Perrigo Company (NASDAQ: PRGO) today announced results for the third quarter and nine months ended March 30, 2002.
Net sales for the third quarter were $198.5 million, an increase of four percent compared with $190.9 million last year. Net income was $19.3 million, or $0.26 per share, including a civil lawsuit settlement of $5.0 million after-tax, or $0.07 per share. Excluding the lawsuit settlement, net income in the quarter was $14.3 million, or $0.19 per share compared with $10.1 million, or $0.14 per share, a year ago.
"We are pleased with the excellent results recorded in our fiscal third quarter," stated David T. Gibbons, President and Chief Executive Officer. "The addition of Wrafton Laboratories, strong vitamin and antacid sales and new products led to the sales increase. Margin expansion was derived in part by the aggressive management of inventories, which resulted in lower obsolescence expense. Lower inventories and receivables, along with continuing cost control, contributed to operating cash flow of $55 million in the quarter. We achieved our objective of substantially higher customer service levels, while at the same time making substantial improvement to our balance sheet."
For the nine months ended March 30, 2002, sales were $644.3 million, an increase of $71.7 million, or 13 percent, from $572.6 million reported a year ago. Net sales last year, prior to a charge for the discontinuation of certain cough/cold and diet aid products, were $586.6 million. Net income for the nine months was $48.9 million, or $0.65 per share. Excluding the $5.0 million after-tax lawsuit settlement, net income was $43.9 million, or $0.58 per share. This compares with reported net income of $21.5 million, or $0.29 per share, a year ago. Excluding the product discontinuation charge, net income for the nine months last year was $36.8 million, or $0.50 per share.
Commenting further, Gibbons said, "We have done a good job to date meeting our plans while managing through a seasonal cycle that proved difficult to forecast. Revenues, new product introductions, cost control initiatives and working capital measures have met our targets within this challenging environment. In line with our seasonal pattern, we expect lower fourth- quarter sales and margins compared with the third quarter and expect earnings of $0.04 to $0.06 per share.
"Looking forward, we see continuing progress as we execute against our core strategies -- quality, customer service, low cost and innovation. However, we also anticipate challenges ahead, such as the speed with which we can implement new global sourcing initiatives meant to offset rising costs for health care coverage, liability insurance and quality programs. While we will be challenged to continue increasing our margins and income next year, we are confident Perrigo is doing all the right things to achieve our long-term goals and to maintain our strong leadership position in the store brand market."
Perrigo will host a conference call to discuss third quarter fiscal 2002 results at 11:00 a.m. (EDT) today. The call and replay will be available via webcast on the Company's web site at http://www.perrigo.com/investor or by phone, toll free, 1-800-553-0318. A taped replay of the call will be available beginning at approximately 2:30 p.m. (EDT) Thursday, April 25. To listen to the replay, call 1-800-475-6701, access code 637133 (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 sold by supermarket, drug, and mass merchandise chains under their own labels. The Company's products include over-the-counter pharmaceuticals such as analgesics, cough and cold remedies, gastrointestinal, and feminine hygiene products, and nutritional products, such as vitamins, nutritional supplements and nutritional drinks. Visit Perrigo on the Internet at http://www.perrigo.com/ .
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 see the "Cautionary Note Regarding Forward-Looking Statements" on pages 24-29 of the Company's Form 10-K for the year ended June 30, 2001 for a discussion of certain important factors that relate to forward-looking statements contained in this press release. In addition, the Company's future results may be affected by the impact of events flowing from the September 11, 2001 terrorist attacks, current economic conditions in the United States, retailers' financial difficulties or current cough/cold/flu seasonal trends. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
PERRIGO COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Third Quarter Year-To-Date
2002 2001 2002 2001
Net sales $198,491 $190,898 $644,301 $572,590
Cost of sales 143,333 144,472 476,999 429,653
PPA product discontinuation -- -- -- 20,200
Gross profit 55,158 46,426 167,302 122,737
Operating expenses
Distribution 4,048 4,080 12,330 11,498
Research and development 4,312 5,202 13,116 12,630
Selling and administration 24,748 24,152 71,540 68,379
Restructuring -- -- 2,046 --
Unusual litigation (7,813) (538) (7,813) (995)
25,295 32,896 91,219 91,512
Operating income 29,863 13,530 76,083 31,225
Interest and other, net (220) (1,687) (496) (2,822)
Income before income taxes 30,083 15,217 76,579 34,047
Income tax expense 10,822 5,116 27,663 12,592
Net income $19,261 $10,101 $48,916 $21,455
Basic earnings per share $0.26 $0.14 $0.67 $0.29
Diluted earnings per share $0.26 $0.14 $0.65 $0.29
PERRIGO COMPANY
SELECTED BALANCE SHEET DATA
(in thousands)
March 30, June 30,
2002 2001
(unaudited)
Current assets $309,108 $313,137
Property & equipment, net 211,455 212,087
Other assets 52,627 50,688
Total Assets $573,190 $575,912
Current liabilities $138,107 $171,759
Deferred income taxes 18,046 17,419
Other long-term liabilities 2,685 859
Shareholders' equity 414,352 385,875
Total Liabilities and Equity $573,190 $575,912
PERRIGO COMPANY
SELECTED STATEMENTS OF CASH FLOWS DATA
(in thousands)
(unaudited)
Year-To-Date
2002 2001
Net income $48,916 $21,455
Depreciation and amortization 17,968 18,055
Other operating activities (13,882) 40,541
Net cash from operating activities 53,002 80,051
Additions to property and
equipment (17,321) (17,373)
Proceeds from sale of assets
held for sale 14,161 --
Other (426) --
Net cash (for) from investing
activities (3,586) (17,373)
Net cash (for) from financing
activities (23,719) 493
Net Increase in Cash and Cash
Equivalents 25,697 63,171
Cash and Cash Equivalents, at
Beginning of Period 11,016 7,055
Effect of exchange rate changes
on cash (39) --
Cash and Cash Equivalents, at End
of Period $36,674 $70,226
SOURCE: Perrigo Company
Contact: Ernest J. Schenk, Manager, Investor Relations and Communication
of Perrigo Company, +1-616-673-9212, E-mail: Investor@perrigo.com
Website: http://www.perrigo.com/
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