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Perrigo Reports Record Sales, Earnings and Cash Flow From Operations for Fiscal 2009
Date:8/18/2009

ALLEGAN, Mich., Aug. 18 /PRNewswire-FirstCall/ -- Perrigo Company (Nasdaq: PRGO; TASE) today announced results for its fourth quarter and full year ended June 27, 2009.

Perrigo's Chairman and CEO Joseph C. Papa commented, "Our sales topped $2 billion for the first time in our history. For the third straight year, we delivered year-over-year record sales and for the second straight year, we translated our top line growth to record earnings and cash flow from operations. In the fourth quarter alone we generated $157 million in operating cash flow. Our team is executing well -- growing market share, managing our supply chain, improving customer service levels, investing in quality and delivering strong returns. By bringing innovative new products to market today and continuing to invest in research and development for future launches, we continue to make quality healthcare more affordable at a time when consumers need to save money more than ever."

Papa continued, "We are also very pleased to announce the next phase in the evolution of our API business. In an effort to strengthen our position in an important and strategic segment of our business, on August 6, 2009, we acquired an 85% stake in a state-of-the-art API manufacturing facility outside of Mumbai, India for $12 million. By the middle of fiscal 2011, we expect this new facility to be on-line and to begin production of certain API products manufactured today in Germany and Israel. We also expect this facility to manufacture certain specialty APIs, as well as allow for the vertical integration of Rx and future candidate Rx-to-OTC switch products. This transition to India will enable us to leverage the capacity created in Israel for other specialty API products. We are also exiting our German manufacturing facility by the first quarter of 2011. This transformation will position Perrigo to be more competitive in the medium and long-term and allow for further growth opportunities."

In connection with the closure of the German facility (which was part of the 2005 Agis acquisition), the Company incurred restructuring charges of approximately $15 million. Refer to Table II at the end of this press release for adjustments in the current year and prior year periods and additional non-GAAP disclosure information.

The Company's reported results are summarized in the attached Consolidated Statements of Income, Balance Sheets and Statements of Cash Flows. As part of management's strategic review of its portfolio of businesses, in March 2009, the Company committed to a plan to sell its Israel Consumer Products business. The results of this business are reflected in the consolidated financial statements as discontinued operations for all periods presented.

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

                               Fourth Quarter             Fiscal Year
                               --------------             -----------
                               2009        2008        2009         2008
    Net Sales                $508,209    $474,282  $2,006,862   $1,729,921
    Reported Income           $32,280     $32,160    $141,098     $140,197
    Adjusted Income           $46,927     $42,151    $174,637     $154,485
    Reported Diluted EPS        $0.35       $0.34       $1.51        $1.47
    Adjusted Diluted EPS        $0.50       $0.44       $1.87        $1.62
    Diluted Shares             93,290      95,076      93,629       95,210

Fourth Quarter Results

Net sales from continuing operations for the fourth quarter of fiscal 2009 were $508 million, an increase of 7%. Reported income from continuing operations was $32 million, or $0.35 per share, relatively flat compared with $32 million, or $0.34 per share, a year ago. Excluding charges as outlined in Table II at the end of this release, fourth quarter fiscal 2009 adjusted income from continuing operations was $47 million, or $0.50 per share.

Fiscal Year Results

Net sales from continuing operations for fiscal 2009 were $2,007 million, an increase of 16% over fiscal 2008. The year-over-year increase was driven by $214 million of incremental consolidated new product sales. Adjusted operating income of $267 million was an increase of 24% over fiscal 2008, and adjusted consolidated operating margin improved 80 basis points to 13.3%. Reported income from continuing operations was $141 million, relatively unchanged from fiscal 2008, while adjusted income from continuing operations of $175 million was a 13% increase from fiscal 2008.

Consumer Healthcare

Consumer Healthcare segment net sales in the fourth quarter were $407 million compared with $375 million in the fourth quarter last year, an increase of $32 million or 9%. The increase resulted from approximately $33 million of sales from the acquisitions of JB Labs, Unico, Diba and Brunel, and $28 million from incremental sales of new and existing products. These increases were partially offset by the impact of unfavorable changes in foreign currency exchange rates of $15 million and $14 million from divestitures and discontinued products, respectively. Reported operating income was $56 million, compared with $52 million a year ago, largely driven by increased sales and the absence of a $3 million charge to cost of sales related to the step-up in value of inventory acquired in the Galpharm acquisition and $2 million related to restructuring in the U.K. On an adjusted basis, operating income was relatively consistent with last year at $56 million compared to $57 million in fiscal 2008. Adjusted operating margin decreased 140 basis points year-over-year for the quarter due to lower gross margins and increased R&D spending.

For the full year of fiscal 2009, Consumer Healthcare net sales increased 23% or $303 million compared to fiscal 2008. The increase resulted from a combination of sales of new and existing products of approximately $233 million. The increase was also driven by $140 million of sales from the acquisitions of JB Labs, Unico, Galpharm, Brunel and Diba. These combined increases were partially offset by the impact of unfavorable changes in foreign currency exchange rates of $37 million and the absence of the U.K.'s vitamins, minerals and supplements business's sales of $35 million. Reported operating income was $234 million, compared with $173 million a year ago, largely driven by increased sales. On an adjusted basis, operating income was $239 million compared to $181 million in fiscal 2008. Adjusted operating margin increased 110 basis points year-over-year due to improved product mix and cost management.

