-- Full-year revenue from continuing operations increased $262 million,
or 13 percent, to a record $2.27 billion.
-- Adjusted income from continuing operations for the full year increased
50 percent to $263 million, or $2.83 per share.
-- GAAP income from continuing operations for the full year increased 59
percent to $224 million, or $2.41 per share.
-- Record full year cash flow from operations of $314 million. Strong
fourth quarter cash flow of $98 million.
-- Management expects full-year fiscal 2011 GAAP earnings per share from
continuing operations to be in a range of $3.08 to $3.28 per share.
This is an increase of 28% to 36% from fiscal 2010's $2.41 per share.
-- Management expects full-year fiscal 2011 adjusted earnings from
continuing operations, which now excludes deal-related amortization,
to be in a range of $3.40 to $3.60 per share. This is an increase of
12% to 18% from fiscal 2010 presented on a consistent basis.
Perrigo Company (NASDAQ: PRGO)(TASE: PRGO) today announced results for its fourth quarter and full year ended June 26, 2010.
Perrigo's Chairman and CEO Joseph C. Papa commented, "For the fourth straight year, we delivered year-over-year record sales, earnings and cash flow from operations. Despite significant challenges, from competition in our largest product to stronger regulatory oversight, we remained focused on execution and delivered results ahead of our own expectations. During the year, we made two business acquisitions that expanded our portfolio into adjacent categories and new geographical areas. We extended our product pipeline into ophthalmics. We also entered strategic partnerships for new products leveraging Perrigo's powerful sales, marketing and distribution capabilities. We are continuing along our strategic path in these challenging times to make quality healthcare more affordable to consumers around the globe."
The Company's reported results are summarized in the attached Consolidated Statements of Income, Balance Sheets and Cash Flows. As part of management's continued strategic review of the Company's portfolio of businesses, management committed to a plan to sell, and subsequently sold on February 26, 2010, the Company's 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
-------------- -----------
2010 2009 2010 2009
---- ---- ---- ----
Net Sales $619,395 $508,209 $2,268,870 $2,006,862
Reported Income $49,698 $32,280 $224,097 $141,098
Adjusted Income $66,195 $46,927 $262,648 $174,637
Reported Diluted
EPS $0.53 $0.35 $2.41 $1.51
Adjusted Diluted
EPS $0.71 $0.50 $2.83 $1.87
Diluted Shares 92,948 93,290 92,845 93,629
Fourth Quarter Results
Net sales from continuing operations for the fourth quarter of fiscal 2010 were $619 million, an increase of 22% compared to last year. Reported income from continuing operations was $50 million, or $0.53 per share, a strong increase over $32 million, or $0.35 per share, a year ago. Excluding the charges as outlined in Table II at the end of this release, fourth quarter fiscal 2010 adjusted income from continuing operations was $66 million, or $0.71 per share. Reported operating income included approximately $10 million in inventory step-up charges related to the acquisitions of PBM Holdings, Inc. (PBM) and Orion Laboratories (Orion).
Fiscal Year Results
Net sales for fiscal 2010 were $2.27 billion, an increase of 13% over fiscal 2009. The increase was driven largely by strong performance in the Consumer Healthcare and Rx segments. The growth included consolidated new product sales of approximately $125 million. Reported gross profit was $746 million, up 25%, and the reported gross margin was 32.9%, up from 29.7% last year. The gross margin improvement was driven primarily by new products. Reported operating margin increased 250 basis points to 14.8% and adjusted operating margin increased 360 basis points to 16.9%. Reported income from continuing operations was $224 million, an increase of 59%. Adjusted income from continuing operations was $263 million, or an increase of 50% from fiscal 2009.
