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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's First Quarter Revenue Increases Seven Percent Driven by New Product Growth

The Perrigo Company (NASDAQ: PRGO)(TASE: PRGO) today announced results for its fiscal year 2007 first quarter that ended September 30, 2006.

                             Perrigo Company
                 (in thousands, except per share amounts)

                                 Fiscal 2007          Fiscal 2006
                             1st Quarter Ended    1st Quarter Ended
                                  9/30/06               9/24/05

   Sales                         $340,868              $319,734
   Net Income                     $17,549               $12,911
   Diluted EPS                      $0.19                 $0.14
   Diluted Shares                  93,521                94,314

Sales for the first quarter of fiscal 2007 were $340.9 million, an increase of seven percent. Net income was $17.5 million, or $0.19 per share, compared with $12.9 million, or $0.14 per share, a year ago.

The first quarter of fiscal 2006 included an acquisition-related write-off of the step-up in the value of inventory acquired ($3.7 million after-tax, or $0.04 per share). Excluding this adjustment, net income was $16.6 million, or $0.18 per share. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release.

Joseph Papa, Perrigo's President and CEO, stated, "Fiscal 2007 is off to a good start, with year-over-year sales increases across our entire business portfolio. New product launches led by the smoking cessation category continue to be a driver for Consumer Healthcare's performance. At the same time, we are in the process of launching over twenty newly reformulated cough/cold products in order to meet the retailers' and consumers' needs for the current season. The Rx Pharmaceutical and API businesses grew sales in a marketplace that continues to be very competitive."

Mr. Papa added, "I am very excited about all of our on-going activity related to bringing new products to the marketplace and the significant work being done by our global research and development teams to allow for additional new product launches in the future."

Consumer Healthcare

Consumer Healthcare segment sales in the quarter were $242.5 million compared with $227.1 million in the first quarter last year, an increase of $15.1 million, or seven percent. These results were driven by new product introductions of $7.3 million, primarily in the smoking cessation and vitamin categories, as well as growth of $5.1 million or 19 percent in the Mexican and U.K. operations.

Reported operating income was $18.1 million, compared with $13.3 million a year ago, reflecting higher gross profit from increased sales volume in both the domestic and international operations.

On September 25, the Company announced it had received approval from the Food and Drug Administration for over-the-counter Famotidine tablets, 20 mg (Maximum Strength Pepcid® AC tablets) indicated for the prevention and treatment of heartburn due to acid indigestion. Shipments began immediately.

Subsequent to the end of the first quarter, the Company also began shipping coated mint nicotine polacrilix gum. This is the store brand equivalent to Nicorette® Fresh Mint™ coated gum which has estimated retail sales of more than $100 million.

Rx Pharmaceuticals

The Rx Pharmaceuticals segment reported sales of $31.4 million, including $5.4 million in non-product revenues, compared with $29.1 million a year ago. Operating income was $5.8 million up from $3.8 million last year.


The API segment reported sales of $29.8 million compared with sales of $26.8 million a year ago. Operating income was $4.7 million compared with $6.6 million last year, reflecting a combination of lower margins on existing product sales, and higher research and development and selling and administration expenses. Excluding inventory step-up charges, adjusted operating income was $8.3 million a year ago.


The Other category, which consists of Israel Consumer Products and Israel Pharmaceutical and Diagnostic Products operating segments, reported sales of $37.2 million compared with $36.7 million last year. Reported operating income was $2.7 million compared with an operating loss of $0.9 million last year. Excluding inventory step-up charges, adjusted operating income was $1.8 million last year.


Looking forward, Mr. Papa noted, "Our portfolio of broad healthcare solutions continues to enable us to deliver value in a challenging marketplace. I am confident in our ability to effectively manage through the operational complexities of the launches of our new and reformulated products this year. We are continuing to invest in strong new product opportunities for future years in all of our businesses. Throughout the organization, we continue our focus on quality, with parallel efforts on continued cost reduction and working capital management."

Perrigo will host a conference call to discuss fiscal 2007 first quarter results at 10:00 a.m. (ET) on Tuesday, October 31. The conference call will be available live via web cast to interested parties on the Perrigo website or by phone 800-473-1292, International 973-409-9262 and, reference ID#7959085. A taped replay of the call will be available beginning at approximately 2:30 p.m. (ET) Tuesday, October 31 until midnight Monday, November 13. To listen to the replay, call 877-519-4471, International 973-341-3080, access code #7959058.

The Perrigo Company is a leading global healthcare supplier and the world's largest manufacturer of over-the-counter (OTC) pharmaceutical and nutritional products for the store brand market. Store brand products are sold by food, drug, mass merchandise, dollar store and club store retailers under their own labels. The Company also develops, manufactures and markets prescription generic drugs, active pharmaceutical ingredients and consumer products, and operates manufacturing facilities in the United States, Israel, United Kingdom, Mexico, Germany and China. Visit Perrigo on the Internet ( ).