On July 13, 2009, the Company announced that it had received approval from the U.S. Food and Drug Administration (FDA) to market over-the-counter (OTC) coated nicotine polacrilex lozenge USP, 2 mg and 4 mg in cherry and cinnamon flavors.

Rx Pharmaceuticals

The Rx Pharmaceutical segment fourth quarter net sales were $49 million compared with $38 million a year ago, an increase of 27%. The increase in sales was driven by increased volume on existing products, strong base business performance and strategic pricing initiatives. Adjusted operating income was $12 million an increase of $8 million from last year due to strong gross margins and strong cost management.

For the full year of fiscal 2009, net sales for the Rx Pharmaceutical segment increased 2% from fiscal 2008 to $164 million. The increase was due primarily to new product sales of approximately $17 million, along with an increase in sales volumes on the Company's existing portfolio of products of approximately $9 million. The increases were partially offset by the absence of the fiscal 2008 receipt of a one-time cash payment of $9 million from a customer in lieu of expected future minimum royalty payments, as well as a reduction in non-product revenue of $6 million and pricing pressures due to continued competition in the marketplace for generic drugs.

API

The API segment reported fourth quarter net sales of $39 million compared with $38 million a year ago. The increase was due primarily to improved product mix and was partially offset by $3 million in unfavorable changes in foreign currency exchange rates. Adjusted operating income increased $5 million or 146% due to improved sales mix, operational efficiencies and cost management.

For the full year of fiscal 2009, net sales decreased 9% compared to fiscal 2008. This decrease was due primarily to a decline of approximately $9 million in sales of existing products, the absence of a one-time $5 million accrual reversal and approximately $4 million resulting from unfavorable changes in foreign currency exchange rates. This decrease was partially offset by new product sales of approximately $5 million. Adjusted operating income was $15 million down from $20 million.

Other

Continuing operations for the Other category, consisting of the Israel Pharmaceutical and Diagnostic Products operating segment, reported fourth quarter net sales of $13 million, compared with $23 million a year ago. The decrease was due to the change whereby the Company is now a distributor to a customer rather than a supplier to that customer and also by unfavorable changes in foreign currency exchange rates. Operating income was $2 million, up from $800 thousand last year. The increase in operating income was due primarily to effective cost management and favorable currency exchange rates.

For the full year of fiscal 2009, net sales decreased $15 million or 18%, compared to fiscal 2008. The decrease was driven primarily by a $12 million impact related to the change in a customer contract relationship mentioned above. In addition, sales decreased by approximately $3 million due to changes in the sales mix of products.

Guidance

Chairman and CEO Joseph C. Papa concluded, "In challenging economic times, Perrigo is uniquely positioned to continue to save consumers nearly a billion dollars annually on their healthcare spend while adding value for our customers and shareholders. We expect fiscal 2010 earnings from continuing operations to be between $2.00 and $2.12 per share, which implies a year-over-year growth rate of earnings from continuing operations of 7% to 13% over adjusted fiscal 2009 EPS. Perrigo is the right company in the right place at the right time."

Perrigo will host a conference call to discuss fiscal 2009 fourth quarter and full year results at 10:00 a.m. (ET) on Tuesday, August 18. The conference call will be available live via webcast to interested parties on the Perrigo website http://www.perrigo.com or by phone 877-248-9413, International 973-582-2737 and reference ID# 20224149. A taped replay of the call will be available beginning at approximately 2:00 p.m. (ET) Tuesday, August 18, until midnight Tuesday, August 25, 2009. To listen to the replay, call 800-642-1687, International 706-645-9291, access code 20224149.

Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes OTC and generic prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients (API) and pharmaceutical and medical diagnostic products. The Company is the world's largest manufacturer of OTC pharmaceutical products for the store brand market. The Company's primary markets and locations of manufacturing and logistics operations are the United States, Israel, Mexico and the United Kingdom. Visit Perrigo on the Internet (http://www.perrigo.com).

Note: Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or other comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. These and other important factors, including those discussed under "Risk Factors" in the Company's Form 10-K for the year ended June 27, 2009, as well as the Company's subsequent filings with the Securities and Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this press release are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                             PERRIGO COMPANY
                    CONSOLIDATED STATEMENTS OF INCOME
                (in thousands, except per share amounts)


                                             Fiscal Year
                                      2009        2008        2007
                                      ----        ----        ----

    Net sales                    $2,006,862  $1,729,921  $1,368,351
    Cost of sales                 1,410,865   1,212,193   1,001,167
                                  ---------   ---------   ---------
    Gross profit                    595,997     517,728     367,184
                                    -------     -------     -------

