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Perrigo is a leading global consumer-focused self-care company. Our vision is to making 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 Second Quarter Fiscal 2003 Earnings Of $0.24 Per Share
Elects To Expense Stock Option Compensation
PRNewswire-FirstCall
ALLEGAN, Mich.

The Perrigo Company (NASDAQ: PRGO) today announced results for the second quarter and six months of fiscal 2003 ended December 28, 2002.

                      Perrigo Company (NASDAQ: PRGO)
                 (in thousands, except per share amounts)

                       Second Quarter               Year-To-Date
                    2003            2002        2003           2002
  Sales           $227,521        $228,694    $440,736       $445,810
  Net Income       $16,814         $15,214     $35,592        $26,951
  Diluted Shares    70,394          74,560      71,003         75,369
  Diluted EPS        $0.24           $0.20       $0.50          $0.36

Net sales for the second quarter were $227.5 million, compared with $228.7 million last year. Net income increased 11 percent to $16.8 million, or $0.24 per share, compared with $15.2 million, or $0.20 per share, a year ago.

The Company noted that, effective for the fiscal second quarter, it has elected to expense stock option compensation. All prior periods have been restated to reflect the compensation cost that would have been recognized had the stock option expense been applied to all awards granted after July 1, 1995. Before adoption of this expense, earnings were $0.25 per share, compared with $0.22 per share last year. Please refer to the restated results in the summary table at the end of this announcement.

Commenting on the second quarter, David T. Gibbons, Perrigo President and Chief Executive Officer stated, "We are pleased with the excellent results recorded again this quarter. Our earnings reflect not only the continuing focus on operational efficiency, cost reduction and working capital management, but favorable mix and pricing, which contributed to an improvement in margins. Cash flow and the balance sheet remain strong, with cash from operations in the first six months exceeding $37 million."

Net sales for the six months ended December 28, 2002, were $440.7 million, a decline of one percent, compared with $445.8 million last year. Net income for the six months was $35.6 million, or $0.50 per share, including a lawsuit settlement of $2.0 million after-tax, or $0.03 per share. Excluding the lawsuit settlement, net income was $33.6 million, or $0.47 per share, an increase of 25 percent compared with net income of $27.0 million, or $0.36 per share, a year ago.

Mr. Gibbons noted, "We have had a great start to our fiscal year, reporting record earnings over the past six months while continuing to make good progress in achieving our long-term goals. With another weak cough, cold and flu season underway, and the recent launch of new national brand products in the allergy category, we remain cautious about the second half of the year."

On January 23, 2003, the Company announced that its Board of Directors declared the Company's first quarterly dividend of $0.025 per share, payable on March 21, 2003, to shareholders of record on February 28, 2003. Said Gibbons, "We are pleased to be able to make this commitment to our shareholders. The strong cash flow, the strong balance sheet and our confidence in our long-term prospects support the Board's decision to adopt a policy of paying quarterly cash dividends."

The Company also recently announced the appointment of the following new Board members: Gary M. Cohen, President, BD Medical Systems, Becton, Dickinson and Company; Judith A. Hemberger, Executive Vice President and Chief Operating Officer, Pharmion Corporation; and Gary K. Kunkle, Jr., President and Chief Operating Officer of DENTSPLY International, Inc. With these additions, seven of Perrigo's nine directors will meet the standards of independence under all existing and proposed stock exchange governance guidelines. Mr. Gibbons said, "Our decision to expense options, the addition of independent directors, the implementation of new standards of governance and the initiation of dividend payments demonstrate our commitment to our shareholders' interests."

Perrigo will host a conference call to discuss second quarter fiscal 2003 results at 11:00 a.m. (EST) today. The call and replay will be available via webcast on the Company's web site at www.perrigo.com/investor or by phone, toll free, 888-489-0147. A taped replay of the call will be available beginning at approximately 2:30 p.m. (EST) Monday, January 27. To listen to the replay, call 800-642-1687, access code 7622482.

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 (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. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or other comparable terminology. Please see the "Cautionary Note Regarding Forward-Looking Statements" on pages 23-27 of the Company's Form 10-K for the year ended June 29, 2002 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 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)

                                     Second Quarter        Year-To-Date
                                    2003        2002      2003       2002
                                           (as restated)       (as restated)

  Net sales                       $227,521    $228,694  $440,736   $445,810
  Cost of sales                    163,225     165,990   314,761    330,767
  Gross profit                      64,296      62,704   125,975    115,043

  Operating expenses
     Distribution                    4,083       4,265     8,110      8,282
     Research and development        5,321       6,407    10,769     11,703
     Selling and administration     28,547      25,732    54,150     49,825
       Subtotal                     37,951      36,404    73,029     69,810
     Restructuring                       -       2,046         -      2,046
     Unusual litigation                  -           -    (3,128)         -
       Total                        37,951      38,450    69,901     71,856

  Operating income                  26,345      24,254    56,074     43,187
  Interest and other, net             (514)       (113)     (722)      (276)

  Income before income taxes        26,859      24,367    56,796     43,463
  Income tax expense                10,045       9,153    21,204     16,512

  Net income                       $16,814     $15,214   $35,592    $26,951

  Earnings per share
     Basic                           $0.24       $0.21     $0.51      $0.36
     Diluted                         $0.24       $0.20     $0.50      $0.36

  Weighted average shares
   outstanding:
     Basic                          69,273      73,343    70,000     73,842
     Diluted                        70,394      74,560    71,003     75,369



                             PERRIGO COMPANY
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (in thousands)

