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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 Reports Record Sales and Earnings for Second Quarter Fiscal 2008
Increases Full Year Guidance
PRNewswire-FirstCall
ALLEGAN, Mich.
  -- Second quarter revenue increased $65 million, or 17 percent, to
     $435 million

  -- GAAP net income increased 63 percent to $34 million, or $0.36 per share

  -- Second quarter cash provided by operations of $67 million

  -- Fiscal 2008 earnings guidance increased to between $1.50 and
     $1.60 per share


Perrigo Company (NASDAQ: PRGO)(TASE: PRGO) today announced results for its second quarter fiscal year 2008 and six months ended December 29, 2007.

                             Perrigo Company
                 (in thousands, except per share amounts)

                            Second Quarter              Six Months
                          2008         2007         2008         2007

  Sales                 $435,483     $370,629     $818,223     $710,844
  Net Income             $34,289      $21,088      $68,308      $37,970
  Diluted EPS              $0.36        $0.23        $0.72        $0.41
  Diluted Shares          95,283       93,506       95,104       93,595


  Second Quarter Results

Net sales for the second quarter of fiscal 2008 were a record $435.5 million, an increase of $64.9 million, or 17 percent, compared with $370.6 million last year. Reported net income was $34.3 million, or $0.36 per share, compared with $21.1 million, or $0.23 per share a year ago, which included expense for a product recall of $3.2 million after-tax, or $0.03 per share, and a restructuring charge of $417 thousand after-tax, or less than $0.01 per share.

Perrigo Chairman and CEO, Joseph C. Papa, stated, "I am extremely pleased with our performance this quarter both financially and operationally. Record sales were achieved through double digit sales growth in each of our business segments. Operating income grew 85 percent from last year on a 390 basis point improvement in gross margins. These improvements, along with continued focus on working capital, generated $67 million in cash flow from operations, up $43 million from last year. These results also come before the largest new product launch in our history, Omeprazole, which we expect to start shipping by the end of our third fiscal quarter."

Six Months Results

Net sales for the six months ended December 29, 2007 were $818.2 million, an increase of $107.4 million, or 15 percent, compared with $710.8 million last year. Reported net income was $68.3 million, or $0.72 per share, compared with $38.0 million, or $0.41 per share last year. The year ago period included expense for a product recall of $3.9 million after-tax, or $0.04 per share, and a restructuring charge of $417 thousand after-tax, or less than $0.01 per share.

Consumer Healthcare

Consumer Healthcare segment net sales in the quarter were a record $320.2 million, up $44.3 million, or 16 percent, compared with $275.9 million a year ago. The sales increase resulted from $9.9 million in new product revenue; strong sales in the smoking cessation, analgesics and cough/cold product categories and increases in non-U.S. businesses. Operating income was $38.5 million, compared with $17.4 million a year ago. The income gain was a result of the volume increase as well as benefits from supply chain and operational efficiency improvements. Additionally, last year's second quarter included $3.2 million in after-tax costs related to a product recall.

On December 28, 2007, Perrigo announced it received final approval from the FDA for its Abbreviated New Drug Application (ANDA) for OTC Cetirizine Hydrochloride Tablets, 5 and 10 mg. The product will be marketed under store brand labels and is comparable to McNeil Consumer Healthcare's Zyrtec® Tablets. Store brand shipments began in January.

For the first six months of 2008, Consumer Healthcare sales were $588.5 million, up $70.7 million, or 14 percent, compared with $517.8 million last year. Operating income was $68.1 million, up $33.6 million, or 97 percent, compared with $34.5 million last year, which included after-tax costs of $3.9 million related to a product recall.

On January 9, 2008, the Company announced it acquired Galpharm Healthcare, Ltd., a leading United Kingdom-based supplier of over-the-counter store brand products, for approximately $86 million. The acquisition is expected to add more than $55 million in sales annually and be accretive to earnings in the first 12 months.

Rx Pharmaceuticals

The Rx Pharmaceuticals segment reported sales of $38.7 million, including $5.0 million of service and royalty revenue, an increase of $10.4 million, or 37 percent, compared with $28.3 million a year ago. Fiscal 2008 second quarter results also included $6.9 million in sales of products acquired from Glades Pharmaceuticals. Operating income was $8.4 million, up from $3.7 million last year as a result of increased volume and improved margins.

