Press Releases

Perrigo is a leading global consumer-focused self-care company. Our vision is to make lives better by bringing “Quality, Affordable Self-Care Products” that consumers trust everywhere they are sold. The Company is a leading provider of health and wellness solutions that enhance individual well-being by empowering consumers to proactively prevent or treat conditions that can be self-managed.

Learn More

Perrigo Company Reports Results for Fiscal Year 2001's Second Quarter

The Perrigo Company's (NASDAQ: PRGO) second quarter results announced today included a $24.0 million charge, or $0.21 per share, for the voluntary discontinuation of production and withdrawal of cough and cold products and diet aids containing phenylpropanolamine (PPA). The Company withdrew these products in compliance with the FDA's recommendation. This charge was $5.0 million or $0.05 per share higher than announced on November 8, 2000, but was more than offset by improved operating results in the quarter.

On a proforma basis prior to the PPA product withdrawal charges, fiscal 2001 sales were $204.9 million, a two percent increase compared with $200.7 million in the second quarter last year. Proforma net income for the quarter was $16.1 million or $0.22 per share versus $11.0 million or $0.15 per share a year ago.

The product withdrawal resulted in a $14.0 million reduction in sales due to PPA product returns. These returns reduced gross margin by $3.8 million and when combined with a $20.2 million charge to cost of sales for product returns, product write-offs and the cost of disposal, income before tax was reduced by $24.0 million or $0.21 per share. Including the PPA charges, net sales in the quarter were $190.9 million and reported net income was $0.8 million, or $0.01 per share, versus $11.0 million, or $0.15 per share, last year.

Perrigo's President and Chief Executive Officer, David T. Gibbons, stated, "What is masked by the returns and charge related to the PPA issue is the fact that this was a good quarter for Perrigo. Excluding the PPA charge, our second quarter gross margin improved to 27.3% from 24.0% last year, a 3.3 percentage point gain. We succeeded in returning inventory obsolescence costs to levels in line with more normal historical results. Also, with the elimination of long-term debt and continued positive cash flow, we earned interest and other income of nearly $1.0 million during the quarter, compared with having interest and other expenses of $2.0 million for last year's second quarter."

Commenting on this year's cough and cold season, Mr. Gibbons said, "The indicators have shown that thus far, the cough, cold and flu season has been weaker than last year, which itself was weak. In fact, tracking service data indicates that through mid-January, this season is 18 to 20 percent below a year ago in terms of the number of people affected by colds and flu. The strength of the season and how long it lasts will influence the level of cough and cold product reorders in our third quarter."

Excluding the PPA product returns and $17.8 million of personal care sales last year, fiscal 2001's first half sales, on a proforma basis, were $398.2 million compared with $395.2 million for the first six months a year ago. Proforma net income for the six months was $26.7 million or $0.36 per share versus $20.6 million or $0.28 per share last year. Including PPA product sales returns, reported net sales in the first half were $384.2 million and reported net income including the PPA charge was $11.4 million or $0.15 per share. For the first half of last year, including personal care, Perrigo reported net income of $21.0 million or $0.29 per share.

"Perrigo continues to make headway in the implementation of our ongoing quality and compliance improvement programs. Our efforts focus on revising operating procedures, expanding documentation, staffing additions and more comprehensive training. At the same time we are also working toward improved customer service. When we are finished, quality and customer service will be clear and compelling competitive advantages for Perrigo," Mr. Gibbons concluded.

Douglas R. Schrank, Executive Vice President and Chief Financial Officer, stated, "The improved financial results recorded in our first half this year, excluding PPA, will be tough to match in the second half. The cost of our quality and compliance efforts will be up substantially. It will be difficult to replace last year's PPA product sales and the effect of not having PPA replacement products are expected to reduce earnings by $0.03 to $0.04 per share during the last six months. We expect earnings for Perrigo's fiscal 2001 third quarter to be in a range of $0.08 to $0.12 per share. For the full year ending June 30, 2001, we expect earnings to be in a range of $0.43 to $0.48 per share, excluding the PPA product withdrawal costs in the second quarter."