Consumer Healthcare
Consumer Healthcare segment net sales in the fourth quarter were $481 million, compared with $407 million in the fourth quarter last year, an increase of $74 million or 18%. The increase resulted from $46 million of sales attributable to the acquisitions of PBM and Orion, $19 million of new product sales and $17 million from higher sales volumes of existing products, primarily in the analgesic category, as well as from favorable changes in foreign currency exchange rates, which increased sales by $2 million. These increases were partially offset by a decline of approximately $10 million in sales from existing products, primarily in gastrointestinal, nutrition and oral electrolytes categories. Reported gross profit was $144 million, compared to $120 million a year ago. Adjusted gross profit was $154 million compared to $120 million a year ago. Adjusted gross margin increased 270 basis points to 32.1%, largely driven by acquisitions, increased sales in analgesics and favorable product mix. Reported operating income was $67 million, compared with $56 million a year ago, and adjusted operating income was $77 million compared to $56 million a year ago. Adjusted operating margin increased 210 basis points to 15.9% due to the strong gross margin improvement.
For fiscal year 2010, Consumer Healthcare net sales increased $194 million or 12%, compared to fiscal 2009. The increase resulted from approximately $89 million in incremental sales from the Company's acquisitions of PBM, Orion, J.B. Laboratories, Unico Holdings and Laboratorios Diba, new product sales of $70 million and an increase in sales of existing products of $61 million, primarily in the gastrointestinal, cough/cold and analgesics categories. This growth was partially offset by $19 million in decreased sales from existing products, primarily in the nutrition, feminine hygiene and smoking cessation categories. Net sales were also reduced by approximately $7 million as a result of foreign currency exchange rates. Reported gross profit was $561 million, compared to $460 million a year ago. Adjusted gross profit was $571 million, compared to $465 million a year ago. Adjusted gross margin increased 280 basis points to 31.2%, largely driven by acquisitions, new product sales and lower inventory costs. Reported operating income was $305 million, compared with $234 million a year ago, and adjusted operating income was $315 million, compared to $239 million a year ago. Adjusted operating margin increased 260 basis points to 17.2%.
On May 3, 2010, the Company announced that it had closed the previously announced acquisition of PBM.
On May 5, 2010, the Company announced that it had acquired the exclusive U.S. store brand rights to sell and distribute Dextromethorphan Polistirex Extended Release Suspension Cough Suppressant, the generic version of Reckitt Benckiser's Delsym®, from Tris Pharma.
On June 3, 2010, the Company announced that it had received final approval from the U.S. Food and Drug Administration (FDA) for its abbreviated new drug application (ANDA) for over-the-counter (OTC) Miconazole Nitrate Vaginal Cream and Suppository, a generic to Monistat® -1 Combination Pack.
On June 29, 2010, the Company announced that it had acquired the exclusive U.S. store brand rights to sell and distribute OTC versions of Fexofenadine HCl 180 mg and 60 mg tabs, plus Fexofenadine HCl 60 mg and Pseudoephedrine 120 mg tabs, the generic versions of Sanofi-Aventis' Allegra® and Allegra® D-12 products.
On July 26, 2010, the Company announced that it had received final approval from the FDA to manufacture and market OTC Cetirizine Cherry Syrup, 1mg/ml.
Rx Pharmaceuticals
The Rx Pharmaceuticals segment fourth quarter net sales were $84 million, compared with approximately $49 million a year ago, an increase of 72%. This increase was due primarily to an increase in new product sales and increased sales in over-the-counter Rx (ORx). Reported gross profit was $33 million, compared to $21 million a year ago. The increase was due primarily to new product sales, increased sales in ORx and less downward pricing pressure. Gross margin decreased 360 basis points to 39.4%. The decrease was due primarily to the successful new product launch of imiquimod cream, of which the Company is the authorized generic distributor and recognizes a lower gross margin in line with such contracts. Reported operating income was approximately $17 million, an increase of $5 million from last year, and adjusted operating income was $22 million, compared to $12 million a year ago. Adjusted operating margin increased 90 basis points from last year to 25.7% due to increased operating expense leverage.
For fiscal year 2010, net sales for the Rx Pharmaceuticals segment increased 45% over fiscal 2009. Net sales increased due to higher sales of existing products, new product sales, less downward pricing pressure and an increase in service and royalty revenue.
On May 26, 2010, the Company announced that it had acquired rights to Novel Laboratories' (Novel) pending ANDA for HalfLytely® and Bisacodyl Tablets Bowel Prep Kit (PEG-3350, sodium chloride, sodium bicarbonate and potassium chloride for oral solution and bisacodyl delayed-release tablets).
