Ireland | Not Applicable | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Treasury Building, Lower Grand Canal Street, Dublin 2, Ireland | - | |
(Address of principal executive offices) | (Zip Code) |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
• | Transaction charges for completed business acquisition |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | Write-offs of in-process research and development |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
• | Charges associated with the step-ups in value of inventory acquired |
• | Acquisition charges for completed business acquisition |
• | Write-offs of in-process research and development |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | Loss on sales of investments |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
• | Charges associated with legal contingency |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | Losses on equity method investments |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
• | Transaction charges for completed business acquisitions |
• | Charges associated with legal contingency |
• | Litigation settlements |
• | Contingent consideration adjustment |
• | Escrow settlement |
• | Write-offs of in-process research and development |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | Losses on equity method investments |
• | Loss on sales of investments |
• | Loss on extinguishment of debt |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
(d) | Exhibits |
99.1 | Press release issued by Perrigo Company plc on August 14, 2014, furnished solely pursuant to Item 2.02 of Form 8-K. |
(Registrant) | ||||
PERRIGO COMPANY PLC | ||||
By: | /s/ Judy L. Brown | |||
Dated: August 14, 2014 | Judy L. Brown | |||
Executive Vice President and | ||||
Chief Financial Officer | ||||
(Principal Accounting and Financial Officer) |
• | Fiscal fourth quarter net sales increased 18% year-over-year to a record $1.14 billion. |
• | Fiscal fourth quarter adjusted net income increased 58% to $234 million, or $1.74 per diluted share; GAAP net income of $132 million, or $0.98 per diluted share, includes amortization expense and other charges. |
• | Record quarterly adjusted gross margin of 44.5%, with GAAP gross margin of 36.3% and record quarterly adjusted operating margin of 28.4%, with GAAP operating margin of 17.3%. |
• | Fiscal 2014 net sales increased 15% year-over-year to a record $4.06 billion, with organic growth of 7%. |
• | Fiscal 2014 adjusted net income increased 40% to $740 million or $6.39 per diluted share; GAAP net income of $205 million, or $1.77 per diluted share, includes amortization expense and other charges. |
• | Management expects full-year fiscal 2015 adjusted earnings range of $7.20 to $7.50 per diluted share, an increase of 13% to 17% over fiscal 2014 adjusted earnings per share, and reported earnings of between $4.05 and $4.35 per diluted share. |
Fiscal 2014 | Fiscal 2013 | |||
Fourth Quarter Ended | Fourth Quarter Ended | YoY | ||
6/28/2014 | 6/29/2013 | % Change | ||
Net Sales | $1,144.2 | $967.2 | 18 | % |
Reported Net Income | $131.7 | $118.5 | 11 | % |
Adjusted Net Income | $234.1 | $148.1 | 58 | % |
Reported Diluted EPS | $0.98 | $1.25 | -22 | % |
Adjusted Diluted EPS | $1.74 | $1.57 | 11 | % |
Diluted Shares | 134.3 | 94.6 | 42 | % |
Fiscal 2014 | Fiscal 2013 | |||
Year Ended | Year Ended | YoY | ||
6/28/2014 | 6/29/2013 | % Change | ||
Net Sales | $4,060.8 | $3,539.8 | 15 | % |
Reported Net Income | $205.3 | $441.9 | -54 | % |
Adjusted Net Income | $739.5 | $529.7 | 40 | % |
Reported Diluted EPS | $1.77 | $4.68 | -62 | % |
Adjusted Diluted EPS | $6.39 | $5.61 | 14 | % |
Diluted Shares | 115.6 | 94.5 | 22 | % |
Fiscal 2014 | Fiscal 2013 | |||
Fourth Quarter Ended | Fourth Quarter Ended | YoY | ||
6/28/2014 | 6/29/2013 | % Change | ||
Net Sales | $606.9 | $562.5 | +8 | % |
Reported Gross Profit | $202.0 | $199.1 | +1 | % |
Adjusted Gross Profit | $205.7 | $202.3 | +2 | % |
Reported Operating Income | $104.7 | $101.9 | +3 | % |
Adjusted Operating Income | $113.3 | $112.7 | +1 | % |
Reported Gross Margin | 33.3 | % | 35.4 | % | -210 bps |
Adjusted Gross Margin | 33.9 | % | 36.0 | % | -210 bps |
Reported Operating Margin | 17.3 | % | 18.1 | % | -80 bps |
Adjusted Operating Margin | 18.7 | % | 20.0 | % | -130 bps |
Fiscal 2014 | Fiscal 2013 | |||
Fourth Quarter Ended | Fourth Quarter Ended | YoY | ||
6/28/2014 | 6/29/2013 | % Change | ||
Net Sales | $145.2 | $149.7 | -3 | % |
Reported Gross Profit | $36.8 | $40.1 | -8 | % |
Adjusted Gross Profit | $39.9 | $43.2 | -8 | % |
Reported Operating Income | $12.1 | $17.2 | -30 | % |
Adjusted Operating Income | $20.2 | $24.5 | -18 | % |
