Perrigo Company (NASDAQ: PRGO)(TASE: PRGO) today announced results for its fourth quarter and full year ended June 27, 2009.
Perrigo's Chairman and CEO Joseph C. Papa commented, "Our sales topped $2 billion for the first time in our history. For the third straight year, we delivered year-over-year record sales and for the second straight year, we translated our top line growth to record earnings and cash flow from operations. In the fourth quarter alone we generated $157 million in operating cash flow. Our team is executing well -- growing market share, managing our supply chain, improving customer service levels, investing in quality and delivering strong returns. By bringing innovative new products to market today and continuing to invest in research and development for future launches, we continue to make quality healthcare more affordable at a time when consumers need to save money more than ever."
Papa continued, "We are also very pleased to announce the next phase in the evolution of our API business. In an effort to strengthen our position in an important and strategic segment of our business, on August 6, 2009, we acquired an 85% stake in a state-of-the-art API manufacturing facility outside of Mumbai, India for $12 million. By the middle of fiscal 2011, we expect this new facility to be on-line and to begin production of certain API products manufactured today in Germany and Israel. We also expect this facility to manufacture certain specialty APIs, as well as allow for the vertical integration of Rx and future candidate Rx-to-OTC switch products. This transition to India will enable us to leverage the capacity created in Israel for other specialty API products. We are also exiting our German manufacturing facility by the first quarter of 2011. This transformation will position Perrigo to be more competitive in the medium and long-term and allow for further growth opportunities."
In connection with the closure of the German facility (which was part of the 2005 Agis acquisition), the Company incurred restructuring charges of approximately $15 million. Refer to Table II at the end of this press release for adjustments in the current year and prior year periods and additional non-GAAP disclosure information.
The Company's reported results are summarized in the attached Consolidated Statements of Income, Balance Sheets and Statements of Cash Flows. As part of management's strategic review of its portfolio of businesses, in March 2009, the Company committed to a plan to sell its Israel Consumer Products business. The results of this business are reflected in the consolidated financial statements as discontinued operations for all periods presented.
Perrigo Company
(from continuing operations, in thousands, except per share amounts)
(see the attached table II for reconciliation to GAAP numbers)
Fourth Quarter Fiscal Year
-------------- -----------
2009 2008 2009 2008
Net Sales $508,209 $474,282 $2,006,862 $1,729,921
Reported Income $32,280 $32,160 $141,098 $140,197
Adjusted Income $46,927 $42,151 $174,637 $154,485
Reported Diluted EPS $0.35 $0.34 $1.51 $1.47
Adjusted Diluted EPS $0.50 $0.44 $1.87 $1.62
Diluted Shares 93,290 95,076 93,629 95,210
Fourth Quarter Results
Net sales from continuing operations for the fourth quarter of fiscal 2009 were $508 million, an increase of 7%. Reported income from continuing operations was $32 million, or $0.35 per share, relatively flat compared with $32 million, or $0.34 per share, a year ago. Excluding charges as outlined in Table II at the end of this release, fourth quarter fiscal 2009 adjusted income from continuing operations was $47 million, or $0.50 per share.
Fiscal Year Results
Net sales from continuing operations for fiscal 2009 were $2,007 million, an increase of 16% over fiscal 2008. The year-over-year increase was driven by $214 million of incremental consolidated new product sales. Adjusted operating income of $267 million was an increase of 24% over fiscal 2008, and adjusted consolidated operating margin improved 80 basis points to 13.3%. Reported income from continuing operations was $141 million, relatively unchanged from fiscal 2008, while adjusted income from continuing operations of $175 million was a 13% increase from fiscal 2008.
Consumer Healthcare
Consumer Healthcare segment net sales in the fourth quarter were $407 million compared with $375 million in the fourth quarter last year, an increase of $32 million or 9%. The increase resulted from approximately $33 million of sales from the acquisitions of JB Labs, Unico, Diba and Brunel, and $28 million from incremental sales of new and existing products. These increases were partially offset by the impact of unfavorable changes in foreign currency exchange rates of $15 million and $14 million from divestitures and discontinued products, respectively. Reported operating income was $56 million, compared with $52 million a year ago, largely driven by increased sales and the absence of a $3 million charge to cost of sales related to the step-up in value of inventory acquired in the Galpharm acquisition and $2 million related to restructuring in the U.K. On an adjusted basis, operating income was relatively consistent with last year at $56 million compared to $57 million in fiscal 2008. Adjusted operating margin decreased 140 basis points year-over-year for the quarter due to lower gross margins and increased R&D spending.
