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 |
• | Loss on equity investments |
• | Loss on sales 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 and integration-related charges |
• | Financing charges and extinguishment of debt incurred in connection with financing a complete acquisition |
• | Losses on derivatives associated with hedging an 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 an acquisition |
• | Investment distribution |
• | Increase in litigation accrual |
(d) | Exhibits |
99.1 | Press release issued by Perrigo Company plc on April 21, 2015, furnished solely pursuant to Item 2.02 of Form 8-K. |
(Registrant) | ||||
PERRIGO COMPANY PLC | ||||
By: | /s/ Judy L. Brown | |||
Dated: | April 21, 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 April 21, 2015, furnished solely pursuant to Item 2.02 of Form 8-K. |
• | Delivered record fiscal third quarter net sales of $1.05 billion. |
• | Excluding the effect of the pre-closing debt and equity issuances related to the Omega Pharma (Omega) acquisition, fiscal third quarter adjusted net income increased 41% to a third quarter record of $249 million, with adjusted diluted earnings per share of $1.85 also up 41%. |
• | Reported fiscal third quarter GAAP net loss of $95 million and GAAP diluted loss per share of $0.67 driven by Omega-related charges. |
• | Achieved record fiscal third quarter adjusted gross margin of 45.7% (GAAP gross margin of 36.1%) and record adjusted operating margin of 29.8% (GAAP operating margin of 19.0%). |
• | Generated record third quarter operating cash flow of $268 million. |
• | The Company expects calendar year 2015 adjusted earnings per diluted share range of $7.50 to $8.00, an increase of 20% to 28% over calendar 2014 adjusted earnings per share. |
• | Perrigo's calendar 2014 to 2017 three-year compound annual growth rate goal for consolidated organic net sales is 5-10%. |
Fiscal 2015 | Fiscal 2014 | ||||
Third Quarter Ended | Third Quarter Ended | YoY | |||
3/28/2015 | 3/29/2014 | % Change | |||
Net Sales | $1,049.1 | $1,004.2 | 4 | % | |
Reported Net Income | $(94.9) | $48.1 | -297 | % | |
Adjusted Net Income | $248.5 | $176.2 | 41 | % | |
Reported Diluted EPS | $(0.67) | $0.36 | -286 | % | |
Adjusted Diluted EPS | $1.85 | $1.31 | 41 | % | |
Reported Diluted Shares | 140.8 | 134.3 | 5 | % | |
Adjusted Diluted Shares | 134.5 | 134.3 | — | % |
• | Consumer Healthcare, which will include the legacy Consumer Healthcare business and the legacy Nutritionals (infant nutrition and VMS) business to create one consumer facing segment. This segment will also include the legacy Israel Pharmaceuticals and Diagnostics business, previously reported in the “Other” category. |
• | Branded Consumer Healthcare, which will comprise the newly acquired Omega business. |
• | Rx Pharmaceuticals, which will continue to comprise the legacy Rx Pharmaceuticals business. |
• | Specialty Sciences, which will continue to comprise royalties from Tysabri®. |
• | Other, which will comprise the legacy Active Pharmaceutical Ingredients (API) business. |
• | Net sales between $5.4 billion and $5.7 billion. |
• | Adjusted distribution, selling, general and administrative expenses as a percent of total net sales of approximately 17.5%. |
• | Adjusted research and development (R&D) expense as a percent of total net sales of approximately 3.5%. |