    Operating expenses
       Distribution                  24,203      25,152      23,478
       Research and development      77,922      72,191      66,480
       Selling and
        administration              231,639     220,429     170,124
                                    -------     -------     -------
          Subtotal                  333,764     317,772     260,082
                                    -------     -------     -------
       Write-off of in-process
         research and
         development                    279       2,786       8,252
       Restructuring                 14,647       2,312         879
                                     ------       -----         ---
          Total                     348,690     322,870     269,213
                                    -------     -------     -------

    Operating income                247,307     194,858      97,971
    Interest, net                    27,154      17,415      16,110
    Other expense (income), net       1,269        (503)     (5,271)
    Investment impairment            15,104           -           -
                                    -------     -------     -------

    Income from continuing
     operations before
     income taxes                   203,780     177,946      87,132
    Income tax expense               62,682      37,749      14,298
                                     ------      ------      ------
    Income from continuing
     operations                     141,098     140,197      72,834
    Income (loss) from
     discontinued operations,
     net of tax                       2,951      (4,424)        963
                                      -----      ------         ---
    Net income                     $144,049    $135,773     $73,797
                                   ========    ========     =======

    Earnings (loss) per share (1)
       Basic
          Continuing operations       $1.53       $1.51       $0.79
          Discontinued
           operations                  0.03       (0.05)       0.01
                                       ----       -----        ----
          Basic earnings per
           share                      $1.56       $1.46       $0.80
       Diluted
          Continuing operations       $1.51       $1.47       $0.78
          Discontinued
           operations                  0.03       (0.05)       0.01
                                       ----       -----        ----
          Diluted earnings per
           share                      $1.54       $1.43       $0.79

    Weighted average shares
     outstanding
       Basic                         92,183      93,124      92,230
       Diluted                       93,629      95,210      93,807

    Dividends declared per share     $0.215      $0.195      $0.178


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



                          PERRIGO COMPANY
                    CONSOLIDATED BALANCE SHEETS
                           (in thousands)

                                           June 27,    June 28,
    Assets                                   2009        2008
                                             ----        ----
    Current assets
       Cash and cash equivalents          $316,133    $318,599
       Investment securities                     3         560
       Accounts receivable, net            325,810     317,875
       Inventories                         384,794     374,782
       Current deferred income taxes        41,941      42,241
       Income taxes refundable               8,926      10,215
       Prepaid expenses and
        other current assets                23,658      36,951
       Current assets of
        discontinued operations             51,699      58,968
                                            ------      ------
              Total current assets       1,152,964   1,160,191

    Property and equipment
       Land                                 22,876      22,275
       Buildings                           262,990     254,030
       Machinery and equipment             478,085     443,288
                                           -------     -------
                                           763,951     719,593
       Less accumulated depreciation      (409,634)   (381,053)
                                          --------    --------
                                           354,317     338,540

    Restricted cash                        400,000     400,000
    Goodwill and other indefinite-
     lived intangible assets               268,819     287,112
    Other intangible assets, net           214,207     220,724
    Non-current deferred income taxes       74,438      73,726
    Other non-current assets                49,756      63,914
    Non-current assets of
     discontinued operations                21,854      34,202
                                            ------      ------
                                        $2,536,355  $2,578,409
                                        ==========  ==========

    Liabilities and
     Shareholders' Equity
    Current liabilities
       Accounts payable                   $271,537    $235,922
       Payroll and related taxes            54,196      70,977
       Accrued customer programs            54,461      53,419
       Accrued liabilities                  61,704      55,055
       Accrued income taxes                  3,334       3,317
       Current deferred income taxes        18,528      24,493
       Current portion of
        long-term debt                      17,181      20,095
       Current liabilities of
        discontinued operations             19,620      25,716
                                            ------      ------
              Total current
               liabilities                 500,561     488,994

    Non-current liabilities
       Long-term debt, less
        current portion                    875,000     895,095
       Non-current
        deferred income
        taxes                              139,916     138,158
       Other non-current liabilities        87,024     106,453
       Non-current liabilities of
        discontinued operations             11,933      15,994
                                            ------      ------
              Total non-current
               liabilities               1,113,873   1,155,700

    Shareholders' Equity
       Preferred stock, without par
        value, 10,000 shares authorized          -           -
       Common stock, without par value,
        200,000 shares authorized          452,243     488,537
       Accumulated other
        comprehensive income                50,592     155,184
       Retained earnings                   419,086     289,994
                                           -------     -------
              Total shareholders'
               equity                      921,921     933,715
                                           -------     -------
                                        $2,536,355  $2,578,409
                                        ==========  ==========

    Supplemental Disclosures of
     Balance Sheet Information
       Related to Continuing
        Operations
              Allowance for
               doubtful accounts           $11,394      $7,511
              Working capital             $620,324    $637,945
              Preferred stock, shares
               issued and outstanding            -           -
              Common stock, shares
               issued and outstanding       92,209      93,311



                                 PERRIGO COMPANY
     CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                  (in thousands)