Reported Gross Margin | 25.3 | % | 26.8 | % | -150 bps |
Adjusted Gross Margin | 27.5 | % | 28.9 | % | -140 bps |
Reported Operating Margin | 8.3 | % | 11.5 | % | -320 bps |
Adjusted Operating Margin | 13.9 | % | 16.4 | % | -250 bps |
Fiscal 2014 | Fiscal 2013 | |||
Fourth Quarter Ended | Fourth Quarter Ended | YoY | ||
6/28/2014 | 6/29/2013 | % Change | ||
Net Sales | $253.4 | $194.7 | +30 | % |
Reported Gross Profit | $135.6 | $92.3 | +47 | % |
Adjusted Gross Profit | $153.1 | $109.0 | +40 | % |
Reported Operating Income | $89.3 | $57.2 | +56 | % |
Adjusted Operating Income | $122.3 | $83.0 | +47 | % |
Reported Gross Margin | 53.5 | % | 47.4 | % | +610 bps |
Adjusted Gross Margin | 60.4 | % | 56.0 | % | +440 bps |
Reported Operating Margin | 35.2 | % | 29.4 | % | +580 bps |
Adjusted Operating Margin | 48.3 | % | 42.7 | % | +560 bps |
Fiscal 2014 | Fiscal 2013 | |||
Fourth Quarter Ended | Fourth Quarter Ended | YoY | ||
6/28/2014 | 6/29/2013 | % Change | ||
Net Sales | $32.5 | $40.9 | -21 | % |
Reported Gross Profit | $16.8 | $18.7 | -10 | % |
Adjusted Gross Profit | $17.3 | $19.2 | -10 | % |
Reported Operating Income | $8.8 | $10.0 | -12 | % |
Adjusted Operating Income | $9.5 | $10.5 | -10 | % |
Reported Gross Margin | 51.7 | % | 45.7 | % | +600 bps |
Adjusted Gross Margin | 53.4 | % | 46.9 | % | +650 bps |
Reported Operating Margin | 27.0 | % | 24.5 | % | +250 bps |
Adjusted Operating Margin | 29.3 | % | 25.7 | % | +360 bps |
Fiscal 2014 | |
Fourth Quarter Ended | |
6/28/2014 | |
Net Sales | $85.9 |
Reported Gross Profit | $18.1 |
Adjusted Gross Profit | $85.9 |
Reported Operating Income | $4.9 |
Adjusted Operating Income | $78.5 |
Reported Gross Margin | 21.1 | % |
Adjusted Gross Margin | 100.0 | % |
Reported Operating Margin | 5.8 | % |
Adjusted Operating Margin | 91.4 | % |
Fiscal Year Ended | |||||||||||
June 28, 2014 | June 29, 2013 | June 30, 2012 | |||||||||
Net sales | $ | 4,060.8 | $ | 3,539.8 | $ | 3,173.2 | |||||
Cost of sales | 2,613.1 | 2,259.8 | 2,077.7 | ||||||||
Gross profit | 1,447.7 | 1,280.0 | 1,095.6 | ||||||||
Operating expenses | |||||||||||
Distribution | 55.3 | 47.5 | 39.1 | ||||||||
Research and development | 152.5 | 115.2 | 105.8 | ||||||||
Selling | 208.6 | 186.1 | 148.3 | ||||||||
Administration | 411.3 | 240.2 | 224.4 | ||||||||
Write-off of in-process research and development | 6.0 | 9.0 | — | ||||||||
Restructuring | 47.0 | 2.9 | 8.8 | ||||||||
Total | 880.7 | 600.9 | 526.4 | ||||||||
Operating income | 567.0 | 679.1 | 569.2 | ||||||||
Interest, net | 103.5 | 65.8 | 60.7 | ||||||||
Other expense (income), net | 12.4 | 0.9 | (3.5 | ) | |||||||
Loss on sales of investments | 12.7 | 4.7 | — | ||||||||
Loss on extinguishment of debt | 165.8 | — | — | ||||||||
Income from continuing operations before income taxes | 272.6 | 607.7 | 512.0 | ||||||||
Income tax expense | 67.3 | 165.8 | 119.0 | ||||||||
Income from continuing operations | 205.3 | 441.9 | 393.0 | ||||||||
Income from discontinued operations, net of tax | — | — | 8.6 | ||||||||
Net income | $ | 205.3 | $ | 441.9 | $ | 401.6 | |||||
Earnings per share | |||||||||||
Basic | |||||||||||
Continuing operations | $ | 1.78 | $ | 4.71 | $ | 4.22 | |||||
Discontinued operations | — | — | 0.09 | ||||||||
Basic earnings per share | $ | 1.78 | $ | 4.71 | $ | 4.31 | |||||
Diluted | |||||||||||
Continuing operations | $ | 1.77 | $ | 4.68 | $ | 4.18 | |||||
Discontinued operations | — | — | 0.09 | ||||||||
Diluted earnings per share | $ | 1.77 | $ | 4.68 | $ | 4.27 | |||||
Weighted average shares outstanding | |||||||||||
Basic | 115.1 | 93.9 | 93.2 | ||||||||
Diluted | 115.6 | 94.5 | 94.1 | ||||||||
Dividends declared per share | $ | 0.39 | $ | 0.35 | $ | 0.31 |
Fiscal Year Ended | |||||||||||
June 28, 2014 | June 29, 2013 | June 30, 2012 | |||||||||
Net income | $ | 205.3 | $ | 441.9 | $ | 401.6 | |||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | 83.8 | 26.9 | (76.7 | ) | |||||||
Change in fair value of derivative financial instruments, net of tax of $(1.2) million, $3.2 million, and $5.1 million, respectively | (11.6 | ) | 6.0 | (9.4 | ) | ||||||
Change in fair value of investment securities, net of tax of $1.2 million, $0.0 million, and $0.1 million, respectively | 2.4 | 4.4 | (1.0 | ) | |||||||
Post-retirement liability adjustments, net of tax of $0.0 million, $0.2 million, and $0.3 million, respectively | (12.0 | ) | 0.3 | (0.6 | ) | ||||||
Other comprehensive income (loss), net of tax | 62.6 | 37.6 | (87.6 | ) | |||||||
Comprehensive income | $ | 267.9 | $ | 479.6 | $ | 314.0 |
June 28, 2014 | June 29, 2013 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 799.5 | $ | 779.9 | |||
