MEAD JOHNSON NUTRITI stocks is 3.1%.
Net earnings attributable to shareholders for the first six months of 2009 totaled $238.0 million, compared with $244.8 million, for the same period a year ago. Interest expense in the first half of 2009 totaled $52.3 million. Results for 2008 include no interest expense as the company was a wholly owned subsidiary of BMS and carried no debt at that time. Results for 2009 benefited from a lower effective tax rate (ETR) compared with 2008 largely due to benefits associated with the restructuring of our foreign operations as part of the separation from BMS. The ETR for the first half of 2009 was 31.0% versus 37.4% for 2008. Earnings per diluted share for the first half of 2009 were $1.21, compared with $1.44 in 2008. There were approximately 196.7 million diluted shares outstanding in the first half of 2009, versus 170.0 million shares in 2008.
We incurred $6.9 million and $24.1 million in costs in connection with our IPO and separation during the three and six months ended June 30, 2009, respectively, compared to $0.2 million during the three and six months ended June 30, 2008. These costs relate to legal, accounting, systems separation and consulting services.
On August 26, 2008, we issued a $2.0 billion intercompany note to BMS. The note was restructured at the IPO date reducing the related party debt to approximately $1.8 billion. Interest expensenet during the three and six months ended June 30, 2009, was $24.3 million and $52.3 million, respectively. The company had no debt outstanding and no interest expense during the three and six months ended June 30, 2008.
Our 2009 results include operating model changes in Brazil, Europe and Mexico. In Brazil, our ability to operate as a new stand-alone subsidiary that is separate from BMS is delayed for a period of time due to certain statutory and regulatory requirements for permits and applications. Until we are able to operate as a stand-alone entity in Brazil, BMS is distributing and recording sales for our products and our role is limited to marketing activities. In Europe, we have transitioned to a third-party distributor model with BMS temporarily serving as our distributor. This will reduce net sales by the amount of the distributors margin and lower costs for the distribution-related expenses. In Mexico, we now operate our business through a newly formed operating subsidiary that is expected to incur higher profit sharing costs than were allocated to us when we operated within BMS. The combined effect of these operating model changes was to reduce net sales growth for the three months ended June 30, 2009, by approximately $10.3 million and to increase EBIT by approximately $0.5 million. The combined effect of these operating model changes was to reduce net sales and EBIT growth for the six months ended June 30, 2009, by approximately $17.6 million and $1.4 million, respectively.
Interest expensenet of $24.3 million primarily represents interest incurred on the $744.2 million 2014 Note, the $500.0 million 2016 Note and the $500.0 million 2019 Note.
Read the The complete ReportMJN is in the portfolios of Steve Mandel of Lone Pine Capital, Edward Owens of Vanguard Health Care Fund, Edward Owens of Vanguard Health Care Fund, Ron Baron of Baron Funds.
Mead Johnson Nutrition Company is a pediatric nutrition company. It manufactures distributes and sells infant formulas and other nutritional products worldwide primarily under the `Enfa` family of brands. The Company\'s Enfa family of brands including Enfamil infant formula is a global brand franchise in pediatric nutrition. The company\'s products include routine and specialty infant formulas children\'s milks and milk modifiers pediatric vitamins dietary supplements for pregnant and breastfeeding mothers and products for metabolic disorders. It also launched Nutramigen AA an amino acid infant formula for infants with severe protein allergies. The company a subsidiary of Bristol-Myers Squibb Company and headquartered in Evansville Indiana offers its products in North America Europe Asia and Latin America. MEAD JOHNSON NUTRITI has a market cap of $2.99 billion; its shares were traded at around $38.9 with and P/S ratio of 1.1. The dividend yield of MEAD JOHNSON NUTRITI stocks is 3.1%.
Highlight of Business Operations:
Earnings before interest and income taxes (EBIT) increased to $406.9 million, up from $397.1 million a year earlier. Factors affecting EBIT in the first six months of 2009 include the benefit of lower commodity costs, the carryover benefit of pricing actions taken in 2008, productivity savings and manufacturing efficiencies. These benefits were somewhat offset by higher costs incurred as a stand-alone public company and the impact of a stronger dollar. Results for 2009 include costs associated with the initial public offering (IPO) and separation from Bristol-Myers Squibb Company (BMS) of $24.1 million and severance charges of $7.6 million, partly offset by an $11.9 million gain from the sale of a non-strategic intangible asset, as well as $10.0 million received from a patent settlement.Net earnings attributable to shareholders for the first six months of 2009 totaled $238.0 million, compared with $244.8 million, for the same period a year ago. Interest expense in the first half of 2009 totaled $52.3 million. Results for 2008 include no interest expense as the company was a wholly owned subsidiary of BMS and carried no debt at that time. Results for 2009 benefited from a lower effective tax rate (ETR) compared with 2008 largely due to benefits associated with the restructuring of our foreign operations as part of the separation from BMS. The ETR for the first half of 2009 was 31.0% versus 37.4% for 2008. Earnings per diluted share for the first half of 2009 were $1.21, compared with $1.44 in 2008. There were approximately 196.7 million diluted shares outstanding in the first half of 2009, versus 170.0 million shares in 2008.
We incurred $6.9 million and $24.1 million in costs in connection with our IPO and separation during the three and six months ended June 30, 2009, respectively, compared to $0.2 million during the three and six months ended June 30, 2008. These costs relate to legal, accounting, systems separation and consulting services.
On August 26, 2008, we issued a $2.0 billion intercompany note to BMS. The note was restructured at the IPO date reducing the related party debt to approximately $1.8 billion. Interest expensenet during the three and six months ended June 30, 2009, was $24.3 million and $52.3 million, respectively. The company had no debt outstanding and no interest expense during the three and six months ended June 30, 2008.
Our 2009 results include operating model changes in Brazil, Europe and Mexico. In Brazil, our ability to operate as a new stand-alone subsidiary that is separate from BMS is delayed for a period of time due to certain statutory and regulatory requirements for permits and applications. Until we are able to operate as a stand-alone entity in Brazil, BMS is distributing and recording sales for our products and our role is limited to marketing activities. In Europe, we have transitioned to a third-party distributor model with BMS temporarily serving as our distributor. This will reduce net sales by the amount of the distributors margin and lower costs for the distribution-related expenses. In Mexico, we now operate our business through a newly formed operating subsidiary that is expected to incur higher profit sharing costs than were allocated to us when we operated within BMS. The combined effect of these operating model changes was to reduce net sales growth for the three months ended June 30, 2009, by approximately $10.3 million and to increase EBIT by approximately $0.5 million. The combined effect of these operating model changes was to reduce net sales and EBIT growth for the six months ended June 30, 2009, by approximately $17.6 million and $1.4 million, respectively.
Interest expensenet of $24.3 million primarily represents interest incurred on the $744.2 million 2014 Note, the $500.0 million 2016 Note and the $500.0 million 2019 Note.
Read the The complete ReportMJN is in the portfolios of Steve Mandel of Lone Pine Capital, Edward Owens of Vanguard Health Care Fund, Edward Owens of Vanguard Health Care Fund, Ron Baron of Baron Funds.