For the full year of fiscal 2009, Consumer Healthcare net sales increased 23% or $303 million compared to fiscal 2008. The increase resulted from a combination of sales of new and existing products of approximately $233 million. The increase was also driven by $140 million of sales from the acquisitions of JB Labs, Unico, Galpharm, Brunel and Diba. These combined increases were partially offset by the impact of unfavorable changes in foreign currency exchange rates of $37 million and the absence of the U.K.'s vitamins, minerals and supplements business's sales of $35 million. Reported operating income was $234 million, compared with $173 million a year ago, largely driven by increased sales. On an adjusted basis, operating income was $239 million compared to $181 million in fiscal 2008. Adjusted operating margin increased 110 basis points year-over-year due to improved product mix and cost management.
On July 13, 2009, the Company announced that it had received approval from the U.S. Food and Drug Administration (FDA) to market over-the-counter (OTC) coated nicotine polacrilex lozenge USP, 2 mg and 4 mg in cherry and cinnamon flavors.
Rx Pharmaceuticals
The Rx Pharmaceutical segment fourth quarter net sales were $49 million compared with $38 million a year ago, an increase of 27%. The increase in sales was driven by increased volume on existing products, strong base business performance and strategic pricing initiatives. Adjusted operating income was $12 million an increase of $8 million from last year due to strong gross margins and strong cost management.
For the full year of fiscal 2009, net sales for the Rx Pharmaceutical segment increased 2% from fiscal 2008 to $164 million. The increase was due primarily to new product sales of approximately $17 million, along with an increase in sales volumes on the Company's existing portfolio of products of approximately $9 million. The increases were partially offset by the absence of the fiscal 2008 receipt of a one-time cash payment of $9 million from a customer in lieu of expected future minimum royalty payments, as well as a reduction in non-product revenue of $6 million and pricing pressures due to continued competition in the marketplace for generic drugs.
API
The API segment reported fourth quarter net sales of $39 million compared with $38 million a year ago. The increase was due primarily to improved product mix and was partially offset by $3 million in unfavorable changes in foreign currency exchange rates. Adjusted operating income increased $5 million or 146% due to improved sales mix, operational efficiencies and cost management.
For the full year of fiscal 2009, net sales decreased 9% compared to fiscal 2008. This decrease was due primarily to a decline of approximately $9 million in sales of existing products, the absence of a one-time $5 million accrual reversal and approximately $4 million resulting from unfavorable changes in foreign currency exchange rates. This decrease was partially offset by new product sales of approximately $5 million. Adjusted operating income was $15 million down from $20 million.
Other
Continuing operations for the Other category, consisting of the Israel Pharmaceutical and Diagnostic Products operating segment, reported fourth quarter net sales of $13 million, compared with $23 million a year ago. The decrease was due to the change whereby the Company is now a distributor to a customer rather than a supplier to that customer and also by unfavorable changes in foreign currency exchange rates. Operating income was $2 million, up from $800 thousand last year. The increase in operating income was due primarily to effective cost management and favorable currency exchange rates.
For the full year of fiscal 2009, net sales decreased $15 million or 18%, compared to fiscal 2008. The decrease was driven primarily by a $12 million impact related to the change in a customer contract relationship mentioned above. In addition, sales decreased by approximately $3 million due to changes in the sales mix of products.
Guidance
Chairman and CEO Joseph C. Papa concluded, "In challenging economic times, Perrigo is uniquely positioned to continue to save consumers nearly a billion dollars annually on their healthcare spend while adding value for our customers and shareholders. We expect fiscal 2010 earnings from continuing operations to be between $2.00 and $2.12 per share, which implies a year-over-year growth rate of earnings from continuing operations of 7% to 13% over adjusted fiscal 2009 EPS. Perrigo is the right company in the right place at the right time."
Perrigo will host a conference call to discuss fiscal 2009 fourth quarter and full year results at 10:00 a.m. (ET) on Tuesday, August 18. The conference call will be available live via webcast to interested parties on the Perrigo website http://www.perrigo.com/ or by phone 877-248-9413, International 973-582-2737 and reference ID# 20224149. A taped replay of the call will be available beginning at approximately 2:00 p.m. (ET) Tuesday, August 18, until midnight Tuesday, August 25, 2009. To listen to the replay, call 800-642-1687, International 706-645-9291, access code 20224149.
Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes OTC and generic prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients (API) and pharmaceutical and medical diagnostic 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 and logistics operations 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 27, 2009, 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
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Fiscal Year
2009 2008 2007
---- ---- ----
Net sales $2,006,862 $1,729,921 $1,368,351
Cost of sales 1,410,865 1,212,193 1,001,167
--------- --------- ---------
Gross profit 595,997 517,728 367,184
------- ------- -------
Operating expenses
Distribution 24,203 25,152 23,478
Research and development 77,922 72,191 66,480
Selling and
administration 231,639 220,429 170,124
------- ------- -------
Subtotal 333,764 317,772 260,082
------- ------- -------
Write-off of in-process
research and
development 279 2,786 8,252
Restructuring 14,647 2,312 879
------ ----- ---
Total 348,690 322,870 269,213
------- ------- -------
Operating income 247,307 194,858 97,971
Interest, net 27,154 17,415 16,110
Other expense (income), net 1,269 (503) (5,271)
Investment impairment 15,104 - -
------- ------- -------
Income from continuing
operations before
income taxes 203,780 177,946 87,132
Income tax expense 62,682 37,749 14,298
------ ------ ------
Income from continuing
operations 141,098 140,197 72,834
Income (loss) from
discontinued operations,
net of tax 2,951 (4,424) 963
----- ------ ---
Net income $144,049 $135,773 $73,797
======== ======== =======
Earnings (loss) per share (1)
Basic
Continuing operations $1.53 $1.51 $0.79
Discontinued
operations 0.03 (0.05) 0.01
---- ----- ----
Basic earnings per
share $1.56 $1.46 $0.80
Diluted
Continuing operations $1.51 $1.47 $0.78
Discontinued
operations 0.03 (0.05) 0.01
---- ----- ----
Diluted earnings per
share $1.54 $1.43 $0.79
Weighted average shares
outstanding
Basic 92,183 93,124 92,230
Diluted 93,629 95,210 93,807
Dividends declared per share $0.215 $0.195 $0.178
(1) The sum of individual per share amounts may not equal due
to rounding.
PERRIGO COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 27, June 28,
Assets 2009 2008
---- ----
Current assets
Cash and cash equivalents $316,133 $318,599
Investment securities 3 560
Accounts receivable, net 325,810 317,875
Inventories 384,794 374,782
Current deferred income taxes 41,941 42,241
Income taxes refundable 8,926 10,215
Prepaid expenses and
other current assets 23,658 36,951
Current assets of
discontinued operations 51,699 58,968
------ ------
Total current assets 1,152,964 1,160,191
Property and equipment
Land 22,876 22,275
Buildings 262,990 254,030
Machinery and equipment 478,085 443,288
------- -------
763,951 719,593
Less accumulated depreciation (409,634) (381,053)
-------- --------
354,317 338,540
Restricted cash 400,000 400,000
Goodwill and other indefinite-
lived intangible assets 268,819 287,112
Other intangible assets, net 214,207 220,724
Non-current deferred income taxes 74,438 73,726
Other non-current assets 49,756 63,914
Non-current assets of
discontinued operations 21,854 34,202
------ ------
$2,536,355 $2,578,409
========== ==========
Liabilities and
Shareholders' Equity
Current liabilities
Accounts payable $271,537 $235,922
Payroll and related taxes 54,196 70,977
Accrued customer programs 54,461 53,419
Accrued liabilities 61,704 55,055
Accrued income taxes 3,334 3,317
Current deferred income taxes 18,528 24,493
Current portion of
long-term debt 17,181 20,095
Current liabilities of
discontinued operations 19,620 25,716
------ ------
Total current
liabilities 500,561 488,994
Non-current liabilities
Long-term debt, less
current portion 875,000 895,095
Non-current
deferred income
taxes 139,916 138,158
Other non-current liabilities 87,024 106,453
Non-current liabilities of
discontinued operations 11,933 15,994
------ ------
Total non-current