Investment securities | 5.9 | — | |||||
Accounts receivable, net of allowance for doubtful accounts of $2.7 million and $2.1 million, respectively | 935.1 | 651.9 | |||||
Inventories | 631.6 | 703.9 | |||||
Current deferred income taxes | 62.8 | 47.1 | |||||
Prepaid expenses and other current assets | 116.0 | 54.1 | |||||
Total current assets | 2,550.9 | 2,236.9 | |||||
Non-current assets | |||||||
Fixed assets, net | 779.9 | 681.4 | |||||
Goodwill and other indefinite-lived intangible assets | 3,543.8 | 1,174.1 | |||||
Other intangible assets, net | 6,787.0 | 1,157.6 | |||||
Non-current deferred income taxes | 23.6 | 20.3 | |||||
Other non-current assets | 195.0 | 80.6 | |||||
Total non-current assets | 11,329.3 | 3,114.0 | |||||
Total assets | 13,880.2 | 5,350.8 | |||||
Liabilities and shareholders’ equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 364.3 | $ | 382.0 | |||
Short-term debt | 2.1 | 5.0 | |||||
Payroll and related taxes | 112.3 | 82.1 | |||||
Accrued customer programs | 256.5 | 131.7 | |||||
Accrued liabilities | 179.4 | 95.7 | |||||
Accrued income taxes | 17.4 | 11.6 | |||||
Current deferred income taxes | 1.1 | 0.2 | |||||
Current portion of long-term debt | 141.6 | 41.2 | |||||
Total current liabilities | 1,074.7 | 749.4 | |||||
Non-current liabilities | |||||||
Long-term debt, less current portion | 3,090.5 | 1,927.8 | |||||
Non-current deferred income taxes | 727.9 | 127.8 | |||||
Other non-current liabilities | 293.4 | 213.2 | |||||
Total non-current liabilities | 4,111.8 | 2,268.8 | |||||
Total liabilities | 5,186.5 | 3,018.2 | |||||
Shareholders’ equity | |||||||
Controlling interest: | |||||||
Preferred shares, $0.0001 par value, 10 million shares authorized | — | — | |||||
Ordinary shares, €0.001 par value, 10 billion shares authorized | 6,678.2 | 538.5 | |||||
Accumulated other comprehensive income | 139.6 | 77.0 | |||||
Retained earnings | 1,875.1 | 1,715.9 | |||||
8,692.9 | 2,331.4 | ||||||
Noncontrolling interest | 0.8 | 1.2 | |||||
Total shareholders’ equity | 8,693.7 | 2,332.6 | |||||
Total liabilities and shareholders' equity | $ | 13,880.2 | $ | 5,350.8 | |||
Supplemental Disclosures of Balance Sheet Information | |||||||
Preferred shares, issued and outstanding | — | — | |||||
Ordinary shares, issued and outstanding | 133.8 | 94.1 |
Fiscal Year Ended | |||||||||||
June 28, 2014 | June 29, 2013 | June 30, 2012 | |||||||||
Cash Flows From (For) Operating Activities | |||||||||||
Net income | $ | 205.3 | $ | 441.9 | $ | 401.6 | |||||
Adjustments to derive cash flows | |||||||||||
Loss on extinguishment of debt | 165.8 | — | — | ||||||||
Write-off of in-process research and development | 6.0 | 9.0 | — | ||||||||
Gain on sale of pipeline development projects | — | — | (3.5 | ) | |||||||
Losses on sales of investments | 12.7 | 4.7 | — | ||||||||
Gain on sale of business | — | — | (8.6 | ) | |||||||
Restructuring and asset impairment | 47.0 | 2.9 | 8.7 | ||||||||
Depreciation and amortization | 358.9 | 160.2 | 135.3 | ||||||||
Share-based compensation | 24.6 | 18.4 | 19.0 | ||||||||
Income tax benefit from exercise of stock options | (2.5 | ) | (1.4 | ) | (1.8 | ) | |||||
Excess tax benefit of stock transactions | (5.7 | ) | (15.7 | ) | (12.9 | ) | |||||
Deferred income taxes | (53.8 | ) | 5.7 | 27.5 | |||||||
Subtotal | 758.3 | 625.6 | 565.2 | ||||||||
Changes in operating assets and liabilities, net of asset and business acquisitions and disposition | |||||||||||
Accounts receivable | (226.7 | ) | (37.0 | ) | (49.3 | ) | |||||
Inventories | 83.0 | (94.6 | ) | 5.4 | |||||||
Accounts payable | (24.9 | ) | 6.5 | (23.6 | ) | ||||||
Payroll and related taxes | (55.5 | ) | (11.9 | ) | 5.0 | ||||||
Accrued customer programs | 113.1 | 12.6 | (1.6 | ) | |||||||
Accrued liabilities | 23.0 | 8.4 | 4.2 | ||||||||
Accrued income taxes | (10.7 | ) | 28.9 | 13.7 | |||||||
Other | 33.9 | 15.3 | (5.7 | ) | |||||||
Subtotal | (64.8 | ) | (71.8 | ) | (51.8 | ) | |||||
Net cash from operating activities | 693.5 | 553.8 | 513.4 | ||||||||
Cash Flows (For) From Investing Activities | |||||||||||
Acquisitions of businesses, net of cash acquired | (1,605.8 | ) | (852.3 | ) | (582.3 | ) | |||||
Purchase of securities | (15.0 | ) | — | — | |||||||
Proceeds from sale of securities | 81.4 | 8.6 | — | ||||||||
Additions to property and equipment | (171.6 | ) | (104.1 | ) | (120.2 | ) | |||||
Proceeds from sales of property and equipment | 6.2 | — | — | ||||||||
Proceeds from sale of intangible assets and pipeline development projects | — | — | 10.5 | ||||||||
Proceeds from sale of business | — | — | 8.6 | ||||||||
Acquisitions of assets | — | — | (0.8 | ) | |||||||
