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 |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | Acquisition and integration-related charges |
• | Write-off of contingent consideration |
• | Escrow settlement |
• | Write-offs of in-process research and development |
• | Transaction charges and extinguishment of debt incurred in connection with a completed business acquisition |
• | Litigation settlement |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | R&D payment made in connection with collaborative arrangement |
• | Acquisition and integration-related charges |
• | Financing charges and extinguishment of debt incurred in connection with financing a pending acquisition |
• | Losses on derivatives associated with hedging a pending acquisition's foreign currency-denominated purchase price |
• | Equity method investment losses |
• | Income from transfer of rights agreement |
• | The weighted average effect of shares issued to finance a pending acquisition |
• | Investment distribution |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | Acquisition-related costs (inclusive of transaction charges and extinguishment of debt) |
• | Write-off of contingent consideration |
• | Escrow settlement |
• | Equity method investment losses |
• | Write-offs of in-process research and development |
• | Litigation settlement |
• | Losses on sale of investments |
• | Amortization of acquired intangible assets related to business combinations and asset acquisitions |
• | Restructuring charges related to completed business acquisition and for organizational improvements |
• | R&D payment made in connection with collaborative arrangement |
• | Acquisition-related costs (inclusive of related financing charges, extinguishment of debt, and losses on derivatives associated with hedging a pending acquisition's foreign currency-denominated purchase price) |
• | The weighted average effect of shares issued to finance a pending acquisition |
• | Incremental interest expense from senior notes issued to finance a pending acquisition |
• | Equity method investment losses |
• | Transfer of rights agreement |
• | Investment distribution |
(d) | Exhibits |
99.1 | Press release issued by Perrigo Company plc on February 5, 2015, furnished solely pursuant to Item 2.02 of Form 8-K. |
(Registrant) | ||||
PERRIGO COMPANY PLC | ||||
By: | /s/ Judy L. Brown | |||
Dated: | February 5, 2015 | Judy L. Brown | ||
Executive Vice President and | ||||
Chief Financial Officer | ||||
(Principal Accounting and Financial Officer) |
99.1 | Press release issued by Perrigo Company plc on February 5, 2015, furnished solely pursuant to Item 2.02 of Form 8-K. |
• | Fiscal second quarter net sales increased to a second quarter record of $1.07 billion. |
• | Excluding the effect of the pre-closing debt and equity issuances related to the previously announced acquisition of Omega Pharma NV ("Omega"), fiscal second quarter adjusted net income increased 32% to a second quarter record of $245 million, with adjusted diluted earnings per share of $1.82. |
• | Reported fiscal second quarter GAAP net income of $70 million and GAAP diluted earnings per share of $0.51. |
• | Record fiscal second quarter adjusted gross margin of 45.2% (GAAP gross margin of 35.8%) and adjusted operating margin of 29.5% (GAAP operating margin of 17.2%). |
• | Record second quarter operating cash flow of $273 million. |
• | Excluding the effect of the pre-closing debt and equity issuances related to Omega, management expects full-year fiscal 2015 adjusted earnings range of $7.25 to $7.45 per diluted share, an increase of 13% to 17% over fiscal 2014 adjusted earnings per share, and GAAP earnings of between $3.66 and $3.86 per diluted share. |
Fiscal 2015 | Fiscal 2014 | ||||
Second Quarter Ended | Second Quarter Ended | YoY | |||
12/27/2014 | 12/28/2013 | % Change | |||
Net Sales | $1,071.7 | $979.0 | 9 | % | |
Reported Net Income (Loss) | $70.2 | $(86.0) | NM | ||
Adjusted Net Income | $244.9 | $185.3 | 32 | % | |
Reported Diluted EPS | $0.51 | $(0.87) | NM | ||
Adjusted Diluted EPS | $1.82 | $1.87 | -3 | % | |
Reported Diluted Shares | 136.8 | 98.7 | 39 | % | |
Adjusted Diluted Shares | 134.5 | 99.2 | 36 | % |
Fiscal 2015 | Fiscal 2014 | |||||
Second Quarter Ended | Second Quarter Ended | YoY | ||||
12/27/2014 | 12/28/2013 | % Change | ||||
Net Sales | $529.6 | $536.3 | -1 | % | ||
Reported Gross Profit | $168.8 | $171.7 | -2 | % | ||
Adjusted Gross Profit | $175.4 | $175.1 | — | % | ||
Reported Operating Income | $74.9 | $89.5 | -16 | % | ||
Adjusted Operating Income | $95.7 | $93.5 | +2 | % | ||