                           Common Stock      Accumulated  Comprehen-
                              Issued            Other       sive
                              ------        Comprehensive  Income   Retained
                         Shares    Amount   Income (loss)  (loss)   Earnings
                         ------    ------   -------------  -------  --------
    Balance at July
     1, 2006             92,922  $516,098         $3,593   $77,170  $121,053

    Net income                -         -              -    73,797    73,797
    Accumulated other
     comprehensive
     income (loss):
       Change in fair
        value of
        derivative
        financial
        instruments, net
        of $606 tax           -         -         (1,126)   (1,126)
       Foreign
        currency
        translation
        adjustments           -         -         53,074    53,074         -
       Change in fair
        value of
        investment
        securities                                (1,415)   (1,415)        -
       Adjustment
        from adoption
        of SFAS 158,
        net of $1,373
        tax                   -         -          2,550         -         -
    Issuance of
     common stock
     under:
       Stock options      1,496    15,362              -         -         -
       Restricted
        stock plan          338         -              -         -         -
    Compensation for
     stock options            -     3,793              -         -         -
    Compensation for
     restricted stock         -     5,160              -         -         -
    Cash dividends,
     $0.178 per share         -         -              -         -   (16,476)
    Tax effect from
     stock
     transactions             -     1,470              -         -         -
    Purchases and
     retirements
     of common
     stock               (1,361)  (22,464)             -         -         -
                         ------   -------           ----      ----      ----
    Balance at June
     30, 2007            93,395   519,419         56,676   124,330   178,374
                                                           =======

    Net income                -         -              -   135,773   135,773
    Accumulated other
     comprehensive
     income (loss):
       Change in fair
        value of
        derivative
        financial
        instruments, net
        of $1,852 tax         -         -         (3,440)   (3,440)        -
       Foreign
        currency
        translation
        adjustments           -         -        105,826   105,826         -
       Change in fair
        value of
        investment
        securities                                (3,453)   (3,453)        -
       Post-retirement
        liability
        adjustments,
        net of $229
        tax                   -         -           (425)     (425)        -
    Adjustment to
     adopt FIN 48             -         -              -         -    (5,934)
    Issuance of
     common stock
     under:
       Stock options      2,393    32,210              -         -         -
       Restricted
        stock plan           19         -              -         -         -
    Compensation for
     stock options            -     2,730              -         -         -
    Compensation for
     restricted stock         -     5,739              -         -         -
    Cash dividends,
     $0.195 per share         -         -              -         -   (18,219)
    Tax effect from
     stock
     transactions             -     6,603              -         -         -
    Purchases and
     retirements
     of common
     stock               (2,496)  (78,164)             -         -         -
                         ------   -------          -----     -----     -----
    Balance at June
     28, 2008            93,311   488,537        155,184   234,281   289,994
                                                           =======

    Net income                -         -              -   144,049   144,049
    Accumulated other
     comprehensive
     income (loss):
       Change in fair
        value of
        derivative
        financial
        instruments, net
        of $162 tax           -         -            300       300         -
       Foreign
        currency
        translation
        adjustments           -         -       (103,450) (103,450)        -
       Change in fair
        value of
        investment
        securities                                 3,956     3,956         -
       Adjustment
        to adopt
        FSP FAS 115-2         -         -         (5,000)   (5,000)    5,000
       Post-retirement
        liability
        adjustments,
        net of $214
        tax                   -         -           (398)     (398)        -
    Issuance of
     common stock
     under:
       Stock options        720    10,062              -         -         -
       Restricted
        stock plan           14         -              -         -         -
    Compensation for
     stock options            -     3,313              -         -         -
    Compensation for
     restricted stock         -     7,040              -         -         -
    Cash dividends,
     $0.215 per share         -         -              -         -   (19,957)
    Tax effect from
     stock
     transactions             -     5,780              -         -         -
    Purchases and
     retirements
     of common
     stock               (1,836)  (62,489)             -         -         -
                         ------   -------          -----     -----     -----
    Balance at June
     27, 2009            92,209  $452,243        $50,592    39,457   419,086
                         ======  ========        =======    ======   =======



                             PERRIGO COMPANY
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (in thousands)

                                                Fiscal Year
                                                -----------
                                           2009      2008      2007
                                           ----      ----      ----
    Cash Flows From (For)
     Operating Activities
       Net income                      $144,049  $135,773   $73,797
       Adjustments to derive
        cash flows
          Write-off of in-
           process research and
           development                      279     2,786     8,252
          Depreciation and
           amortization                  70,142    69,231    58,032
          Restructuring and asset
           impairment                    31,351    12,658     2,913
          Share-based compensation       10,353     8,469     8,953
          Income tax benefit
           from exercise of
           stock options                 (3,490)    3,992     1,482
          Excess tax benefit of stock
           transactions                  (2,290)  (10,595)   (2,952)
          Deferred income taxes          (1,422)   (1,542)   (4,335)
                                         ------    ------    ------
       Sub-total                        248,972   220,772   146,142
                                        -------   -------   -------

