Press Releases

Perrigo Company plc Reports Record Second Quarter Revenue, Adjusted Net Income And Adjusted Margins

Feb 5, 2015

DUBLIN, Feb. 5, 2015 /PRNewswire/ -- 

  • Fiscal second quarter net sales increased to a second quarter record of $1.07 billion.
  • Excluding the effect of the pre-closing debt and equity issuances related to the previously announced acquisition of Omega Pharma NV ("Omega"), fiscal second quarter adjusted net income increased 32% to a second quarter record of $245 million, with adjusted diluted earnings per share of $1.82.
  • Reported fiscal second quarter GAAP net income of $70 million and GAAP diluted earnings per share of $0.51.
  • Record fiscal second quarter adjusted gross margin of 45.2% (GAAP gross margin of 35.8%) and adjusted operating margin of 29.5% (GAAP operating margin of 17.2%).
  • Record second quarter operating cash flow of $273 million.
  • Excluding the effect of the pre-closing debt and equity issuances related to Omega, management expects full-year fiscal 2015 adjusted earnings range of $7.25 to $7.45 per diluted share, an increase of 13% to 17% over fiscal 2014 adjusted earnings per share, and GAAP earnings of between $3.66 and $3.86 per diluted share.

Perrigo Company plc (NYSE: PRGO; TASE) today announced results for its second quarter ended December 27, 2014.

Perrigo Company

Perrigo's Chairman, President and CEO Joseph C. Papa commented, "The team's financial performance for the quarter was generally in-line with our expectations, highlighted by record second quarter net sales, adjusted net income and adjusted margins. U.S. OTC grew approximately 2%, and we realized new product sales of $54 million, primarily in the Rx segment. Offsetting these positive impacts, we experienced the previously disclosed quarterly decline in CHC contract sales and disappointing sales in the VMS Nutritional and Animal Health categories. Our team remains intensely focused on launching greater than $235 million in new products in fiscal 2015, the majority in the second half of the year, illustrating our continued commitment to make quality healthcare more affordable for consumers around the globe."

Refer to Tables I, II, and III at the end of this press release for a reconciliation of non-GAAP adjustments to the current year and prior year periods and additional non-GAAP information. The Company's reported results are summarized in the attached Consolidated Statements of Operations, Balance Sheets and Cash Flows.

Perrigo Company plc

(in millions, except per share amounts)

(see the attached Table I for reconciliation to GAAP numbers)

(YoY % Change may not calculate due to rounding)







Fiscal 2015

Fiscal 2014




Second
Quarter
Ended

Second
Quarter
Ended

YoY


12/27/2014

12/28/2013

% Change

Net Sales

$1,071.7

$979.0

9%

Reported Net Income (Loss)

$70.2

$(86.0)

NM

Adjusted Net Income

$244.9

$185.3

32%

Reported Diluted EPS

$0.51

$(0.87)

NM

Adjusted Diluted EPS

$1.82

$1.87

-3%

Reported Diluted Shares

136.8

98.7

39%

Adjusted Diluted Shares

134.5

99.2

36%

Second Quarter Results

Net sales in the quarter were $1.07 billion, an increase of 9% over the second quarter of fiscal 2014, primarily attributable to $79 million in incremental sales of Tysabri® from the acquisition of Elan Corporation plc ("Elan") and new product sales of $54 million. This increase was offset partially by lower sales volumes in the contract manufacturing and Animal Health categories within Consumer Healthcare and the VMS and infant foods categories within the Nutritionals segment, as well as a negative foreign exchange impact of $7 million.

Excluding charges as outlined in Table I at the end of this release, second quarter fiscal 2015 adjusted net income increased 32% to $245 million or $1.82 per diluted share versus $1.87 for the same period last year. The earnings for the quarter exclude $0.06 per share of dilution attributable to the pre-closing debt and equity issuances related to the Omega transaction.

Consumer Healthcare

Consumer Healthcare Segment

(in millions)

(see the attached Table II for reconciliation to GAAP numbers)

(YoY % Change may not calculate due to rounding)



Fiscal 2015

Fiscal 2014




Second
Quarter Ended

Second
Quarter Ended

YoY


12/27/2014

12/28/2013

% Change








Net Sales

$529.6

$536.3

-1%

Reported Gross Profit

$168.8

$171.7

-2%

Adjusted Gross Profit

$175.4

$175.1

—%

Reported Operating Income

$74.9

$89.5

-16%

Adjusted Operating Income

$95.7

$93.5

+2%








Reported Gross Margin

31.9%

32.0%

-10 bps

Adjusted Gross Margin

33.1%

32.7%

+40 bps

Reported Operating Margin

14.1%

16.7%

-260 bps

Adjusted Operating Margin

18.1%

17.4%

+70 bps

Consumer Healthcare segment net sales were $530 million, reflecting an increase in sales of existing products of $13 million (primarily in the smoking cessation category) and $13 million related to new product sales and the acquisition of OTC products from Aspen. These combined increases were more than offset by a decline of $30 million in sales of existing products (primarily in the contract manufacturing and Animal Health categories).

Adjusted gross margin grew 40 bps due to greater sales of higher margin products versus last year, while adjusted operating margin was driven by relatively lower promotional expenses versus last year.

