Mead Johnson Nutrition Company (NYSE: MJN) today announced its financial results for the fourth quarter and year ended December 31, 2013.
- Fourth quarter 2013 sales of $1,060.7 million increased eight percent from $981.1 million in the prior-year quarter. Sales were up 11 percent on a constant dollar basis. On a constant dollar basis, both the Asia and Latin America segments contributed double-digit sales growth, partially offset by a mid-single digit decline in the North America/Europe segment.
- GAAP net earnings in the fourth quarter of 2013 were $0.75 per diluted share, compared to $0.66 per diluted share in the prior-year quarter. Sales growth, gross margin improvement and a lower effective tax rate were partially offset by higher pension settlement expense and demand-generation investments.
- Non-GAAP (1) net earnings were $0.78 per diluted share for the fourth quarter of 2013, compared to $0.72 per diluted share in the prior-year quarter.
- Full year 2013 sales of $4,200.7 million were up eight percent from $3,901.3 million in the prior year. On a constant dollar basis, sales were up nine percent with double-digit growth in both the Asia and Latin America segments and a low-single digit decline in the North America/Europe segment.
- GAAP net earnings were $3.19 per diluted share in 2013, compared to $2.95 per diluted share in 2012. Sales growth and improved gross margin were partially offset by higher demand-generation investments, the China administrative penalty and higher pension settlement expense.
- Non-GAAP net earnings of $3.38 per diluted share for the full year of 2013 were up 10 percent from $3.08 per diluted share in the prior year.
(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 strong 2013 performance as we achieved sales growth at the top end of our guidance range and earnings that exceeded expectations,” said Chief Executive Officer Kasper Jakobsen. “Sales growth was strong in both Asia and Latin America with broad-based market share gains in growing markets. We also saw share gains in Canada and in the U.S. non-WIC (2) business, which partially offset lower category consumption in the U.S. We delivered strong gross margin improvement from higher pricing and productivity. This enabled us to substantially increase our investment in demand creation, while delivering 10 percent growth in earnings per share on a non-GAAP basis.”
(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).Fourth Quarter Results Sales for the fourth quarter of 2013 totaled $1,060.7 million, up eight percent from $981.1 million in the prior-year quarter. Sales benefited six percent from volume and five percent from price, reduced by three percent from foreign exchange. Gross margin for the fourth quarter of 2013 was 63.0 percent, up 190 basis points from the fourth quarter of the prior year. The gross margin improvement was primarily driven by price increases and productivity, which more than offset higher dairy costs. The increase in sales and gross profit was partially offset by record levels of advertising and promotion spend and higher pension settlement expense. Earnings before interest and income taxes (“EBIT”) for the fourth quarter of 2013 totaled $205.2 million compared to $189.7 million in the prior-year quarter.
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