                                       December 28,  June 29,  December 29,
                                           2002        2002        2001
  Assets                              (unaudited) (as restated)  (unaudited)
  Current assets                                               (as restated)
     Cash and cash equivalents             $71,773     $76,824        $814
     Accounts receivable, net of
      allowances                           102,722      82,560     112,214
     Inventories, net of allowances        153,477     155,611     161,677
     Prepaid expenses and other current
      assets                                 6,907       6,896      10,613
     Current deferred income taxes          21,657      19,860      23,463
            Total current assets           356,536     341,751     308,781

  Property and equipment                   411,858     399,461     388,102
     Less accumulated depreciation         201,759     188,417     178,593
                                           210,099     211,044     209,509

  Goodwill, net                             35,919      35,919      47,471
  Other                                      4,678       5,073       3,258
                                          $607,232    $593,787    $569,019

  Liabilities and Shareholders' Equity
  Current liabilities
     Accounts payable                      $68,970     $74,449     $68,429
     Notes payable                           9,469       8,338       6,631
     Payrolls and related taxes             27,884      31,338      22,531
     Accrued expenses                       41,931      32,721      33,847
     Income taxes                            9,872       8,088      10,680
            Total current liabilities      158,126     154,934     142,118

  Deferred income taxes                     20,428      18,295      15,770
  Long-term debt                                 -           -       1,600
  Other long-term liabilities                3,212       2,396       2,426

  Shareholders' equity
     Preferred stock, without par
      value, 10,000 shares authorized            -           -           -
     Common stock, without par value,
      200,000 shares authorized             81,699     110,698     117,727
     Unearned compensation                    (414)       (608)       (903)
     Accumulated other comprehensive
      income                                   890         373         420
     Retained earnings                     343,291     307,699     289,861
            Total shareholders' equity     425,466     418,162     407,105
                                          $607,232    $593,787    $569,019

  Supplemental Disclosures of Balance
   Sheet Information
     Allowance for doubtful accounts        $9,465      $7,569      $8,825
     Allowance for inventory               $20,855     $21,360     $27,056
     Working capital                      $198,410    $186,817    $166,663
     Preferred stock, shares issued              -           -           -
     Common stock, shares issued            69,479      72,550      73,372


                             PERRIGO COMPANY
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (in thousands)
                               (unaudited)

                                                        Year-To-Date
                                                   2003             2002
      Cash Flows From (For) Operating Activities:              (as restated)
         Net income                               $35,592          $26,951
         Depreciation and amortization             13,505           12,312
         Compensation - stock options               2,667            3,033
                                                   51,764           42,296

         Accounts receivable                      (20,162)         (18,627)
         Inventories                                2,134             (568)
         Current and deferred income
          taxes                                     2,120          (14,317)
         Accounts payable                          (5,479)         (15,958)
         Restructuring, net of cash                     -            2,046
         Other                                      7,082            3,617
               Net cash from (for)
                operating activities               37,459           (1,511)

      Cash Flows (For) From Investing
       Activities:
         Additions to property and
          equipment                               (11,975)          (9,731)
         Proceeds from sale of assets
          held for sale                                 -           14,161
         Other                                          -             (426)
               Net cash (for) from
                investing activities              (11,975)           4,004

      Cash Flows From (For) Financing
       Activities:
         Borrowings (repayments) of
          short-term debt, net                      1,131           (4,541)
         Tax benefit of stock
          transactions                                  -            1,603
         Issuance of common stock                   1,059           10,036
         Repurchase of common stock               (32,667)         (21,454)
         Other                                        (58)           1,661
               Net cash for financing
                activities                        (30,535)         (12,695)

      Net Decrease in Cash and Cash
       Equivalents                                 (5,051)         (10,202)
      Cash and Cash Equivalents, at
       Beginning of Period                         76,824           11,016
      Cash and Cash Equivalents, at End
       of Period                                  $71,773             $814

      Supplemental Disclosures of Cash
       Flow Information:
         Interest paid                               $467           $1,051
         Income taxes paid                        $18,922          $29,970



                             PERRIGO COMPANY
                    STOCK OPTION COMPENSATION EXPENSE
                       IMPACT ON NET INCOME AND EPS
                 (in thousands, except per share amounts)
                               (unaudited)

                                          Second Quarter     Year-To-Date
                                          2003     2002     2003     2002
  Net income before adoption             $18,047  $16,565  $38,058  $29,655
  Compensation expenses (net of tax
   benefit)                                1,233    1,351    2,466    2,704
  Net income after adoption              $16,814  $15,214  $35,592  $26,951

  Weighted average shares outstanding
    Basic                                 69,273   73,343   70,000   73,842
    Diluted
        Before adoption                   71,017   75,227   71,572   76,064
        After adoption                    70,394   74,560   71,003   75,369

  Basic EPS
    Before adoption                        $0.26    $0.23    $0.54    $0.40
    After adoption                         $0.24    $0.21    $0.51    $0.36

  Diluted EPS
    Before adoption                        $0.25    $0.22    $0.53    $0.39
    After adoption                         $0.24    $0.20    $0.50    $0.36

SOURCE: Perrigo Company

CONTACT: Ernest J. Schenk, Manager, Investor Relations and Communication
of Perrigo Company, +1-269-673-9212, or E-mail: Investor@perrigo.com

Web site: http://www.perrigo.com/investor

Web site: http://www.perrigo.com/

Company News On-Call: http://www.prnewswire.com/gh/cnoc/comp/699550.html