Nutritionals

Nutritionals Segment

(in millions)

(see the attached Table II for reconciliation to GAAP numbers)

(YoY % Change may not calculate due to rounding)



Fiscal 2015

Fiscal 2014




Second
Quarter Ended

Second
Quarter Ended

YoY


12/27/2014

12/28/2013

% Change








Net Sales

$130.6

$139.7

-7%

Reported Gross Profit

$31.8

$38.7

-18%

Adjusted Gross Profit

$34.9

$41.8

-17%

Reported Operating Income

$7.2

$13.3

-46%

Adjusted Operating Income

$14.4

$20.7

-31%








Reported Gross Margin

24.4%

27.7%

-330 bps

Adjusted Gross Margin

26.7%

29.9%

-320 bps

Reported Operating Margin

5.5%

9.6%

-410 bps

Adjusted Operating Margin

11.0%

14.8%

-380 bps

The Nutritionals segment reported second quarter net sales of $131 million as new product sales of $12 million were more than offset by $12 million in lower year-over-year sales primarily in the VMS and infant food categories and $8 million in discontinued products. Increased competition in the VMS category and retailer promotion in the infant food categories were the primary drivers in the quarter.

Second quarter gross margin contracted due to competition in the market place in the VMS category and an isolated $3 million inventory loss, which the Company expects to recover in a future period through an insurance claim.

Rx Pharmaceuticals

Rx Pharmaceuticals Segment

(in millions)

(see the attached Table II for reconciliation to GAAP numbers)

(YoY % Change may not calculate due to rounding)



Fiscal 2015

Fiscal 2014




Second
Quarter Ended

Second
Quarter Ended

YoY


12/27/2014

12/28/2013

% Change








Net Sales

$276.6

$246.6

+12%

Reported Gross Profit

$149.5

$128.8

+16%

Adjusted Gross Profit

$167.3

$150.2

+11%

Reported Operating Income

$109.7

$100.4

+9%

Adjusted Operating Income

$127.7

$123.1

+4%








Reported Gross Margin

54.0%

52.2%

+180 bps

Adjusted Gross Margin

60.5%

60.9%

-40 bps

Reported Operating Margin

39.6%

40.7%

-110 bps

Adjusted Operating Margin

46.2%

49.9%

-370 bps

The Rx Pharmaceuticals segment reported second quarter net sales of $277 million due to new product sales of $33 million and increased volumes, partially offset by discontinued products of $14 million.

Adjusted operating margin was impacted by higher investments in both clinical R&D and in growing the specialty pharmaceuticals sales force.

API

API Segment

(in millions)

(see the attached Table II for reconciliation to GAAP numbers)

(YoY % Change may not calculate due to rounding)



Fiscal 2015

Fiscal 2014




Second
Quarter Ended

Second
Quarter Ended

YoY


12/27/2014

12/28/2013

% Change








Net Sales

$30.0

$30.0

—%

Reported Gross Profit

$13.2

$16.5

-20%

Adjusted Gross Profit

$13.7

$17.1

-20%

Reported Operating Income

$7.4

$8.2

-10%

Adjusted Operating Income

$7.9

$8.7

-9%








Reported Gross Margin

43.9%

55.2%

-1,130 bps

Adjusted Gross Margin

45.5%

56.9%

-1,140 bps

Reported Operating Margin

24.7%

27.4%

-270 bps

Adjusted Operating Margin

26.3%

29.1%

-280 bps

The API segment's second quarter net sales were flat versus last year due to a slight increase in sales of existing products offset by unfavorable changes in foreign currency exchange rates.

Gross margin was impacted primarily by the expiration of U.S. exclusivity on the generic version of temozolomide while operating margin flow-through benefited from lower selling, general and administration costs.

Specialty Sciences

Specialty Sciences Segment

(in millions)

(see the attached Table II for reconciliation to GAAP numbers)



Fiscal 2015

Fiscal 2014




Second
Quarter Ended

Second
Quarter Ended

YoY


12/27/2014

12/28/2013

% Change








Net Sales

$86.6

$7.4

+1,070%

Reported Gross Profit

$14.1

$(1.3)

NM

Adjusted Gross Profit

$86.6

$7.4

+1,070%

Reported Operating Income

$9.5

$(19.0)

NM

Adjusted Operating Income

$82.8

$4.3

+1,826%








Reported Gross Margin

16.3%

(17.1)%

NM

Adjusted Gross Margin

100.0%

100.0%

 bps

Reported Operating Margin

11.0%

(256.2)%

NM

Adjusted Operating Margin

95.6%

57.6%

+3,800 bps








During the second quarter, the Company recognized $87 million of royalty revenue related to Biogen Idec's global sales of its Multiple Sclerosis drug Tysabri®.  The increase is due to the timing of the closing of the Elan acquisition on December 18, 2013 as well as the higher current royalty rate of 18% versus 12% last year.

Closing

Excluding the charges outlined in Table III (which includes all impacts related to the Omega acquisition), the Company expects fiscal 2015 adjusted earnings to be between $7.25 and $7.45 per diluted share as compared to $6.39 in fiscal 2014. This range implies a year-over-year growth rate in adjusted earnings per diluted share of 13% to 17% over fiscal 2014. The Company also expects fiscal 2015 reported earnings to be between $3.66 and $3.86 per diluted share as compared to $1.77 in fiscal 2014. A reconciliation to GAAP measures is attached in Table III.

