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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 Fourth Quarter and Fiscal Year Revenue, Earnings and Cash Flow From Operations
- Full-year revenue from continuing operations increased $418 million, or 15%, to a record $3.2 billion.
- GAAP income from continuing operations for the full year increased 15% to $393 million, or $4.18 per diluted share.
- Adjusted income from continuing operations for the full year increased 25% to a record $469 million, or $4.99 per diluted share.
- Record full-year cash flow from operations of $513 million.
- Fiscal fourth quarter GAAP income from continuing operations increased 25% to $107 million, or $1.14 per diluted share, while adjusted income from continuing operations increased 27% to $121 million, or $1.28 per diluted share, as revenue increased $127
- Management expects full-year fiscal 2013 adjusted earnings per share to be in a range of $5.30 to $5.50 per diluted share, an increase of 6% to 10% from fiscal 2012's $4.99 per diluted share.
PR Newswire
ALLEGAN, Mich.

ALLEGAN, Mich., Aug. 16, 2012 /PRNewswire/ -- Perrigo Company (Nasdaq: PRGO; TASE) today announced results for its fourth quarter and full year ended June 30, 2012.

(Logo:  http://photos.prnewswire.com/prnh/20120301/DE62255LOGO )

Perrigo's Chairman and CEO Joseph C. Papa commented, "For the sixth straight year, we delivered year-over-year record sales and earnings while continuing to make investments in our facilities and production processes which we believe will further enhance our own already high standards of excellent product quality. During this fiscal year, we also announced the acquisition of CanAm Care to broaden our diabetes category offerings, multiple supply agreements for infant formula in China and numerous new product launches. The penetration of store brand share in the U.S. market continues to gain momentum as retailers and patients continue to turn to high quality, affordable alternatives for their healthcare needs. We look forward to another great year, with many new products in the pipeline across all segments."

Refer to Table I 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 Cash Flows.                                                                                

Perrigo Company
(from continuing operations, in thousands, except per share amounts)
(see the attached Table I for reconciliation to GAAP numbers)

 

Fourth Quarter

Fiscal Year

2012

2011

2012

2011

Net Sales

$831,767

$704,629

$3,173,249

$2,755,029

Reported Income

$107,050

$85,570

$392,974

$340,558

Adjusted Income

$120,946

$95,418

$469,375

$375,361

Reported Diluted EPS

$1.14

$0.91

$4.18

$3.64

Adjusted Diluted EPS

$1.28

$1.02

$4.99

$4.01

Diluted Shares

94,296

93,853

94,052

93,529

Fourth Quarter Results
Net sales for the fourth quarter of fiscal 2012 were approximately $832 million, an increase of 18% compared to last year. Excluding the charges outlined in Table I at the end of this release, fourth quarter fiscal 2012 adjusted income from continuing operations was $121 million, or $1.28 per diluted share, up from $95 million, or $1.02 per diluted share, a year ago.

Fiscal Year Results
Net sales from fiscal 2012 were $3.2 billion, an increase of 15% over fiscal 2011. The increase was driven primarily by $245 million of net sales attributable to the Paddock Labs and CanAm Care acquisitions and new product sales of $211 million, which excludes $6 million of new products launched by Paddock Labs. Reported gross profit was $1.1 billion, up 16%, and reported gross margin was 34.5%, slightly up from 34.3% last year. Adjusted gross profit was $1.2 billion, up 21%, and adjusted gross margin was 37.1%, up from 35.4% last year. The gross margin improvement was driven primarily by new products and the acquisition of Paddock Labs. Reported operating margin increased 10 basis points to 17.9%, and adjusted operating margin increased 200 basis points to 21.6%. Reported income from continuing operations was $393 million, an increase of 15%. Adjusted income from continuing operations was $469 million, or an increase of 25% from fiscal 2011.

Consumer Healthcare
Consumer Healthcare segment net sales in the fourth quarter were $484 million, compared with $434 million in the fourth quarter last year, an increase of $50 million or 12%. The increase resulted from increased sales of existing products of $30 million (primarily in the cough/cold, analgesics and smoking cessation categories), $26 million of new product sales (primarily in the gastrointestinal and dermatological care categories) and $10 million attributable to sales from the CanAm Care acquisition. These increases were partially offset by a decline in sales of existing products of $12 million, primarily in the gastrointestinal and contract categories, as well as a $4 million decline in sales due to unfavorable changes in foreign currency exchange rates. Reported gross profit was $150 million, compared to $133 million a year ago. Adjusted gross profit was $151 million compared to $134 million a year ago. Adjusted gross margin increased 20 basis points to 31.2%. Reported operating income was $79 million, compared with $74 million a year ago, and adjusted operating income was $82 million compared to $77 million a year ago. Adjusted operating margin decreased 100 basis points to 16.9% due to higher spending on sales and marketing promotions to support new product launches and the inclusion of expenses related to the CanAm Care acquisition.