• | Adjusted operating margin as a percent of total net sales of approximately 27%. |
• | Operating cash flow of approximately $1.2 billion. |
• | Capital expenditures between $125 million and $155 million. |
• | Interest expense of approximately $170 million. |
• | Adjusted effective tax rate of approximately 17%. |
• | Adjusted earnings per diluted share between $7.50 and $8.00. |
• | Consumer Healthcare net sales are expected to represent approximately 50% of consolidated net sales. |
• | Branded Consumer Healthcare net sales are expected to represent approximately 20% of consolidated net sales.(1) |
• | Rx Pharmaceuticals net sales are expected to represent approximately 20% of consolidated net sales. |
Three Months Ended | Nine Months Ended | ||||||||||||||
March 28, 2015 | March 29, 2014 | March 28, 2015 | March 29, 2014 | ||||||||||||
Net sales | $ | 1,049.1 | $ | 1,004.2 | $ | 3,072.3 | $ | 2,916.6 | |||||||
Cost of sales | 670.3 | 689.2 | 1,988.0 | 1,884.7 | |||||||||||
Gross profit | 378.8 | 315.0 | 1,084.3 | 1,031.9 | |||||||||||
Operating expenses | |||||||||||||||
Distribution | 14.7 | 13.9 | 44.0 | 41.2 | |||||||||||
Research and development | 35.4 | 44.7 | 125.2 | 114.5 | |||||||||||
Selling | 48.8 | 52.5 | 144.0 | 150.0 | |||||||||||
Administration | 79.6 | 81.1 | 245.1 | 314.2 | |||||||||||
Write-off of in-process research and development | — | — | — | 6.0 | |||||||||||
Restructuring | 1.1 | 19.5 | 5.3 | 36.5 | |||||||||||
Total operating expenses | 179.6 | 211.7 | 563.6 | 662.4 | |||||||||||
Operating income | 199.2 | 103.3 | 520.7 | 369.5 | |||||||||||
Interest expense, net | 43.3 | 26.2 | 100.0 | 77.3 | |||||||||||
Other expense, net | 258.6 | 14.4 | 320.5 | 19.5 | |||||||||||
Loss on extinguishment of debt | — | — | 9.6 | 165.8 | |||||||||||
Income (loss) before income taxes | (102.7 | ) | 62.7 | 90.6 | 106.9 | ||||||||||
Income tax expense (benefit) | (7.8 | ) | 14.6 | 19.1 | 33.5 | ||||||||||
Net income (loss) | $ | (94.9 | ) | $ | 48.1 | $ | 71.5 | $ | 73.4 | ||||||
Earnings per share | |||||||||||||||
Basic earnings per share | $ | (0.67 | ) | $ | 0.36 | $ | 0.52 | $ | 0.67 | ||||||
Diluted earnings per share | $ | (0.67 | ) | $ | 0.36 | $ | 0.52 | $ | 0.67 | ||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 140.8 | 133.7 | 137.0 | 108.9 | |||||||||||
Diluted | 140.8 | 134.3 | 137.5 | 109.4 | |||||||||||
Dividends declared per share | $ | 0.125 | $ | 0.105 | $ | 0.335 | $ | 0.285 |
Three Months Ended | Nine Months Ended | ||||||||||||||
March 28, 2015 | March 29, 2014 | March 28, 2015 | March 29, 2014 | ||||||||||||
Net income (loss) | $ | (94.9 | ) | $ | 48.1 | $ | 71.5 | $ | 73.4 | ||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustments | (27.9 | ) | 6.2 | (152.1 | ) | 59.3 | |||||||||
Change in fair value of derivative financial instruments | 0.8 | (1.0 | ) | (5.0 | ) | (11.6 | ) | ||||||||
Change in fair value of investment securities | 1.2 | 10.5 | 0.7 | 5.7 | |||||||||||
Change in post-retirement and pension liability adjustments | (0.4 | ) | — | (2.2 | ) | (0.1 | ) | ||||||||
Other comprehensive income (loss) | (26.3 | ) | 15.7 | (158.6 | ) | 53.3 | |||||||||
Comprehensive income (loss) | $ | (121.2 | ) | $ | 63.8 | $ | (87.1 | ) | $ | 126.7 |
March 28, 2015 | June 28, 2014 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 3,430.4 | $ | 799.5 | |||