Net cash for investing activities | (1,704.8 | ) | (947.8 | ) | (684.1 | ) | |||||
Cash Flows (For) From Financing Activities | |||||||||||
Purchase of noncontrolling interest | (7.2 | ) | — | — | |||||||
Borrowings (repayments) of short-term debt, net | (3.0 | ) | 5.0 | (2.7 | ) | ||||||
Premium on early retirement of debt | (133.5 | ) | — | — | |||||||
Net proceeds from debt issuances | 3,293.6 | 637.3 | 1,089.2 | ||||||||
Repayments of long-term debt | (2,035.0 | ) | (40.0 | ) | (610.0 | ) | |||||
Deferred financing fees | (48.8 | ) | (6.0 | ) | (5.1 | ) | |||||
Excess tax benefit of stock transactions | 5.7 | 15.7 | 12.9 | ||||||||
Issuance of common stock | 9.8 | 10.7 | 11.6 | ||||||||
Repurchase of common stock | (7.5 | ) | (12.4 | ) | (8.2 | ) | |||||
Cash dividends | (46.1 | ) | (33.0 | ) | (29.0 | ) | |||||
Net cash from financing activities | 1,028.0 | 577.2 | 458.7 | ||||||||
Effect of exchange rate changes on cash | 2.9 | (5.8 | ) | 4.4 | |||||||
Net increase in cash and cash equivalents | 19.6 | 177.4 | 292.4 | ||||||||
Cash and cash equivalents, beginning of period | 779.9 | 602.5 | 310.1 | ||||||||
Cash and cash equivalents, end of period | $ | 799.5 | $ | 779.9 | $ | 602.5 |
Fiscal Year Ended | |||||||||||
June 28, 2014 | June 29, 2013 | June 30, 2012 | |||||||||
Supplemental Disclosures of Cash Flow Information | |||||||||||
Cash paid/received during the year for: | |||||||||||
Interest paid | $ | 98.4 | $ | 58.5 | $ | 53.7 | |||||
Interest received | $ | 2.4 | $ | 3.9 | $ | 4.0 | |||||
Income taxes paid | $ | 93.2 | $ | 133.2 | $ | 82.3 | |||||
Income taxes refunded | $ | 4.3 | $ | 1.3 | $ | 0.9 |
Common Stock Issued | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | |||||||||||||||
Shares | Amount | |||||||||||||||||
Balance at June 25, 2011 | 92.8 | $ | 467.7 | $ | 127.1 | $ | 934.3 | $ | 1,529.1 | |||||||||
Net income | — | — | — | 401.6 | 401.6 | |||||||||||||
Other comprehensive loss | — | — | (87.6 | ) | — | (87.6 | ) | |||||||||||
Issuance of common stock under: | ||||||||||||||||||
Stock options | 0.5 | 11.6 | — | — | 11.6 | |||||||||||||
Restricted stock plan | 0.3 | — | — | — | — | |||||||||||||
Compensation for stock options | — | 5.0 | — | — | 5.0 | |||||||||||||
Compensation for restricted stock | — | 14.0 | — | — | 14.0 | |||||||||||||
Cash dividends, $0.31 per share | — | — | — | (29.0 | ) | (29.0 | ) | |||||||||||
Tax effect from stock transactions | — | 14.7 | — | — | 14.7 | |||||||||||||
Repurchases of common stock | (0.1 | ) | (8.2 | ) | — | — | (8.2 | ) | ||||||||||
Balance at June 30, 2012 | 93.5 | 504.7 | 39.4 | 1,306.9 | 1,851.0 | |||||||||||||
Net income | — | — | — | 441.9 | 441.9 | |||||||||||||
Other comprehensive income | — | — | 37.6 | — | 37.6 | |||||||||||||
Issuance of common stock under: | — | |||||||||||||||||
Stock options | 0.4 | 10.7 | — | — | 10.7 | |||||||||||||
Restricted stock plan | 0.4 | — | — | — | — | |||||||||||||
Compensation for stock options | — | 6.1 | — | — | 6.1 | |||||||||||||
Compensation for restricted stock | — | 12.3 | — | — | 12.3 | |||||||||||||
Cash dividends, $0.35 per share | — | — | — | (33.0 | ) | (33.0 | ) | |||||||||||
Tax effect from stock transactions | — | 17.1 | — | — | 17.1 | |||||||||||||
Repurchases of common stock | (0.1 | ) | (12.4 | ) | — | — | (12.4 | ) | ||||||||||
Balance at June 29, 2013 | 94.1 | 538.5 | 77.0 | 1,715.9 | 2,331.4 | |||||||||||||
Net income | — | — | — | 205.3 | 205.3 | |||||||||||||
Other comprehensive income | — | — | 62.6 | — | 62.6 | |||||||||||||
Issuance of common stock under: | ||||||||||||||||||
Elan acquisition | 39.4 | 6,117.2 | — | — | 6,117.2 | |||||||||||||
Stock options | 0.2 | 9.8 | — | — | 9.8 | |||||||||||||
Restricted stock plan | 0.2 | — | — | — | — | |||||||||||||
Compensation for stock options | — | 6.5 | — | — | 6.5 | |||||||||||||
Compensation for restricted stock | — | 18.1 | — | — | 18.1 | |||||||||||||
Cash dividends, $0.39 per share | — | — | — | (46.1 | ) | (46.1 | ) | |||||||||||
Tax effect from stock transactions | — | 8.2 | — | — | 8.2 | |||||||||||||
Repurchases of common stock | (0.1 | ) | (7.5 | ) | — | — | (7.5 | ) | ||||||||||
Registration of ordinary shares | — | (5.4 | ) | — | — | (5.4 | ) | |||||||||||
Purchase of noncontrolling interest | — | (7.2 | ) | — | — | (7.2 | ) | |||||||||||
Balance at June 28, 2014 | 133.8 | $ | 6,678.2 | $ | 139.6 | $ | 1,875.1 | $ | 8,692.9 |
Table I | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Consolidated | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 1,144.2 | $ | — | $ | 1,144.2 | $ | 967.2 | $ | — | $ | 967.2 | 18 | % | 18 | % | |||||||||||||