On June 2, 2010, the Company announced that, on May 27, 2010, Novel received tentative approval from the FDA on its ANDA for the generic version of HalfLytely®.
On July 14, 2010, the Company announced its filing with the FDA for its ANDA for Clobetasol Propionate Emulsion Foam, 0.05%. The Company believes it is first-to-file on this product.
On July 30, 2010, the Company announced its filing with the FDA for its ANDA for the generic version of Gynazol-1®. On July 29, 2010, KV Pharmaceutical Company filed suit in the United States District Court for the District of Delaware, alleging patent infringement to prevent the Company from proceeding with the commercialization of this product.
API
The API segment reported fourth quarter net sales of $38 million, compared with $39 million a year ago. The decrease was due primarily to lower sales of existing products, which was partially offset by new product sales and dossier sales. Reported operating income increased approximately $12 million due primarily to charges related to the restructuring in Germany that were included in fiscal 2009. Adjusted operating income decreased $1 million. Adjusted operating margin decreased 170 basis points to 22%.
For fiscal year 2010, net sales increased 2% or $3 million, compared to fiscal 2009. Reported operating income increased $14 million over last year, and adjusted operating income increased $8 million over last year to $23 million. Adjusted operating margin increased 570 basis points to 16.8%.
Other
Continuing operations for the Other category, consisting of the Israel Pharmaceutical and Diagnostic Products operating segment, reported fourth quarter net sales of $16 million compared with $13 million a year ago. The operating segment reported operating income of approximately $1 million, compared to operating income of $2 million for fiscal 2009. Net sales for fiscal 2010 decreased 13% compared to fiscal 2009. The decrease was due primarily to approximately $22 million related to the loss of a customer contract.
Guidance
Chairman and CEO Joseph C. Papa concluded, "We had strong performance and execution across our businesses during fiscal 2010, and in fiscal 2011, we look to build on that success. We expect fiscal 2011 reported diluted earnings from continuing operations to be between $3.08 and $3.28 per share as compared to $2.41 in fiscal 2010. Excluding the charges outlined in Table III at the end of this release, we expect fiscal 2011 adjusted diluted earnings from continuing operations to be between $3.40 and $3.60 per share as compared to $3.04 in fiscal 2010. This new range implies a year-over-year growth rate of adjusted earnings from continuing operations of 12% to 18% over fiscal 2010 adjusted diluted EPS."
Perrigo will host a conference call to discuss fiscal 2010 fourth quarter and year end results at 10:00 a.m. (ET) on Thursday, August 12. 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# 88720364. A taped replay of the call will be available beginning at approximately 2:00 p.m. (ET) Thursday, August 12, until midnight Friday, August 27, 2010. To listen to the replay, call 800-642-1687, International 706-645-9291, access code 88720364.
Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes OTC and generic prescription (Rx) pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients (API) and pharmaceutical and medical diagnostic products. The Company is the world's largest store brand manufacturer of OTC pharmaceutical products and infant formulas. The Company's primary markets and locations of manufacturing and logistics operations are the United States, Israel, Mexico, the United Kingdom and Australia. 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 26, 2010, 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
-----------
2010 2009 2008
---- ---- ----
Net sales $2,268,870 $2,006,862 $1,729,921
Cost of sales 1,522,854 1,410,865 1,212,193
--------- --------- ---------
Gross profit 746,016 595,997 517,728
------- ------- -------
Operating expenses
Distribution 28,388 24,203 25,152
Research and development 82,509 77,922 72,191
Selling and
administration 270,701 231,639 220,429
------- -------
Subtotal 381,598 333,764 317,772
------- ------- -------
Write-off of in-process
research and development 19,000 279 2,786
Restructuring 9,523 14,647 2,312
----- ------ -----
Total 410,121 348,690 322,870
------- ------- -------
Operating income 335,895 247,307 194,858
Interest, net 28,778 27,154 17,415
Other expense (income),
net (1,069) 1,269 (503)
Investment impairment - 15,104 -
--- ------ ---
Income from continuing
operations before 308,186 203,780 177,946
Income tax expense 84,089 62,682 37,749
------ ------ ------
Income from continuing
operations 224,097 141,098 140,197
Income (loss) from
discontinued operations,
net of tax (1,551) 2,951 (4,424)
------ ----- ------
Net income $222,546 $144,049 $135,773
======== ======== ========
Earnings (loss) per share
(1)
Basic
Continuing operations $2.45 $1.53 $1.51
Discontinued operations (0.02) 0.03 (0.05)
----- ---- -----
Basic earnings per share $2.43 $1.56 $1.46
Diluted
Continuing operations $2.41 $1.51 $1.47
Discontinued operations (0.02) 0.03 (0.05)
----- ---- -----
Diluted earnings per
share $2.40 $1.54 $1.43
Weighted average shares
outstanding
Basic 91,399 92,183 93,124
Diluted 92,845 93,629 95,210
Dividends declared per
share $0.2425 $0.215 $0.195
(1) The sum of individual per share amounts may not equal due to rounding.