For the first six months of fiscal 2008, net sales were $73.6 million, including $10.8 million of service and royalty revenue and $13.5 million in sales of acquired products, resulting in an increase of $13.9 million, or 23 percent, compared with $59.7 million last year. Operating income was $15.8 million, up 67 percent from $9.5 million last year.

API

API segment sales were $34.6 million, compared with $28.6 million a year ago, or an increase of 21 percent. Operating income was $3.4 million, compared with $5.9 million last year, reflecting a less favorable product sales mix. For the six months, sales were $73.4 million, up $15.0 million, or 26 percent, compared with $58.4 million a year ago. Operating income for the six months was $10.7 million, compared with $10.6 million in the same period last year.

Other

The Other category, consisting of the Israel Consumer Products and Israel Pharmaceutical and Diagnostic Products segments, reported second quarter sales of $42.0 million, compared with $37.8 million a year ago, an increase of 11 percent. Operating income was $3.3 million, compared with $3.0 million last year. Sales for the six months were $82.7 million, up 10 percent, compared with $75.0 million in the same period a year ago. Operating income was $5.8 million, compared with $5.6 million last year.

In the fiscal 2008 second quarter, unallocated expenses were $4.8 million, compared with $3.6 million a year ago, due to higher employee wage and benefit costs. For the six months in fiscal 2008, unallocated expenses were $5.5 million, compared with $8.1 million last year. The decrease was due primarily to a favorable legal settlement that offset expenses in the first quarter of fiscal 2008.

Outlook

The Company is increasing full year guidance and now anticipates adjusted EPS for the full fiscal year in the range of $1.50 to $1.60 per share, up 69 to 80 percent from last year. This increase from previous guidance reflects the continued strong performance of Perrigo's existing portfolio and additional volume gains as a result of ongoing quality issues at a competitor. The Company also expects its full-year tax rate to be in the range of 21 to 24 percent, down from prior guidance as a result of forecasted changes to the worldwide income mix and additional tax planning measures. The Company expects to generate cash from operations in the range of $180 million to $200 million.

Mr. Papa stated, "Perrigo is executing in a challenging economic environment by delivering quality, affordable healthcare to our customers. We continue our focus on improving quality, our supply chain, and working capital management, while investing in our new product pipeline. The Galpharm acquisition is another example of improving our customer offering, while also improving our return on invested capital. We are generating strong cash flow and delivering value to our customers and shareholders."

Perrigo will host a conference call to discuss fiscal 2008 second quarter results at 10:00am (ET) on Tuesday, February 5. The conference call will be available via webcast to interested parties on the Perrigo website http://www.perrigo.com/ or by phone 888-694-4676, International 973-582-2737, and reference ID# 31908064. A taped replay of the call will be available beginning at approximately 2:30 p.m. (ET) Tuesday, February 5, until midnight Tuesday, February 12, 2008. To listen to the replay, call 800-642-1687, International 706-645-9291, access code 31908064.

Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes over-the-counter (OTC) and prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients (API) and consumer products. The Company is the world's largest manufacturer of OTC pharmaceutical products for the store brand market. The Company's primary markets and locations of manufacturing facilities are the United States, Israel, Mexico and the United Kingdom. Visit Perrigo on the Internet (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. 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. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. These and other important factors, including those discussed under "Risk Factors" in the Company's Form 10-K for the year ended June 30, 2007, as well as the Company's subsequent filings with the Securities and Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this press release are made only as of the date hereof, and 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
                                   2008      2007       2008      2007

  Net sales                      $435,483  $370,629   $818,223  $710,844
  Cost of sales                   305,071   274,147    571,093   521,547
  Gross profit                    130,412    96,482    247,130   189,297

  Operating expenses
     Distribution                   7,744     7,155     14,818    14,539
     Research and development      16,143    14,902     32,463    27,949
     Selling and administration    57,685    47,396    104,960    94,068
     Restructuring                      -       642          -       642
       Total                       81,572    70,095    152,241   137,198

  Operating income                 48,840    26,387     94,889    52,099
  Interest, net                     3,674     3,300      8,329     7,886
  Other income, net                  (969)   (2,258)    (2,152)   (2,319)