Reported Gross Margin | 31.9 | % | 32.0 | % | -10 bps | |
Adjusted Gross Margin | 33.1 | % | 32.7 | % | +40 bps | |
Reported Operating Margin | 14.1 | % | 16.7 | % | -260 bps | |
Adjusted Operating Margin | 18.1 | % | 17.4 | % | +70 bps |
Fiscal 2015 | Fiscal 2014 | |||||
Second Quarter Ended | Second Quarter Ended | YoY | ||||
12/27/2014 | 12/28/2013 | % Change | ||||
Net Sales | $130.6 | $139.7 | -7 | % | ||
Reported Gross Profit | $31.8 | $38.7 | -18 | % | ||
Adjusted Gross Profit | $34.9 | $41.8 | -17 | % | ||
Reported Operating Income | $7.2 | $13.3 | -46 | % | ||
Adjusted Operating Income | $14.4 | $20.7 | -31 | % | ||
Reported Gross Margin | 24.4 | % | 27.7 | % | -330 bps | |
Adjusted Gross Margin | 26.7 | % | 29.9 | % | -320 bps | |
Reported Operating Margin | 5.5 | % | 9.6 | % | -410 bps | |
Adjusted Operating Margin | 11.0 | % | 14.8 | % | -380 bps |
Fiscal 2015 | Fiscal 2014 | |||||
Second Quarter Ended | Second Quarter Ended | YoY | ||||
12/27/2014 | 12/28/2013 | % Change | ||||
Net Sales | $276.6 | $246.6 | +12 | % | ||
Reported Gross Profit | $149.5 | $128.8 | +16 | % | ||
Adjusted Gross Profit | $167.3 | $150.2 | +11 | % | ||
Reported Operating Income | $109.7 | $100.4 | +9 | % | ||
Adjusted Operating Income | $127.7 | $123.1 | +4 | % | ||
Reported Gross Margin | 54.0 | % | 52.2 | % | +180 bps | |
Adjusted Gross Margin | 60.5 | % | 60.9 | % | -40 bps | |
Reported Operating Margin | 39.6 | % | 40.7 | % | -110 bps | |
Adjusted Operating Margin | 46.2 | % | 49.9 | % | -370 bps |
Fiscal 2015 | Fiscal 2014 | |||||
Second Quarter Ended | Second Quarter Ended | YoY | ||||
12/27/2014 | 12/28/2013 | % Change | ||||
Net Sales | $30.0 | $30.0 | — | % | ||
Reported Gross Profit | $13.2 | $16.5 | -20 | % | ||
Adjusted Gross Profit | $13.7 | $17.1 | -20 | % | ||
Reported Operating Income | $7.4 | $8.2 | -10 | % | ||
Adjusted Operating Income | $7.9 | $8.7 | -9 | % | ||
Reported Gross Margin | 43.9 | % | 55.2 | % | -1,130 bps | |
Adjusted Gross Margin | 45.5 | % | 56.9 | % | -1,140 bps | |
Reported Operating Margin | 24.7 | % | 27.4 | % | -270 bps | |
Adjusted Operating Margin | 26.3 | % | 29.1 | % | -280 bps |
Fiscal 2015 | Fiscal 2014 | |||||
Second Quarter Ended | Second Quarter Ended | YoY | ||||
12/27/2014 | 12/28/2013 | % Change | ||||
Net Sales | $86.6 | $7.4 | +1,070 | % | ||
Reported Gross Profit | $14.1 | $(1.3) | NM | |||
Adjusted Gross Profit | $86.6 | $7.4 | +1,070 | % | ||
Reported Operating Income | $9.5 | $(19.0) | NM | |||
Adjusted Operating Income | $82.8 | $4.3 | +1,826 | % | ||
Reported Gross Margin | 16.3 | % | (17.1 | )% | NM | |
Adjusted Gross Margin | 100.0 | % | 100.0 | % | — | |
Reported Operating Margin | 11.0 | % | (256.2 | )% | NM | |
Adjusted Operating Margin | 95.6 | % | 57.6 | % | +3,800 bps | |
• | Debt and equity financing costs and additional shares issued related to the Omega financings of $0.44 per diluted share. |
• | Omega operating results for the remaining forecast period, shares to be issued to complete the acquisition, and transaction related costs. |
Three Months Ended | Six Months Ended | ||||||||||||||
December 27, 2014 | December 28, 2013 | December 27, 2014 | December 28, 2013 | ||||||||||||
Net sales | $ | 1,071.7 | $ | 979.0 | $ | 2,023.1 | $ | 1,912.4 | |||||||
Cost of sales | 687.9 | 618.3 | 1,317.6 | 1,195.4 | |||||||||||
Gross profit | 383.8 | 360.7 | 705.5 | 717.0 | |||||||||||
Operating expenses | |||||||||||||||
Distribution | 14.8 | 14.0 | 29.2 | 27.2 | |||||||||||
Research and development | 53.2 | 37.5 | 89.8 | 69.8 | |||||||||||
Selling | 44.9 | 47.3 | 95.3 | 97.6 | |||||||||||
Administration | 84.1 | 154.4 | 165.5 | 233.2 | |||||||||||
Write-off of in-process research and development | — | 6.0 | — | 6.0 | |||||||||||
Restructuring | 2.4 | 14.9 | 4.2 | 17.0 | |||||||||||
Total operating expenses | 199.4 | 274.1 | 384.0 | 450.8 | |||||||||||
Operating income | 184.4 | 86.6 | 321.5 | 266.2 | |||||||||||
Interest expense, net | 30.8 | 29.7 | 56.7 | 51.1 | |||||||||||
Other expense, net | 59.3 | 4.1 | 61.9 | 5.1 | |||||||||||
Loss on extinguishment of debt | 9.6 | 165.8 | 9.6 | 165.8 | |||||||||||
Income (loss) before income taxes | 84.7 | (113.0 | ) | 193.3 | 44.2 | ||||||||||
Income tax expense (benefit) | 14.5 | (27.0 | ) | 26.8 | 18.9 | ||||||||||
Net income (loss) | $ | 70.2 | $ | (86.0 | ) | $ | 166.5 | $ | 25.3 | ||||||
Earnings (loss) per share | |||||||||||||||
Basic earnings (loss) per share | $ | 0.52 | $ | (0.87 | ) | $ | 1.23 | $ | 0.26 | ||||||
Diluted earnings (loss) per share | $ | 0.51 | $ | (0.87 | ) | $ | 1.23 | $ | 0.26 | ||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 136.3 | 98.7 | 135.1 | 96.4 | |||||||||||