Investment securities | 21.8 | 5.9 | |||||
Accounts receivable, net of allowance for doubtful accounts of $1.8 million and $2.7 million, respectively | 881.7 | 935.1 | |||||
Inventories | 637.0 | 631.6 | |||||
Current deferred income taxes | 69.9 | 62.8 | |||||
Prepaid expenses and other current assets | 89.2 | 116.0 | |||||
Total current assets | 5,130.0 | 2,550.9 | |||||
Non-current assets | |||||||
Property and equipment, net | 769.2 | 779.9 | |||||
Goodwill and other indefinite-lived intangible assets | 3,467.3 | 3,543.8 | |||||
Other intangible assets, net | 6,527.8 | 6,787.0 | |||||
Non-current deferred income taxes | 27.7 | 23.6 | |||||
Other non-current assets | 260.8 | 195.0 | |||||
Total non-current assets | 11,052.8 | 11,329.3 | |||||
Total assets | $ | 16,182.8 | $ | 13,880.2 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 323.2 | $ | 364.3 | |||
Short-term debt | 3.4 | 2.1 | |||||
Payroll and related taxes | 85.3 | 112.3 | |||||
Accrued customer programs | 282.5 | 256.5 | |||||
Accrued liabilities | 230.2 | 179.4 | |||||
Accrued income taxes | 4.0 | 17.4 | |||||
Current deferred income taxes | — | 1.1 | |||||
Current portion of long-term debt | 355.6 | 141.6 | |||||
Total current liabilities | 1,284.2 | 1,074.7 | |||||
Non-current liabilities | |||||||
Long-term debt, less current portion | 4,367.8 | 3,090.5 | |||||
Non-current deferred income taxes | 644.6 | 727.9 | |||||
Other non-current liabilities | 300.5 | 293.4 | |||||
Total non-current liabilities | 5,312.9 | 4,111.8 | |||||
Total liabilities | 6,597.1 | 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 | 7,704.7 | 6,678.2 | |||||
Accumulated other comprehensive income (loss) | (19.0 | ) | 139.6 | ||||
Retained earnings | 1,900.0 | 1,875.1 | |||||
9,585.7 | 8,692.9 | ||||||
Noncontrolling interest | — | 0.8 | |||||
Total shareholders’ equity | 9,585.7 | 8,693.7 | |||||
Total liabilities and shareholders' equity | $ | 16,182.8 | $ | 13,880.2 | |||
Supplemental Disclosures of Balance Sheet Information | |||||||
Preferred shares, issued and outstanding | — | — | |||||
Ordinary shares, issued and outstanding | 140.8 | 133.8 |
Nine Months Ended | |||||||
March 28, 2015 | March 29, 2014 | ||||||
Cash Flows From (For) Operating Activities | |||||||
Net income | $ | 71.5 | $ | 73.4 | |||
Adjustments to derive cash flows | |||||||
Depreciation and amortization | 381.5 | 237.6 | |||||
Loss on acquisition-related foreign currency derivatives | 324.5 | — | |||||
Share-based compensation | 23.7 | 18.5 | |||||
Loss on extinguishment of debt | 9.6 | 165.8 | |||||
Non-cash restructuring charges | 5.3 | 17.6 | |||||
Loss on sales of investments | — | 12.7 | |||||
Excess tax benefit of stock transactions | (2.5 | ) | (6.4 | ) | |||
Deferred income taxes | (84.5 | ) | (27.1 | ) | |||
Other non-cash adjustments | 7.1 | 5.0 | |||||
Subtotal | 736.2 | 497.1 | |||||
Increase (decrease) in cash due to: | |||||||
Accounts receivable | 34.9 | (90.0 | ) | ||||
Inventories | (15.7 | ) | 19.7 | ||||
Accounts payable | (28.8 | ) | (52.4 | ) | |||
Payroll and related taxes | (27.4 | ) | (40.3 | ) | |||
Accrued customer programs | 24.0 | 82.6 | |||||
Accrued liabilities | 49.6 | 8.8 | |||||
Accrued income taxes | (18.8 | ) | (21.3 | ) | |||
Other | (18.4 | ) | (3.4 | ) | |||
Subtotal | (0.6 | ) | (96.3 | ) | |||