The following factors are not reflected in the guidance range above:

  • Debt and equity financing costs and additional shares issued related to the Omega financings of $0.44 per diluted share.
  • Omega operating results for the remaining forecast period, shares to be issued to complete the acquisition, and transaction related costs.

The conference call will be begin at 9:00 a.m. (ET) live via webcast to interested parties in the investor relations section of the Perrigo website at http://perrigo.investorroom.com/events-webcasts or by phone at 877-248-9413, International 973-582-2737, and reference ID#66179145. A taped replay of the call will be available beginning at approximately 1:00 p.m. (ET) Thursday, February 5, 2015 until midnight Friday, February 20, 2015. To listen to the replay, dial 855-859-2056, International 404-537-3406, and use access code 66179145.

From its beginnings as a packager of generic home remedies in 1887, Perrigo Company plc, headquartered in Ireland, has grown to become a leading global healthcare supplier. Perrigo develops, manufactures and distributes over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, nutritional products and active pharmaceutical ingredients (API), and has a specialty sciences business comprised of assets focused on the treatment of Multiple Sclerosis. The Company is the world's largest manufacturer of OTC healthcare products for the store brand market and an industry leader in pharmaceutical technologies. Perrigo's mission is to offer uncompromised "Quality Affordable Healthcare Products®," and it does so across a wide variety of product categories primarily in the United States, United Kingdom, Mexico, Israel and Australia, as well as more than 40 other key markets worldwide, including Canada, China and Latin America. Visit Perrigo on the Internet (http://www.perrigo.com).

Note: Certain statements in this report 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 particular, statements about the Company's expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this report, including certain statements contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations" are 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 the negative of those terms or other comparable terminology.

Please see the Company's documents filed with the Securities and Exchange Commission, including the Company's annual reports filed on Form 10-K,  quarterly reports on Form 10-Q, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this document. 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 may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements 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 PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)



Three Months Ended


Six Months Ended


December 27,
2014


December 28,
2013


December 27,
2014


December 28,
2013

Net sales

$

1,071.7



$

979.0



$

2,023.1



$

1,912.4


Cost of sales

687.9



618.3



1,317.6



1,195.4


Gross profit

383.8



360.7



705.5



717.0














Operating expenses












Distribution

14.8



14.0



29.2



27.2


Research and development

53.2



37.5



89.8



69.8


Selling

44.9



47.3



95.3



97.6


Administration

84.1



154.4



165.5



233.2


Write-off of in-process research and
development



6.0





6.0


Restructuring

2.4



14.9



4.2



17.0


Total operating expenses

199.4



274.1



384.0



450.8














Operating income

184.4



86.6



321.5



266.2














Interest expense, net

30.8



29.7



56.7



51.1


Other expense, net

59.3



4.1



61.9



5.1


Loss on extinguishment of debt

9.6



165.8



9.6



165.8


Income (loss) before income taxes

84.7



(113.0)



193.3



44.2


Income tax expense (benefit)

14.5



(27.0)



26.8



18.9


Net income (loss)

$

70.2



$

(86.0)



$

166.5



$

25.3














Earnings (loss) per share












Basic earnings (loss) per share

$

0.52



$

(0.87)



$

1.23



$

0.26


Diluted earnings (loss) per share

$

0.51



$

(0.87)



$

1.23



$

0.26














Weighted average shares outstanding












Basic

136.3



98.7



135.1



96.4


Diluted

136.8



98.7



135.6



96.9














Dividends declared per share

$

0.105



$

0.09



$

0.21



$

0.18


 

 

PERRIGO COMPANY PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)



Three Months Ended


Six Months Ended


December 27,
2014


December 28,
2013


December 27,
 2014


December 28,
 2013

Net income (loss)

$

70.2



$

(86.0)



$

166.5



$

25.3


Other comprehensive income (loss):












Foreign currency translation
adjustments

(60.4)



16.5



(124.2)



53.1


Change in fair value of derivative
financial instruments

(3.7)



(1.4)



(5.8)



(10.6)


Change in fair value of investment
securities

(1.1)



(4.8)



(0.5)



(4.8)


Change in post-retirement and pension
liability adjustments

(1.7)





(1.7)



(0.1)


Other comprehensive income (loss)

(66.9)



10.3



(132.2)



37.6


Comprehensive income (loss)

$

3.3



$

(75.7)



$

34.3



$

62.9


 

 

PERRIGO COMPANY PLC

CONSOLIDATED BALANCE SHEETS

(in millions)



December 27,
2014


June 28,
2014

Assets






Current assets






Cash and cash equivalents

$

3,596.1



$

799.5


Investment securities

20.0



5.9


Accounts receivable, net of allowance for doubtful accounts of $3.3 million and $2.7 million, respectively