Diluted | 136.8 | 98.7 | 135.6 | 96.9 | |||||||||||
Dividends declared per share | $ | 0.105 | $ | 0.09 | $ | 0.21 | $ | 0.18 |
Three Months Ended | Six Months Ended | ||||||||||||||
December 27, 2014 | December 28, 2013 | December 27, 2014 | December 28, 2013 | ||||||||||||
Net income (loss) | $ | 70.2 | $ | (86.0 | ) | $ | 166.5 | $ | 25.3 | ||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustments | (60.4 | ) | 16.5 | (124.2 | ) | 53.1 | |||||||||
Change in fair value of derivative financial instruments | (3.7 | ) | (1.4 | ) | (5.8 | ) | (10.6 | ) | |||||||
Change in fair value of investment securities | (1.1 | ) | (4.8 | ) | (0.5 | ) | (4.8 | ) | |||||||
Change in post-retirement and pension liability adjustments | (1.7 | ) | — | (1.7 | ) | (0.1 | ) | ||||||||
Other comprehensive income (loss) | (66.9 | ) | 10.3 | (132.2 | ) | 37.6 | |||||||||
Comprehensive income (loss) | $ | 3.3 | $ | (75.7 | ) | $ | 34.3 | $ | 62.9 |
December 27, 2014 | June 28, 2014 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 3,596.1 | $ | 799.5 | |||
Investment securities | 20.0 | 5.9 | |||||
Accounts receivable, net of allowance for doubtful accounts of $3.3 million and $2.7 million, respectively | 924.7 | 935.1 | |||||
Inventories | 641.8 | 631.6 | |||||
Current deferred income taxes | 66.6 | 62.8 | |||||
Prepaid expenses and other current assets | 115.0 | 116.0 | |||||
Total current assets | 5,364.2 | 2,550.9 | |||||
Non-current assets | |||||||
Property and equipment, net | 756.8 | 779.9 | |||||
Goodwill and other indefinite-lived intangible assets | 3,481.3 | 3,543.8 | |||||
Other intangible assets, net | 6,637.2 | 6,787.0 | |||||
Non-current deferred income taxes | 29.4 | 23.6 | |||||
Other non-current assets | 191.8 | 195.0 | |||||
Total non-current assets | 11,096.5 | 11,329.3 | |||||
Total assets | $ | 16,460.7 | $ | 13,880.2 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 302.7 | $ | 364.3 | |||
Short-term debt | — | 2.1 | |||||
Payroll and related taxes | 85.7 | 112.3 | |||||
Accrued customer programs | 310.3 | 256.5 | |||||
Accrued liabilities | 230.1 | 179.4 | |||||
Accrued income taxes | 29.4 | 17.4 | |||||
Current deferred income taxes | 4.5 | 1.1 | |||||
Current portion of long-term debt | 362.3 | 141.6 | |||||
Total current liabilities | 1,325.0 | 1,074.7 | |||||
Non-current liabilities | |||||||
Long-term debt, less current portion | 4,439.4 | 3,090.5 | |||||
Non-current deferred income taxes | 690.0 | 727.9 | |||||
Other non-current liabilities | 291.1 | 293.4 | |||||
Total non-current liabilities | 5,420.5 | 4,111.8 | |||||
Total liabilities | 6,745.5 | 5,186.5 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity | |||||||
Controlling interest: | |||||||
Preferred shares, $0.0001 par value, 10 million shares authorized | — | — | |||||
Ordinary shares, €0.001 par value, 10 billion shares authorized | 7,695.2 | 6,678.2 | |||||
Accumulated other comprehensive income | 7.4 | 139.6 | |||||
Retained earnings | 2,012.6 | 1,875.1 | |||||
9,715.2 | 8,692.9 | ||||||
Noncontrolling interest | — | 0.8 | |||||
Total shareholders’ equity | 9,715.2 | 8,693.7 | |||||
Total liabilities and shareholders' equity | $ | 16,460.7 | $ | 13,880.2 | |||
Supplemental Disclosures of Balance Sheet Information | |||||||
Preferred shares, issued and outstanding | — | — | |||||
Ordinary shares, issued and outstanding | 140.8 | 133.8 |
Six Months Ended | |||||||
December 27, 2014 | December 28, 2013 | ||||||
Cash Flows From (For) Operating Activities | |||||||
Net income (loss) | $ | 166.5 | $ | 25.3 | |||
Adjustments to derive cash flows | |||||||
Depreciation and amortization | 253.7 | 110.4 | |||||
Loss on acquisition-related foreign currency derivatives | 26.4 | — | |||||
Share-based compensation | 16.2 | 13.6 | |||||
Loss on extinguishment of debt | 9.6 | 165.8 | |||||
Non-cash restructuring charges | 4.2 | 14.3 | |||||
Excess tax benefit of stock transactions | (3.8 | ) | (6.9 | ) | |||
Deferred income taxes | (38.2 | ) | (5.4 | ) | |||
Other non-cash adjustments | 8.6 | 6.3 | |||||
Subtotal | 443.2 | 323.4 | |||||
Increase (decrease) in cash due to: | |||||||
Accounts receivable | (4.5 | ) | (65.1 | ) | |||
Inventories | (17.7 | ) | 10.5 | ||||
Accounts payable | (46.8 | ) | (70.8 | ) | |||
Payroll and related taxes | (26.3 | ) | 13.7 | ||||
Accrued customer programs | 51.8 | 72.8 | |||||
Accrued liabilities | 52.0 | 2.0 | |||||
Accrued income taxes | 32.4 | (50.4 | ) | ||||
Other | (16.4 | ) | (15.8 | ) | |||
Subtotal | 24.5 | (103.1 | ) | ||||
Net cash from (for) operating activities | 467.7 | 220.3 | |||||