For fiscal year 2012, Consumer Healthcare net sales increased $131 million or 8%, compared to fiscal 2011. The increase was due to new product sales of $102 million (mainly in the cough/cold, gastrointestinal, diabetes and dermatological care categories), an increase in existing product sales of $48 million (mainly in the cough/cold, feminine hygiene and smoking cessation categories) and $18 million in sales attributable to the CanAm Care acquisition. These increases were partially offset by a decline of $34 million in sales of existing products (mainly in the gastrointestinal, analgesics and contract manufacturing categories). Sales were negatively affected by approximately $4 million due to unfavorable changes in foreign currency exchange rates.

Nutritionals
The Nutritionals segment fourth quarter net sales were $135 million, compared to $123 million last year, an increase of 10%. This increase was due primarily to new product sales of $13 million (primarily in the infant formula category) attributable to retail shipments in advance of a planned July 1st shutdown of the Company's Vermont Plant to do an SAP conversion and to prepare for the installation of a new packaging line. Reported gross profit was $38 million, compared to $37 million a year ago. Reported operating income was $14 million, up from $12 million a year ago while the reported operating margin increased 60 basis points. Adjusted operating income increased to approximately $22 million, up from $18 million a year ago, as the adjusted operating margin increased 200 basis points to 16.3% due to the decision to restructure operations at the Company's Florida facility.

Net sales for fiscal 2012 decreased $2 million to $501 million compared to fiscal 2011. Existing product sales within the infant formula category were lower due to the absence of increased demand when a competitor's product returned to the market following a prior recall. In addition, the VMS product category net sales decreased by approximately $14 million due primarily to SKU rationalization as a result of increased competition. These decreases were partially offset by increased sales in the infant and toddler foods product category of $13 million.

Rx Pharmaceuticals
The Rx Pharmaceuticals segment fourth quarter net sales were $157 million, compared with $92 million a year ago, an increase of 70%. This increase was due to net sales of $58 million from the Paddock Labs acquisition and new product sales of $11 million. Reported gross profit was $74 million, compared to $50 million a year ago, while adjusted gross profit was $82 million, compared to $53 million a year ago. Reported gross margin decreased 730 basis points to 47.1%, while the adjusted gross margin decreased 510 basis points to 52.5%, due primarily to certain pre-launch production costs, relative product mix and production variances. Reported operating income was $54 million, an increase of $16 million from last year, and adjusted operating income was $64 million, compared to $41 million a year ago. Adjusted operating margin decreased 410 basis points from last year to 40.5%.

Net sales for fiscal 2012 increased 80%, or $274 million, compared to fiscal 2011 due to net sales of $228 million from the Paddock Labs acquisition, new product sales of $29 million and growth in the base business. Reported gross margin increased 20 basis points to 47.7%, and reported operating margin increased 120 basis points to 36.2% from a year ago. Adjusted gross margin increased 660 basis points to 57.3%, and adjusted operating margin increased 780 basis points to 46.0% from a year ago.

API
The API segment reported fourth quarter net sales of $38 million, compared with $37 million a year ago. Reported operating income increased $12 million to $18 million compared to last year, while adjusted operating income increased $11 million compared to $7 million last year. Reported operating margin increased 3,010 basis points to 46.8%, while the adjusted operating margin increased 2,870 basis points to 48.0%. The performance of the API segment was favorably impacted due to a commercial agreement with a customer to supply a generic product that was launched in the fourth quarter of fiscal 2012, which unexpectedly received 180-day exclusivity status.

Net sales for fiscal 2012 increased 6%, or $10 million, compared to fiscal 2011 due to $12 million of increased demand in the U.S. for fluticasone and $7 million of new product sales. The Company also recognized $4 million in sales due to the commercial agreement mentioned above. These increases were partially offset by pricing pressures on a key product of $8 million, along with a $2 million negative impact due to unfavorable changes in foreign currency exchange rates.

Other
Continuing operations for the Other category, consisting of the Israel Pharmaceutical and Diagnostic Products operating segment, reported fourth quarter net sales of $17 million compared with $18 million a year ago. The segment reported adjusted operating income of $0.6 million, flat to last year. Net sales for fiscal 2012 increased 9% to $73 million, up from $67 million a year ago. Adjusted operating income was $4 million compared to $3 million for fiscal 2011. 

Guidance
Chairman and CEO Joseph C. Papa concluded, "We had strong performance and execution across our businesses during fiscal 2012. With macroeconomic tailwinds blowing in our favor, we look to build on that success in fiscal 2013."