924.7



935.1


Inventories

641.8



631.6


Current deferred income taxes

66.6



62.8


Prepaid expenses and other current assets

115.0



116.0


Total current assets

5,364.2



2,550.9


Non-current assets






Property and equipment, net

756.8



779.9


Goodwill and other indefinite-lived intangible assets

3,481.3



3,543.8


Other intangible assets, net

6,637.2



6,787.0


Non-current deferred income taxes

29.4



23.6


Other non-current assets

191.8



195.0


Total non-current assets

11,096.5



11,329.3


Total assets

$

16,460.7



$

13,880.2


Liabilities and Shareholders' Equity






Current liabilities






Accounts payable

$

302.7



$

364.3


Short-term debt



2.1


Payroll and related taxes

85.7



112.3


Accrued customer programs

310.3



256.5


Accrued liabilities

230.1



179.4


Accrued income taxes

29.4



17.4


Current deferred income taxes

4.5



1.1


Current portion of long-term debt

362.3



141.6


Total current liabilities

1,325.0



1,074.7


Non-current liabilities






Long-term debt, less current portion

4,439.4



3,090.5


Non-current deferred income taxes

690.0



727.9


Other non-current liabilities

291.1



293.4


Total non-current liabilities

5,420.5



4,111.8


Total liabilities

6,745.5



5,186.5


Commitments and contingencies






Shareholders' equity






Controlling interest:






Preferred shares, $0.0001 par value, 10 million shares authorized




Ordinary shares, €0.001 par value, 10 billion shares authorized

7,695.2



6,678.2


Accumulated other comprehensive income

7.4



139.6


Retained earnings

2,012.6



1,875.1



9,715.2



8,692.9


Noncontrolling interest



0.8


Total shareholders' equity

9,715.2



8,693.7


Total liabilities and shareholders' equity

$

16,460.7



$

13,880.2








Supplemental Disclosures of Balance Sheet Information






Preferred shares, issued and outstanding




Ordinary shares, issued and outstanding

140.8



133.8


 

 

PERRIGO COMPANY PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)



Six Months Ended


December 27,
2014


December 28,
2013

Cash Flows From (For) Operating Activities






Net income (loss)

$

166.5



$

25.3


Adjustments to derive cash flows






Depreciation and amortization

253.7



110.4


Loss on acquisition-related foreign currency derivatives

26.4




Share-based compensation

16.2



13.6


Loss on extinguishment of debt

9.6



165.8


Non-cash restructuring charges

4.2



14.3


Excess tax benefit of stock transactions

(3.8)



(6.9)


Deferred income taxes

(38.2)



(5.4)


Other non-cash adjustments

8.6



6.3


Subtotal

443.2



323.4


Increase (decrease) in cash due to:






Accounts receivable

(4.5)



(65.1)


Inventories

(17.7)



10.5


Accounts payable

(46.8)



(70.8)


Payroll and related taxes

(26.3)



13.7


Accrued customer programs

51.8



72.8


Accrued liabilities

52.0



2.0


Accrued income taxes

32.4



(50.4)


Other

(16.4)



(15.8)


Subtotal

24.5



(103.1)


Net cash from (for) operating activities

467.7



220.3


Cash Flows From (For) Investing Activities






Acquisitions of businesses, net of cash acquired

(83.0)



(1,527.9)


Additions to property and equipment

(48.0)



(77.8)


Settlement of acquisition-related foreign currency derivatives

(26.4)




Other investing

0.8



6.2


Net cash from (for) investing activities

(156.6)



(1,599.5)


Cash Flows From (For) Financing Activities






Issuances of debt

2,504.5



3,293.6


Payments on long-term debt

(934.5)



(1,965.0)


Deferred financing fees

(24.8)



(48.8)


Premium on early debt retirement



(133.5)


Issuance of ordinary shares

1,039.4



6.7


Equity issuance costs

(35.7)




Excess tax benefit of stock transactions

3.8



6.9


Repurchase of ordinary shares

(7.7)



(7.3)


Cash dividends

(29.0)



(18.0)


Purchase of noncontrolling interest



(7.2)


Other financing

(7.0)



(5.0)


Net cash from (for) financing activities

2,509.0



1,122.4


Effect of exchange rate changes on cash

(23.5)



(2.0)


Net increase (decrease) in cash and cash equivalents

2,796.6



(258.8)


Cash and cash equivalents, beginning of period

799.5



779.9


Cash and cash equivalents, end of period

$

3,596.1



$

521.1








Supplemental Disclosures of Cash Flow Information






Cash paid/received during the period for:






Interest paid

$

56.9



$

49.1


Interest received

$

0.4



$

1.6


Income taxes paid

$

20.8



$

73.9


Income taxes refunded

$

7.5



$

3.6


 

 


 

Table I

PERRIGO COMPANY PLC

RECONCILIATION OF NON-GAAP MEASURES

(in millions, except per share amounts)

(unaudited)


























Three Months Ended







Consolidated

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

1,071.7



$



$

1,071.7



$

979.0



$



$

979.0



9

%


9

%

Cost of sales

687.9



100.8


(a)

587.1



618.3



37.5


(a)

580.8



11

%


1

%

Gross profit

383.8



100.8



484.6



360.7



37.5



398.2



6

%


22

%

























Operating expenses
























Distribution

14.8





14.8



14.0





14.0



6

%


6

%

Research and development

53.2



10.0


(c)

43.2



37.5





37.5



42

%


15

%

Selling

44.9



5.5


(a)

39.4



47.3



5.5


(a)

41.8



-5

%


-6

%

Administration

84.1



13.6


(a,b,d)

70.5



154.4



87.3


(a,l,m)