  Income before income taxes       46,135    25,345     88,712    46,532
  Income tax expense               11,846     4,257     20,404     8,562

  Net income                      $34,289   $21,088    $68,308   $37,970

  Earnings per share
     Basic                          $0.37     $0.23      $0.73     $0.41
     Diluted                        $0.36     $0.23      $0.72     $0.41

  Weighted average shares
   outstanding
     Basic                         93,147    91,836     93,186    92,104
     Diluted                       95,283    93,506     95,104    93,595

  Dividends declared per share    $0.0500   $0.0450    $0.0950   $0.0875



                               PERRIGO COMPANY
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (in thousands)

                                       December 29,  June 30,  December 30,
                                           2007        2007        2006
  Assets                                (unaudited)             (unaudited)
  Current assets
     Cash and cash equivalents            $72,163     $30,305     $39,635
     Investment securities                 29,642      49,110      34,030
     Accounts receivable                  311,013     282,045     246,603
     Inventories                          326,002     295,114     322,624
     Current deferred income taxes         38,683      41,400      50,358
     Income taxes refundable                4,568           -           -
     Assets held for sale                   2,746       2,746           -
     Prepaid expenses and other
      current assets                       18,669      18,340      24,515
            Total current assets          803,486     719,060     717,765

  Property and equipment                  687,068     664,096     629,325
     Less accumulated depreciation        358,068     333,024     308,999
                                          329,000     331,072     320,326

  Restricted cash                         400,000     422,000     400,000
  Goodwill                                212,934     196,218     188,272
  Other intangible assets                 191,430     159,977     137,921
  Non-current deferred income taxes        59,925      54,908      46,039
  Other non-current assets                 42,535      41,919      43,740
                                       $2,039,310  $1,925,154  $1,854,063

  Liabilities and Shareholders'
   Equity
  Current liabilities
     Accounts payable                    $194,214    $164,318    $173,008
     Notes payable                          3,937      11,776      18,333
     Payroll and related taxes             44,673      46,226      41,049
     Accrued customer programs             48,882      48,218      45,436
     Accrued liabilities                   40,137      47,333      44,328
     Accrued income taxes                       -      29,460      23,311
     Current deferred income taxes         20,320      17,125       6,193
     Current portion of long-term
     debt                                  16,539      15,381           -
            Total current
             liabilities                  368,702     379,837     351,658

  Non-current liabilities
     Long-term debt                       648,077     650,762     668,784
     Non-current deferred income
      taxes                               106,569     103,775     106,702
     Other non-current liabilities         99,566      36,311      34,646
            Total non-current
             liabilities                  854,212     790,848     810,132

  Shareholders' equity
     Preferred stock, without par
      value, 10,000 shares
      authorized                                -           -           -
     Common stock, without par
      value, 200,000 shares
      authorized                          505,076     519,419     509,910
     Accumulated other
      comprehensive income                 79,470      56,676      31,456
     Retained earnings                    231,850     178,374     150,907
            Total shareholders'
             equity                       816,396     754,469     692,273
                                       $2,039,310  $1,925,154  $1,854,063

  Supplemental Disclosures of
   Balance Sheet Information
     Allowance for doubtful
      accounts                             $8,944      $9,421     $12,198
     Allowance for inventory              $36,184     $36,210     $39,098
     Working capital                     $434,784    $339,223    $366,107
     Preferred stock, shares
      issued                                    -           -           -
     Common stock, shares
      issued                               93,353      93,395      92,666



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

                                                   Year-To-Date
                                              2008              2007
  Cash Flows (For) From Operating
   Activities
     Net income                              $68,308           $37,970
     Adjustments to derive cash flows
        Depreciation and amortization         30,983            27,681
        Share-based compensation               3,930             5,718
        Deferred income taxes                  6,096            (4,248)
     Sub-total                               109,317            67,121

     Changes in operating assets
      and liabilities
        Accounts receivable                  (22,125)           (9,295)
        Inventories                          (24,238)          (22,919)
        Income taxes refundable               (4,568)                -
        Accounts payable                      24,951            (4,034)
        Payroll and related taxes             (2,605)          (12,658)
        Accrued customer programs                664            (4,098)
        Accrued liabilities                   (6,663)             (937)
        Accrued income taxes                  10,266             9,480
        Other                                 10,131            (5,025)
     Sub-total                               (14,187)          (49,486)
           Net cash from operating
            activities                        95,130            17,635