liabilities 1,113,873 1,155,700
Shareholders' Equity
Preferred stock, without par
value, 10,000 shares authorized - -
Common stock, without par value,
200,000 shares authorized 452,243 488,537
Accumulated other
comprehensive income 50,592 155,184
Retained earnings 419,086 289,994
------- -------
Total shareholders'
equity 921,921 933,715
------- -------
$2,536,355 $2,578,409
========== ==========
Supplemental Disclosures of
Balance Sheet Information
Related to Continuing
Operations
Allowance for
doubtful accounts $11,394 $7,511
Working capital $620,324 $637,945
Preferred stock, shares
issued and outstanding - -
Common stock, shares
issued and outstanding 92,209 93,311
PERRIGO COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(in thousands)
Common Stock Accumulated Comprehen-
Issued Other sive
------ Comprehensive Income Retained
Shares Amount Income (loss) (loss) Earnings
------ ------ ------------- ------- --------
Balance at July
1, 2006 92,922 $516,098 $3,593 $77,170 $121,053
Net income - - - 73,797 73,797
Accumulated other
comprehensive
income (loss):
Change in fair
value of
derivative
financial
instruments, net
of $606 tax - - (1,126) (1,126)
Foreign
currency
translation
adjustments - - 53,074 53,074 -
Change in fair
value of
investment
securities (1,415) (1,415) -
Adjustment
from adoption
of SFAS 158,
net of $1,373
tax - - 2,550 - -
Issuance of
common stock
under:
Stock options 1,496 15,362 - - -
Restricted
stock plan 338 - - - -
Compensation for
stock options - 3,793 - - -
Compensation for
restricted stock - 5,160 - - -
Cash dividends,
$0.178 per share - - - - (16,476)
Tax effect from
stock
transactions - 1,470 - - -
Purchases and
retirements
of common
stock (1,361) (22,464) - - -
------ ------- ---- ---- ----
Balance at June
30, 2007 93,395 519,419 56,676 124,330 178,374
=======
Net income - - - 135,773 135,773
Accumulated other
comprehensive
income (loss):
Change in fair
value of
derivative
financial
instruments, net
of $1,852 tax - - (3,440) (3,440) -
Foreign
currency
translation
adjustments - - 105,826 105,826 -
Change in fair
value of
investment
securities (3,453) (3,453) -
Post-retirement
liability
adjustments,
net of $229
tax - - (425) (425) -
Adjustment to
adopt FIN 48 - - - - (5,934)
Issuance of
common stock
under:
Stock options 2,393 32,210 - - -
Restricted
stock plan 19 - - - -
Compensation for
stock options - 2,730 - - -
Compensation for
restricted stock - 5,739 - - -
Cash dividends,
$0.195 per share - - - - (18,219)
Tax effect from
stock
transactions - 6,603 - - -
Purchases and
retirements
of common
stock (2,496) (78,164) - - -
------ ------- ----- ----- -----
Balance at June
28, 2008 93,311 488,537 155,184 234,281 289,994
=======
Net income - - - 144,049 144,049
Accumulated other
comprehensive
income (loss):
Change in fair
value of
derivative
financial
instruments, net
of $162 tax - - 300 300 -
Foreign
currency
translation
adjustments - - (103,450) (103,450) -
Change in fair
value of
investment
securities 3,956 3,956 -
Adjustment
to adopt
FSP FAS 115-2 - - (5,000) (5,000) 5,000
Post-retirement
liability
adjustments,
net of $214
tax - - (398) (398) -
Issuance of
common stock
under:
Stock options 720 10,062 - - -
Restricted
stock plan 14 - - - -
Compensation for
stock options - 3,313 - - -
Compensation for
restricted stock - 7,040 - - -
Cash dividends,
$0.215 per share - - - - (19,957)
Tax effect from
stock
transactions - 5,780 - - -
Purchases and
retirements
of common
stock (1,836) (62,489) - - -
------ ------- ----- ----- -----
Balance at June
27, 2009 92,209 $452,243 $50,592 39,457 419,086
====== ======== ======= ====== =======
PERRIGO COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Fiscal Year
-----------
2009 2008 2007
---- ---- ----
Cash Flows From (For)
Operating Activities
Net income $144,049 $135,773 $73,797
Adjustments to derive
cash flows
Write-off of in-
process research and
development 279 2,786 8,252