Cost of sales | 728.5 | 93.0 | (a) | 635.4 | 611.0 | 23.9 | (a) | 587.1 | 19 | % | 8 | % | |||||||||||||||||
Gross profit | 415.7 | 93.0 | 508.8 | 356.2 | 23.9 | 380.1 | 17 | % | 34 | % | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Distribution | 14.1 | — | 14.1 | 12.5 | — | 12.5 | 13 | % | 13 | % | |||||||||||||||||||
Research and development | 38.1 | — | 38.1 | 30.9 | — | 30.9 | 23 | % | 23 | % | |||||||||||||||||||
Selling | 58.6 | 5.8 | (a) | 52.8 | 56.5 | 5.6 | (a) | 50.9 | 4 | % | 4 | % | |||||||||||||||||
Administration | 97.0 | 17.8 | (a,b) | 79.2 | 64.3 | 3.7 | (a,f) | 60.6 | 51 | % | 31 | % | |||||||||||||||||
Write-off of in-process research and development | — | — | 9.0 | 9.0 | — | -100 | % | NM | |||||||||||||||||||||
Restructuring | 10.5 | 10.5 | (c) | — | 2.9 | 2.9 | — | 264 | % | NM | |||||||||||||||||||
Total operating expenses | 218.3 | 34.1 | 184.2 | 176.1 | 21.2 | 154.9 | 24 | % | 19 | % | |||||||||||||||||||
Operating income | 197.4 | 127.1 | 324.6 | 180.1 | 45.1 | 225.2 | 10 | % | 44 | % | |||||||||||||||||||
Interest, net | 26.3 | — | 26.3 | 18.6 | — | 18.6 | 41 | % | 41 | % | |||||||||||||||||||
Other expense, net | 5.6 | 3.5 | (d) | 2.1 | 0.1 | — | 0.1 | NM | NM | ||||||||||||||||||||
Income before income taxes | 165.5 | 130.6 | 296.2 | 161.4 | 45.1 | 206.6 | 3 | % | 43 | % | |||||||||||||||||||
Income tax expense | 33.8 | 28.3 | (e) | 62.1 | 43.0 | 15.5 | (e) | 58.5 | -21 | % | 6 | % | |||||||||||||||||
Net income | $ | 131.7 | $ | 102.3 | $ | 234.1 | $ | 118.5 | $ | 29.6 | $ | 148.1 | 11 | % | 58 | % | |||||||||||||
Diluted earnings per share | $ | 0.98 | $ | 1.74 | $ | 1.25 | $ | 1.57 | -22 | % | 11 | % | |||||||||||||||||
Diluted weighted average shares outstanding | 134.3 | 134.3 | 94.6 | 94.6 | |||||||||||||||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 36.3 | % | 44.5 | % | 36.8 | % | 39.3 | % | |||||||||||||||||||||
Operating expenses | 19.1 | % | 16.1 | % | 18.2 | % | 16.0 | % | |||||||||||||||||||||
Operating income | 17.3 | % | 28.4 | % | 18.6 | % | 23.3 | % |
Twelve Months Ended | |||||||||||||||||||||||||||||
Consolidated | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 4,060.8 | $ | — | $ | 4,060.8 | $ | 3,539.8 | $ | — | $ | 3,539.8 | 15 | % | 15 | % | |||||||||||||
Cost of sales | 2,613.1 | 255.2 | (a) | 2,357.9 | 2,259.8 | 81.1 | (a,h) | 2,178.7 | 16 | % | 8 | % | |||||||||||||||||
Gross profit | 1,447.7 | 255.2 | 1,702.9 | 1,280.0 | 81.1 | 1,361.1 | 13 | % | 25 | % | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Distribution | 55.3 | — | 55.3 | 47.5 | — | 47.5 | 16 | % | 16 | % | |||||||||||||||||||
Research and development | 152.5 | — | 152.5 | 115.2 | — | 115.2 | 32 | % | 32 | % | |||||||||||||||||||
Selling | 208.6 | 22.3 | (a) | 186.3 | 186.1 | 21.1 | (a) | 165.0 | 12 | % | 13 | % | |||||||||||||||||
Administration | 411.3 | 131.7 | (a,b,g) | 279.6 | 240.2 | 12.1 | (a,f) | 228.1 | 71 | % | 23 | % | |||||||||||||||||
Write-off of IPR&D | 6.0 | 6.0 | — | 9.0 | 9.0 | — | -34 | % | — | % | |||||||||||||||||||
Restructuring | 47.0 | 47.0 | (c) | — | 2.9 | 2.9 | — | NM | — | % | |||||||||||||||||||
Total operating expenses | 880.7 | 207.0 | 673.7 | 600.9 | 45.1 | 555.8 | 47 | % | 21 | % | |||||||||||||||||||
Operating income | 567.0 | 462.2 | 1,029.2 | 679.1 | 126.2 | 805.3 | -17 | % | 28 | % | |||||||||||||||||||
Interest, net | 103.5 | 10.0 | (g) | 93.5 | 65.8 | — | 65.8 | 57 | % | 42 | % | ||||||||||||||||||
Other expense, net | 12.4 | 8.8 | (d,g) | 3.6 | 0.9 | — | 0.9 | NM | 300 | % | |||||||||||||||||||
Loss on sales of investments | 12.7 | 12.7 | — | 4.7 | 4.7 | — | 172 | % | — | % | |||||||||||||||||||
Loss on extinguishment of debt | 165.8 | 165.8 | — | — | — | — | NM | — | % | ||||||||||||||||||||
Income before income taxes | 272.6 | 659.5 | 932.1 | 607.7 | 130.9 | 738.6 | -55 | % | 26 | % | |||||||||||||||||||
Income tax expense | 67.3 | 125.3 | (e) | 192.6 | 165.8 | 43.1 | (e) | 208.9 | -59 | % | -8 | % | |||||||||||||||||
Net income | $ | 205.3 | $ | 534.2 | $ | 739.5 | $ | 441.9 | $ | 87.8 | $ | 529.7 | -54 | % | 40 | % | |||||||||||||
Diluted earnings per share | $ | 1.77 | $ | 6.39 | $ | 4.68 | $ | 5.61 | -62 | % | 14 | % | |||||||||||||||||
Diluted weighted average shares outstanding | 115.6 | 115.6 | 94.5 | 94.5 | |||||||||||||||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 35.7 | % | 41.9 | % | 36.2 | % | 38.5 | % | |||||||||||||||||||||
Operating expenses | 21.7 | % | 16.6 | % | 17.0 | % | 15.7 | % | |||||||||||||||||||||
Operating income | 14.0 | % | 25.3 | % | 19.2 | % | 22.8 | % |
*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) Acquisition-related amortization | |||||||||||||||
(b) Loss contingency accrual of $15.0 million | |||||||||||||||