       Changes in operating
        assets and
        liabilities, net of
        asset and business
        acquisitions
           Accounts receivable            6,446   (38,742)  (36,812)
           Inventories                      341   (72,480)   18,786
           Income taxes refundable       (1,066)   (6,883)        -
           Accounts payable              24,821    67,638   (19,186)
           Payroll and related taxes    (20,621)   27,046    (4,956)
           Accrued customer programs      1,124     5,450    (1,316)
           Accrued liabilities          (13,483)    1,773     1,184
           Accrued income taxes          13,201    31,274    18,224
           Other                         (1,390)    8,467     5,375
                                         ------     -----     -----
       Sub-total                          9,373    23,543   (18,701)
                                          -----    ------   -------
              Net cash from operating
               activities               258,345   244,315   127,441
                                        -------   -------   -------

    Cash Flows (For) From
     Investing Activities
       Purchase of securities                 -  (176,298) (335,016)
       Proceeds from sales of
        securities                            -   208,097   312,521
       Issuance of note receivable            -         -    (1,000)
       Additions to property
        and equipment                   (59,238)  (44,824)  (45,014)
       Proceeds from sales of property
        and equipment                         -         -     2,613
       Cash acquired in asset
        exchange                          2,115         -         -
       Acquisitions of assets            (1,000)  (12,401)  (59,538)
       Acquisitions of
        businesses, net of cash
        acquired                        (88,248)  (83,312)        -
       Equity investment                      -   (12,500)        -
                                         ------    ------   -------
               Net cash for investing
                activities             (146,371) (121,238) (125,434)
                                       --------  --------  --------

    Cash Flows (For) From
     Financing Activities
       Repayments of short-term
        debt, net                       (13,736)  (11,776)   (8,295)
       Borrowings of long-term debt           -   465,000   130,000
       Repayments of long-term debt     (31,380) (225,801)  (90,000)
       Excess tax benefit of stock
        transactions                      2,290    10,595     2,952
       Issuance of common stock          10,062    32,210    15,362
       Repurchase of common stock       (62,489)  (78,164)  (22,464)
       Cash dividends                   (19,957)  (18,219)  (16,476)
                                        -------   -------   -------
              Net cash (for) from
               financing activities    (115,210)  173,845    11,079
                                       --------   -------    ------

    Effect of exchange rate
     changes on cash                        769    (8,623)   (1,799)
                                            ---    ------    ------
            Net increase (decrease)
             in cash and cash
             equivalents                 (2,467)  288,299    11,287

    Cash and cash equivalents
     of continuing operations,
     beginning of period                318,599    30,301    19,018
    Cash balance of discontinued
     operations, beginning of
     period                                   5         4         -
                                            ---       ---       ---
    Cash and cash equivalents,
     end of period                      316,137   318,604    30,305
           Less cash balance of
            discontinued
            operations, end of
            period                           (4)       (5)       (4)
                                             --        --        --
    Cash and cash equivalents
     of continuing operations,
     end of period                     $316,133  $318,599   $30,301
                                       ========  ========   =======

    Supplemental Disclosures of Cash
     Flow Information
       Cash paid/received during
        the year for:
          Interest paid                 $47,066   $37,111   $36,020
          Interest received             $24,348   $21,664   $20,079
          Income taxes paid             $73,276   $32,718   $12,896
          Income taxes refunded         $11,283    $7,693   $11,316




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

                                   Fourth Quarter          Fiscal Year
                                   --------------          -----------
                                   2009      2008        2009        2008
                                   ----      ----        ----        ----
    Segment Net Sales
      Consumer Healthcare        $407,009  $374,645  $1,638,770  $1,336,140
      Rx Pharmaceuticals           48,840    38,425     164,163     161,271
      API                          38,940    38,313     136,002     149,553
      Other                        13,420    22,899      67,927      82,957
                                   ------    ------      ------      ------
        Total                    $508,209  $474,282  $2,006,862  $1,729,921
                                 ========  ========  ==========  ==========

    Segment Operating Income (Loss)
      Consumer Healthcare         $56,059   $52,105    $233,756    $172,654
      Rx Pharmaceuticals           12,090    (5,774)     29,028      21,386
      API                          (5,409)    3,752         433      20,475
      Other                         2,353       809       7,680       7,030
      Unallocated expenses         (9,569)  (10,513)    (23,311)    (23,901)
      Write-off of in-process
       R&D                              -         -        (279)     (2,786)
                                    -----     -----       -----      ------
        Total                     $55,524   $40,379    $247,307    $194,858
                                  =======   =======    ========    ========


      *All information based on continuing operations.