67.1



-46

%


5

%

Write-off of in-process research and development







6.0



6.0


(n)



-100

%


%

Restructuring

2.4



2.4


(b)



14.9



14.9


(b)



-84

%


NM

Total operating expenses

199.4



31.5



167.9



274.1



113.8



160.4



-27

%


5

%

























Operating income

184.4



132.3



316.7



86.6



151.3



237.9



113

%


33

%

Interest expense, net

30.8



5.0


(e)

25.8



29.7



9.0


(o)

20.7



4

%


25

%

Other expense, net

59.3



56.4


(f,g,h)

2.9



4.1



1.8


(o)

2.3



NM


26

%

Loss on extinguishment of debt

9.6



9.6


(i)



165.8



165.8


(o)



-94

%


%

Income (loss) before income taxes

84.7



203.3



288.0



(113.0)



327.8



214.8



-175

%


34

%

Income tax expense (benefit)

14.5



28.6


(j)

43.1



(27.0)



56.5


(j)

29.5



-154

%


46

%

Net income (loss)

$

70.2



$

174.7



$

244.9



$

(86.0)



$

271.3



$

185.3



-182

%


32

%

























Diluted earnings (loss) per share

$

0.51






$

1.82



$

(0.87)






$

1.87



-159

%


-3

%

























Diluted weighted average shares outstanding

136.8



(2.3)


(k)

134.5



98.7






99.2



39

%


36

%

























Selected ratios as a percentage of net sales**






















         Gross profit

35.8

%





45.2

%


36.8

%





40.7

%







         Operating expenses

18.6

%





15.7

%


28.0

%





16.4

%







         Operating income

17.2

%





29.5

%


8.8

%





24.3

%































Table I continued

PERRIGO COMPANY PLC

RECONCILIATION OF NON-GAAP MEASURES

(in millions, except per share amounts)

(unaudited)


























Six Months Ended



Consolidated

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

2,023.1



$



$

2,023.1



$

1,912.4



$



$

1,912.4



6

%


6

%

Cost of sales

1,317.6



201.4


(a)

1,116.2



1,195.4



61.0


(a)

1,134.5



10

%


-2

%

Gross profit

705.5



201.4



906.9



717.0



61.0



777.9



-2

%


17

%

























Operating expenses
























Distribution

29.2





29.2



27.2





27.2



7

%


7

%

Research and development

89.8



10.0


(c)

79.8



69.8





69.8



29

%


14

%

Selling

95.3



11.0


(a)

84.3



97.6



11.0


(a)

86.6



-2

%


-2

%

Administration

165.5



15.9


(a,b,d)

149.6



233.2



102.8


(a,m,q,r)

130.4



-29

%


15

%

Write-off of in-process research and development







6.0



6.0


(n)



-100

%


%

Restructuring

4.2



4.2


(b)



17.0



17.0


(b)



-76

%


%

Total operating expenses

384.0



41.1



342.9



450.8



136.8



314.0



-15

%


9

%

























Operating income

321.5



242.5



564.0



266.2



197.8



464.0



21

%


22

%

Interest expense, net

56.7



5.0


(e)

51.7



51.1



10.0


(o)

41.1



11

%


26

%

Other expense, net

61.9



58.4


(f,h,p)

3.5



5.1



3.5


(o)

1.6



NM


119

%

Loss on extinguishment of debt

9.6



9.6


(i)



165.8



165.8


(o)



-94

%


%

Income (loss) before income taxes

193.3



315.5



508.8



44.2



377.1



421.3



NM


21

%

Income tax expense (benefit)

26.8



49.5


(j)

76.3



18.9



73.3


(j)

92.1



42

%


-17

%

Net income (loss)

$

166.5



$

266.0



$

432.5



$

25.3



$

303.8



$

329.1



NM


31

%

























Diluted earnings per share

$

1.23






$

3.22



$

0.26






$

3.40



NM


-5

%

























Diluted weighted average shares outstanding

135.6



(1.2)


(k)

134.4



96.9






96.9
































Selected ratios as a percentage of net sales**






















         Gross profit

34.9

%





44.8

%


37.5

%





40.7

%







         Operating expenses

19.0

%





17.0

%


23.6

%





16.4

%







         Operating income

15.9

%





27.9

%


13.9

%





24.3

%







 

Table I continued

PERRIGO COMPANY PLC

RECONCILIATION OF NON-GAAP MEASURES














* Amounts may not sum or cross-foot due to rounding













**Ratios as a % to net sales may not calculate due to rounding











NM - Calculations are not meaningful










(a) Amortization expense









(b) Restructuring and other integration-related charges



(c) R&D payment of $10.0 million made in connection with collaborative arrangement



(d) Omega transaction expenses totaling $11.6 million



(e) Omega financing fees



(f) Loss on derivatives associated with the pending Omega acquisition totaling $64.7 million



(g) Elan equity method investment losses totaling $3.0 million



(h) Income of $12.5 million from transfer of a rights agreement



(i) Bridge fees and extinguishment of debt in connection with Omega financing



(j) Tax effect of non-GAAP adjustments



(k) Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the pending Omega acquisition



(l) Elan acquisition and integration-related charges of $93.7 million offset partially by a $4.9 million write-off of contingent consideration related to the Fera acquisition