  Cash Flows (For) From Investing
   Activities
     Purchase of securities                 (133,791)         (117,746)
     Proceeds from sales of securities       153,502           111,665
     Asset acquisition                       (12,401)                -
     Additions to property and equipment     (13,714)          (19,784)
     Proceeds from sales of
      property and equipment                       -             2,613
           Net cash for investing
            activities                        (6,404)          (23,252)

  Cash Flows (For) From Financing
   Activities
     Repayments of short-term debt, net       (7,839)           (1,699)
     Borrowings of long-term debt             50,000            60,000
     Repayments of long-term debt            (55,000)          (15,000)
     Tax effect of stock transactions          1,115               (59)
     Issuance of common stock                 16,029             3,700
     Repurchases of common stock             (35,417)          (15,547)
     Cash dividends                           (8,898)           (8,116)
           Net cash (for) from
            financing activities             (40,010)           23,279

          Net increase in cash and
           cash equivalents                   48,716            17,662
  Cash and cash equivalents, at
   beginning of period                        30,305            19,018
  Effect of exchange rate changes on cash     (6,858)            2,955
  Cash and cash equivalents, at end
   of period                                 $72,163           $39,635

  Supplemental Disclosures of Cash
   Flow Information
     Cash paid/received during the
      period for:
        Interest paid                        $19,561           $18,254
        Interest received                    $10,392            $9,831
        Income taxes paid                    $11,723            $6,727
        Income taxes refunded                 $1,288            $1,369



                                   Table I
                               PERRIGO COMPANY
                             SEGMENT INFORMATION
                               (in thousands)
                                 (unaudited)

                                      Second Quarter       Fiscal Year
                                      2008      2007      2008      2007
  Segment Sales
  Consumer Healthcare               $320,205  $275,947  $588,464  $517,756
  Rx Pharmaceuticals                  38,655    28,260    73,615    59,685
  API                                 34,608    28,633    73,422    58,412
  Other                               42,015    37,789    82,722    74,991
         Total                      $435,483  $370,629  $818,223  $710,844

  Segment Operating Income (Loss)
  Consumer Healthcare                $38,521   $17,420   $68,070   $34,520
  Rx Pharmaceuticals                   8,356     3,686    15,801     9,473
  API                                  3,425     5,929    10,701    10,587
  Other                                3,292     2,976     5,781     5,640
  Unallocated expenses                (4,754)   (3,624)   (5,464)   (8,121)
         Total                       $48,840   $26,387   $94,889   $52,099



                                  Table II
                               PERRIGO COMPANY
                     RECONCILIATION OF NON-GAAP MEASURES
                   (in thousands, except per share amounts)
                                 (unaudited)

                                      Second Quarter       Fiscal Year
                                      2008      2007      2008      2007

  Reported operating income          $48,840   $26,387   $94,889   $52,099
     Restructuring                         -       642         -       642
  Adjusted operating income          $48,840   $27,029   $94,889   $52,741


  Reported net income                $34,289   $21,088   $68,308   $37,970
     Restructuring (1)                     -       417        -        417
  Adjusted net income                $34,289   $21,505   $68,308   $38,387

  Diluted earnings per share
     Reported                          $0.36     $0.23     $0.72     $0.41
     Adjusted                          $0.36     $0.23     $0.72     $0.41

  Diluted weighted average shares
   outstanding                        95,283    93,506    95,104    93,595

  (1) Net of taxes at 35%



                             Table II (Continued)
                             REPORTABLE SEGMENTS
                     RECONCILIATION OF NON-GAAP MEASURES
                   (in thousands, except per share amounts)
                                 (unaudited)

                                        Second Quarter      Fiscal Year
                                       2008      2007      2008      2007
      Consumer Healthcare
      Reported operating income      $38,521   $17,420   $68,070   $34,520
         Restructuring                     -       642         -       642
      Adjusted operating income      $38,521   $18,062   $68,070   $35,162

First Call Analyst:
FCMN Contact: pblain@perrigo.com

SOURCE: Perrigo Company

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

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