MEAD JOHNSON NUTRITI (MJN, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $3.2 billion; its shares were traded at around $41.6 with a P/E ratio of 19.9 and P/S ratio of 1.1. The dividend yield of Mead Johnson Nutriti stocks is 1.9%.
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. Net interest expense for the nine months ended September 30, 2009, totaled $75.3 million compared with $11.9 million for the same period in 2008. 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 nine months ended September 30, 2009, was 30.1% versus 35.5% for 2008. Earnings per diluted share for the nine months ended September 30, 2009, were $1.68, compared with $2.05 in 2008. There were 199.3 million diluted shares outstanding during the first nine months of 2009, versus 170.0 million shares in 2008.
We incurred $7.2 million and $31.3 million in costs in connection with our IPO and separation during the three and nine months ended September 30, 2009, respectively, compared to $13.8 million and $14.0 million during the three and nine months ended September 30, 2008, respectively. 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. Net interest expense during the three and nine months ended September 30, 2009, was $23.0 million and $75.3 million, respectively, compared with $11.9 million for both the three and nine months ended September 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 was delayed until late in the third quarter. Prior to that time, BMS distributed and recorded sales for our products and we conducted marketing activities. In Europe, we have transitioned to a third-party distributor model with BMS serving as our distributor. This reduced net sales by the amount of the distributors margin and lowered costs for the distribution-related expenses. In Mexico, we now operate our business through a newly formed operating subsidiary that is incurring 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 September 30, 2009, by $7.7 million and EBIT by $0.3 million. The combined effect of these operating model changes was to reduce net sales and EBIT growth for the nine months ended September 30, 2009, by $25.3 million and $1.7 million, respectively.
Interest expensenet for the third quarter of 2009 primarily represents interest incurred on the $744.2 million 2014 Note, the $500.0 million 2016 Note and the $500.0 million 2019 Note. Interest expensenet for the third quarter of 2008 represented interest incurred on the $2.0 billion intercompany note payable issued in August 2008.
Read the The complete ReportMJN is in the portfolios of Steve Mandel of Lone Pine Capital, 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 $3.2 billion; its shares were traded at around $41.6 with a P/E ratio of 19.9 and P/S ratio of 1.1. The dividend yield of Mead Johnson Nutriti stocks is 1.9%.
Highlight of Business Operations:
Earnings before interest and income taxes (EBIT) increased to $566.6 million, up from $560.8 million a year earlier. Factors affecting EBIT in the first nine months of 2009 include the benefit of lower commodity costs and the carryover benefit of pricing actions taken in 2008, along with price increases in 2009 in a select number of international markets. 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 $31.3 million.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. Net interest expense for the nine months ended September 30, 2009, totaled $75.3 million compared with $11.9 million for the same period in 2008. 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 nine months ended September 30, 2009, was 30.1% versus 35.5% for 2008. Earnings per diluted share for the nine months ended September 30, 2009, were $1.68, compared with $2.05 in 2008. There were 199.3 million diluted shares outstanding during the first nine months of 2009, versus 170.0 million shares in 2008.
We incurred $7.2 million and $31.3 million in costs in connection with our IPO and separation during the three and nine months ended September 30, 2009, respectively, compared to $13.8 million and $14.0 million during the three and nine months ended September 30, 2008, respectively. 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. Net interest expense during the three and nine months ended September 30, 2009, was $23.0 million and $75.3 million, respectively, compared with $11.9 million for both the three and nine months ended September 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 was delayed until late in the third quarter. Prior to that time, BMS distributed and recorded sales for our products and we conducted marketing activities. In Europe, we have transitioned to a third-party distributor model with BMS serving as our distributor. This reduced net sales by the amount of the distributors margin and lowered costs for the distribution-related expenses. In Mexico, we now operate our business through a newly formed operating subsidiary that is incurring 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 September 30, 2009, by $7.7 million and EBIT by $0.3 million. The combined effect of these operating model changes was to reduce net sales and EBIT growth for the nine months ended September 30, 2009, by $25.3 million and $1.7 million, respectively.
Interest expensenet for the third quarter of 2009 primarily represents interest incurred on the $744.2 million 2014 Note, the $500.0 million 2016 Note and the $500.0 million 2019 Note. Interest expensenet for the third quarter of 2008 represented interest incurred on the $2.0 billion intercompany note payable issued in August 2008.
Read the The complete ReportMJN is in the portfolios of Steve Mandel of Lone Pine Capital, Edward Owens of Vanguard Health Care Fund, Ron Baron of Baron Funds.