The Company expects fiscal 2013 reported earnings from continuing operations to be between $4.77 and $4.97 per diluted share as compared to $4.18 in fiscal 2012. Excluding the charges outlined in Table III at the end of this release, the Company expects fiscal 2013 adjusted earnings to be between $5.30 and $5.50 per diluted share as compared to $4.99 in fiscal 2012. This new range implies a year-over-year growth rate in adjusted earnings of 6% to 10% over fiscal 2012's adjusted earnings from continuing operations per diluted share. 

Perrigo will host a conference call to discuss fiscal fourth quarter and fiscal year 2012 results at 10:00 a.m. (ET) on Thursday, August 16, 2012. 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# 10926008. A taped replay of the call will be available beginning at approximately 2:00 p.m. (ET) Thursday, August 16, 2012, until midnight Friday, September 7, 2012. To listen to the replay, call 855-859-2056, International 404-537-3406, access code 10926008.          

From its beginnings as a packager of generic home remedies in 1887, Allegan, Michigan-based Perrigo Company has grown to become a leading global provider of quality, affordable healthcare products. Perrigo develops, manufactures and distributes over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, infant formulas, nutritional products, dietary supplements and active pharmaceutical ingredients (API). 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 logistics operations have evolved over the years to include the United States, Israel, Mexico, the United Kingdom, India, China 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 30, 2012, 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





2012

2011


2010

Net sales

$

3,173,249

$

2,755,029

$

2,268,150

Cost of sales

2,077,651

1,810,159


1,521,917

Gross profit

1,095,598

944,870


746,233

Operating expenses









   Distribution

39,122

34,684


28,322

   Research and development

105,774

89,250


83,515

   Selling and administration

372,721

329,698


269,974

      Subtotal

517,617

453,632


381,811

   Write-off of in-process research and
    development

-

-


19,000

   Restructuring

8,755

1,033


9,523

      Total

526,372

454,665


410,334

Operating income

569,226

490,205


335,899

Interest, net

60,736

42,312


28,415

Other income, net

(3,499)

(2,661)


(1,165)

Income from continuing operations before income taxes

511,989

450,554


308,649

Income tax expense

119,015

109,996


84,215

Income from continuing operations

392,974

340,558


224,434

Income (loss) from discontinued operations,
  net of tax

8,639

(1,361)


(635)

Net income 

$

401,613

$

339,197

$

223,799

Earnings (loss) per share (1)









   Basic









      Continuing operations

$

4.22

$

3.69

$

2.46

      Discontinued operations

0.09

(0.01)


(0.01)

      Basic earnings per share

$

4.31

$

3.67

$

2.45

   Diluted









      Continuing operations

$

4.18

$

3.64

$

2.42

      Discontinued operations

0.09

(0.01)


(0.01)

      Diluted earnings per share 

$

4.27

$

3.63

$

2.41

Weighted average shares outstanding








   Basic

93,219

92,313


91,399

   Diluted

94,052

93,529


92,845

Dividends declared per share

$

0.3100

$

0.2725

$

0.2425











(1) The sum of individual per share amounts may not equal due to rounding.





































See accompanying notes to consolidated financial statements.











 

PERRIGO COMPANY

CONSOLIDATED BALANCE SHEETS

(in thousands)










June 30, 2012

June 25, 2011

Assets





Current assets





   Cash and cash equivalents

$

602,489

$

310,104

   Accounts receivable, net

572,582

477,851

   Inventories 

547,455

505,576

   Current deferred income taxes

45,738

30,474

   Income taxes refundable

1,047

370

   Prepaid expenses and other current assets

26,610

50,350

   Current assets of discontinued operations 

-

2,568

          Total current assets

1,795,921

1,377,293

Property and equipment





   Land

40,376

39,868

   Buildings

343,279

324,773

   Machinery and equipment

735,182

641,157



1,118,837

1,005,798

   Less accumulated depreciation

(540,487)

(498,490)



578,350

507,308







Goodwill and other indefinite-lived intangible assets

820,122

644,902

Other intangible assets, net

729,253

567,573

Non-current deferred income taxes

13,444

10,531

Other non-current assets

86,957

81,614


$

4,024,047

$

3,189,221







Liabilities and Shareholders' Equity





Current liabilities





   Accounts payable

$

317,341

$

343,278

   Short-term debt

90

2,770

   Payroll and related taxes

89,934

81,455

   Accrued customer programs

116,055

91,374

   Accrued liabilities

76,406

57,514

   Accrued income taxes

12,905

10,551

   Current portion of long-term debt

40,000

15,000

   Current liabilities of discontinued operations 

-

4,093

          Total current liabilities

652,731

606,035

Non-current liabilities





   Long-term debt, less current portion

1,329,235

875,000

   Non-current deferred income taxes

24,126

10,601

   Other non-current liabilities

165,310

166,598

          Total non-current liabilities

1,518,671

1,052,199

Shareholders' Equity





   Controlling interest:





         Preferred stock, without par value, 10,000 shares
          authorized

-

-

         Common stock, without par value, 200,000 shares
          authorized

504,708

467,661

         Accumulated other comprehensive income

39,404

127,050

         Retained earnings

1,306,925

934,333



1,851,037

1,529,044

   Noncontrolling interest

1,608

1,943

          Total shareholders' equity

1,852,645

1,530,987


$

4,024,047

$

3,189,221







Supplemental Disclosures of Balance Sheet Information





   Related to Continuing Operations





          Allowance for doubtful accounts

$

2,556

$

7,837

          Working capital 

$

1,143,190

$

772,783

          Preferred stock, shares issued and outstanding

-

-

          Common stock, shares issued and outstanding

93,484

92,778














See accompanying notes to consolidated financial statements.

 

PERRIGO COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)











Fiscal Year


2012

2011


2010

Cash Flows (For) From Operating Activities








   Net income

$

401,613

$

339,197

$

223,799

   Adjustments to derive cash flows








      Write-off of in-process research and
       development

-

-


19,000

      Gain on sale of pipeline development
       projects

(3,500)

-


-

      (Gain) loss on sale of business

(8,639)

2,151


(750)

      Restructuring and asset impairment

8,668

1,033


9,523

      Depreciation and amortization

135,323

102,941


74,104

      Share-based compensation

18,973

15,355


14,696

      Income tax benefit from exercise of stock
       options

(1,796)

(623)


(1,302)

      Excess tax benefit of stock transactions

(12,893)

(17,193)


(9,860)

      Deferred income taxes

27,476

(56,140)


(16,073)

   Subtotal

565,225

386,721


313,137

   Changes in operating assets and liabilities,
    net of asset and business acquisitions
    and disposition








      Accounts receivable

(49,349)

(107,235)


(21,766)

      Inventories

5,353

(30,416)


(32,217)

      Accounts payable

(23,555)

57,804


(1,558)

      Payroll and related taxes

4,988

616


30,917

      Accrued customer programs

(1,568)

31,440


5,142

      Accrued liabilities

4,203

(32,335)


7,451

      Accrued income taxes

13,746

56,216


26,310

      Other

(5,667)

11,150


4,947

   Subtotal

(51,849)

(12,760)


19,226

          Net cash from operating activities

513,376

373,961


332,363

Cash Flows (For) From Investing Activities








   Acquired research and development

-

-


(19,000)

   Acquisitions of businesses, net of cash
    acquired

(582,329)

2,624


(868,802)

   Additions to property and equipment

(120,192)

(99,443)


(57,816)

   Proceeds from sale of intangible assets and
    pipeline development projects

10,500

-


-

   Proceeds (return of consideration) from
    sale of business

8,639

(3,558)


35,980

   Acquisitions of assets

(750)

(10,750)


(10,262)

   Proceeds from sales of securities

-

560


-

          Net cash for investing activities

(684,132)

(110,567)


(919,900)

Cash Flows (For) From Financing Activities








   Repayments of short-term debt, net

(2,680)

(6,230)


(8,771)

   Borrowings of long-term debt

1,089,235

150,000


625,000

   Repayments of long-term debt

(610,000)

(195,000)


(165,000)

   Deferred financing fees

(5,097)

(5,483)


(5,813)

   Excess tax benefit of stock transactions

12,893

17,193


9,860

   Issuance of common stock

11,621

14,341


21,444

   Repurchase of common stock

(8,236)

(8,308)


(71,088)

   Cash dividends

(29,021)

(25,303)


(22,329)

          Net cash from (for) financing activities

458,715

(58,790)


383,303

Effect of exchange rate changes on cash

4,426

(4,265)


(3,643)

          Net increase (decrease) in cash and
           cash equivalents

292,385

200,339


(207,877)

Cash and cash equivalents of continuing
  operations, beginning of period

310,104

109,765


317,638

Cash balance of discontinued operations,
  beginning of period

-

-


4

Cash and cash equivalents, end of period

$

602,489

$

310,104

$

109,765










Supplemental Disclosures of Cash Flow
  Information








   Cash paid/received during the year for:








      Interest paid

$

53,694

$

47,455

$

53,557

      Interest received

$

3,989

$

3,726

$

21,392

      Income taxes paid

$

82,338

$

115,627

$

77,420

      Income taxes refunded

$

910

$

1,440

$

1,433




















See accompanying notes to consolidated financial statements.