Cash Flows From (For) Investing Activities | |||||||
Acquisitions of businesses, net of cash acquired | (83.0 | ) | (1,527.9 | ) | |||
Additions to property and equipment | (48.0 | ) | (77.8 | ) | |||
Settlement of acquisition-related foreign currency derivatives | (26.4 | ) | — | ||||
Other investing | 0.8 | 6.2 | |||||
Net cash from (for) investing activities | (156.6 | ) | (1,599.5 | ) | |||
Cash Flows From (For) Financing Activities | |||||||
Issuances of debt | 2,504.5 | 3,293.6 | |||||
Payments on long-term debt | (934.5 | ) | (1,965.0 | ) | |||
Deferred financing fees | (24.8 | ) | (48.8 | ) | |||
Premium on early debt retirement | — | (133.5 | ) | ||||
Issuance of ordinary shares | 1,039.4 | 6.7 | |||||
Equity issuance costs | (35.7 | ) | — | ||||
Excess tax benefit of stock transactions | 3.8 | 6.9 | |||||
Repurchase of ordinary shares | (7.7 | ) | (7.3 | ) | |||
Cash dividends | (29.0 | ) | (18.0 | ) | |||
Purchase of noncontrolling interest | — | (7.2 | ) | ||||
Other financing | (7.0 | ) | (5.0 | ) | |||
Net cash from (for) financing activities | 2,509.0 | 1,122.4 | |||||
Effect of exchange rate changes on cash | (23.5 | ) | (2.0 | ) | |||
Net increase (decrease) in cash and cash equivalents | 2,796.6 | (258.8 | ) | ||||
Cash and cash equivalents, beginning of period | 799.5 | 779.9 | |||||
Cash and cash equivalents, end of period | $ | 3,596.1 | $ | 521.1 | |||
Supplemental Disclosures of Cash Flow Information | |||||||
Cash paid/received during the period for: | |||||||
Interest paid | $ | 56.9 | $ | 49.1 | |||
Interest received | $ | 0.4 | $ | 1.6 | |||
Income taxes paid | $ | 20.8 | $ | 73.9 | |||
Income taxes refunded | $ | 7.5 | $ | 3.6 |
Table I | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Consolidated | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 1,071.7 | $ | — | $ | 1,071.7 | $ | 979.0 | $ | — | $ | 979.0 | 9 | % | 9 | % | |||||||||||||
Cost of sales | 687.9 | 100.8 | (a) | 587.1 | 618.3 | 37.5 | (a) | 580.8 | 11 | % | 1 | % | |||||||||||||||||
Gross profit | 383.8 | 100.8 | 484.6 | 360.7 | 37.5 | 398.2 | 6 | % | 22 | % | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Distribution | 14.8 | — | 14.8 | 14.0 | — | 14.0 | 6 | % | 6 | % | |||||||||||||||||||
Research and development | 53.2 | 10.0 | (c) | 43.2 | 37.5 | — | 37.5 | 42 | % | 15 | % | ||||||||||||||||||
Selling | 44.9 | 5.5 | (a) | 39.4 | 47.3 | 5.5 | (a) | 41.8 | -5 | % | -6 | % | |||||||||||||||||
Administration | 84.1 | 13.6 | (a,b,d) | 70.5 | 154.4 | 87.3 | (a,l,m) | 67.1 | -46 | % | 5 | % | |||||||||||||||||
Write-off of in-process research and development | — | — | — | 6.0 | 6.0 | (n) | — | -100 | % | — | % | ||||||||||||||||||
Restructuring | 2.4 | 2.4 | (b) | — | 14.9 | 14.9 | (b) | — | -84 | % | NM | ||||||||||||||||||
Total operating expenses | 199.4 | 31.5 | 167.9 | 274.1 | 113.8 | 160.4 | -27 | % | 5 | % | |||||||||||||||||||
Operating income | 184.4 | 132.3 | 316.7 | 86.6 | 151.3 | 237.9 | 113 | % | 33 | % | |||||||||||||||||||
Interest expense, net | 30.8 | 5.0 | (e) | 25.8 | 29.7 | 9.0 | (o) | 20.7 | 4 | % | 25 | % | |||||||||||||||||
Other expense, net | 59.3 | 56.4 | (f,g,h) | 2.9 | 4.1 | 1.8 | (o) | 2.3 | NM | 26 | % | ||||||||||||||||||
Loss on extinguishment of debt | 9.6 | 9.6 | (i) | — | 165.8 | 165.8 | (o) | — | -94 | % | — | % | |||||||||||||||||
Income (loss) before income taxes | 84.7 | 203.3 | 288.0 | (113.0 | ) | 327.8 | 214.8 | -175 | % | 34 | % | ||||||||||||||||||
Income tax expense (benefit) | 14.5 | 28.6 | (j) | 43.1 | (27.0 | ) | 56.5 | (j) | 29.5 | -154 | % | 46 | % | ||||||||||||||||
Net income (loss) | $ | 70.2 | $ | 174.7 | $ | 244.9 | $ | (86.0 | ) | $ | 271.3 | $ | 185.3 | -182 | % | 32 | % | ||||||||||||
Diluted earnings (loss) per share | $ | 0.51 | $ | 1.82 | $ | (0.87 | ) | $ | 1.87 | -159 | % | -3 | % | ||||||||||||||||
Diluted weighted average shares outstanding | 136.8 | (2.3 | ) | (k) | 134.5 | 98.7 | 99.2 | 39 | % | 36 | % | ||||||||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 35.8 | % | 45.2 | % | 36.8 | % | 40.7 | % | |||||||||||||||||||||
Operating expenses | 18.6 | % | 15.7 | % | 28.0 | % | 16.4 | % | |||||||||||||||||||||
Operating income | 17.2 | % | 29.5 | % | 8.8 | % | 24.3 | % | |||||||||||||||||||||
Table I continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||
Consolidated | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 2,023.1 | $ | — | $ | 2,023.1 | $ | 1,912.4 | $ | — | $ | 1,912.4 | 6 | % | 6 | % | |||||||||||||
Cost of sales | 1,317.6 | 201.4 | (a) | 1,116.2 | 1,195.4 | 61.0 | (a) | 1,134.5 | 10 | % | -2 | % | |||||||||||||||||