Net cash from (for) operating activities | 735.6 | 400.8 | |||||
Cash Flows From (For) Investing Activities | |||||||
Acquisitions of businesses, net of cash acquired | (87.0 | ) | (1,598.3 | ) | |||
Purchase of securities | — | (15.0 | ) | ||||
Proceeds from sales of securities | — | 81.4 | |||||
Additions to property and equipment | (79.8 | ) | (120.0 | ) | |||
Settlement of acquisition-related foreign currency derivatives | (324.5 | ) | — | ||||
Other investing | 0.8 | 6.2 | |||||
Net cash from (for) investing activities | (490.5 | ) | (1,645.7 | ) | |||
Cash Flows From (For) Financing Activities | |||||||
Issuances of debt | 2,504.3 | 3,293.6 | |||||
Debt repayments | (948.2 | ) | (2,000.0 | ) | |||
Deferred financing fees | (28.1 | ) | (48.8 | ) | |||
Premium on early debt retirement | — | (133.5 | ) | ||||
Issuance of ordinary shares | 1,040.6 | 8.9 | |||||
Equity issuance costs | (35.7 | ) | — | ||||
Excess tax benefit of stock transactions | 2.5 | 6.4 | |||||
Repurchase of ordinary shares | (7.7 | ) | (7.5 | ) | |||
Cash dividends | (46.5 | ) | (32.0 | ) | |||
Purchase of noncontrolling interest | — | (7.2 | ) | ||||
Other financing | (3.7 | ) | (5.0 | ) | |||
Net cash from (for) financing activities | 2,477.5 | 1,074.9 | |||||
Effect of exchange rate changes on cash | (91.7 | ) | (0.5 | ) | |||
Net increase (decrease) in cash and cash equivalents | 2,630.9 | (170.5 | ) | ||||
Cash and cash equivalents, beginning of period | 799.5 | 779.9 | |||||
Cash and cash equivalents, end of period | $ | 3,430.4 | $ | 609.4 | |||
Supplemental Disclosures of Cash Flow Information | |||||||
Cash paid/received during the period for: | |||||||
Interest paid | $ | 62.1 | $ | 54.7 | |||
Interest received | $ | 0.6 | $ | 2.1 | |||
Income taxes paid | $ | 113.0 | $ | 83.3 | |||
Income taxes refunded | $ | 9.1 | $ | 3.6 |
Table I | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Consolidated | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 1,049.1 | $ | — | $ | 1,049.1 | $ | 1,004.2 | $ | — | $ | 1,004.2 | 4 | % | 4 | % | |||||||||||||
Cost of sales | 670.3 | 101.0 | (a) | 569.3 | 689.2 | 101.2 | (a) | 588.0 | -3 | % | -3 | % | |||||||||||||||||
Gross profit | 378.8 | 101.0 | 479.8 | 315.0 | 101.2 | 416.2 | 20 | % | 15 | % | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Distribution | 14.7 | — | 14.7 | 13.9 | — | 13.9 | 6 | % | 6 | % | |||||||||||||||||||
Research and development | 35.4 | — | 35.4 | 44.7 | — | 44.7 | -21 | % | -21 | % | |||||||||||||||||||
Selling | 48.8 | 5.6 | (a) | 43.2 | 52.5 | 5.5 | (a) | 47.0 | -7 | % | -8 | % | |||||||||||||||||
Administration | 79.6 | 5.6 | (a,b,c) | 74.0 | 81.1 | 11.1 | (a,h,i,j) | 70.0 | -2 | % | 6 | % | |||||||||||||||||
Restructuring | 1.1 | 1.1 | (d) | — | 19.5 | 19.5 | (d) | — | -94 | % | |||||||||||||||||||
Total operating expenses | 179.6 | 12.3 | 167.3 | 211.7 | 36.1 | 175.6 | -15 | % | -5 | % | |||||||||||||||||||
Operating income | 199.2 | 113.3 | 312.5 | 103.3 | 137.3 | 240.6 | 93 | % | 30 | % | |||||||||||||||||||
Interest expense, net | 43.3 | 18.7 | (e) | 24.6 | 26.2 | — | 26.2 | 66 | % | -6 | % | ||||||||||||||||||
Other expense, net | 258.6 | 258.5 | (e,m) | 0.1 | 14.4 | 14.5 | (k,l) | (0.1 | ) | NM | -159 | % | |||||||||||||||||
Income (loss) before income taxes | (102.7 | ) | 390.5 | 287.8 | 62.7 | 151.8 | 214.5 | -264 | % | 34 | % | ||||||||||||||||||