 

 

PERRIGO COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME

(in thousands, except per share amounts)




















Accumulated






Common Stock 

Other





Issued

Comprehensive

Comprehensive

Retained

Shares

Amount

Income (Loss)

Income (Loss)

Earnings

Balance at June 27, 2009

92,209

$

452,243

$

44,894

$

52,992

$

418,969

Net income

-

-

-

223,799

223,799

Accumulated other comprehensive income (loss):












   Change in fair value of derivative financial












instruments, net of $898 tax

-

-

1,668

1,668

-

   Foreign currency translation adjustments

-

-

(2,362)

(2,362)

-

   Change in fair value of investment securities

-

-

(568)

(568)

-

   Post-retirement liability adjustments, net of $233 tax

-

-

(432)

(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

-

-

-

-

(22,329)

Tax effectfrom stock transactions

-

11,162

-

-

-

Repurchases of common stock

(2,062)

(71,088)

-

-

-

Balance at June 26, 2010

91,694

428,457

43,200

222,105

620,439

Net income

-

-

-

339,197

339,197

Accumulated other comprehensive income (loss):












   Change in fair value of derivative financial












instruments, net of $425 tax

-

-

(790)

(790)

-

   Foreign currency translation adjustments

-

-

81,691

81,691

-

   Change in fair value of investment securities

-

-

3,110

3,110

-

   Post-retirement liability adjustments, net of $87 tax

-

-

(161)

(161)

-

Issuance of common stock under:












   Stock options 

781

14,341

-

-

-

   Restricted stock plan

445

-

-

-

-

Compensation for stock options

-

3,794

-

-

-

Compensation for restricted stock 

-

11,561

-

-

-

Cash dividends, $0.2725 per share

-

-

-

-

(25,303)

Tax effectfrom stock transactions

-

17,816

-

-

-

Repurchases of common stock

(142)

(8,308)

-

-

-

Balance at June 25, 2011

92,778

467,661

127,050

423,047

934,333

Net income

-

-

-

401,613

401,613

Accumulated other comprehensive income (loss):












   Change in fair value of derivative financial












instruments, net of $5,065 tax

-

-

(9,406)

(9,406)

-

   Foreign currency translation adjustments

-

-

(76,656)

(76,656)

-

   Change in fair value of investment securities

-

-

(1,033)

(1,033)

-

   Post-retirement liability adjustments, net of $297 tax

-

-

(551)

(551)

-

Issuance of common stock under:












   Stock options 

519

11,621

-

-

-

   Restricted stock plan

277

-

-

-

-

Compensation for stock options

-

5,009

-

-

-

Compensation for restricted stock 

-

13,964

-

-

-

Cash dividends, $0.3100 per share

-

-

-

-

(29,021)

Tax effectfrom stock transactions

-

14,689

-

-

-

Repurchases of common stock

(90)

(8,236)

-

-

-

Balance at June 30, 2012

93,484

$

504,708

$

39,404

$

313,967

$

1,306,925














See accompanying notes to consolidated financial statements.














Table I

PERRIGO COMPANY

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, except per share amounts)

(unaudited)

















Three Months Ended



Consolidated

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$      831,767

$                 -

$       831,767

$      704,629

$                 -

$      704,629

18 %

18 %

Cost of sales

537,896

13,446

(a)

524,450

462,295

8,392

(a)

453,903

16 %

16 %

Gross profit

293,871

13,446

307,317

242,334

8,392

250,726

21 %

23 %
















Operating expenses














Distribution

9,582

-

9,582

8,962

-

8,962

7 %

7 %

Research and development

27,038

750

(b)

26,288

23,408

-

23,408

16 %

12 %

Selling and administration

94,641

5,034

(a)

89,607

85,645

4,854

(a,e)

80,791

11 %

11 %

Restructuring

1,674

1,674

(c)

-

1,033

1,033

(c)

-

62 %

-

Total

132,935

7,458

125,477

119,048

5,887

113,161

12 %

11 %
















Operating income

160,936

20,904

181,840

123,286

14,279

137,565

31 %

32 %

Interest, net

15,874

-

15,874

10,594

-

10,594

50 %

50 %

Other expense (income), net

722

-

722

(716)

-

(716)

-

-

Income from continuing operations before income taxes

144,340

20,904

165,244

113,408

14,279

127,687

27 %

29 %

Income tax expense

37,290

7,008

(d)

44,298

27,838

4,431

(d)