Gross profit | 705.5 | 201.4 | 906.9 | 717.0 | 61.0 | 777.9 | -2 | % | 17 | % | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Distribution | 29.2 | — | 29.2 | 27.2 | — | 27.2 | 7 | % | 7 | % | |||||||||||||||||||
Research and development | 89.8 | 10.0 | (c) | 79.8 | 69.8 | — | 69.8 | 29 | % | 14 | % | ||||||||||||||||||
Selling | 95.3 | 11.0 | (a) | 84.3 | 97.6 | 11.0 | (a) | 86.6 | -2 | % | -2 | % | |||||||||||||||||
Administration | 165.5 | 15.9 | (a,b,d) | 149.6 | 233.2 | 102.8 | (a,m,q,r) | 130.4 | -29 | % | 15 | % | |||||||||||||||||
Write-off of in-process research and development | — | — | — | 6.0 | 6.0 | (n) | — | -100 | % | — | % | ||||||||||||||||||
Restructuring | 4.2 | 4.2 | (b) | — | 17.0 | 17.0 | (b) | — | -76 | % | — | % | |||||||||||||||||
Total operating expenses | 384.0 | 41.1 | 342.9 | 450.8 | 136.8 | 314.0 | -15 | % | 9 | % | |||||||||||||||||||
Operating income | 321.5 | 242.5 | 564.0 | 266.2 | 197.8 | 464.0 | 21 | % | 22 | % | |||||||||||||||||||
Interest expense, net | 56.7 | 5.0 | (e) | 51.7 | 51.1 | 10.0 | (o) | 41.1 | 11 | % | 26 | % | |||||||||||||||||
Other expense, net | 61.9 | 58.4 | (f,h,p) | 3.5 | 5.1 | 3.5 | (o) | 1.6 | NM | 119 | % | ||||||||||||||||||
Loss on extinguishment of debt | 9.6 | 9.6 | (i) | — | 165.8 | 165.8 | (o) | — | -94 | % | — | % | |||||||||||||||||
Income (loss) before income taxes | 193.3 | 315.5 | 508.8 | 44.2 | 377.1 | 421.3 | NM | 21 | % | ||||||||||||||||||||
Income tax expense (benefit) | 26.8 | 49.5 | (j) | 76.3 | 18.9 | 73.3 | (j) | 92.1 | 42 | % | -17 | % | |||||||||||||||||
Net income (loss) | $ | 166.5 | $ | 266.0 | $ | 432.5 | $ | 25.3 | $ | 303.8 | $ | 329.1 | NM | 31 | % | ||||||||||||||
Diluted earnings per share | $ | 1.23 | $ | 3.22 | $ | 0.26 | $ | 3.40 | NM | -5 | % | ||||||||||||||||||
Diluted weighted average shares outstanding | 135.6 | (1.2 | ) | (k) | 134.4 | 96.9 | 96.9 | ||||||||||||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 34.9 | % | 44.8 | % | 37.5 | % | 40.7 | % | |||||||||||||||||||||
Operating expenses | 19.0 | % | 17.0 | % | 23.6 | % | 16.4 | % | |||||||||||||||||||||
Operating income | 15.9 | % | 27.9 | % | 13.9 | % | 24.3 | % |
Table I continued | |||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||
* Amounts may not sum or cross-foot due to rounding | |||||||||||||||
**Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||
NM - Calculations are not meaningful | |||||||||||||||
(a) Amortization expense | |||||||||||||||
(b) Restructuring and other integration-related charges | |||||||||||||||
(c) R&D payment of $10.0 million made in connection with collaborative arrangement | |||||||||||||||
(d) Omega transaction expenses totaling $11.6 million | |||||||||||||||
(e) Omega financing fees | |||||||||||||||
(f) Loss on derivatives associated with the pending Omega acquisition totaling $64.7 million | |||||||||||||||
(g) Elan equity method investment losses totaling $3.0 million | |||||||||||||||
(h) Income of $12.5 million from transfer of a rights agreement | |||||||||||||||
(i) Bridge fees and extinguishment of debt in connection with Omega financing | |||||||||||||||
(j) Tax effect of non-GAAP adjustments | |||||||||||||||
(k) Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the pending Omega acquisition | |||||||||||||||
(l) Elan acquisition and integration-related charges of $93.7 million offset partially by a $4.9 million write-off of contingent consideration related to the Fera acquisition | |||||||||||||||
(m) Favorable escrow settlement of $2.5 million related to Sergeant's | |||||||||||||||
(n) Write-offs of IPR&D related to Paddock and Rosemont | |||||||||||||||
(o) Elan transaction costs and extinguishment of debt | |||||||||||||||
(p) Elan equity method investment losses totaling $6.2 million, offset partially by a $1.1 million investment distribution | |||||||||||||||
(q) Elan acquisition and integration-related charges of $98.7 million offset partially by a $4.9 million write-off of contingent consideration related to the Fera acquisition | |||||||||||||||
(r) Litigation settlement of $2.5 million |
Table II | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Consumer Healthcare | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 529.6 | $ | — | $ | 529.6 | $ | 536.3 | $ | — | $ | 536.3 | -1 | % | -1 | % | |||||||||||||
Cost of sales | 360.8 | 6.6 | (a) | 354.2 | 364.6 | 3.4 | (a) | 361.2 | -1 | % | -2 | % | |||||||||||||||||
Gross profit | 168.8 | 6.6 | 175.4 | 171.7 | 3.4 | 175.1 | -2 | % | — | % | |||||||||||||||||||
Operating expenses | 93.9 | 14.2 | (a,b,c) | 79.7 | 82.2 | 0.6 | (a,b,d) | 81.6 | 14 | % | -2 | % | |||||||||||||||||