Income tax expense (benefit) | (7.8 | ) | 47.1 | (f) | 39.3 | 14.6 | 23.8 | (f) | 38.3 | -153 | % | 3 | % | ||||||||||||||||
Net income (loss) | $ | (94.9 | ) | $ | 343.4 | $ | 248.5 | $ | 48.1 | $ | 128.0 | $ | 176.2 | -297 | % | 41 | % | ||||||||||||
Diluted earnings per share | $ | (0.67 | ) | $ | 1.85 | $ | 0.36 | $ | 1.31 | -286 | % | 41 | % | ||||||||||||||||
Diluted weighted average shares outstanding | 140.8 | 6.3 | (g) | 134.5 | 134.3 | 134.3 | 5 | % | — | % | |||||||||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 36.1 | % | 45.7 | % | 31.4 | % | 41.4 | % | |||||||||||||||||||||
Operating expenses | 17.1 | % | 15.9 | % | 21.1 | % | 17.5 | % | |||||||||||||||||||||
Operating income | 19.0 | % | 29.8 | % | 10.3 | % | 24.0 | % | |||||||||||||||||||||
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||||||||||||||||
NM - Calculations are not meaningful | |||||||||||||||||||||||||||||
(a) Acquisition-related amortization | |||||||||||||||||||||||||||||
(b) Omega acquisition and integration-related expenses totaling $2.0 million | |||||||||||||||||||||||||||||
(c) Increase in litigation accrual of $2.0 million | |||||||||||||||||||||||||||||
(d) Restructuring and other integration-related charges | |||||||||||||||||||||||||||||
(e) Omega financing fees | |||||||||||||||||||||||||||||
(f) Tax effect of non-GAAP adjustments | |||||||||||||||||||||||||||||
(g) Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the Omega acquisition | |||||||||||||||||||||||||||||
(h) Elan transaction costs of $3.2 million | |||||||||||||||||||||||||||||
(i) Write-up of contingent consideration of $5.8 million | |||||||||||||||||||||||||||||
(j) Litigation settlement of $2.0 million | |||||||||||||||||||||||||||||
(k) Losses on Elan equity method investments | |||||||||||||||||||||||||||||
(l) Loss on sale of investments | |||||||||||||||||||||||||||||
(m) Loss on derivatives associated with the Omega acquisition totaling $258.2 million | |||||||||||||||||||||||||||||
Table I continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||
Consolidated | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 3,072.3 | $ | — | $ | 3,072.3 | $ | 2,916.6 | $ | — | $ | 2,916.6 | 5 | % | 5 | % | |||||||||||||
Cost of sales | 1,988.0 | 302.4 | (a) | 1,685.6 | 1,884.7 | 162.2 | (a) | 1,722.5 | 5 | % | -2 | % | |||||||||||||||||
Gross profit | 1,084.3 | 302.4 | 1,386.7 | 1,031.9 | 162.2 | 1,194.1 | 5 | % | 16 | % | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||
Distribution | 44.0 | — | 44.0 | 41.2 | — | 41.2 | 7 | % | 7 | % | |||||||||||||||||||
Research and development | 125.2 | 10.0 | (b) | 115.2 | 114.5 | — | 114.5 | 9 | % | 1 | % | ||||||||||||||||||
Selling | 144.0 | 16.5 | (a) | 127.5 | 150.0 | 16.6 | (a) | 133.5 | -4 | % | -2 | % | |||||||||||||||||
Administration | 245.1 | 21.5 | (a,c,d,e,t) | 223.6 | 314.2 | 113.9 | (a,m,n,o,p) | 200.3 | -22 | % | 12 | % | |||||||||||||||||
Write-off of in-process research and development | — | — | — | 6.0 | 6.0 | (q) | — | -100 | % | NM | |||||||||||||||||||
Restructuring | 5.3 | 5.3 | (c) | — | 36.5 | 36.5 | (c) | — | -85 | % | NM | ||||||||||||||||||
Total operating expenses | 563.6 | 53.3 | 510.3 | 662.4 | 173.0 | 489.5 | -15 | % | 4 | % | |||||||||||||||||||
Operating income | 520.7 | 355.7 | 876.4 | 369.5 | 335.2 | 704.6 | 41 | % | 24 | % | |||||||||||||||||||