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 page 1 of the Company's Form 10-K for the year ended July 1, 2006, as well as the Company's subsequent filings with the Securities and Exchange Commission, 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
                 (in thousands, except per share amounts)

                                                         First Quarter
                                                     2007              2006

             Net sales                           $340,868          $319,734
             Cost of sales                        245,225           232,818
             Gross profit                          95,643            86,916

             Operating expenses
               Distribution                         7,384             7,150
               Research and development            13,047            12,649
               Selling and administration          48,474            46,388
                 Total                             68,905            66,187

             Operating income                      26,738            20,729
             Interest, net                          4,586             4,026
             Other income, net                        (61)           (1,246)

             Income before income taxes            22,213            17,949
             Income tax expense                     4,664             5,038

             Net income                           $17,549           $12,911

             Earnings per share
                Basic                               $0.19             $0.14
                Diluted                             $0.19             $0.14

             Weighted average shares outstanding
                Basic                              92,168            93,188
                Diluted                            93,521            94,314

             Dividends declared per share          $0.043            $0.040

                             PERRIGO COMPANY
                              (in thousands)

                                       September 30,  July 1,  September 24,
                                               2006     2006           2005
  Assets                                (unaudited)             (unaudited)
  Current assets
     Cash and cash equivalents              $33,027     $19,018     $25,118
     Investment securities                   27,922      26,733      15,823
     Accounts receivable                    230,892     240,130     212,433
     Inventories                            326,648     302,941     269,695
     Current deferred income taxes           52,215      52,058      49,870
     Prepaid expenses and other current
      assets                                 21,068      16,298      39,270
            Total current assets            691,772     657,178     612,209

  Property and equipment                    617,813     606,907     594,464
     Less accumulated depreciation          298,260     287,549     275,758
                                            319,553     319,358     318,706

  Restricted cash                           400,000     400,000     400,000
  Goodwill                                  183,205     152,183     144,362
  Other intangible assets                   134,078     132,426     144,315
  Non-current deferred income taxes          43,380      43,143      26,828
  Other non-current assets                   44,449      46,336      44,617
                                         $1,816,437  $1,750,624  $1,691,037

  Liabilities and Shareholders' Equity
  Current liabilities
     Accounts payable                      $172,680    $179,740    $142,361
     Notes payable                            5,740      20,081      19,303
     Payroll and related taxes               41,458      54,153      37,788
     Accrued customer programs               45,084      49,534      40,129
     Accrued liabilities                     40,901      45,335      56,821
     Accrued income taxes                    17,860      14,132      25,903
     Current deferred income taxes            9,837       8,456      10,980
            Total current liabilities       333,560     371,431     333,285

  Non-current liabilities
     Long-term debt                         678,272     621,717     670,814
     Non-current deferred income taxes      105,427      81,923      56,586
     Other non-current liabilities           36,922      34,809      37,715
            Total non-current liabilities   820,621     738,449     765,115

  Shareholders' equity
     Preferred stock, without par value,
      10,000 shares authorized                    -           -           -
     Common stock, without par value,
      200,000 shares authorized             510,132     516,098     523,093
     Accumulated other comprehensive
      income (loss)                          17,461       3,593      (4,402)
     Retained earnings                      134,663     121,053      73,946
            Total shareholders' equity      662,256     640,744     592,637
                                         $1,816,437  $1,750,624  $1,691,037

  Supplemental Disclosures of Balance
   Sheet Information
     Allowance for doubtful accounts        $12,195     $11,178     $10,207
     Allowance for inventory                $40,882     $42,509     $37,164
     Working capital                       $358,212    $285,747    $278,924
     Preferred stock, shares issued               -           -           -
     Common stock, shares issued             92,556      92,922      93,561

                             PERRIGO COMPANY
                              (in thousands)

                                                         First Quarter
                                                     2007             2006
      Cash Flows From (For) Operating Activities
         Net income                               $17,549          $12,911
         Adjustments to derive cash flows
            Depreciation and amortization          13,502           14,296
            Share-based compensation                2,434            2,403
            Deferred income taxes                  (1,157)          (1,072)
         Sub-total                                 32,328           28,538

      Changes in operating assets and liabilities
            Accounts receivable                     7,897           (1,559)
            Inventories                           (25,321)           3,776
            Accounts payable                       (5,785)            (723)
            Payroll and related taxes             (12,423)          (4,631)
            Accrued customer programs              (4,450)          (1,537)
            Accrued liabilities                    (4,466)          (2,938)
            Accrued income taxes                    3,833            2,757
            Other                                   1,983           (5,961)
         Sub-total                                (38,732)         (10,816)
               Net cash from (for)
                operating activities               (6,404)          17,722