PERRIGO COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 26, June 27,
Assets 2010 2009
---- ----
Current assets
Cash and cash equivalents $97,568 $316,133
Restricted cash 400,000 -
Investment securities 557 3
Accounts receivable, net 358,500 325,810
Inventories 448,871 384,794
Current deferred income taxes 26,648 23,261
Income taxes refundable 13,864 8,926
Prepaid expenses and other current
assets 28,071 23,658
Current assets of discontinued
operations 7,214 51,699
----- ------
Total current assets 1,381,293 1,134,284
Property and equipment
Land 37,189 22,876
Buildings 306,322 262,990
Machinery and equipment 542,442 478,085
------- -------
885,953 763,951
Less accumulated depreciation (437,037) (409,634)
-------- --------
448,916 354,317
Restricted cash - 400,000
Goodwill and other indefinite-lived
intangible assets 622,745 268,819
Other intangible assets, net 587,094 214,207
Other non-current assets 52,688 49,756
Non-current assets of discontinued
operations - 21,854
--- ------
$3,092,736 $2,443,237
========== ==========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $258,493 $271,537
Notes payable 9,000 -
Payroll and related taxes 82,088 54,196
Accrued customer programs 59,898 54,461
Accrued liabilities 88,750 61,704
Accrued income taxes 3,048 3,334
Current portion of long-term debt 400,000 17,181
Current liabilities of discontinued
operations 5,428 19,620
----- ------
Total current liabilities 906,705 482,033
Non-current liabilities
Long-term debt, less current portion 935,000 875,000
Non-current deferred income taxes 55,333 65,326
Other non-current liabilities 107,043 86,476
Non-current liabilities of discontinued
operations - 11,933
--- ------
Total non-current liabilities 1,097,376 1,038,735
Shareholders' Equity
Controlling interest shareholders'
equity:
Preferred stock, without par value,
10,000 shares authorized - -
Common stock, without par value, 200,000
shares authorized 428,457 452,243
Accumulated other comprehensive income 39,048 50,592
Retained earnings 619,303 419,086
------- -------
1,086,808 921,921
Noncontrolling interest 1,847 548
----- ---
Total shareholders' equity 1,088,655 922,469
--------- -------
$3,092,736 $2,443,237
========== ==========
Supplemental Disclosures of Balance
Sheet Information
Related to Continuing Operations
Allowance for doubtful accounts $7,657 $11,394
Working capital $472,802 $620,172
Preferred stock, shares issued and
outstanding - -
Common stock, shares issued and
outstanding 91,694 92,209
PERRIGO COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(in thousands)
Accumulated
Common Stock Other
Issued Comprehensive
------
Income
Shares Amount (loss)
------ ------ -------
Balance at
June 30, 2007 93,395 519,419 56,676
Net income - - -
Accumulated
other
comprehensive
income
(loss):
Change in fair
value of
derivative
financial
instruments,
net of $1,852
tax - - (3,440)
Foreign
currency
translation
adjustments - - 105,826
Change in fair
value of
investment
securities - - (3,453)
Post-
retirement
liability
adjustments,
net of $229
tax - - (425)
Adjustment to
adopt ASC
Subtopic
740-10 - - -
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 - - -
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
Net income - - -
Accumulated
other
comprehensive
income
(loss):
Change in fair
value of
derivative
financial
instruments,
net of $162
tax - - 300
Foreign
currency
translation
adjustments - - (103,450)
Change in fair
value of
investment
securities - - 3,956
Adjustment to
adopt ASC
320-10-65 - - (5,000)
Post-
retirement