Interest expense, net | 100.0 | 23.7 | (f) | 76.3 | 77.3 | 10.0 | (r) | 67.3 | 29 | % | 13 | % | |||||||||||||||||
Other expense, net | 320.5 | 317.0 | (f,g,h,i) | 3.5 | 19.5 | 18.1 | (r,s) | 1.5 | 1,544 | % | 133 | % | |||||||||||||||||
Loss on extinguishment of debt | 9.6 | 9.6 | (j) | — | 165.8 | 165.8 | (r) | — | -94 | % | NM | ||||||||||||||||||
Income (loss) before income taxes | 90.6 | 706.0 | 796.6 | 106.9 | 529.1 | 635.8 | -15 | % | 25 | % | |||||||||||||||||||
Income tax expense (benefit) | 19.1 | 96.6 | (k) | 115.7 | 33.5 | 97.0 | (k) | 130.5 | -43 | % | -11 | % | |||||||||||||||||
Net income (loss) | $ | 71.5 | $ | 609.4 | $ | 680.9 | $ | 73.4 | $ | 432.1 | $ | 505.3 | -3 | % | 35 | % | |||||||||||||
Diluted earnings per share | $ | 0.52 | $ | 5.06 | $ | 0.67 | $ | 4.62 | -22 | % | 10 | % | |||||||||||||||||
Diluted weighted average shares outstanding | 137.5 | 3.1 | (l) | 134.4 | 109.4 | 109.4 | |||||||||||||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 35.3 | % | 45.1 | % | 35.4 | % | 40.9 | % | |||||||||||||||||||||
Operating expenses | 18.3 | % | 16.6 | % | 22.7 | % | 16.8 | % | |||||||||||||||||||||
Operating income | 16.9 | % | 28.5 | % | 12.7 | % | 24.2 | % |
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||
NM - Calculations are not meaningful | |||||||||||||||
(a) Acquisition-related amortization | |||||||||||||||
(b) R&D payment of $10.0 million made in connection with collaborative arrangement | |||||||||||||||
(c) Restructuring and other integration-related charges | |||||||||||||||
(d) Omega acquisition and integration-related expenses totaling $13.6 million | |||||||||||||||
(e) Increase in litigation accrual of $2.0 million | |||||||||||||||
(f) Omega financing fees | |||||||||||||||
(g) Loss on derivatives associated with the Omega acquisition totaling $322.9 million | |||||||||||||||
(h) Income of $12.5 million from transfer of a rights agreement | |||||||||||||||
(i) Elan equity method investment losses totaling $6.5 million, offset partially by a $1.1 million investment distribution | |||||||||||||||
(j) Bridge fees and extinguishment of debt in connection with Omega financing | |||||||||||||||
(k) Tax effect of non-GAAP adjustments | |||||||||||||||
(l) Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the Omega acquisition | |||||||||||||||
(m) Favorable escrow settlement of $2.5 million related to Sergeant's | |||||||||||||||
(n) Elan acquisition and integration-related charges of $108.9 million | |||||||||||||||
(o) Litigation settlement of $2.5 million | |||||||||||||||
(p) Net write-up of contingent consideration of $0.8 million | |||||||||||||||
(q) Write-offs of IPR&D related to the Paddock and Rosemont acquisitions | |||||||||||||||
(r) Elan transaction costs and extinguishment of debt | |||||||||||||||
(s) Loss on sale of investments | |||||||||||||||
(t) Other acquisition-related costs of $1.4 million |
Table II | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Consumer Healthcare | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 537.3 | $ | — | $ | 537.3 | $ | 537.3 | $ | — | $ | 537.3 | — | % | — | % | |||||||||||||
Cost of sales | 366.6 | 6.4 | (a) | 360.2 | 368.3 | 3.5 | (a) | 364.8 | — | % | -1 | % | |||||||||||||||||
Gross profit | 170.8 | 6.4 | 177.2 | 169.0 | 3.5 | 172.5 | 1 | % | 3 | % | |||||||||||||||||||