(c) Restructuring charges primarily related to Elan | |||||||||||||||
(d) Losses on Elan equity method investments | |||||||||||||||
(e) Total tax effect for non-GAAP pre-tax adjustments | |||||||||||||||
(f) Acquisition and other integration costs | |||||||||||||||
(g) Elan transaction costs | |||||||||||||||
(h) Inventory step-ups of $10.8 million |
Table II | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Consumer Healthcare | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 606.9 | $ | — | $ | 606.9 | $ | 562.5 | $ | — | $ | 562.5 | 8 | % | 8 | % | |||||||||||||
Cost of sales | 404.9 | 3.7 | (a) | 401.2 | 363.4 | 3.2 | (a) | 360.2 | 11 | % | 11 | % | |||||||||||||||||
Gross profit | 202.0 | 3.7 | 205.7 | 199.1 | 3.2 | 202.3 | 1 | % | 2 | % | |||||||||||||||||||
Operating expenses | 97.3 | 4.9 | (a,b) | 92.4 | 97.2 | 7.6 | (a,c) | 89.6 | — | % | 3 | % | |||||||||||||||||
Operating income | $ | 104.7 | $ | 8.6 | $ | 113.3 | $ | 101.9 | $ | 10.8 | $ | 112.7 | 3 | % | 1 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 33.3 | % | 33.9 | % | 35.4 | % | 36.0 | % | |||||||||||||||||||||
Operating expenses | 16.0 | % | 15.2 | % | 17.3 | % | 15.9 | % | |||||||||||||||||||||
Operating income | 17.3 | % | 18.7 | % | 18.1 | % | 20.0 | % | |||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||||
Consumer Healthcare | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 2,219.0 | $ | — | $ | 2,219.0 | $ | 2,089.0 | $ | — | $ | 2,089.0 | 6 | % | 6 | % | |||||||||||||
Cost of sales | 1,499.2 | 14.0 | (a) | 1,485.2 | 1,405.2 | 18.6 | (a,i) | 1,386.6 | 7 | % | 7 | % | |||||||||||||||||
Gross profit | 719.8 | 14.0 | 733.8 | 683.8 | 18.6 | 702.4 | 5 | % | 4 | % | |||||||||||||||||||
Operating expenses | 351.2 | 11.6 | (a,g,h) | 339.6 | 320.6 | 12.1 | (a,c) | 308.5 | 10 | % | 10 | % | |||||||||||||||||
Operating income | $ | 368.6 | $ | 25.6 | $ | 394.2 | $ | 363.2 | $ | 30.6 | $ | 393.8 | 1 | % | — | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 32.4 | % | 33.1 | % | 32.7 | % | 33.6 | % | |||||||||||||||||||||
Operating expenses | 15.8 | % | 15.3 | % | 15.3 | % | 14.8 | % | |||||||||||||||||||||
Operating income | 16.6 | % | 17.8 | % | 17.4 | % | 18.9 | % |
Three Months Ended | |||||||||||||||||||||||||||||
Nutritionals | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 145.2 | $ | — | $ | 145.2 | $ | 149.7 | $ | — | $ | 149.7 | -3 | % | -3 | % | |||||||||||||
Cost of sales | 108.4 | 3.1 | (a) | 105.3 | 109.5 | 3.1 | (a) | 106.5 | -1 | % | -1 | % | |||||||||||||||||
Gross profit | 36.8 | 3.1 | 39.9 | 40.1 | 3.1 | 43.2 | -8 | % | -8 | % | |||||||||||||||||||
Operating expenses | 24.7 | 5.0 | (a) | 19.7 | 23.0 | 4.3 | (a) | 18.7 | 7 | % | 5 | % | |||||||||||||||||
Operating income | $ | 12.1 | $ | 8.1 | $ | 20.2 | $ | 17.2 | $ | 7.3 | $ | 24.5 | -30 | % | -18 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 25.3 | % | 27.5 | % | 26.8 | % | 28.9 | % | |||||||||||||||||||||
Operating expenses | 17.0 | % | 13.5 | % | 15.3 | % | 12.5 | % | |||||||||||||||||||||
Operating income | 8.3 | % | 13.9 | % | 11.5 | % | 16.4 | % | |||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||||
Nutritionals | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 551.7 | $ | — | $ | 551.7 | $ | 508.4 | $ | — | $ | 508.4 | 9 | % | 9 | % | |||||||||||||
Cost of sales | 410.1 | 12.3 | (a) | 397.8 | 381.3 | 12.2 | (a) | 369.1 | 8 | % | 8 | % | |||||||||||||||||
Gross profit | 141.6 | 12.3 | 153.9 | 127.1 | 12.2 | 139.3 | 11 | % | 10 | % | |||||||||||||||||||
Operating expenses | 101.1 | 19.8 | (a,j) | 81.3 | 91.9 | 17.0 | (a) | 74.9 | 10 | % | 9 | % | |||||||||||||||||
Operating income | $ | 40.5 | $ | 32.1 | $ | 72.6 | $ | 35.2 | $ | 29.2 | $ | 64.4 | 15 | % | 13 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 25.7 | % | 27.9 | % | 25.0 | % | 27.4 | % | |||||||||||||||||||||
Operating expenses | 18.3 | % | 14.7 | % | 18.1 | % | 14.7 | % | |||||||||||||||||||||
Operating income | 7.3 | % | 13.2 | % | 6.9 | % | 12.7 | % |
Three Months Ended | |||||||||||||||||||||||||||||
Rx Pharmaceuticals | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 253.4 | $ | — | $ | 253.4 | $ | 194.7 | $ | — | $ | 194.7 | 30 | % | 30 | % | |||||||||||||
Cost of sales | 117.8 | 17.5 | (a) | 100.3 | 102.4 | 16.7 | (a) | 85.7 | 15 | % | 17 | % | |||||||||||||||||
Gross profit | 135.6 | 17.5 | 153.1 | 92.3 | 16.7 | 109.0 | 47 | % | 40 | % | |||||||||||||||||||
Operating expenses | 46.3 | 15.5 | (a,d) | 30.8 | 35.1 | 9.1 | (a,e) | 25.9 | 32 | % | 19 | % | |||||||||||||||||
Operating income | $ | 89.3 | $ | 33.0 | $ | 122.3 | $ | 57.2 | $ | 25.8 | $ | 83.0 | 56 | % | 47 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 53.5 | % | 60.4 | % | 47.4 | % | 56.0 | % | |||||||||||||||||||||