Operating income | $ | 74.9 | $ | 20.8 | $ | 95.7 | $ | 89.5 | $ | 4.0 | $ | 93.5 | -16 | % | 2 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 31.9 | % | 33.1 | % | 32.0 | % | 32.7 | % | |||||||||||||||||||||
Operating expenses | 17.7 | % | 15.1 | % | 15.3 | % | 15.2 | % | |||||||||||||||||||||
Operating income | 14.1 | % | 18.1 | % | 16.7 | % | 17.4 | % | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||
Consumer Healthcare | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 1,022.9 | $ | — | $ | 1,022.9 | $ | 1,074.8 | $ | — | $ | 1,074.8 | -5 | % | -5 | % | |||||||||||||
Cost of sales | 701.3 | 13.6 | (a) | 687.7 | 726.1 | 6.8 | (a) | 719.3 | -3 | % | -4 | % | |||||||||||||||||
Gross profit | 321.6 | 13.6 | 335.2 | 348.7 | 6.8 | 355.5 | -8 | % | -6 | % | |||||||||||||||||||
Operating expenses | 181.4 | 18.2 | (a,b,c) | 163.2 | 169.2 | 3.3 | (a,b,d) | 165.9 | 7 | % | -2 | % | |||||||||||||||||
Operating income | $ | 140.2 | $ | 31.8 | $ | 172.0 | $ | 179.5 | $ | 10.0 | $ | 189.5 | -22 | % | -9 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 31.4 | % | 32.8 | % | 32.4 | % | 33.1 | % | |||||||||||||||||||||
Operating expenses | 17.7 | % | 16.0 | % | 15.7 | % | 15.4 | % | |||||||||||||||||||||
Operating income | 13.7 | % | 16.8 | % | 16.7 | % | 17.6 | % | |||||||||||||||||||||
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Nutritionals | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 130.6 | $ | — | $ | 130.6 | $ | 139.7 | $ | — | $ | 139.7 | -7 | % | -7 | % | |||||||||||||
Cost of sales | 98.7 | 3.1 | (a) | 95.6 | 101.0 | 3.1 | (a) | 97.9 | -2 | % | -2 | % | |||||||||||||||||
Gross profit | 31.8 | 3.1 | 34.9 | 38.7 | 3.1 | 41.8 | -18 | % | -17 | % | |||||||||||||||||||
Operating expenses | 24.7 | 4.1 | (a) | 20.6 | 25.4 | 4.3 | (a) | 21.1 | -3 | % | -3 | % | |||||||||||||||||
Operating income | $ | 7.2 | $ | 7.2 | $ | 14.4 | $ | 13.3 | $ | 7.3 | $ | 20.7 | -46 | % | -31 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 24.4 | % | 26.7 | % | 27.7 | % | 29.9 | % | |||||||||||||||||||||
Operating expenses | 18.9 | % | 15.7 | % | 18.2 | % | 15.1 | % | |||||||||||||||||||||
Operating income | 5.5 | % | 11.0 | % | 9.6 | % | 14.8 | % | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||
Nutritionals | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 255.8 | $ | — | $ | 255.8 | $ | 268.7 | $ | — | $ | 268.7 | -5 | % | -5 | % | |||||||||||||
Cost of sales | 190.5 | 6.2 | (a) | 184.3 | 199.2 | 6.1 | (a) | 193.0 | -4 | % | -5 | % | |||||||||||||||||
Gross profit | 65.3 | 6.2 | 71.5 | 69.6 | 6.1 | 75.7 | -6 | % | -6 | % | |||||||||||||||||||
Operating expenses | 49.6 | 8.3 | (a) | 41.3 | 48.5 | 8.6 | (a) | 40.0 | 2 | % | 3 | % | |||||||||||||||||
Operating income | $ | 15.7 | $ | 14.5 | $ | 30.2 | $ | 21.0 | $ | 14.7 | $ | 35.8 | -25 | % | -15 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 25.5 | % | 27.9 | % | 25.9 | % | 28.2 | % | |||||||||||||||||||||
Operating expenses | 19.4 | % | 16.1 | % | 18.1 | % | 14.9 | % | |||||||||||||||||||||
Operating income | 6.1 | % | 11.8 | % | 7.8 | % | 13.3 | % |
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Rx Pharmaceuticals | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 276.6 | $ | — | $ | 276.6 | $ | 246.6 | $ | — | $ | 246.6 | 12 | % | 12 | % | |||||||||||||
Cost of sales | 127.1 | 17.8 | (a) | 109.3 | 117.8 | 21.4 | (a) | 96.4 | 8 | % | 13 | % | |||||||||||||||||
Gross profit | 149.5 | 17.8 | 167.3 | 128.8 | 21.4 | 150.2 | 16 | % | 11 | % | |||||||||||||||||||
Operating expenses | 39.8 | 0.2 | (a) | 39.6 | 28.4 | 1.3 | (a,b,e,f) | 27.1 | 40 | % | 46 | % | |||||||||||||||||
Operating income | $ | 109.7 | $ | 18.0 | $ | 127.7 | $ | 100.4 | $ | 22.7 | $ | 123.1 | 9 | % | 4 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 54.0 | % | 60.5 | % | 52.2 | % | 60.9 | % | |||||||||||||||||||||
Operating expenses | 14.4 | % | 14.3 | % | 11.5 | % | 11.0 | % | |||||||||||||||||||||
Operating income | 39.6 | % | 46.2 | % | 40.7 | % | 49.9 | % | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||
Rx Pharmaceuticals | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 471.2 | $ | — | $ | 471.2 | $ | 450.2 | $ | — | $ | 450.2 | 5 | % | 5 | % | |||||||||||||
Cost of sales | 225.3 | 34.8 | (a) | 190.5 | 208.9 | 37.4 | (a) | 171.5 | 8 | % | 11 | % | |||||||||||||||||
Gross profit | 245.9 | 34.8 | 280.7 | 241.3 | 37.4 | 278.8 | 2 | % | 1 | % | |||||||||||||||||||
Operating expenses | 71.5 | 0.4 | (a) | 71.1 | 57.8 | 5.3 | (a,b,e,f,g) | 52.5 | 24 | % | 35 | % | |||||||||||||||||