32,269

34 %

37 %

Income from continuing operations

$      107,050

$         13,896

$       120,946

$       85,570

$           9,848

$        95,418

25 %

27 %
















Diluted earnings per share from continuing operations

$            1.14


$             1.28

$           0.91


$            1.02

25 %

25 %
















Diluted weighted average shares outstanding

94,296


94,296

93,853


93,853



















Selected ratios as a percentage of net sales














Gross profit

35.3 %


36.9 %

34.4 %


35.6 %



Operating expenses

16.0 %


15.1 %

16.9 %


16.1 %



Operating income

19.3 %


21.9 %

17.5 %


19.5 %




































Fiscal Year Ended



Consolidated

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$   3,173,249

$                 -

$    3,173,249

$   2,755,029

$                 -

$   2,755,029

15 %

15 %

Cost of sales

2,077,651

82,243

(a,f)

1,995,408

1,810,159

30,663

(a)

1,779,496

15 %

12 %

Gross profit

1,095,598

82,243

1,177,841

944,870

30,663

975,533

16 %

21 %
















Operating expenses














Distribution

39,122

-

39,122

34,684

-

34,684

13 %

13 %

Research and development

105,774

(2,750)

(b,g)

108,524

89,250

-

89,250

19 %

22 %

Selling and administration

372,721

29,110

(a,h)

343,611

329,698

19,358

(a,i)

310,340

13 %

11 %

Restructuring

8,755

8,755

(c)

-

1,033

1,033

(c)

-

748 %

-

Total

526,372

35,115

491,257

454,665

20,391

434,274

16 %

13 %
















Operating income

569,226

117,358

686,584

490,205

51,054

541,259

16 %

27 %

Interest, net

60,736

-

60,736

42,312

-

42,312

44 %

44 %

Other income, net

(3,499)

-

(3,499)

(2,661)

-

(2,661)

31 %

31 %

Income from continuing operations before income taxes

511,989

117,358

629,347

450,554

51,054

501,608

14 %

25 %

Income tax expense

119,015

40,957

(d)

159,972

109,996

16,251

(d)

126,247

8 %

27 %

Income from continuing operations

$      392,974

$         76,401

$       469,375

$      340,558

$         34,803

$      375,361

15 %

25 %
















Diluted earnings per share from continuing operations

$            4.18


$            4.99

$           3.64


$           4.01

15 %

24 %
















Diluted weighted average shares outstanding

94,052


94,052

93,529


93,529



















Selected ratios as a percentage of net sales














Gross profit

34.5 %


37.1 %

34.3 %


35.4 %



Operating expenses

16.6 %


15.5 %

16.5 %


15.8 %



Operating income

17.9 %


21.6 %

17.8 %


19.6 %



































(a) Deal-related amortization














(b) Net charge related to acquired R&D and proceeds from sale of IPR&D projects











(c) Restructuring charges related to Florida














(d) Total tax effect for non-GAAP pre-tax adjustments














(e) Acquisition costs of $832














(f) Inventory step-up of $27,179














(g) Proceeds from sale of pipeline development projects of $3,500













(h) Acquisition-related and severance costs of $9,381














(i) Acquisition costs of $3,243














 

Table II

PERRIGO COMPANY

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

(in thousands)

(unaudited)







Three Months Ended



Consumer Healthcare

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$      483,982

$                  -

$     483,982

$     433,813

$                   -

$       433,813

12 %

12 %

Cost of sales

333,925

1,008

(a)

332,917

300,429

1,031

(a)

299,398

11 %

11 %

Gross profit

150,057

1,008

151,065

133,384

1,031

134,415

13 %

12 %

Operating expenses

70,746

1,419

(a)

69,327

59,204

2,265

(a,b)

56,939

19 %

22 %

Operating income

$       79,311

$           2,427

$      81,738

$       74,180

$           3,296

$         77,476

7 %

6 %
















Selected ratios as a percentage of net sales














Gross profit

31.0 %


31.2 %

30.7 %


31.0 %



Operating expenses

14.6 %


14.3 %

13.6 %


13.1 %



Operating income

16.4 %


16.9 %

17.1 %


17.9 %




















Fiscal Year Ended



Consumer Healthcare

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$   1,815,788

$                  -

$  1,815,788

$   1,684,938

$                  -

$    1,684,938

8 %

8 %

Cost of sales

1,255,595

4,046

(a)

1,251,549

1,153,548

3,445

(a)

1,150,103

9 %

9 %

Gross profit

560,193

4,046

564,239

531,390

3,445

534,835

5 %

5 %

Operating expenses

264,540

5,267

(a)

259,273

238,293

5,975

(a,b)