Operating expenses | 78.9 | 3.3 | (a,b) | 75.6 | 84.6 | 3.4 | (a,b) | 81.2 | -7 | % | -7 | % | |||||||||||||||||
Operating income | $ | 91.8 | $ | 9.7 | $ | 101.5 | $ | 84.4 | $ | 6.9 | $ | 91.3 | 9 | % | 11 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 31.8 | % | 33.0 | % | 31.5 | % | 32.1 | % | |||||||||||||||||||||
Operating expenses | 14.7 | % | 14.1 | % | 15.8 | % | 15.1 | % | |||||||||||||||||||||
Operating income | 17.1 | % | 18.9 | % | 15.7 | % | 17.0 | % | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||
Consumer Healthcare | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 1,560.2 | $ | — | $ | 1,560.2 | $ | 1,612.1 | $ | — | $ | 1,612.1 | -3 | % | -3 | % | |||||||||||||
Cost of sales | 1,067.8 | 20.1 | (a) | 1,047.7 | 1,094.4 | 10.3 | (a) | 1,084.1 | -2 | % | -3 | % | |||||||||||||||||
Gross profit | 492.4 | 20.1 | 512.5 | 517.7 | 10.3 | 528.0 | -5 | % | -3 | % | |||||||||||||||||||
Operating expenses | 260.4 | 21.5 | (a,b,c) | 238.9 | 253.9 | 6.7 | (a,b,d) | 247.2 | 3 | % | -3 | % | |||||||||||||||||
Operating income | $ | 232.0 | $ | 41.6 | $ | 273.6 | $ | 263.8 | $ | 17.0 | $ | 280.8 | -12 | % | -3 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 31.6 | % | 32.8 | % | 32.1 | % | 32.8 | % | |||||||||||||||||||||
Operating expenses | 16.7 | % | 15.3 | % | 15.7 | % | 15.3 | % | |||||||||||||||||||||
Operating income | 14.9 | % | 17.5 | % | 16.4 | % | 17.4 | % | |||||||||||||||||||||
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||||||||||||||||
(a) Acquisition-related amortization | |||||||||||||||||||||||||||||
(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 | |||||||||||||||||||||||||||||
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Nutritionals | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 129.9 | $ | — | $ | 129.9 | $ | 137.8 | $ | — | $ | 137.8 | -6 | % | -6 | % | |||||||||||||
Cost of sales | 94.6 | 3.1 | (a) | 91.5 | 102.6 | 3.1 | (a) | 99.5 | -8 | % | -8 | % | |||||||||||||||||
Gross profit | 35.3 | 3.1 | 38.4 | 35.2 | 3.1 | 38.3 | — | % | — | % | |||||||||||||||||||
Operating expenses | 24.1 | 4.1 | (a) | 20.0 | 27.9 | 6.2 | (a,b) | 21.7 | -14 | % | -8 | % | |||||||||||||||||
Operating income | $ | 11.2 | $ | 7.2 | $ | 18.4 | $ | 7.3 | $ | 9.3 | $ | 16.6 | 53 | % | 11 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 27.2 | % | 29.5 | % | 25.6 | % | 27.8 | % | |||||||||||||||||||||
Operating expenses | 18.5 | % | 15.4 | % | 20.3 | % | 15.7 | % | |||||||||||||||||||||
Operating income | 8.6 | % | 14.2 | % | 5.3 | % | 12.1 | % | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||
Nutritionals | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 385.7 | $ | — | $ | 385.7 | $ | 406.6 | $ | — | $ | 406.6 | -5 | % | -5 | % | |||||||||||||
Cost of sales | 285.2 | 9.3 | (a) | 275.9 | 301.8 | 9.2 | (a) | 292.6 | -5 | % | -6 | % | |||||||||||||||||
Gross profit | 100.6 | 9.3 | 109.9 | 104.8 | 9.2 | 114.0 | -4 | % | -4 | % | |||||||||||||||||||
Operating expenses | 73.6 | 12.4 | (a) | 61.2 | 76.5 | 14.8 | (a,b) | 61.6 | -4 | % | -1 | % | |||||||||||||||||
Operating income | $ | 26.9 | $ | 21.7 | $ | 48.6 | $ | 28.3 | $ | 24.0 | $ | 52.4 | -5 | % | -7 | % | |||||||||||||
Selected ratios as a percentage of net sale (2) | |||||||||||||||||||||||||||||
Gross profit | 26.1 | % | 28.5 | % | 25.8 | % | 28.0 | % | |||||||||||||||||||||