Depreciation and
amortization 70,142 69,231 58,032
Restructuring and asset
impairment 31,351 12,658 2,913
Share-based compensation 10,353 8,469 8,953
Income tax benefit
from exercise of
stock options (3,490) 3,992 1,482
Excess tax benefit of stock
transactions (2,290) (10,595) (2,952)
Deferred income taxes (1,422) (1,542) (4,335)
------ ------ ------
Sub-total 248,972 220,772 146,142
------- ------- -------
Changes in operating
assets and
liabilities, net of
asset and business
acquisitions
Accounts receivable 6,446 (38,742) (36,812)
Inventories 341 (72,480) 18,786
Income taxes refundable (1,066) (6,883) -
Accounts payable 24,821 67,638 (19,186)
Payroll and related taxes (20,621) 27,046 (4,956)
Accrued customer programs 1,124 5,450 (1,316)
Accrued liabilities (13,483) 1,773 1,184
Accrued income taxes 13,201 31,274 18,224
Other (1,390) 8,467 5,375
------ ----- -----
Sub-total 9,373 23,543 (18,701)
----- ------ -------
Net cash from operating
activities 258,345 244,315 127,441
------- ------- -------
Cash Flows (For) From
Investing Activities
Purchase of securities - (176,298) (335,016)
Proceeds from sales of
securities - 208,097 312,521
Issuance of note receivable - - (1,000)
Additions to property
and equipment (59,238) (44,824) (45,014)
Proceeds from sales of property
and equipment - - 2,613
Cash acquired in asset
exchange 2,115 - -
Acquisitions of assets (1,000) (12,401) (59,538)
Acquisitions of
businesses, net of cash
acquired (88,248) (83,312) -
Equity investment - (12,500) -
------ ------ -------
Net cash for investing
activities (146,371) (121,238) (125,434)
-------- -------- --------
Cash Flows (For) From
Financing Activities
Repayments of short-term
debt, net (13,736) (11,776) (8,295)
Borrowings of long-term debt - 465,000 130,000
Repayments of long-term debt (31,380) (225,801) (90,000)
Excess tax benefit of stock
transactions 2,290 10,595 2,952
Issuance of common stock 10,062 32,210 15,362
Repurchase of common stock (62,489) (78,164) (22,464)
Cash dividends (19,957) (18,219) (16,476)
------- ------- -------
Net cash (for) from
financing activities (115,210) 173,845 11,079
-------- ------- ------
Effect of exchange rate
changes on cash 769 (8,623) (1,799)
--- ------ ------
Net increase (decrease)
in cash and cash
equivalents (2,467) 288,299 11,287
Cash and cash equivalents
of continuing operations,
beginning of period 318,599 30,301 19,018
Cash balance of discontinued
operations, beginning of
period 5 4 -
--- --- ---
Cash and cash equivalents,
end of period 316,137 318,604 30,305
Less cash balance of
discontinued
operations, end of
period (4) (5) (4)
-- -- --
Cash and cash equivalents
of continuing operations,
end of period $316,133 $318,599 $30,301
======== ======== =======
Supplemental Disclosures of Cash
Flow Information
Cash paid/received during
the year for:
Interest paid $47,066 $37,111 $36,020
Interest received $24,348 $21,664 $20,079
Income taxes paid $73,276 $32,718 $12,896
Income taxes refunded $11,283 $7,693 $11,316
Table I
PERRIGO COMPANY
SEGMENT INFORMATION
(in thousands)
(unaudited)
Fourth Quarter Fiscal Year
-------------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Segment Net Sales
Consumer Healthcare $407,009 $374,645 $1,638,770 $1,336,140
Rx Pharmaceuticals 48,840 38,425 164,163 161,271
API 38,940 38,313 136,002 149,553
Other 13,420 22,899 67,927 82,957
------ ------ ------ ------
Total $508,209 $474,282 $2,006,862 $1,729,921
======== ======== ========== ==========
Segment Operating Income (Loss)
Consumer Healthcare $56,059 $52,105 $233,756 $172,654
Rx Pharmaceuticals 12,090 (5,774) 29,028 21,386
API (5,409) 3,752 433 20,475
Other 2,353 809 7,680 7,030
Unallocated expenses (9,569) (10,513) (23,311) (23,901)
Write-off of in-process
R&D - - (279) (2,786)
----- ----- ----- ------
Total $55,524 $40,379 $247,307 $194,858
======= ======= ======== ========
*All information based on continuing operations.