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

                               Fourth Quarter
                               --------------
                           2009        2008     % Change
                           ----        ----     ---------

    Net sales          $508,209    $474,282          7%

    Reported gross
     profit            $163,853    $135,093         21%
      Inventory
       step-up -
       Unico                  -           -
      Inventory
       step-up -
       Diba                   -           -
      Inventory
       step-up - JB
       Labs                   -           -
      Inventory
       step-up -
       Galpharm               -       2,878
      Impairment of
       fixed assets           -           -
      Impairment of
       intangible
       asset                  -      10,346
                          -----      ------
    Adjusted gross
     profit            $163,853    $148,317         10%
                       ========    ========
    Adjusted gross
     profit %              32.2%       31.3%

    Reported
     operating
     expenses          $108,329     $94,714         14%
      Loss on asset
       exchange               -           -
      Restructuring
       costs -
       Germany          (14,647)          -
      Restructuring
       costs - West
       Coast                  -        (143)
      Restructuring
       costs -
       United
       Kingdom                -      (1,821)
                          -----      ------
    Adjusted
     operating
     expenses           $93,682     $92,750          1%
                        =======     =======
    Adjusted
     operating
     expenses %            18.4%       19.6%

    Reported
     operating
     income             $55,524     $40,379         38%
      Inventory
       step-up -
       Unico                  -           -
      Inventory
       step-up -
       Diba                   -           -
      Inventory
       step-up - JB
       Labs                   -           -
      Inventory
       step-up -
       Galpharm               -       2,878
      Impairment of
       fixed assets           -           -
      Impairment of
       intangible
       asset                  -      10,346
      Loss on asset
       exchange               -           -
      Restructuring
       costs -
       Germany           14,647           -
      Restructuring
       costs - West
       Coast                  -         143
      Restructuring
       costs -
       United
       Kingdom                -       1,821
      Write-off of
       in-process
       R&D - Diba
       acquisition            -           -
      Write-off of
       in-process
       R&D -
       Galpharm
       acquisition            -           -
                          -----       -----
    Adjusted
     operating
     income             $70,171     $55,567         26%
                        =======     =======
    Adjusted
     operating
     income %              13.8%       11.7%

    Reported income
     from continuing
     operations         $32,280     $32,160          0%
      Inventory
       step-up -
       Unico (5)              -           -
      Inventory
       step-up -
       Diba (1)               -           -
      Inventory
       step-up - JB
       Labs (2)               -           -
      Inventory
       step-up -
       Galpharm (1)           -       2,072
      Impairment of
       fixed assets (4)       -           -
      Impairment of
       intangible
       asset (3)              -       6,518
      Investment
       impairment (6)         -           -
      Loss on asset
       exchange (6)           -           -
      Restructuring
       costs -
       Germany (6)       14,647           -
      Restructuring
       costs - West
       Coast (3)              -          90
      Restructuring
       costs -
       United
       Kingdom (1)            -       1,311
      Write-off of
       in-process
       R&D - Diba
       acquisition (1)        -           -
      Write-off of
       in-process
       R&D -
       Galpharm
       acquisition (1)        -           -
                          -----       -----
    Adjusted income
     from continuing
     operations         $46,927     $42,151         11%
                        =======     =======

    Diluted earnings
     per share from
     continuing
     operations
      Reported            $0.35       $0.34          2%
      Adjusted            $0.50       $0.44         13%

    Diluted
     weighted
     average shares
     outstanding         93,290      95,076



                                Fiscal Year
                                -----------
                           2009        2008    % Change
                           ----        ----    ---------

    Net sales        $2,006,862  $1,729,921         16%

    Reported gross
     profit            $595,997    $517,728         15%
      Inventory
       step-up -
       Unico              1,062           -
      Inventory
       step-up -
       Diba               1,503           -
      Inventory
       step-up - JB
       Labs                 358           -
      Inventory
       step-up -
       Galpharm               -       5,756
      Impairment of
       fixed assets       1,600           -
      Impairment of
       intangible
       asset                  -      10,346
                          -----      ------
    Adjusted gross
     profit            $600,520    $533,830         12%
                       ========    ========
    Adjusted gross
     profit %              29.9%       30.9%

    Reported
     operating
     expenses          $348,690    $322,870          8%
      Loss on asset
       exchange            (639)          -
      Restructuring
       costs -
       Germany          (14,647)          -
      Restructuring
       costs - West
       Coast                  -        (491)
      Restructuring
       costs -
       United
       Kingdom                -      (1,821)
                          -----      ------
    Adjusted
     operating
     expenses          $333,404    $320,558          4%
                       ========    ========
    Adjusted
     operating
     expenses %            16.6%       18.5%

    Reported
     operating
     income            $247,307    $194,858         27%
      Inventory
       step-up -
       Unico              1,062           -
      Inventory
       step-up -
       Diba               1,503           -
      Inventory
       step-up - JB
       Labs                 358           -
      Inventory
       step-up -
       Galpharm               -       5,756
      Impairment of
       fixed assets       1,600           -
      Impairment of
       intangible
       asset                  -      10,346
      Loss on asset
       exchange             639           -
      Restructuring
       costs -
       Germany           14,647           -
      Restructuring
       costs - West
       Coast                  -         491
      Restructuring
       costs -
       United
       Kingdom                -       1,821
      Write-off of
       in-process
       R&D - Diba
       acquisition          279           -
      Write-off of
       in-process
       R&D -
       Galpharm
       acquisition            -       2,786
                          -----       -----
    Adjusted
     operating
     income            $267,395    $216,058         24%
                       ========    ========
    Adjusted
     operating
     income %              13.3%       12.5%