liability
adjustments,
net of $214
tax - - (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 - - -
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
Net income - - -
Accumulated
other
comprehensive
income
(loss):
Change in fair
value of
derivative
financial
instruments,
net of $898
tax - - 1,668
Foreign
currency
translation
adjustments - - (12,212)
Change in fair
value of
investment
securities - - (568)
Post-
retirement
liability
adjustments,
net of $233
tax - - (432)
Issuance of
common stock
under:
Stock options 1,347 21,444 -
Restricted
stock plan 200 - -
Compensation
for stock
options - 3,854 -
Compensation
for
restricted
stock - 10,842 -
Cash
dividends,
$0.2425 per
share - - -
Tax effect
from stock
transactions - 11,162 -
Purchases and
retirements
of common
stock (2,062) (71,088) -
------ ------- ---
Balance at
June 26, 2010 91,694 $428,457 $39,048
====== ======== =======
Comprehensive Retained
Income
(loss) Earnings
------ --------
Balance at June 30, 2007 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) -
Foreign currency translation
adjustments 105,826 -
Change in fair value of investment
securities (3,453) -
Post-retirement liability
adjustments, net of $229 tax (425) -
Adjustment to adopt ASC Subtopic
740-10 - (5,934)
Issuance of common stock under:
Stock options - -
Restricted stock plan - -
Compensation for stock options - -
Compensation for restricted stock - -
Cash dividends, $0.195 per share - (18,219)
Tax effect from stock transactions - -
Purchases and retirements of
common stock - -
---
Balance at June 28, 2008 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 -
Foreign currency translation
adjustments (103,450) -
Change in fair value of investment
securities 3,956 -
Adjustment to adopt ASC 320-10-65 (5,000) 5,000
Post-retirement liability
adjustments, net of $214 tax (398) -
Issuance of common stock under:
Stock options - -
Restricted stock plan - -
Compensation for stock options - -
Compensation for restricted stock - -
Cash dividends, $0.215 per share - (19,957)
Tax effect from stock transactions - -
Purchases and retirements of
common stock - -
--- ---
Balance at June 27, 2009 39,457 419,086
======
Net income 222,546 222,546
Accumulated other comprehensive
income (loss):
Change in fair value of derivative
financial
instruments, net of $898 tax 1,668 -
Foreign currency translation
adjustments (12,212) -
Change in fair value of investment
securities (568) -
Post-retirement liability
adjustments, net of $233 tax (432) -
Issuance of common stock under:
Stock options - -
Restricted stock plan - -
Compensation for stock options - -
Compensation for restricted stock - -
Cash dividends, $0.2425 per share - (22,329)
Tax effect from stock transactions - -
Purchases and retirements of
common stock - -
--- ---
Balance at June 26, 2010 $211,002 $619,303
======== ========
PERRIGO COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Fiscal Year
-----------
2010 2009 2008
---- ---- ----
Cash Flows From (For)
Operating Activities
Net income $222,546 $144,049 $135,773
Adjustments to derive cash
flows
Write-off of in-process
research and development 19,000 279 2,786
Depreciation and
amortization 76,133 70,142 69,231
Restructuring and asset
impairment 9,523 31,351 12,658
Gain on sale of business (750) - -
Share-based compensation 14,696 10,353 8,469
Income tax benefit from
exercise of stock options (1,302) (3,490) 3,992
Excess tax benefit of stock
transactions (9,860) (2,290) (10,595)
Deferred income taxes (10,347) (1,422) (1,542)