Operating income | $ | 174.4 | $ | 35.2 | $ | 209.6 | $ | 183.5 | $ | 42.7 | $ | 226.2 | -5 | % | -7 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 52.2 | % | 59.6 | % | 53.6 | % | 61.9 | % | |||||||||||||||||||||
Operating expenses | 15.2 | % | 15.1 | % | 12.8 | % | 11.7 | % | |||||||||||||||||||||
Operating income | 37.0 | % | 44.5 | % | 40.8 | % | 50.2 | % |
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
API | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 30.0 | $ | — | $ | 30.0 | $ | 30.0 | $ | — | $ | 30.0 | — | % | — | % | |||||||||||||
Cost of sales | 16.8 | 0.5 | (a) | 16.3 | 13.5 | 0.5 | (a) | 12.9 | 25 | % | 26 | % | |||||||||||||||||
Gross profit | 13.2 | 0.5 | 13.7 | 16.5 | 0.5 | 17.1 | -20 | % | -20 | % | |||||||||||||||||||
Operating expenses | 5.8 | — | 5.8 | 8.3 | — | 8.3 | 31 | % | 31 | % | |||||||||||||||||||
Operating income | $ | 7.4 | $ | 0.5 | $ | 7.9 | $ | 8.2 | $ | 0.5 | $ | 8.7 | -10 | % | -9 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 43.9 | % | 45.5 | % | 55.2 | % | 56.9 | % | |||||||||||||||||||||
Operating expenses | 19.2 | % | 19.2 | % | 27.8 | % | 27.8 | % | |||||||||||||||||||||
Operating income | 24.7 | % | 26.3 | % | 27.4 | % | 29.1 | % | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||
API | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 54.8 | $ | — | $ | 54.8 | $ | 73.2 | $ | — | $ | 73.2 | -25 | % | -25 | % | |||||||||||||
Cost of sales | 28.6 | 1.0 | (a) | 27.6 | 26.8 | 1.0 | (a) | 25.7 | 7 | % | 7 | % | |||||||||||||||||
Gross profit | 26.2 | 1.0 | 27.2 | 46.4 | 1.0 | 47.4 | -44 | % | -43 | % | |||||||||||||||||||
Operating expenses | 11.8 | — | 11.8 | 15.7 | — | 15.7 | -26 | % | -26 | % | |||||||||||||||||||
Operating income | $ | 14.4 | $ | 1.0 | $ | 15.4 | $ | 30.6 | $ | 1.0 | $ | 31.7 | -53 | % | -51 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 47.7 | % | 49.6 | % | 63.4 | % | 64.8 | % | |||||||||||||||||||||
Operating expenses | 21.3 | % | 21.3 | % | 21.5 | % | 21.5 | % | |||||||||||||||||||||
Operating income | 26.4 | % | 28.2 | % | 41.9 | % | 43.3 | % |
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Specialty Sciences | December 27, 2014 | December 28, 2013 (1) | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 86.6 | $ | — | $ | 86.6 | $ | 7.4 | $ | — | $ | 7.4 | NM | NM | |||||||||||||||
Cost of sales | 72.5 | 72.5 | (a) | — | 8.7 | 8.7 | (a) | — | NM | NM | |||||||||||||||||||
Gross profit | 14.1 | 72.5 | 86.6 | (1.3 | ) | 8.7 | 7.4 | NM | NM | ||||||||||||||||||||
Operating expenses | 4.6 | 0.8 | (a,b) | 3.8 | 17.7 | 14.6 | (a,b) | 3.1 | -74 | % | 21 | % | |||||||||||||||||
Operating income (loss) | $ | 9.5 | $ | 73.3 | $ | 82.8 | $ | (19.0 | ) | $ | 23.3 | $ | 4.3 | -150 | % | NM | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 16.3% | 100.0% | (17.1)% | 100.0% | |||||||||||||||||||||||||
Operating expenses | 5.3% | 4.4% | 239.1% | 42.4% | |||||||||||||||||||||||||
Operating income (loss) | 11.0% | 95.6% | (256.2)% | 57.6% | |||||||||||||||||||||||||
Six Month Ended | |||||||||||||||||||||||||||||
Specialty Sciences | December 27, 2014 | December 28, 2013 (1) | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 178.4 | $ | — | $ | 178.4 | $ | 7.4 | $ | — | $ | 7.4 | NM | NM | |||||||||||||||
Cost of sales | 145.0 | 145.0 | (a) | — | 8.7 | 8.7 | (a) | — | NM | NM | |||||||||||||||||||
Gross profit | 33.4 | 145.0 | 178.4 | (1.3 | ) | 8.7 | 7.4 | NM | NM | ||||||||||||||||||||
Operating expenses | 9.0 | 1.2 | (a,b) | 7.8 | 17.7 | 14.6 | (a,b) | 3.1 | -49 | % | 151 | % | |||||||||||||||||
Operating income (loss) | $ | 24.4 | $ | 146.2 | $ | 170.6 | $ | (19.0 | ) | $ | 23.3 | $ | 4.3 | NM | NM | ||||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 18.7% | 100.0% | (17.1)% | 100.0% | |||||||||||||||||||||||||
Operating expenses | 5.1% | 4.4% | 239.1% | 42.4% | |||||||||||||||||||||||||
Operating income (loss) | 13.7% | 95.6% | (256.2)% | 57.6% | |||||||||||||||||||||||||
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Other | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 18.3 | $ | — | $ | 18.3 | $ | 19.0 | $ | — | $ | 19.0 | -3 | % | -3 | % | |||||||||||||
Cost of sales | 11.9 | 0.4 | (a) | 11.5 | 12.9 | 0.4 | (a) | 12.4 | -7 | % | -7 | % | |||||||||||||||||
Gross profit | 6.4 | 0.4 | 6.8 | 6.1 | 0.4 | 6.6 | 5 | % | 3 | % | |||||||||||||||||||
Operating expenses | 5.3 | — | 5.3 | 5.5 | — | 5.5 | -5 | % | -5 | % | |||||||||||||||||||
Operating income | $ | 1.1 | $ | 0.4 | $ | 1.5 | $ | 0.6 | $ | 0.4 | $ | 1.1 | 91 | % | 45 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 35.1 | % | 37.1 | % | 32.3 | % | 34.6 | % | |||||||||||||||||||||