(m) Favorable escrow settlement of $2.5 million related to Sergeant's



(n) Write-offs of IPR&D related to Paddock and Rosemont



(o) Elan transaction costs and extinguishment of debt



(p) Elan equity method investment losses totaling $6.2 million, offset partially by a $1.1 million investment distribution



(q) Elan acquisition and integration-related charges of $98.7 million offset partially by a $4.9 million write-off of contingent consideration related to the Fera acquisition



(r) Litigation settlement of $2.5 million



 

 

Table II

PERRIGO COMPANY PLC

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

(in millions)

(unaudited)










Three Months Ended







Consumer Healthcare

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

529.6



$



$

529.6



$

536.3



$



$

536.3



-1

%


-1

%

Cost of sales

360.8



6.6


(a)

354.2



364.6



3.4


(a)

361.2



-1

%


-2

%

Gross profit

168.8



6.6



175.4



171.7



3.4



175.1



-2

%


%

Operating expenses

93.9



14.2


(a,b,c)

79.7



82.2



0.6


(a,b,d)

81.6



14

%


-2

%

Operating income

$

74.9



$

20.8



$

95.7



$

89.5



$

4.0



$

93.5



-16

%


2

%

























Selected ratios as a percentage of net sales**
























         Gross profit

31.9

%





33.1

%


32.0

%





32.7

%







         Operating expenses

17.7

%





15.1

%


15.3

%





15.2

%







         Operating income

14.1

%





18.1

%


16.7

%





17.4

%
































Six Months Ended







Consumer Healthcare

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

1,022.9



$



$

1,022.9



$

1,074.8



$



$

1,074.8



-5

%


-5

%

Cost of sales

701.3



13.6


(a)

687.7



726.1



6.8


(a)

719.3



-3

%


-4

%

Gross profit

321.6



13.6



335.2



348.7



6.8



355.5



-8

%


-6

%

Operating expenses

181.4



18.2


(a,b,c)

163.2



169.2



3.3


(a,b,d)

165.9



7

%


-2

%

Operating income

$

140.2



$

31.8



$

172.0



$

179.5



$

10.0



$

189.5



-22

%


-9

%

























Selected ratios as a percentage of net sales**
























         Gross profit

31.4

%





32.8

%


32.4

%





33.1

%







         Operating expenses

17.7

%





16.0

%


15.7

%





15.4

%







         Operating income

13.7

%





16.8

%


16.7

%





17.6

%























































Table II continued

PERRIGO COMPANY PLC

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

(in millions)

(unaudited)










Three Months Ended







Nutritionals

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

130.6



$



$

130.6



$

139.7



$



$

139.7



-7

%


-7

%

Cost of sales

98.7



3.1


(a)

95.6



101.0



3.1


(a)

97.9



-2

%


-2

%

Gross profit

31.8



3.1



34.9



38.7



3.1



41.8



-18

%


-17

%

Operating expenses

24.7



4.1


(a)

20.6



25.4



4.3


(a)

21.1



-3

%


-3

%

Operating income

$

7.2



$

7.2



$

14.4



$

13.3



$

7.3



$

20.7



-46

%


-31

%

























Selected ratios as a percentage of net sales**
























         Gross profit

24.4

%





26.7

%


27.7

%





29.9

%







         Operating expenses

18.9

%





15.7

%


18.2

%





15.1

%







         Operating income

5.5

%





11.0

%


9.6

%





14.8

%
































Six Months Ended







Nutritionals

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

255.8



$



$

255.8



$

268.7



$



$

268.7



-5

%


-5

%

Cost of sales

190.5



6.2


(a)

184.3



199.2



6.1


(a)

193.0



-4

%


-5

%

Gross profit

65.3



6.2



71.5



69.6



6.1



75.7



-6

%


-6

%

Operating expenses

49.6



8.3


(a)

41.3



48.5



8.6


(a)

40.0



2

%


3

%

Operating income

$

15.7



$

14.5



$

30.2



$

21.0



$

14.7



$

35.8



-25

%


-15

%

























Selected ratios as a percentage of net sales**
























         Gross profit

25.5

%





27.9

%


25.9

%





28.2

%







         Operating expenses

19.4

%





16.1

%


18.1

%





14.9

%







         Operating income

6.1

%





11.8

%


7.8

%





13.3

%







 

Table II continued

PERRIGO COMPANY PLC

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

(in millions)

(unaudited)










Three Months Ended







Rx Pharmaceuticals

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

276.6



$



$

276.6



$

246.6



$



$

246.6



12

%


12

%

Cost of sales

127.1



17.8


(a)

109.3



117.8



21.4


(a)

96.4



8

%


13

%

Gross profit

149.5



17.8



167.3



128.8



21.4



150.2



16

%


11

%

Operating expenses

39.8



0.2


(a)

39.6



28.4



1.3


(a,b,e,f)

27.1



40

%


46

%

Operating income

$

109.7



$

18.0



$

127.7



$

100.4



$

22.7



$

123.1



9

%


4

%

























Selected ratios as a percentage of net sales**
























         Gross profit

54.0

%





60.5

%


52.2

%





60.9

%







         Operating expenses

14.4

%





14.3

%


11.5

%





11.0

%







         Operating income

39.6

%





46.2

%


40.7

%





49.9

%
































Six Months Ended







Rx Pharmaceuticals

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

471.2



$



$

471.2



$

450.2



$



$

450.2



5

%


5

%

Cost of sales

225.3



34.8


(a)