Perrigo will host a conference call to discuss second quarter 2001 results at 11 a.m. (EST) today. The call and replay will be available via webcast on the Company's web site at . The conference call may also be accessed by phone on a listen-only basis by calling 800-553-0273 and asking for Perrigo's second quarter review. A taped replay of the call will be available beginning at approximately 2:30 p.m. (EST) Tuesday, January 23. To listen to the replay, call 800-475-6701, access code 566455 (outside the United States, call 320-365-3844).

Perrigo Company is the nation's largest manufacturer of over-the-counter (non-prescription) pharmaceutical and nutritional products for the store brand market. Store brand products are sold by national and regional supermarket, drugstore and mass merchandise chains under their own labels and compete with nationally advertised brands. The Company's products include over-the-counter pharmaceuticals, such as analgesics, cough and cold remedies, antacids, laxatives, feminine hygiene and smoking cessation products, and nutritional products, such as vitamins, nutritional supplements and nutritional drinks. Visit Perrigo on the Internet at .

Note: Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and are subject to the safe harbor created thereby. Please refer to pages 23-27 of the Company's Form 10-K for the year ended July 1, 2000 for a discussion of certain important factors that relate to forward- looking statements contained in this press release. Although the Company believes that the expectations reflected in any such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

                             PERRIGO COMPANY
                 (In thousands, except per share amounts)

                               Second Quarter            Year-To-Date

                          December 30,  January 1,  December 30,  January 1,
                              2000        2000         2000         2000

  Net sales                $190,882    $200,688     $384,215     $413,008
  Cost of sales             138,787     152,616      285,181      315,143
  PPA product withdrawal     20,200           -       20,200            -
  Gross profit               31,895      48,072       78,834       97,865

  Operating expenses
    Distribution              3,961       3,682        7,418        8,450
    Research and development  3,470       3,876        7,428        7,393
    Selling and
     administrative          24,178      21,487       47,269       45,181
    Unusual litigation         (457)          -         (457)           -
                             31,152      29,045       61,658       61,024

  Operating income              743      19,027       17,176       36,841
  Interest and other, net      (961)      2,049       (1,135)       4,511

  Income before income taxes  1,704      16,978       18,311       32,330
  Income tax expense            884       6,014        6,957       11,341

  Net income                   $820     $10,964      $11,354      $20,989

  Basic earnings per share    $0.01       $0.15        $0.15        $0.29

  Diluted earnings per share  $0.01       $0.15        $0.15        $0.29

  Shares outstanding used for
   basic EPS calculation     73,522      73,348       73,513       73,337

  Shares outstanding used for
   diluted EPS calculation   73,953      73,525       73,941       73,527

                             PERRIGO COMPANY
                       SELECTED BALANCE SHEET DATA
                              (In thousands)

                                           December 30,         July 1,
                                               2000              2000

  Current assets                             $305,415          $268,645
  Property & equipment, net                   192,548           193,580
  Other assets                                 23,057            23,839
    Total Assets                             $521,020          $486,064

  Current liabilities                        $138,302          $113,920
  Deferred income taxes                        18,967            19,462
  Minority interest                               935               922
  Shareholders' equity                        362,816           351,760
    Total Liabilities and Equity             $521,020          $486,064

                             PERRIGO COMPANY
                              (In thousands)

                                           December 30,       July 1,
                                               2000            2000

    Net income                               $11,354         $20,989
    Depreciation and amortization             11,766          11,016
    Other operating activities                32,093          (8,515)
  Net cash from operating activities          55,213          23,490

    Additions to property and
     equipment                               (10,116)         (7,643)
    Proceeds from sale of assets
     held for sale                                 -          31,186
  Net cash from (for) investing
   activities                                (10,116)         23,543

  Net cash (for) financing
   activities                                   (507)        (44,997)

  Net Increase in Cash and Cash
   Equivalents                                44,590           2,036
  Cash and Cash Equivalents, at
   Beginning of Period                         7,055           1,695
  Cash and Cash Equivalents, at End
   of Period                                 $51,645          $3,731

SOURCE Perrigo Company

Contact: Ernest J. Schenk, Manager, Investor Relations and Communication
of Perrigo Company, 616-673-9212, email,


Company News On-Call: or fax,
800-758-5804, ext. 699550