Table II
PERRIGO COMPANY
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share amounts)
(unaudited)
Fourth Quarter
--------------
2009 2008 % Change
---- ---- ---------
Net sales $508,209 $474,282 7%
Reported gross
profit $163,853 $135,093 21%
Inventory
step-up -
Unico - -
Inventory
step-up -
Diba - -
Inventory
step-up - JB
Labs - -
Inventory
step-up -
Galpharm - 2,878
Impairment of
fixed assets - -
Impairment of
intangible
asset - 10,346
----- ------
Adjusted gross
profit $163,853 $148,317 10%
======== ========
Adjusted gross
profit % 32.2% 31.3%
Reported
operating
expenses $108,329 $94,714 14%
Loss on asset
exchange - -
Restructuring
costs -
Germany (14,647) -
Restructuring
costs - West
Coast - (143)
Restructuring
costs -
United
Kingdom - (1,821)
----- ------
Adjusted
operating
expenses $93,682 $92,750 1%
======= =======
Adjusted
operating
expenses % 18.4% 19.6%
Reported
operating
income $55,524 $40,379 38%
Inventory
step-up -
Unico - -
Inventory
step-up -
Diba - -
Inventory
step-up - JB
Labs - -
Inventory
step-up -
Galpharm - 2,878
Impairment of
fixed assets - -
Impairment of
intangible
asset - 10,346
Loss on asset
exchange - -
Restructuring
costs -
Germany 14,647 -
Restructuring
costs - West
Coast - 143
Restructuring
costs -
United
Kingdom - 1,821
Write-off of
in-process
R&D - Diba
acquisition - -
Write-off of
in-process
R&D -
Galpharm
acquisition - -
----- -----
Adjusted
operating
income $70,171 $55,567 26%
======= =======
Adjusted
operating
income % 13.8% 11.7%
Reported income
from continuing
operations $32,280 $32,160 0%
Inventory
step-up -
Unico (5) - -
Inventory
step-up -
Diba (1) - -
Inventory
step-up - JB
Labs (2) - -
Inventory
step-up -
Galpharm (1) - 2,072
Impairment of
fixed assets (4) - -
Impairment of
intangible
asset (3) - 6,518
Investment
impairment (6) - -
Loss on asset
exchange (6) - -
Restructuring
costs -
Germany (6) 14,647 -
Restructuring
costs - West
Coast (3) - 90
Restructuring
costs -
United
Kingdom (1) - 1,311
Write-off of
in-process
R&D - Diba
acquisition (1) - -
Write-off of
in-process
R&D -
Galpharm
acquisition (1) - -
----- -----
Adjusted income
from continuing
operations $46,927 $42,151 11%
======= =======
Diluted earnings
per share from
continuing
operations
Reported $0.35 $0.34 2%
Adjusted $0.50 $0.44 13%
Diluted
weighted
average shares
outstanding 93,290 95,076
Fiscal Year
-----------
2009 2008 % Change
---- ---- ---------
Net sales $2,006,862 $1,729,921 16%
Reported gross
profit $595,997 $517,728 15%
Inventory
step-up -
Unico 1,062 -
Inventory
step-up -
Diba 1,503 -
Inventory
step-up - JB
Labs 358 -
Inventory
step-up -
Galpharm - 5,756
Impairment of
fixed assets 1,600 -
Impairment of
intangible
asset - 10,346
----- ------
Adjusted gross
profit $600,520 $533,830 12%
======== ========
Adjusted gross
profit % 29.9% 30.9%
Reported
operating
expenses $348,690 $322,870 8%
Loss on asset
exchange (639) -
Restructuring
costs -
Germany (14,647) -
Restructuring
costs - West
Coast - (491)
Restructuring
costs -
United
Kingdom - (1,821)
----- ------
Adjusted
operating
expenses $333,404 $320,558 4%
======== ========
Adjusted
operating
expenses % 16.6% 18.5%
Reported
operating
income $247,307 $194,858 27%
Inventory
step-up -
Unico 1,062 -
Inventory
step-up -
Diba 1,503 -
Inventory
step-up - JB
Labs 358 -
Inventory
step-up -
Galpharm - 5,756
Impairment of
fixed assets 1,600 -
Impairment of
intangible
asset - 10,346
Loss on asset
exchange 639 -
Restructuring
costs -
Germany 14,647 -
Restructuring
costs - West
Coast - 491
Restructuring
costs -
United
Kingdom - 1,821
Write-off of
in-process
R&D - Diba
acquisition 279 -
Write-off of