    Reported income
     from continuing
     operations        $141,098    $140,197          1%
      Inventory
       step-up -
       Unico (5)            645           -
      Inventory
       step-up -
       Diba (1)           1,082           -
      Inventory
       step-up - JB
       Labs (2)             229           -
      Inventory
       step-up -
       Galpharm (1)           -       4,144
      Impairment of
       fixed assets (4)     992           -
      Impairment of
       intangible
       asset (3)              -       6,518
      Investment
       impairment (6)    15,104           -
      Loss on asset
       exchange (6)         639           -
      Restructuring
       costs -
       Germany (6)       14,647           -
      Restructuring
       costs - West
       Coast (3)              -         309
      Restructuring
       costs -
       United
       Kingdom (1)            -       1,311
      Write-off of
       in-process
       R&D - Diba
       acquisition (1)      201           -
      Write-off of
       in-process
       R&D -
       Galpharm
       acquisition (1)        -       2,006
                          -----       -----
    Adjusted income
     from continuing
     operations        $174,637    $154,485         13%
                       ========    ========

    Diluted earnings
     per share from
     continuing
     operations
      Reported            $1.51       $1.47          2%
      Adjusted            $1.87       $1.62         15%

    Diluted
     weighted
     average shares
     outstanding         93,629      95,210


    (1)  Net of taxes at 28%
    (2)  Net of taxes at 36%
    (3)  Net of taxes at 37%
    (4)  Net of taxes at 38%
    (5)  Net of taxes at 39.3%
    (6)  No tax impact

    *All information based on continuing operations.



                       Table II (Continued)
                       REPORTABLE SEGMENTS
               RECONCILIATION OF NON-GAAP MEASURES
                          (in thousands)
                           (unaudited)

                                      Fourth Quarter
                                      --------------
                                2009        2008      % Change
                                ----        ----      ---------
      Consumer Healthcare
      Net sales              $407,009    $374,645          9%

      Reported gross
       profit                $119,782    $111,037          8%
        Inventory step-up
         - Unico                    -           -
        Inventory step-up
         - Diba                     -           -
        Inventory step-up
         - JB Labs                  -           -
        Inventory step-up
         - Galpharm                 -       2,878
        Impairment of
         fixed assets               -           -
                                -----       -----
      Adjusted gross
       profit                $119,782    $113,915          5%
                             ========    ========
      Adjusted gross
       profit %                  29.4%       30.4%

      Reported operating
       expenses               $63,725     $58,932          8%
        Loss on asset
         exchange                   -           -
        Restructuring
         costs - West
         Coast                      -        (143)
        Restructuring
         costs - United
         Kingdom                    -      (1,821)
                                 ----      ------
      Adjusted operating
       expenses               $63,725     $56,968         12%
                              =======     =======
      Adjusted operating
       expenses %                15.7%       15.2%

      Reported operating
       income                 $56,059     $52,105          8%
        Inventory step-up
         - Unico                    -           -
        Inventory step-up
         - Diba                     -           -
        Inventory step-up
         - JB Labs                  -           -
        Inventory step-up
         - Galpharm                 -       2,878
        Impairment of
         fixed assets               -           -
        Loss on asset
         exchange                   -           -
        Restructuring
         costs - West
         Coast                      -         143
        Restructuring
         costs - United
         Kingdom                    -       1,821
                                 ----       -----
      Adjusted operating
       income                 $56,059     $56,947         -2%
                              =======     =======
      Adjusted operating
       income %                  13.8%       15.2%

      Rx Pharmaceuticals
      Net sales               $48,840     $38,425         27%

      Reported gross
       profit                 $21,010      $3,969
        Impairment of
         intangible asset           -      10,346
                                 ----      ------
      Adjusted gross
       profit                 $21,010     $14,315         47%
                              =======     =======
      Adjusted gross
       profit %                  43.0%       37.3%

      Reported operating
       income (loss)          $12,090     $(5,774)      -309%
        Impairment of
         intangible asset           -      10,346
                                 ----      ------
      Adjusted operating
       income                 $12,090      $4,572        164%
                              =======      ======
      Adjusted operating
       income %                  24.8%       11.9%

      API
      Net sales               $38,940     $38,313          2%

      Reported operating
       expenses               $22,529      $9,678
        Restructuring
         costs - Germany      (14,647)          -
                              -------        ----
      Adjusted operating
       expenses                $7,882      $9,678        -19%
                               ======      ======
      Adjusted operating
       expenses %                20.2%       25.3%

      Reported operating
       income (loss)          $(5,409)     $3,752       -244%
        Restructuring
         costs - Germany       14,647           -
                               ------       -----
      Adjusted operating
       income                  $9,238      $3,752        146%
                               ======      ======
      Adjusted operating
       income %                  23.7%        9.8%

      Unallocated
      Reported operating
       loss                   $(9,569)   $(10,513)        -9%
        Write-off of in-
         process R&D -
         Diba acquisition           -           -
        Write-off of in-
         process R&D -
         Galpharm
         acquisition                -           -
                                -----       -----
      Adjusted operating
       loss                   $(9,569)   $(10,513)        -9%
                              =======    ========