Sub-total 319,639 248,972 220,772
------- ------- -------
Changes in operating assets
and liabilities, net of
asset and
business acquisitions and
disposition
Accounts receivable (6,886) 6,446 (38,742)
Inventories (30,199) 341 (72,480)
Income taxes refundable 4,938 (1,066) (6,883)
Accounts payable (21,166) 24,821 67,638
Payroll and related taxes 30,523 (20,621) 27,046
Accrued customer programs 5,142 1,124 5,450
Accrued liabilities 4,716 (13,483) 1,773
Accrued income taxes 8,275 13,201 31,274
Other (809) (1,390) 8,467
---- ------ -----
Sub-total (5,466) 9,373 23,543
------ ----- ------
Net cash from operating
activities 314,173 258,345 244,315
------- ------- -------
Cash Flows (For) From
Investing Activities
Purchase of securities - - (176,298)
Proceeds from sales of
securities - - 208,097
Acquired research and
development (19,000) - -
Additions to property and
equipment (55,892) (59,238) (44,824)
Proceeds from sale of
business 35,980 - -
Cash acquired in asset
exchange - 2,115 -
Acquisitions of assets (10,262) (1,000) (12,401)
Acquisitions of businesses,
net of cash acquired (868,802) (88,248) (83,312)
Equity investment - - (12,500)
--- --- -------
Net cash for investing
activities (917,976) (146,371) (121,238)
-------- -------- --------
Cash Flows (For) From
Financing Activities
Repayments of short-term
debt, net (8,771) (13,736) (11,776)
Borrowings of long-term
debt 625,000 - 465,000
Repayments of long-term
debt (165,000) (31,380) (225,801)
Deferred financing fees (5,813) - -
Excess tax benefit of stock
transactions 9,860 2,290 10,595
Issuance of common stock 21,444 10,062 32,210
Repurchase of common stock (71,088) (62,489) (78,164)
Cash dividends (22,329) (19,957) (18,219)
------- ------- -------
Net cash (for) from
financing activities 383,303 (115,210) 173,845
------- -------- -------
Effect of exchange rate
changes on cash 1,931 769 (8,623)
----- --- ------
Net increase (decrease) in
cash and cash equivalents (218,569) (2,467) 288,299
Cash and cash equivalents
of continuing operations,
beginning of period 316,133 318,599 30,301
Cash balance of
discontinued operations,
beginning of period 4 5 4
--- --- ---
Cash and cash equivalents,
end of period 97,568 316,137 318,604
Less cash balance of
discontinued operations,
end of period - (4) (5)
--- --- ---
Cash and cash equivalents
of continuing operations,
end of period $97,568 $316,133 $318,599
======= ======== ========
Supplemental Disclosures of
Cash Flow Information
Cash paid/received during
the year for:
Interest paid $43,617 $47,066 $37,111
Interest received $21,336 $24,348 $21,664
Income taxes paid $76,051 $73,276 $32,718
Income taxes refunded $1,433 $11,283 $7,693
Table I
PERRIGO COMPANY
SEGMENT INFORMATION
(in thousands)
(unaudited)
Fourth Quarter* Fiscal Year*
--------------- ------------
2010 2009 2010 2009
---- ---- ---- ----
Segment Net
Sales
Consumer
Healthcare $481,001 $407,009 $1,833,023 $1,638,770
Rx
Pharmaceuticals 84,148 48,840 237,648 164,163
API 37,993 38,940 139,287 136,002
Other 16,253 13,420 58,912 67,927
------ ------ ------ ------
Total $619,395 $508,209 $2,268,870 $2,006,862
======== ======== ========== ==========
Segment
Operating
Income (Loss)
Consumer
Healthcare $66,750 $56,059 $304,582 $233,756
Rx
Pharmaceuticals 16,645 12,090 50,142 29,028
API 6,301 (5,409) 14,526 433
Other 704 2,353 2,696 7,680
Unallocated
expenses (12,849) (9,569) (36,051) (23,590)
------- ------ ------- -------
Total $77,551 $55,524 $335,895 $247,307
======= ======= ======== ========
*All information based on continuing operations.