Operating expenses | 28.7 | % | 28.7 | % | 29.1 | % | 29.1 | % | |||||||||||||||||||||
Operating income | 6.4 | % | 8.4 | % | 3.2 | % | 5.6 | % | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||
Other | December 27, 2014 | December 28, 2013 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP* | Non-GAAP Adjustments* | As Adjusted* | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 40.0 | $ | — | $ | 40.0 | $ | 38.1 | $ | — | $ | 38.1 | 5 | % | 5 | % | |||||||||||||
Cost of sales | 26.9 | 0.8 | (a) | 26.1 | 25.8 | 0.9 | (a) | 24.9 | 4 | % | 5 | % | |||||||||||||||||
Gross profit | 13.1 | 0.8 | 13.9 | 12.3 | 0.9 | 13.2 | 7 | % | 5 | % | |||||||||||||||||||
Operating expenses | 11.1 | — | 11.1 | 10.5 | — | 10.5 | 5 | % | 5 | % | |||||||||||||||||||
Operating income | $ | 2.0 | $ | 0.8 | $ | 2.8 | $ | 1.8 | $ | 0.9 | $ | 2.7 | 14 | % | 4 | % | |||||||||||||
Selected ratios as a percentage of net sales** | |||||||||||||||||||||||||||||
Gross profit | 32.8 | % | 34.8 | % | 32.3 | % | 34.7 | % | |||||||||||||||||||||
Operating expenses | 27.7 | % | 27.7 | % | 27.6 | % | 27.6 | % | |||||||||||||||||||||
Operating income | 5.1 | % | 7.0 | % | 4.7 | % | 7.0 | % |
Table II continued | |||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||
* Amounts may not sum or cross-foot due to rounding | |||||||||||||||
**Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||
NM - Calculations are not meaningful | |||||||||||||||
(1) Only includes activity from December 18, 2013 to December 28, 2013 | |||||||||||||||
(a) Amortization expense | |||||||||||||||
(b) Restructuring and other integration-related charges | |||||||||||||||
(c) R&D payment of $10.0 million made in connection with collaborative arrangement | |||||||||||||||
(d) Favorable escrow settlement of $2.5 million related to Sergeant's | |||||||||||||||
(e) Write-offs of IPR&D related to Paddock and Rosemont | |||||||||||||||
(f) Favorable write-off of $4.9 million of contingent consideration related to the Fera acquisition | |||||||||||||||
(g) Litigation settlement of $2.5 million |
Table III | ||
PERRIGO COMPANY PLC | ||
FY 2015 GUIDANCE AND FY 2014 EPS | ||
RECONCILIATION OF NON-GAAP MEASURES | ||
(in millions except for per share amounts) | ||
(unaudited) | ||
Full Year | ||
Fiscal 2015 Guidance (1) | ||
FY15 reported diluted EPS range | $3.66 - $3.86 | |
Acquisition-related amortization (2) | 2.48 | |
Acquisition-related costs | 0.64 | |
Incremental interest expense (3) | 0.23 | |
Share dilution (4) | 0.21 | |
R&D payment made in connection with collaborative arrangement | 0.06 | |
Losses on Elan equity method investments | 0.04 | |
Restructuring and impairments | 0.03 | |
Investment distribution | (0.01) | |
Transfer of rights agreement | (0.09) | |
FY15 adjusted diluted EPS range | $7.25 - $7.45 | |
FY15 net income - reported | $504.1 - $531.1 | |
Acquisition-related amortization (2) | 343.5 | |
Acquisition-related costs | 88.7 | |
Incremental interest expense (3) | 37.0 | |
R&D payment made in connection with collaborative arrangement | 8.7 | |
Losses on equity method investments | 6.2 | |
Restructuring and impairments | 3.9 | |
Investment distribution | (0.9) | |
Transfer of rights agreement | (12.5) | |
FY15 net income - adjusted | $978.7 - $1,005.7 | |
FY14 adjusted net income | $739.5 | |
% change | 32% - 36% | |
Table III continued | ||
PERRIGO COMPANY PLC | ||
FY 2015 GUIDANCE AND FY 2014 EPS | ||
RECONCILIATION OF NON-GAAP MEASURES | ||
(unaudited) | ||
Full Year Fiscal 2014 | ||
FY14 reported diluted EPS | $1.77 | |
Acquisition-related costs | 2.06 | |
Acquisition-related amortization (2) | 1.93 | |
Restructuring and impairments | 0.34 | |
Charges associated with litigation settlements | 0.11 | |
Losses on sales of investments | 0.09 | |
Losses on Elan equity method investments | 0.06 | |
Charges associated with write-offs of in-process R&D | 0.03 | |
Charge associated with contingent consideration adjustment | 0.01 | |
Earnings associated with escrow settlement | (0.01) | |
FY14 adjusted diluted EPS | $6.39 | |
(1) Guidance excludes Omega operating results for the remaining forecast period, shares to be issued to complete the acquisition, and future transaction-related costs. | ||
(2) Amortization of acquired intangible assets related to business combinations and asset acquisitions. | ||
(3) Effect of incremental interest expense from $1.6 billion of senior notes issued on December 2, 2014 to finance the pending Omega acquisition. | ||
(4) Weighted average impact of 6.8 million shares issued on November 26, 2014 to finance the pending Omega acquisition. |