in-process
R&D -
Galpharm
acquisition - 2,786
----- -----
Adjusted
operating
income $267,395 $216,058 24%
======== ========
Adjusted
operating
income % 13.3% 12.5%
Reported income
from continuing
operations $141,098 $140,197 1%
Inventory
step-up -
Unico (5) 645 -
Inventory
step-up -
Diba (1) 1,082 -
Inventory
step-up - JB
Labs (2) 229 -
Inventory
step-up -
Galpharm (1) - 4,144
Impairment of
fixed assets (4) 992 -
Impairment of
intangible
asset (3) - 6,518
Investment
impairment (6) 15,104 -
Loss on asset
exchange (6) 639 -
Restructuring
costs -
Germany (6) 14,647 -
Restructuring
costs - West
Coast (3) - 309
Restructuring
costs -
United
Kingdom (1) - 1,311
Write-off of
in-process
R&D - Diba
acquisition (1) 201 -
Write-off of
in-process
R&D -
Galpharm
acquisition (1) - 2,006
----- -----
Adjusted income
from continuing
operations $174,637 $154,485 13%
======== ========
Diluted earnings
per share from
continuing
operations
Reported $1.51 $1.47 2%
Adjusted $1.87 $1.62 15%
Diluted
weighted
average shares
outstanding 93,629 95,210
(1) Net of taxes at 28%
(2) Net of taxes at 36%
(3) Net of taxes at 37%
(4) Net of taxes at 38%
(5) Net of taxes at 39.3%
(6) No tax impact
*All information based on continuing operations.
Table II (Continued)
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in thousands)
(unaudited)
Fourth Quarter
--------------
2009 2008 % Change
---- ---- ---------
Consumer Healthcare
Net sales $407,009 $374,645 9%
Reported gross
profit $119,782 $111,037 8%
Inventory step-up
- Unico - -
Inventory step-up
- Diba - -
Inventory step-up
- JB Labs - -
Inventory step-up
- Galpharm - 2,878
Impairment of
fixed assets - -
----- -----
Adjusted gross
profit $119,782 $113,915 5%
======== ========
Adjusted gross
profit % 29.4% 30.4%
Reported operating
expenses $63,725 $58,932 8%
Loss on asset
exchange - -
Restructuring
costs - West
Coast - (143)
Restructuring
costs - United
Kingdom - (1,821)
---- ------
Adjusted operating
expenses $63,725 $56,968 12%
======= =======
Adjusted operating
expenses % 15.7% 15.2%
Reported operating
income $56,059 $52,105 8%
Inventory step-up
- Unico - -
Inventory step-up
- Diba - -
Inventory step-up
- JB Labs - -
Inventory step-up
- Galpharm - 2,878
Impairment of
fixed assets - -
Loss on asset
exchange - -
Restructuring
costs - West
Coast - 143
Restructuring
costs - United
Kingdom - 1,821
---- -----
Adjusted operating
income $56,059 $56,947 -2%
======= =======
Adjusted operating
income % 13.8% 15.2%
Rx Pharmaceuticals
Net sales $48,840 $38,425 27%
Reported gross
profit $21,010 $3,969
Impairment of
intangible asset - 10,346
---- ------
Adjusted gross
profit $21,010 $14,315 47%
======= =======
Adjusted gross
profit % 43.0% 37.3%
Reported operating
income (loss) $12,090 $(5,774) -309%
Impairment of
intangible asset - 10,346
---- ------
Adjusted operating
income $12,090 $4,572 164%
======= ======
Adjusted operating
income % 24.8% 11.9%
API
Net sales $38,940 $38,313 2%
Reported operating
expenses $22,529 $9,678
Restructuring
costs - Germany (14,647) -
------- ----
Adjusted operating
expenses $7,882 $9,678 -19%
====== ======
Adjusted operating
expenses % 20.2% 25.3%
Reported operating
income (loss) $(5,409) $3,752 -244%
Restructuring
costs - Germany 14,647 -
------ -----
Adjusted operating
income $9,238 $3,752 146%
====== ======
Adjusted operating
income % 23.7% 9.8%
Unallocated
Reported operating
loss $(9,569) $(10,513) -9%
Write-off of in-
process R&D -
Diba acquisition - -
Write-off of in-
process R&D -
Galpharm
acquisition - -
----- -----
Adjusted operating
loss $(9,569) $(10,513) -9%
======= ========
Fiscal Year
-----------