232,318

11 %

12 %

Operating income

$      295,653

$           9,313

$     304,966

$     293,097

$           9,420

$       302,517

1 %

1 %
















Selected ratios as a percentage of net sales














Gross profit

30.9 %


31.1 %

31.5 %


31.7 %



Operating expenses

14.6 %


14.3 %

14.1 %


13.8 %



Operating income

16.3 %


16.8 %

17.4 %


18.0 %




















Three Months Ended



Nutritionals

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$      135,335

$                 -

$     135,335

$     123,130

$                 -

$       123,130

10 %

10 %

Cost of sales

96,963

3,021

(a)

93,942

85,668

3,000

(a)

82,668

13 %

14 %

Gross profit

38,372

3,021

41,393

37,462

3,000

40,462

2 %

2 %

Operating expenses

24,583

5,289

(a,c)

19,294

25,596

2,789

(a)

22,807

(4)%

(15)%

Operating income

$       13,789

$           8,310

$      22,099

$       11,866

$           5,789

$         17,655

16 %

25 %
















Selected ratios as a percentage of net sales














Gross profit

28.4 %


30.6 %

30.4 %


32.9 %



Operating expenses

18.2 %


14.3 %

20.8 %


18.5 %



Operating income

10.2 %


16.3 %

9.6 %


14.3 %




















Fiscal Year Ended



Nutritionals

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$      501,026

$                 -

$     501,026

$     503,349

$                 -

$       503,349

(0)%

(0)%

Cost of sales

371,292

14,913

(a)

356,379

343,997

11,999

(a)

331,998

8 %

7 %

Gross profit

129,734

14,913

144,647

159,352

11,999

171,351

(19)%

(16)%

Operating expenses

96,711

23,217

(a,d)

73,494

91,312

11,173

(a)

80,139

6 %

(8)%

Operating income

$       33,023

$         38,130

$      71,153

$       68,040

$         23,172

$         91,212

(51)%

(22)%
















Selected ratios as a percentage of net sales














Gross profit

25.9 %


28.9 %

31.7 %


34.0 %



Operating expenses

19.3 %


14.7 %

18.1 %


15.9 %



Operating income

6.6 %


14.2 %

13.5 %


18.1 %




















Three Months Ended



Rx Pharmaceuticals

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$      156,975

$                  -

$     156,975

$       92,467

$                  -

$         92,467

70 %

70 %

Cost of sales

83,019

8,532

(a)

74,487

42,155

2,923

(a)

39,232

97 %

90 %

Gross profit

73,956

8,532

82,488

50,312

2,923

53,235

47 %

55 %

Operating expenses

19,650

750

(e)

18,900

12,039

-

12,039

63 %

57 %

Operating income

$       54,306

$           9,282

$      63,588

$       38,273

$           2,923

$         41,196

42 %

54 %
















Selected ratios as a percentage of net sales














Gross profit

47.1 %


52.5 %

54.4 %


57.6 %



Operating expenses

12.5 %


12.0 %

13.0 %


13.0 %



Operating income

34.6 %


40.5 %

41.4 %


44.6 %



































(a) Deal-related amortization














(b) Restructuring charges of $1,033 related to Florida













(c) Restructuring charges of $1,674 related to Florida













(d) Restructuring charges of $8,755 related to Florida













(e) Net charge related to acquired R&D and proceeds from sale of IPR&D projects











(f) Inventory step-up of $27,179














(g) Proceeds from sale of pipeline development projects of $3,500












(h) Severance costs of $3,755













 

Table II (Continued)

PERRIGO COMPANY

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

(in thousands)

(unaudited)

















Fiscal Year Ended



Rx Pharmaceuticals

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$       617,389

$                 -

$        617,389

$     343,717

$                -

$      343,717

80 %

80 %

Cost of sales

323,115

59,607

(a,f)

263,508

180,345

10,958

(a)

169,387

79 %

56 %

Gross profit

294,274

59,607

353,881

163,372

10,958

174,330

80 %

103 %

Operating expenses

71,076

1,005

(e,g,h)

70,071

43,008

-

43,008

65 %

63 %

Operating income

$       223,198

$        60,612

$        283,810

$     120,364

$       10,958

$      131,322

85 %

116 %
















Selected ratios as a percentage of net sales














Gross profit

47.7 %


57.3 %

47.5 %


50.7 %



Operating expenses

11.5 %


11.3 %

12.5 %


12.5 %



Operating income

36.2 %


46.0 %

35.0 %


38.2 %




















Three Months Ended



API

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$         38,435

$                 -

$          38,435

$       36,817

$                -

$       36,817

4 %

4 %

Cost of sales

12,462

482

(a)

11,980

21,887

976

(a)