190.5



208.9



37.4


(a)

171.5



8

%


11

%

Gross profit

245.9



34.8



280.7



241.3



37.4



278.8



2

%


1

%

Operating expenses

71.5



0.4


(a)

71.1



57.8



5.3


(a,b,e,f,g)

52.5



24

%


35

%

Operating income

$

174.4



$

35.2



$

209.6



$

183.5



$

42.7



$

226.2



-5

%


-7

%

























Selected ratios as a percentage of net sales**
























         Gross profit

52.2

%





59.6

%


53.6

%





61.9

%







         Operating expenses

15.2

%





15.1

%


12.8

%





11.7

%







         Operating income

37.0

%





44.5

%


40.8

%





50.2

%








Table II continued

PERRIGO COMPANY PLC

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

(in millions)

(unaudited)






Three Months Ended



API

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

30.0



$



$

30.0



$

30.0



$



$

30.0



%


%

Cost of sales

16.8



0.5


(a)

16.3



13.5



0.5


(a)

12.9



25

%


26

%

Gross profit

13.2



0.5



13.7



16.5



0.5



17.1



-20

%


-20

%

Operating expenses

5.8





5.8



8.3





8.3



31

%


31

%

Operating income

$

7.4



$

0.5



$

7.9



$

8.2



$

0.5



$

8.7



-10

%


-9

%

























Selected ratios as a percentage of net sales**
























         Gross profit

43.9

%





45.5

%


55.2

%





56.9

%







         Operating expenses

19.2

%





19.2

%


27.8

%





27.8

%







         Operating income

24.7

%





26.3

%


27.4

%





29.1

%
































Six Months Ended







API

December 27, 2014


December 28, 2013


% Change


GAAP


Non-GAAP Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted

Net sales

$

54.8



$



$

54.8



$

73.2



$



$

73.2



-25

%


-25

%

Cost of sales

28.6



1.0


(a)

27.6



26.8



1.0


(a)

25.7



7

%


7

%

Gross profit

26.2



1.0



27.2



46.4



1.0



47.4



-44

%


-43

%

Operating expenses

11.8





11.8



15.7





15.7



-26

%


-26

%

Operating income

$

14.4



$

1.0



$

15.4



$

30.6



$

1.0



$

31.7



-53

%


-51

%

























Selected ratios as a percentage of net sales**
























         Gross profit

47.7

%





49.6

%


63.4

%





64.8

%







         Operating expenses

21.3

%





21.3

%


21.5

%





21.5

%







         Operating income

26.4

%





28.2

%


41.9

%





43.3

%







 

Table II continued


PERRIGO COMPANY PLC


REPORTABLE SEGMENTS


RECONCILIATION OF NON-GAAP MEASURES


(in millions)


(unaudited)




























Three Months Ended








Specialty Sciences

December 27, 2014


December 28, 2013 (1)


% Change



GAAP


Non-GAAP
Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted


Net sales

$

86.6



$



$

86.6



$

7.4



$



$

7.4



NM


NM


Cost of sales

72.5



72.5


(a)



8.7



8.7


(a)



NM


NM


Gross profit

14.1



72.5



86.6



(1.3)



8.7



7.4



NM


NM


Operating expenses

4.6



0.8


(a,b)

3.8



17.7



14.6


(a,b)

3.1



-74

%


21

%


Operating income (loss)

$

9.5



$

73.3



$

82.8



$

(19.0)



$

23.3



$

4.3



-150

%


NM



























Selected ratios as a percentage of net sales**

























         Gross profit

16.3%





100.0%



(17.1)%





100.0%









         Operating expenses

5.3%





4.4%


239.1%





42.4%








         Operating income (loss)

11.0%





95.6%


(256.2)%





57.6%


































Six Month Ended








Specialty Sciences

December 27, 2014


December 28, 2013 (1)


% Change



GAAP


Non-GAAP
Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted


Net sales

$

178.4



$



$

178.4



$

7.4



$



$

7.4



NM


NM


Cost of sales

145.0



145.0


(a)



8.7



8.7


(a)



NM


NM


Gross profit

33.4



145.0



178.4



(1.3)



8.7



7.4



NM


NM


Operating expenses

9.0



1.2


(a,b)

7.8



17.7



14.6


(a,b)

3.1



-49

%


151

%


Operating income (loss)

$

24.4



$

146.2



$

170.6



$

(19.0)



$

23.3



$

4.3



NM


NM



























Selected ratios as a percentage of net sales**

























         Gross profit

18.7%





100.0%



(17.1)%





100.0%









         Operating expenses

5.1%





4.4%


239.1%





42.4%








         Operating income (loss)

13.7%





95.6%


(256.2)%





57.6%

































Table II continued


PERRIGO COMPANY PLC


REPORTABLE SEGMENTS


RECONCILIATION OF NON-GAAP MEASURES


(in millions)


(unaudited)




























Three Months Ended








Other

December 27, 2014


December 28, 2013


% Change



GAAP


Non-GAAP
Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted


Net sales

$

18.3



$



$

18.3



$

19.0



$



$

19.0



-3

%


-3

%


Cost of sales

11.9



0.4


(a)