2009 2008 % Change
---- ---- ---------
Consumer Healthcare
Net sales $1,638,770 $1,336,140 23%
Reported gross
profit $460,133 $377,765 22%
Inventory step-up
- Unico 1,062 -
Inventory step-up
- Diba 1,503 -
Inventory step-up
- JB Labs 358 -
Inventory step-up
- Galpharm - 5,756
Impairment of
fixed assets 1,600 -
----- ----
Adjusted gross
profit $464,656 $383,521 21%
======== ========
Adjusted gross
profit % 28.4% 28.7%
Reported operating
expenses $226,379 $205,111 10%
Loss on asset
exchange (639) -
Restructuring
costs - West
Coast - (491)
Restructuring
costs - United
Kingdom - (1,821)
---- ------
Adjusted operating
expenses $225,740 $202,799 11%
======== ========
Adjusted operating
expenses % 13.8% 15.2%
Reported operating
income $233,756 $172,654 35%
Inventory step-up
- Unico 1,062 -
Inventory step-up
- Diba 1,503 -
Inventory step-up
- JB Labs 358 -
Inventory step-up
- Galpharm - 5,756
Impairment of
fixed assets 1,600 -
Loss on asset
exchange 639 -
Restructuring
costs - West
Coast - 491
Restructuring
costs - United
Kingdom - 1,821
---- -----
Adjusted operating
income $238,918 $180,722 32%
======== ========
Adjusted operating
income % 14.6% 13.5%
Rx Pharmaceuticals
Net sales $164,163 $161,271 2%
Reported gross
profit $63,801 $58,622 9%
Impairment of
intangible asset - 10,346
---- ------
Adjusted gross
profit $63,801 $68,968 -7%
======= =======
Adjusted gross
profit % 38.9% 42.8%
Reported operating
income (loss) $29,028 $21,386 36%
Impairment of
intangible asset - 10,346
---- ------
Adjusted operating
income $29,028 $31,732 -9%
======= =======
Adjusted operating
income % 17.7% 19.7%
API
Net sales $136,002 $149,553 -9%
Reported operating
expenses $47,124 $34,717 36%
Restructuring
costs - Germany (14,647) -
------- ----
Adjusted operating
expenses $32,477 $34,717 -6%
======= =======
Adjusted operating
expenses % 23.9% 23.2%
Reported operating
income (loss) $433 $20,475 -98%
Restructuring
costs - Germany 14,647 -
------ ----
Adjusted operating
income $15,080 $20,475 -26%
======= =======
Adjusted operating
income % 11.1% 13.7%
Unallocated
Reported operating
loss $(23,590) $(26,687) -12%
Write-off of in-
process R&D -
Diba acquisition 279 -
Write-off of in-
process R&D -
Galpharm
acquisition - 2,786
---- -----
Adjusted operating
loss $(23,311) $(23,901) -2%
======== ========
*All information based on continuing operations.
Table III
PERRIGO COMPANY
RECONCILIATION OF NON-GAAP MEASURES
(in thousands)
(unaudited)
Fourth Quarter Adjustment -
Reported Cost of Inventory
Sales Step-Up
---------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
Segments
Consumer
Healthcare $287,226 $263,607 $- $(2,878)
Rx
Pharmaceuticals 27,829 34,456 - -
API 21,820 24,884 - -
Other 7,481 16,242 - -
----- ------ --- ---
Total $344,356 $339,189 $- $(2,878)
======== ======== === =======
Adjustment - Fourth Quarter
Intangible Adjusted Cost of
Asset Impairment Sales
---------------- ----------------
2009 2008 2009 2008 % Change
---- ---- ---- ---- ---------
Segments
Consumer
Healthcare $- $- $287,226 $260,729 10%
Rx
Pharmaceuticals - (10,346) 27,829 24,110 15%
API - - 21,820 24,884 -12%
Other - - 7,481 16,242 -54%
--- --- ----- ------
Total $- $(10,346) $344,356 $325,965 6%
=== ======== ======== ========
*All information based on continuing operations.
First Call Analyst:
FCMN Contact: Penny.bursma@perrigo.com
SOURCE: Perrigo Company
CONTACT: Arthur J. Shannon, Vice President, Investor Relations and
Communication, +1-269-686-1709, ajshannon@perrigo.com; or Daniel B. Willard,
Manager, Investor Relations, and Communication, +1-269-686-1597,
dbwillard@perrigo.com
Web Site: http://www.perrigo.com/