20,911

(43)%

(43)%

Gross profit

25,973

482

26,455

14,930

976

15,906

74 %

66 %

Operating expenses

8,002

-

8,002

8,784

-

8,784

(9)%

(9)%

Operating income

$         17,971

$             482

$          18,453

$         6,146

$           976

$         7,122

192 %

159 %
















Selected ratios as a percentage of net sales














Gross profit

67.6 %


68.8 %

40.6 %


43.2 %



Operating expenses

20.8 %


20.8 %

23.9 %


23.9 %



Operating income

46.8 %


48.0 %

16.7 %


19.3 %




















Fiscal Year Ended



API

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$       165,782

$                 -

$        165,782

$     155,717

$                -

$      155,717

6 %

6 %

Cost of sales

78,618

1,989

(a)

76,629

87,317

2,503

(a)

84,814

(10)%

(10)%

Gross profit

87,164

1,989

89,153

68,400

2,503

70,903

27 %

26 %

Operating expenses

31,639

-

31,639

30,581

-

30,581

3 %

3 %

Operating income

$         55,525

$          1,989

$          57,514

$       37,819

$        2,503

$       40,322

47 %

43 %
















Selected ratios as a percentage of net sales














Gross profit

52.6 %


53.8 %

43.9 %


45.5 %



Operating expenses

19.1 %


19.1 %

19.6 %


19.6 %



Operating income

33.5 %


34.7 %

24.3 %


25.9 %




















Three Months Ended



Other

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$         17,040

$                 -

$          17,040

$       18,402

$                -

$       18,402

(7)%

(7)%

Cost of sales

11,527

403

(a)

11,124

12,156

462

(a)

11,694

(5)%

(5)%

Gross profit

5,513

403

5,916

6,246

462

6,708

(12)%

(12)%

Operating expenses

5,348

-

5,348

6,078

-

6,078

(12)%

(12)%

Operating income

$             165

$             403

$              568

$            168

$           462

$            630

(2)%

(10)%
















Selected ratios as a percentage of net sales














Gross profit

32.4 %


34.7 %

33.9 %


36.5 %



Operating expenses

31.4 %


31.4 %

33.0 %


33.0 %



Operating income

1.0 %


3.3 %

0.9 %


3.4 %




















Fiscal Year Ended



Other

June 30, 2012

June 25, 2011

% Change

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

Non-GAAP Adjustments

As Adjusted

GAAP

As Adjusted

Net sales

$         73,264

$                -

$          73,264

$       67,308

$              -

$       67,308

9 %

9 %

Cost of sales

49,031

1,688

(a)

47,343

44,952

1,758

(a)

43,194

9 %

10 %

Gross profit

24,233

1,688

25,921

22,356

1,758

24,114

8 %

7 %

Operating expenses

21,489

-

21,489

21,090

-

21,090

2 %

2 %

Operating income

$           2,744

$          1,688

$            4,432

$         1,266

$        1,758

$         3,024

117 %

47 %
















Selected ratios as a percentage of net sales














Gross profit

33.1 %


35.4 %

33.2 %


35.8 %



Operating expenses

29.3 %


29.3 %

31.3 %


31.3 %



Operating income

3.7 %


6.0 %

1.9 %


4.5 %



































(a) Deal-related amortization














(b) Restructuring charges of $1,033 related to Florida













(c) Restructuring charges of $1,674 related to Florida













(d) Restructuring charges of $8,755 related to Florida













(e) Net charge related to acquired R&D and proceeds from sale of IPR&D projects










(f) Inventory step-up of $27,179














(g) Proceeds from sale of pipeline development projects of $3,500











(h) Severance costs of $3,755













 

Table III

PERRIGO COMPANY

FY 2013 GUIDANCE AND FY 2012 EPS

RECONCILIATION OF NON-GAAP MEASURES

(unaudited)





Fiscal 2013 Guidance

FY13 reported diluted EPS range

$4.77 - $4.97

    Deal-related amortization (1)

0.53

FY13 adjusted diluted EPS range

$5.30 - $5.50








Fiscal 2012*

FY12 reported diluted EPS from continuing operations

$4.18

    Deal-related amortization (1)

0.523

    Charge associated with inventory step-up

0.181

    Charges associated with acquisition-related and severance costs

0.062

    Charges associated with restructuring

0.061

    Net charge associated with acquired R&D and proceeds from sale of IPR&D projects

0.012

    Earnings associated with sale of pipeline development projects

(0.026)

FY12 adjusted diluted EPS from continuing operations

$4.99




(1)  Amortization of acquired intangible assets related to business combinations and asset acquisitions




*All information based on continuing operations.

 

SOURCE Perrigo Company

CONTACT: Arthur J. Shannon, Vice President, Investor Relations and Communication, +1-269-686-1709, ajshannon@perrigo.com, or Bradley Joseph, Senior Manager, Investor Relations and Communication, +1-269-686-3373, bradley.joseph@perrigo.com

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