                                        Fiscal Year
                                        -----------
                                 2009        2008      % Change
                                 ----        ----      ---------
      Consumer Healthcare
      Net sales            $1,638,770  $1,336,140         23%

      Reported gross
       profit                $460,133    $377,765         22%
        Inventory step-up
         - Unico                1,062           -
        Inventory step-up
         - Diba                 1,503           -
        Inventory step-up
         - JB Labs                358           -
        Inventory step-up
         - Galpharm                 -       5,756
        Impairment of
         fixed assets           1,600           -
                                -----        ----
      Adjusted gross
       profit                $464,656    $383,521         21%
                             ========    ========
      Adjusted gross
       profit %                  28.4%       28.7%

      Reported operating
       expenses              $226,379    $205,111         10%
        Loss on asset
         exchange                (639)          -
        Restructuring
         costs - West
         Coast                      -        (491)
        Restructuring
         costs - United
         Kingdom                    -      (1,821)
                                 ----      ------
      Adjusted operating
       expenses              $225,740    $202,799         11%
                             ========    ========
      Adjusted operating
       expenses %                13.8%       15.2%

      Reported operating
       income                $233,756    $172,654         35%
        Inventory step-up
         - Unico                1,062           -
        Inventory step-up
         - Diba                 1,503           -
        Inventory step-up
         - JB Labs                358           -
        Inventory step-up
         - Galpharm                 -       5,756
        Impairment of
         fixed assets           1,600           -
        Loss on asset
         exchange                 639           -
        Restructuring
         costs - West
         Coast                      -         491
        Restructuring
         costs - United
         Kingdom                    -       1,821
                                 ----       -----
      Adjusted operating
       income                $238,918    $180,722         32%
                             ========    ========
      Adjusted operating
       income %                  14.6%       13.5%

      Rx Pharmaceuticals
      Net sales              $164,163    $161,271          2%

      Reported gross
       profit                 $63,801     $58,622          9%
        Impairment of
         intangible asset           -      10,346
                                 ----      ------
      Adjusted gross
       profit                 $63,801     $68,968         -7%
                              =======     =======
      Adjusted gross
       profit %                  38.9%       42.8%

      Reported operating
       income (loss)          $29,028     $21,386         36%
        Impairment of
         intangible asset           -      10,346
                                 ----      ------
      Adjusted operating
       income                 $29,028     $31,732         -9%
                              =======     =======
      Adjusted operating
       income %                  17.7%       19.7%

      API
      Net sales              $136,002    $149,553         -9%

      Reported operating
       expenses               $47,124     $34,717         36%
        Restructuring
         costs - Germany      (14,647)          -
                              -------        ----
      Adjusted operating
       expenses               $32,477     $34,717         -6%
                              =======     =======
      Adjusted operating
       expenses %                23.9%       23.2%

      Reported operating
       income (loss)             $433     $20,475        -98%
        Restructuring
         costs - Germany       14,647           -
                               ------        ----
      Adjusted operating
       income                 $15,080     $20,475        -26%
                              =======     =======
      Adjusted operating
       income %                  11.1%       13.7%

      Unallocated
      Reported operating
       loss                  $(23,590)   $(26,687)       -12%
        Write-off of in-
         process R&D -
         Diba acquisition         279           -
        Write-off of in-
         process R&D -
         Galpharm
         acquisition                -       2,786
                                 ----       -----
      Adjusted operating
       loss                  $(23,311)   $(23,901)        -2%
                             ========    ========


      *All information based on continuing operations.



                                Table III
                             PERRIGO COMPANY
                   RECONCILIATION OF NON-GAAP MEASURES
                              (in thousands)
                                (unaudited)

                          Fourth Quarter       Adjustment -
                         Reported Cost of      Inventory
                               Sales             Step-Up
                         ----------------   -----------------
                            2009     2008      2009     2008
                            ----     ----      ----     ----
    Segments
       Consumer
        Healthcare       $287,226 $263,607        $-  $(2,878)
       Rx
        Pharmaceuticals    27,829   34,456         -        -
       API                 21,820   24,884         -        -
       Other                7,481   16,242         -        -
                            -----   ------       ---      ---
         Total           $344,356 $339,189        $-  $(2,878)
                         ======== ========       ===  =======




                          Adjustment -      Fourth Quarter
                           Intangible      Adjusted Cost of
                       Asset Impairment         Sales
                       ----------------   ----------------
                          2009     2008      2009     2008     % Change
                          ----     ----      ----     ----     ---------
    Segments
    Consumer
     Healthcare             $-       $-  $287,226 $260,729         10%
    Rx
     Pharmaceuticals         -  (10,346)   27,829   24,110         15%
    API                      -        -    21,820   24,884        -12%
    Other                    -        -     7,481   16,242        -54%
                           ---      ---     -----   ------
    Total                   $- $(10,346) $344,356 $325,965          6%
                           === ========  ======== ========


      *All information based on continuing operations.                


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SOURCE Perrigo Company
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