Operating expenses | 18.3 | % | 12.2 | % | 18.0 | % | 13.3 | % | |||||||||||||||||||||
Operating income | 35.2 | % | 48.3 | % | 29.4 | % | 42.7 | % | |||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||||
Rx Pharmaceuticals | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 927.1 | $ | — | $ | 927.1 | $ | 709.5 | $ | — | $ | 709.5 | 31 | % | 31 | % | |||||||||||||
Cost of sales | 437.2 | 72.3 | (a) | 364.9 | 348.0 | 46.7 | (a,o) | 301.3 | 26 | % | 21 | % | |||||||||||||||||
Gross profit | 489.9 | 72.3 | 562.2 | 361.5 | 46.7 | 408.2 | 36 | % | 38 | % | |||||||||||||||||||
Operating expenses | 140.1 | 26.7 | (a,d,k,l,m,n) | 113.4 | 98.3 | 10.7 | (a,e,p) | 87.6 | 42 | % | 29 | % | |||||||||||||||||
Operating income | $ | 349.8 | $ | 99.0 | $ | 448.8 | $ | 263.2 | $ | 57.4 | $ | 320.6 | 33 | % | 40 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 52.8 | % | 60.6 | % | 50.9 | % | 57.5 | % | |||||||||||||||||||||
Operating expenses | 15.1 | % | 12.2 | % | 13.9 | % | 12.3 | % | |||||||||||||||||||||
Operating income | 37.7 | % | 48.4 | % | 37.1 | % | 45.2 | % |
Three Months Ended | |||||||||||||||||||||||||||||
API | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 32.5 | $ | — | $ | 32.5 | $ | 40.9 | $ | — | $ | 40.9 | -21 | % | -21 | % | |||||||||||||
Cost of sales | 15.7 | 0.5 | (a) | 15.2 | 22.2 | 0.5 | (a) | 21.7 | -30 | % | -30 | % | |||||||||||||||||
Gross profit | 16.8 | 0.5 | 17.3 | 18.7 | 0.5 | 19.2 | -10 | % | -10 | % | |||||||||||||||||||
Operating expenses | 8.0 | 0.2 | 7.8 | 8.7 | — | 8.7 | -7 | % | -10 | % | |||||||||||||||||||
Operating income | $ | 8.8 | $ | 0.7 | $ | 9.5 | $ | 10.0 | $ | 0.5 | $ | 10.5 | -12 | % | -10 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 51.7 | % | 53.4 | % | 45.7 | % | 46.9 | % | |||||||||||||||||||||
Operating expenses | 24.7 | % | 24.1 | % | 21.2 | % | 21.2 | % | |||||||||||||||||||||
Operating income | 27.0 | % | 29.3 | % | 24.5 | % | 25.7 | % | |||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||||
API | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 137.6 | $ | — | $ | 137.6 | $ | 159.3 | $ | — | $ | 159.3 | -14 | % | -14 | % | |||||||||||||
Cost of sales | 60.5 | 2.1 | (a) | 58.4 | 75.4 | 2.0 | (a) | 73.5 | -20 | % | -21 | % | |||||||||||||||||
Gross profit | 77.1 | 2.1 | 79.2 | 83.9 | 2.0 | 85.8 | -8 | % | -8 | % | |||||||||||||||||||
Operating expenses | 31.0 | 0.2 | 30.8 | 35.0 | — | 35.0 | -11 | % | -12 | % | |||||||||||||||||||
Operating income | $ | 46.1 | $ | 2.3 | $ | 48.4 | $ | 48.9 | $ | 2.0 | $ | 50.8 | -6 | % | -5 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 56.0 | % | 57.6 | % | 52.6 | % | 53.9 | % | |||||||||||||||||||||
Operating expenses | 22.5 | % | 22.4 | % | 21.9 | % | 21.9 | % | |||||||||||||||||||||
Operating income | 33.5 | % | 35.2 | % | 30.7 | % | 31.9 | % |
Three Months Ended | |||||||||||
Specialty Sciences | June 28, 2014 | ||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | |||||||||
Net sales | $ | 85.9 | $ | — | $ | 85.9 | |||||
Cost of sales | 67.8 | 67.8 | (a) | — | |||||||
Gross profit | 18.1 | 67.8 | 85.9 | ||||||||
Operating expenses | 13.2 | 5.8 | (f) | 7.4 | |||||||
Operating income | $ | 4.9 | $ | 73.6 | $ | 78.5 | |||||
Selected ratios as a percentage of net sales** | |||||||||||
Gross profit | 21.1 | % | 100.0 | % | |||||||
Operating expenses | 15.3 | % | 8.6 | % | |||||||
Operating income | 5.8 | % | 91.4 | % | |||||||
Twelve Months Ended(1) | |||||||||||
Specialty Sciences | June 28, 2014 | ||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | |||||||||
Net sales | $ | 146.7 | $ | — | $ | 146.7 | |||||
Cost of sales | 152.8 | 152.8 | (a) | — | |||||||
Gross profit | (6.1 | ) | 152.8 | 146.7 | |||||||
Operating expenses | 62.5 | 37.3 | (f) | 25.2 | |||||||
Operating income (loss) | $ | (68.6 | ) | $ | 190.1 | $ | 121.5 | ||||
Selected ratios as a percentage of net sales** | |||||||||||
Gross profit | (4.1 | )% | 100.0 | % | |||||||
Operating expenses | 42.6 | % | 17.2 | % | |||||||
Operating income (loss) | (46.7 | )% | 82.8 | % |
Three Months Ended | |||||||||||||||||||||||||||||
Other | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 20.3 | $ | — | $ | 20.3 | $ | 19.5 | $ | — | $ | 19.5 | 4 | % | 4 | % | |||||||||||||
Cost of sales | 13.8 | 0.5 | (a) | 13.3 | 13.4 | 0.4 | (a) | 13.0 | 3 | % | 2 | % | |||||||||||||||||
Gross profit | 6.5 | 0.5 | 7.0 | 6.0 | 0.4 | 6.5 | 8 | % | 8 | % | |||||||||||||||||||
Operating expenses | 5.1 | — | 5.1 | 5.4 | — | 5.4 | -5 | % | -6 | % | |||||||||||||||||||
