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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.

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Perrigo Company Reports Third Quarter Earnings of $0.14 Per Share

Perrigo Company (NASDAQ: PRGO) today announced results for the third quarter and nine months ended March 31, 2001.

Net sales for the quarter were $192.0 million, an increase of four percent compared with $184.5 million last year. Net income was $10.1 million, up 58 percent from $6.4 million a year ago. Earnings per share were $0.14 in the quarter compared with $0.09 in the third quarter of fiscal 2000.

David T. Gibbons, Perrigo's President and Chief Executive Officer, stated, "Higher revenues and margins, along with interest income from our strong cash position, contributed to the improved earnings for the quarter. While the cough and cold season has proven to be weak overall, sales in our key cough/cold and analgesic product categories benefited from a stronger February and March. In the third quarter last year, our gross profit margin was impacted by high inventory obsolescence expenses. This year, tighter inventory controls kept those expenses near historically low levels. I am also pleased to note that efficient working capital management contributed $25 million in operating cash flow in the quarter."

In November 2000, in compliance with the Food and Drug Administration's (FDA) recommendation, the Company voluntarily discontinued production and halted shipments of all products containing the ingredient phenylpropanolamine (PPA). On a proforma basis, excluding the PPA discontinuation, which resulted in a $14 million reduction in sales in the fiscal second quarter, and $17.8 million in sales from a business sold in fiscal year 2000, the Company reported nine months sales of $590.2 million compared with $579.8 million a year ago. The PPA discontinuation also resulted in a charge of $24.0 million or $0.21 per share, in the fiscal second quarter. Proforma net income was $36.8 million or $0.50 per share versus $27.0 million or $0.37 per share last year. Including the PPA related reduction in sales, reported net sales in the nine months were $576.2 million and reported net income, including the PPA charge, was $21.5 million or $0.29. For the nine months last year, including the divested personal care business, Perrigo reported net income of $27.4 million or $0.37 per share.

"Excluding the PPA product discontinuations, our nine months earnings have improved significantly over last year on a modest sales gain. Favorable obsolescence expense, combined with sound inventory management, has resulted in margin improvement, despite higher compliance costs. We have also benefited from a strong cash position and no long-term debt," said Gibbons. "Going forward, we anticipate that increased funding for research and development and higher costs for our global quality improvement and compliance initiatives will carry through fiscal 2002. We will be challenged with absorbing these costs over the next several quarters, and until the longer- term payoff of production efficiencies are fully incorporated in operations, we expect modest growth in earnings."

Douglas R. Schrank, Executive Vice President and Chief Financial Officer, stated, "Due to the seasonal nature of our business, our profitability is generally the weakest in our June quarter. Additionally, this year we will see higher quality and compliance expenses impacting cost of sales. These costs become more visible when quarterly revenues hit their seasonal lows. Consequently, we anticipate earnings for Perrigo's fiscal fourth quarter to be in a range of $(0.02) to $0.01 per share. For the full year ending June 30, 2001, we expect earnings to be in a range of $0.48 to $0.51 per share, excluding the PPA product discontinuation costs in the second quarter."

Perrigo will host a conference call to discuss third quarter 2001 results at 11:00 a.m. (EDT) 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 1-800-230-1085 and asking for Perrigo's third quarter review. A taped replay of the call will be available beginning at approximately 2:30 p.m. (EDT) Tuesday, May 1. To listen to the replay, call 1-800-475-6701, access code 584136 (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)

                                    Third Quarter          Year-To-Date
                                 March 31,    April 1,  March 31,   April 1,
                                   2001        2000       2001       2000

  Net sales                      $191,956    $184,528   $576,171   $597,536
  Cost of sales                   144,472     148,264    429,653    463,407
  PPA product discontinuation           -           -     20,200          -
  Gross profit                     47,484      36,264    126,318    134,129

  Operating expenses
     Distribution                   4,080       4,071     11,498     12,521
     Research and development       5,202       2,799     12,630     10,192
     Selling and administration    24,410      19,407     71,679     64,588
     Unusual litigation              (538)          -       (995)         -
                                   33,154      26,277     94,812     87,301

  Operating income                 14,330       9,987     31,506     46,828
  Interest and other, net          (1,687)         10     (2,822)     4,521

  Income before income taxes       16,017       9,977     34,328     42,307
  Income tax expense                5,916       3,602     12,873     14,943

  Net income                      $10,101      $6,375    $21,455    $27,364

  Basic earnings per share          $0.14       $0.09      $0.29      $0.37

  Diluted earnings per share        $0.14       $0.09      $0.29      $0.37

  Shares outstanding used for
     basic EPS calculation         73,468      73,367     73,485     73,347

  Shares outstanding used for
     diluted EPS calculation       74,552      73,537     74,081     73,531

                                 PERRIGO COMPANY
                           SELECTED BALANCE SHEET DATA
                                  (In thousands)

                                                March 31,           July 1,
                                                  2001               2000

      Current assets                             $324,965          $268,645
      Property & equipment, net                   193,791           193,580
      Other assets                                 22,768            23,839
         Total Assets                            $541,524          $486,064

      Current liabilities                        $149,439          $113,920
      Deferred income taxes                        18,967            19,462
      Minority interest                               903               922
      Shareholders' equity                        372,215           351,760
         Total Liabilities and Equity            $541,524          $486,064

                                 PERRIGO COMPANY
                                  (In thousands)

                                                  March 31,         April 1,
                                                    2001              2000

         Net income                               $21,455           $27,364
         Depreciation and amortization             18,055            16,987
         Other operating activities                40,541            41,723
      Net cash from operating activities           80,051            86,074

         Additions to property and
          equipment                               (17,373)          (10,634)
         Proceeds from sale of assets
          held for sale                                 -            31,186
      Net cash (for) from investing
       activities                                 (17,373)           20,552

      Net cash from (for) financing
       activities                                     493          (107,438)

      Net Increase (Decrease) in Cash
       and Cash Equivalents                        63,171              (812)
      Cash and Cash Equivalents, at
       Beginning of Period                          7,055             1,695
      Cash and Cash Equivalents, at End
       of Period                                  $70,226              $883


SOURCE: Perrigo Company

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


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