11.5



12.9



0.4


(a)

12.4



-7

%


-7

%


Gross profit

6.4



0.4



6.8



6.1



0.4



6.6



5

%


3

%


Operating expenses

5.3





5.3



5.5





5.5



-5

%


-5

%


Operating income

$

1.1



$

0.4



$

1.5



$

0.6



$

0.4



$

1.1



91

%


45

%



























Selected ratios as a percentage of net sales**

























         Gross profit

35.1

%





37.1

%


32.3

%





34.6

%








         Operating expenses

28.7

%





28.7

%


29.1

%





29.1

%








         Operating income

6.4

%





8.4

%


3.2

%





5.6

%


































Six Months Ended








Other

December 27, 2014


December 28, 2013


% Change



GAAP


Non-GAAP
Adjustments


As Adjusted


GAAP*


Non-GAAP Adjustments*


As Adjusted*


GAAP


As Adjusted


Net sales

$

40.0



$



$

40.0



$

38.1



$



$

38.1



5

%


5

%


Cost of sales

26.9



0.8


(a)

26.1



25.8



0.9


(a)

24.9



4

%


5

%


Gross profit

13.1



0.8



13.9



12.3



0.9



13.2



7

%


5

%


Operating expenses

11.1





11.1



10.5





10.5



5

%


5

%


Operating income

$

2.0



$

0.8



$

2.8



$

1.8



$

0.9



$

2.7



14

%


4

%



























Selected ratios as a percentage of net sales**

























         Gross profit

32.8

%





34.8

%


32.3

%





34.7

%








         Operating expenses

27.7

%





27.7

%


27.6

%





27.6

%








         Operating income

5.1

%





7.0

%


4.7

%





7.0

%








Table II continued

PERRIGO COMPANY PLC

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

















* Amounts may not sum or cross-foot due to rounding













**Ratios as a % to net sales may not calculate due to rounding











NM - Calculations are not meaningful

(1) Only includes activity from December 18, 2013 to December 28, 2013
















(a) Amortization expense









(b) Restructuring and other integration-related charges



(c) R&D payment of $10.0 million made in connection with collaborative arrangement



(d) Favorable escrow settlement of $2.5 million related to Sergeant's



(e) Write-offs of IPR&D related to Paddock and Rosemont



(f) Favorable write-off of $4.9 million of contingent consideration related to the Fera acquisition



(g) Litigation settlement of $2.5 million




























































 

Table III

PERRIGO COMPANY PLC

FY 2015 GUIDANCE AND FY 2014 EPS

RECONCILIATION OF NON-GAAP MEASURES

(in millions except for per share amounts)

(unaudited)






Full Year



Fiscal 2015 Guidance (1)


FY15 reported diluted EPS range

$3.66 - $3.86


Acquisition-related amortization (2)

2.48


Acquisition-related costs

0.64


Incremental interest expense (3)

0.23


Share dilution (4)

0.21


R&D payment made in connection with collaborative arrangement

0.06


Losses on Elan equity method investments

0.04


Restructuring and impairments

0.03


Investment distribution

(0.01)


Transfer of rights agreement

(0.09)


FY15 adjusted diluted EPS range

$7.25 - $7.45





FY15 net income - reported

$504.1 - $531.1


Acquisition-related amortization (2)

343.5


Acquisition-related costs

88.7


Incremental interest expense (3)

37.0


R&D payment made in connection with collaborative arrangement

8.7


Losses on equity method investments

6.2


Restructuring and impairments

3.9


Investment distribution

(0.9)


Transfer of rights agreement

(12.5)


FY15 net income - adjusted

$978.7 - $1,005.7





FY14 adjusted net income

$739.5





% change

32% - 36%








Table III continued

PERRIGO COMPANY PLC

FY 2015 GUIDANCE AND FY 2014 EPS

RECONCILIATION OF NON-GAAP MEASURES

(unaudited)






Full Year Fiscal 2014


FY14 reported diluted EPS

$1.77


Acquisition-related costs

2.06


Acquisition-related amortization (2)

1.93


Restructuring and impairments

0.34


Charges associated with litigation settlements

0.11


Losses on sales of investments

0.09


Losses on Elan equity method investments

0.06


Charges associated with write-offs of in-process R&D

0.03


Charge associated with contingent consideration adjustment

0.01


Earnings associated with escrow settlement

(0.01)


FY14 adjusted diluted EPS

$6.39





(1) Guidance excludes Omega operating results for the remaining forecast period, shares to be issued to complete the acquisition, and future transaction-related costs.


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


(3) Effect of incremental interest expense from $1.6 billion of senior notes issued on December 2, 2014 to finance the pending Omega acquisition.


(4) Weighted average impact of 6.8 million shares issued on November 26, 2014 to finance the pending Omega acquisition.

 

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/perrigo-company-plc-reports-record-second-quarter-revenue-adjusted-net-income-and-adjusted-margins-300031443.html

SOURCE Perrigo Company plc

For further information: Arthur J. Shannon, Vice President, Investor Relations and Global Communications, (269) 686-1709, E-mail: ajshannon@perrigo.com or Bradley Joseph, Director, Investor Relations and Global Communications, (269) 686-3373, E-mail: bradley.joseph@perrigo.com


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