Operating income | $ | 1.4 | $ | 0.5 | $ | 1.9 | $ | 0.7 | $ | 0.4 | $ | 1.1 | 100 | % | 73 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 31.7 | % | 33.9 | % | 31.1 | % | 33.3 | % | |||||||||||||||||||||
Operating expenses | 24.3 | % | 24.3 | % | 27.6 | % | 27.6 | % | |||||||||||||||||||||
Operating income | 7.3 | % | 9.6 | % | 3.5 | % | 5.7 | % | |||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||||
Other | June 28, 2014 | June 29, 2013 | % Change | ||||||||||||||||||||||||||
GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 78.7 | $ | — | $ | 78.7 | $ | 73.6 | $ | — | $ | 73.6 | 7 | % | 7 | % | |||||||||||||
Cost of sales | 53.2 | 1.8 | (a) | 51.4 | 49.9 | 1.7 | (a) | 48.2 | 7 | % | 7 | % | |||||||||||||||||
Gross profit | 25.5 | 1.8 | 27.3 | 23.7 | 1.7 | 25.4 | 8 | % | 7 | % | |||||||||||||||||||
Operating expenses | 21.5 | — | 21.5 | 20.3 | — | 20.3 | 6 | % | 6 | % | |||||||||||||||||||
Operating income | $ | 4.0 | $ | 1.8 | $ | 5.8 | $ | 3.4 | $ | 1.7 | $ | 5.1 | 18 | % | 14 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 32.4 | % | 34.7 | % | 32.3 | % | 34.5 | % | |||||||||||||||||||||
Operating expenses | 27.2 | % | 27.2 | % | 27.6 | % | 27.6 | % | |||||||||||||||||||||
Operating income | 5.2 | % | 7.5 | % | 4.6 | % | 6.9 | % |
*Amounts may not sum or cross-foot due to rounding. | |||||||||||||||
**Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||
(1) Only includes activity from December 18, 2013 to June 28, 2014 | |||||||||||||||
(a) Acquisition-related amortization | |||||||||||||||
(b) Restructuring charges and other integration-related expenses of $2.5 million related to Aspen | |||||||||||||||
(c) Restructuring and other integration-related charges of $5.6 million related to Velcera | |||||||||||||||
(d) Loss contingency accrual of $15.0 million | |||||||||||||||
(e) Write-off of in-process R&D of $9.0 million related to the Paddock acquisition | |||||||||||||||
(f) Elan restructuring and integration-related charges | |||||||||||||||
(g) Restructuring and integration charges totaling $6.0 million related to Aspen, Georgia, and Velcera | |||||||||||||||
(h) Escrow settlement of $2.5 million | |||||||||||||||
(i) Inventory step-up of $7.7 million | |||||||||||||||
(j) Litigation settlements of $2.8 million | |||||||||||||||
(k) Write-off of in-process R&D of $6.0 million related to the Paddock and Rosemont acquisitions | |||||||||||||||
(l) Contingent consideration adjustment of $1.1 million | |||||||||||||||
(m) Restructuring charges of $1.7 million related to Paddock | |||||||||||||||
(n) Litigation settlement of $2.5 million | |||||||||||||||
(o) Inventory step-up of $3.1 million | |||||||||||||||
(p) Restructuring charges of $1.5 million related to Cobrek |
Table III | ||
PERRIGO COMPANY PLC | ||
FY 2015 GUIDANCE AND FY 2014 EPS | ||
RECONCILIATION OF NON-GAAP MEASURES | ||
(unaudited) | ||
Fiscal 2015 Guidance | ||
FY15 reported diluted EPS range | $4.05 - $4.35 | |
Acquisition-related amortization (1) | 3.15 | |
FY15 adjusted diluted EPS range | $7.20 - $7.50 | |
Fiscal 2015 Guidance | ||
(in millions) | ||
FY15 net income - reported | $546.1 - $586.6 | |
Acquisition-related amortization (1) | 425.9 | |
FY15 net income - adjusted | $972.0 - $1,012.5 | |
FY14 adjusted net income | $739.5 | |
% change | 31 - 37% | |
Fiscal 2014 | ||
FY14 reported diluted EPS | $1.77 | |
Charges associated with acquisition and other integration-related costs | 2.06 | |
Acquisition-related amortization (1) | 1.93 | |
Charges associated with restructuring | 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) Amortization of acquired intangible assets related to business combinations and asset acquisitions. |
Table IV | |||||||||
PERRIGO COMPANY PLC | |||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||
(unaudited) | |||||||||
Fiscal Year | Change | ||||||||
2014 | 2013 | % | |||||||
Consolidated | |||||||||
Net sales, as reported | 4,060.8 | 3,539.8 | 15 | % | |||||
Less: FY 14 acquisitions(1) | (121.8 | ) | — | ||||||
Less: FY 13 acquisitions(2) | (168.3 | ) | — | ||||||
Net sales, organic | 3,770.5 | 3,539.8 | 7 | % | |||||
(1) Net sales from acquisition of Elan Corporation, plc, which was acquired on December 18, 2013, and acquired product portfolios from Aspen Global, Inc. and Fera Pharmaceuticals, LLC, which occurred on February 28, 2014 and February 18, 2014, respectively. | |||||||||
(2) Net sales from the acquisitions of Sergeant's Pet Care Products, Inc., Rosemont Pharmaceuticals Ltd., Velcera, Inc., which occurred on October 1, 2012, February 11, 2013, and April 1, 2013, respectively, and the acquisition of a product portfolio from Fera Pharmaceuticals, LLC, which occurred on June 17, 2013. | |||||||||