Table II
PERRIGO COMPANY
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share amounts)
(unaudited)
Fourth Quarter*
---------------
2010 2009 % Change
---- ---- --------
Net sales $619,395 $508,209 22%
Reported gross profit $199,211 $163,853 22%
Inventory step-ups 9,873 -
Impairment of fixed assets - -
--- ---
Adjusted gross profit $209,084 $163,853 28%
======== ========
Adjusted gross profit % 33.8% 32.2%
Reported operating income $77,551 $55,524 40%
Inventory step-ups 9,873 -
Write-offs of in-process R&D 5,000 -
Impairment of fixed assets - -
Restructuring charges 2,049 14,647
Acquisition costs 5,137 -
Loss on asset exchange - -
Adjusted operating income $99,610 $70,171 42%
======= =======
Adjusted operating income % 16.1% 13.8%
Reported interest and other,
net $11,063 $5,393 105%
Acquisition costs (2,800) -
Investment impairment - -
--- ---
Adjusted interest and other,
net $8,263 $5,393 53%
====== ======
Reported income from continuing
operations $49,698 $32,280 54%
Inventory step-ups (1) 6,159 -
Restructuring charges- Florida
(1) - -
Restructuring charges -Germany
(2) 2,049 14,647
Acquisition costs - Orion (2) - -
Acquisition costs - PBM (1) 5,119 -
Write-offs of in-process R&D
(1) 3,170 -
Impairment of fixed assets (1) - -
Investment impairment (2) - -
Loss on asset exchange (2) - -
Adjusted income from continuing
operations $66,195 $46,927 41%
======= =======
Diluted earnings per share from
continuing operations
Reported $0.53 $0.35 51%
Adjusted $0.71 $0.50 42%
Diluted weighted average shares
outstanding 92,948 93,290
Fiscal Year*
------------
2010 2009 % Change
---- ---- --------
Net sales $2,268,870 $2,006,862 13%
Reported gross profit $746,016 $595,997 25%
Inventory step-ups 10,904 2,923
Impairment of fixed assets - 1,600
-----
Adjusted gross profit $756,920 $600,520 26%
======== ========
Adjusted gross profit % 33.4% 29.9%
Reported operating income $335,895 $247,307 36%
Inventory step-ups 10,904 2,923
Write-offs of in-process R&D 19,000 279
Impairment of fixed assets - 1,600
Restructuring charges 9,523 14,647
Acquisition costs 8,189 -
Loss on asset exchange - 639
Adjusted operating income $383,511 $267,395 43%
======== ========
Adjusted operating income % 16.9% 13.3%
Reported interest and other,
net $27,709 $43,527 -36%
Acquisition costs (3,500) -
Investment impairment - (15,104)
-------
Adjusted interest and other,
net $24,209 $28,423 -15%
======= =======
Reported income from continuing
operations $224,097 $141,098 59%
Inventory step-ups (1) 6,932 1,956
Restructuring charges- Florida
(1) 431 -
Restructuring charges -Germany
(2) 8,824 14,647
Acquisition costs - Orion (2) 600 -
Acquisition costs - PBM (1) 7,152 -
Write-offs of in-process R&D
(1) 14,612 201
Impairment of fixed assets (1) - 992
Investment impairment (2) - 15,104
Loss on asset exchange (2) - 639
Adjusted income from continuing
operations $262,648 $174,637 50%
======== ========
Diluted earnings per share from
continuing operations
Reported $2.41 $1.51 60%
Adjusted $2.83 $1.87 51%
Diluted weighted average shares
outstanding 92,845 93,629
(1) Net of taxes
(2) Not tax affected
*All information based on continuing operations.