      Cash Flows (For) From Investing Activities
         Purchase of securities                   (52,340)         (19,438)
         Proceeds from sales of securities         51,074           21,372
         Additions to property and equipment       (8,113)          (8,228)
               Net cash for investing activities   (9,379)          (6,294)

      Cash (For) From Financing Activities
         Repayments of short-term debt, net       (14,331)          (6,104)
         Borrowings of long-term debt              55,000           15,000
         Tax (expense) benefit of stock
          transactions                                616             (500)
         Issuance of common stock                   2,222            2,000
         Repurchase of common stock               (11,238)          (8,558)
         Cash dividends                            (3,939)          (3,741)
               Net cash (for) from
                financing activities               28,330           (1,903)

              Net increase in cash and
               cash equivalents                    12,547            9,525
      Cash and cash equivalents, at
       beginning of period                         19,018           16,707
      Effect of exchange rate changes on cash       1,462           (1,114)
      Cash and cash equivalents, at end
       of period                                  $33,027          $25,118

      Supplemental Disclosures of Cash
       Flow Information
         Cash paid/received during the
          period for:
            Interest paid                          $8,309           $9,210
            Interest received                      $4,700           $5,641
            Income taxes paid                      $1,797           $2,928
            Income taxes refunded                       -           $4,866

                                 Table I
                             PERRIGO COMPANY
                           SEGMENT INFORMATION
                              (in thousands)

                                                         First Quarter
                                                    2007              2006
  Segment Sales
  Consumer Healthcare                           $242,462          $227,100
  Rx Pharmaceuticals                              31,425            29,094
  API                                             29,779            26,791
  Other                                           37,202            36,749
             Total                              $340,868          $319,734

  Segment Operating Income (Loss)
  Consumer Healthcare                            $18,126           $13,327
  Rx Pharmaceuticals                               5,787             3,836
  API                                              4,658             6,586
  Other                                            2,664              (864)
  Unallocated expenses                            (4,497)           (2,156)
             Total                               $26,738           $20,729

                                 Table II
                             PERRIGO COMPANY
                 (in thousands, except per share amounts)

                                                        First Quarter
                                                    2007              2006

  Net sales                                     $340,868          $319,734

  Reported gross profit                          $95,643           $86,916
    Inventory step-up                                  -             4,762
  Adjusted gross profit                          $95,643           $91,678
  Adjusted gross profit %                           28.1%             28.7%

  Reported operating income                      $26,738           $20,729
    Inventory step-up                                  -             4,762
  Adjusted operating income                      $26,738           $25,491

  Reported net income                            $17,549           $12,911
    Inventory step-up (1)                              -             3,714
  Adjusted net income                            $17,549           $16,625

  Diluted earnings per share
    Reported                                       $0.19             $0.14
    Adjusted                                       $0.19             $0.18

  Diluted weighted average shares outstanding     93,521            94,314

  (1)  Net of taxes at 22%

                           Table II (Continued)
                           REPORTABLE SEGMENTS
                 (in thousands, except per share amounts)

                                                          First Quarter
                                                     2007              2006
       Consumer Healthcare
       Net sales                                 $242,462          $227,100

       Reported gross profit                      $57,227           $52,644
         Inventory step-up                              -               318
       Adjusted gross profit                      $57,227           $52,962
       Adjusted gross profit %                       23.6%             23.3%

       Reported operating income                  $18,126           $13,327
         Inventory step-up                              -               318
       Adjusted operating income                  $18,126           $13,645

       Net sales                                  $29,779           $26,791

       Reported gross profit                      $11,879           $12,004
         Inventory step-up                              -             1,747
       Adjusted gross profit                      $11,879           $13,751
       Adjusted gross profit %                       39.9%             51.3%

       Reported operating income                   $4,658            $6,586
         Inventory step-up                              -             1,747
       Adjusted operating income                   $4,658            $8,333

       Net sales                                  $37,202           $36,749

       Reported gross profit                      $12,750           $10,643
         Inventory step-up                             -              2,697
       Adjusted gross profit                      $12,750           $13,340
       Adjusted gross profit %                       34.3%             36.3%

       Reported operating income (loss)            $2,664             $(864)
         Inventory step-up                              -             2,697
       Adjusted operating income                   $2,664            $1,833

First Call Analyst:
FCMN Contact:

SOURCE: Perrigo Company

CONTACT: Arthur J. Shannon, Vice President, Investor Relations and
Communication, +1-269-686-1709, or Ernest J. Schenk,
Manager, Investor Relations and Communication, +1-269-673-9212, , both of Perrigo Company

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