Table II (Continued)
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in thousands)
(unaudited)
Fourth Quarter*
---------------
2010 2009 % Change
---- ---- --------
Consumer Healthcare
Net sales $481,001 $407,009 18%
Reported gross profit $144,377 $119,784 21%
Inventory step-ups 9,873 -
Impairment of fixed assets - -
--- ---
Adjusted gross profit $154,250 $119,784 29%
======== ========
Adjusted gross profit % 32.1% 29.4%
Reported operating income $66,750 $56,059 19%
Restructuring charges -
Florida - -
Inventory step-ups 9,873 -
Impairment of fixed assets - -
Loss on asset exchange - -
Adjusted operating income $76,623 $56,059 37%
======= =======
Adjusted operating income % 15.9% 13.8%
Rx Pharmaceuticals
Net sales $84,148 $48,840 72%
Reported operating income $16,645 $12,090 38%
Write-off of in-process R&D
- ANDA 5,000 -
---
Adjusted operating income $21,645 $12,090 79%
======= =======
Adjusted operating income % 25.7% 24.8%
API
Net sales $37,993 $38,940 -2%
Reported operating income
(loss) $6,301 $(5,409) -216%
Restructuring charges -
Germany 2,049 14,647
------
Adjusted operating income $8,350 $9,238 -10%
====== ======
Adjusted operating income % 22.0% 23.7%
Other
Net sales $16,253 $13,420 21%
Reported gross profit $5,875 $5,939 -1%
Inventory step-ups - Asset
acquisitions - -
--- ---
Adjusted gross profit $5,875 $5,939 -1%
====== ======
Adjusted gross profit % 36.1% 44.3%
Reported operating income $704 $2,353 -70%
Inventory step-ups - Asset
acquisitions - -
--- ---
Adjusted operating income $704 $2,353 -70%
==== ======
Adjusted operating income % 4.3% 17.5%
Unallocated
Reported operating loss $(12,849) $(9,569) 34%
Acquisition costs 5,137 -
Write-off of in-process R&D
- Diba acquisition - -
--- ---
Adjusted operating loss $(7,712) $(9,569) -19%
======= =======
Fiscal Year*
------------
2010 2009 % Change
---- ---- --------
Consumer Healthcare
Net sales $1,833,023 $1,638,770 12%
Reported gross profit $561,482 $460,135 22%
Inventory step-ups 9,873 2,923
Impairment of fixed assets - 1,600
--- -----
Adjusted gross profit $571,355 $464,658 23%
======== ========
Adjusted gross profit % 31.2% 28.4%
Reported operating income $304,582 $233,756 30%
Restructuring charges -
Florida 699 -
Inventory step-ups 9,873 2,923
Impairment of fixed assets - 1,600
Loss on asset exchange - 639
Adjusted operating income $315,154 $238,918 32%
======== ========
Adjusted operating income % 17.2% 14.6%
Rx Pharmaceuticals
Net sales $237,648 $164,163 45%
Reported operating income $50,142 $29,028 73%
Write-off of in-process R&D
- ANDA 19,000 -
---
Adjusted operating income $69,142 $29,028 138%
======= =======
Adjusted operating income % 29.1% 17.7%
API
Net sales $139,287 $136,002 2%
Reported operating income
(loss) $14,526 $433 3255%
Restructuring charges -
Germany 8,824 14,647
------
Adjusted operating income $23,350 $15,080 55%
======= =======
Adjusted operating income % 16.8% 11.1%
Other
Net sales $58,912 $67,927 -13%
Reported gross profit $21,012 $24,504 -14%
Inventory step-ups - Asset
acquisitions 1,031 -
----- ---
Adjusted gross profit $22,043 $24,504 -10%
======= =======
Adjusted gross profit % 37.4% 36.1%
Reported operating income $2,696 $7,680 -65%
Inventory step-ups - Asset
acquisitions 1,031 -
----- ---
Adjusted operating income $3,727 $7,680 -51%
====== ======
Adjusted operating income % 6.3% 11.3%
Unallocated
Reported operating loss $(36,051) $(23,590) 53%
Acquisition costs 8,189 -
Write-off of in-process R&D
- Diba acquisition - 279
--- ---
Adjusted operating loss $(27,862) $(23,311) 20%
======== ========
*All information based on continuing operations.
Fiscal
2011*
Guidance
--------
FY11 reported diluted EPS from continuing operations
range $3.08 - $3.28
Deal-related amortization (1) 0.32
----
FY11 adjusted diluted EPS from continuing operations
range $3.40 - $3.60
=============
Fiscal
2010*
-------
FY10 reported diluted EPS from continuing operations $2.41
Charges associated with inventory step-ups 0.075
Charges associated with acquired research and
development 0.157
Charges associated with acquisition costs 0.083
Charges associated with restructuring 0.100
FY10 adjusted diluted EPS from continuing operations,
including deal-related amortization $2.83
Deal-related amortization (1) 0.21
FY10 adjusted diluted EPS from continuing operations,
excluding deal-related amortization $3.04
=====
(1) Amortization of acquired intangible assets related to business
combinations and asset acquisitions
*All information based on continuing operations.
First Call Analyst:
FCMN Contact: penny.blain@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/