Operating expenses | 19.1 | % | 15.9 | % | 18.8 | % | 15.2 | % | |||||||||||||||||||||
Operating income | 7.0 | % | 12.6 | % | 7.0 | % | 12.9 | % | |||||||||||||||||||||
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||||||||||||||||
(a) Acquisition-related amortization | |||||||||||||||||||||||||||||
(b) Litigation settlement of $2.0 million |
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Rx Pharmaceuticals | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 251.6 | $ | — | $ | 251.6 | $ | 223.4 | $ | — | $ | 223.4 | 13 | % | 13 | % | |||||||||||||
Cost of sales | 109.9 | 18.2 | (a) | 91.7 | 110.5 | 17.3 | (a) | 93.2 | -1 | % | -1 | % | |||||||||||||||||
Gross profit | 141.7 | 18.2 | 159.9 | 112.9 | 17.3 | 130.2 | 25 | % | 23 | % | |||||||||||||||||||
Operating expenses | 41.7 | 2.2 | (a,b) | 39.5 | 35.9 | 6.0 | (a,c) | 29.9 | 16 | % | 32 | % | |||||||||||||||||
Operating income | $ | 100.0 | $ | 20.4 | $ | 120.4 | $ | 77.0 | $ | 23.3 | $ | 100.3 | 30 | % | 20 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 56.3 | % | 63.5 | % | 50.5 | % | 58.3 | % | |||||||||||||||||||||
Operating expenses | 16.6 | % | 15.7 | % | 16.1 | % | 13.4 | % | |||||||||||||||||||||
Operating income | 39.7 | % | 47.8 | % | 34.5 | % | 44.9 | % | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||
Rx Pharmaceuticals | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 722.8 | $ | — | $ | 722.8 | $ | 673.6 | $ | — | $ | 673.6 | 7 | % | 7 | % | |||||||||||||
Cost of sales | 335.2 | 52.9 | (a) | 282.3 | 319.4 | 54.8 | (a) | 264.6 | 5 | % | 7 | % | |||||||||||||||||
Gross profit | 387.6 | 52.9 | 440.5 | 354.2 | 54.8 | 409.0 | 9 | % | 8 | % | |||||||||||||||||||
Operating expenses | 113.2 | 2.6 | (a,b) | 110.6 | 93.7 | 11.3 | (a,d,e,f,g) | 82.4 | 21 | % | 34 | % | |||||||||||||||||
Operating income | $ | 274.4 | $ | 55.5 | $ | 329.9 | $ | 260.5 | $ | 66.1 | $ | 326.6 | 5 | % | 1 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 53.6 | % | 60.9 | % | 52.6 | % | 60.7 | % | |||||||||||||||||||||
Operating expenses | 15.7 | % | 15.3 | % | 13.9 | % | 12.2 | % | |||||||||||||||||||||
Operating income | 38.0 | % | 45.6 | % | 38.7 | % | 48.5 | % | |||||||||||||||||||||
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||||||||||||||||
(a) Acquisition-related amortization | (e) Restructuring and other integration-related charges | ||||||||||||||||||||||||||||
(b) Increase in litigation accrual of $2.0 million | (f) Net loss of $0.8 million related to the adjustment of contingent consideration to fair value | ||||||||||||||||||||||||||||
(c) Gain of $5.8 million related to the adjustment of contingent consideration to fair value | (g) Litigation settlement of $2.5 million | ||||||||||||||||||||||||||||
(d) Write-offs of IPR&D related to Paddock and Rosemont |
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
API | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 30.7 | $ | — | $ | 30.7 | $ | 32.0 | $ | — | $ | 32.0 | -4 | % | -4 | % | |||||||||||||
Cost of sales | 14.9 | 0.5 | (a) | 14.4 | 18.0 | 0.5 | (a) | 17.5 | -18 | % | -18 | % | |||||||||||||||||
Gross profit | 15.8 | 0.5 | 16.3 | 14.0 | 0.5 | 14.5 | 13 | % | 12 | % | |||||||||||||||||||
Operating expenses | 5.3 | — | 5.3 | 7.2 | — | 7.2 | -27 | % | -27 | % | |||||||||||||||||||
Operating income | $ | 10.5 | $ | 0.5 | $ | 11.0 | $ | 6.8 | $ | 0.5 | $ | 7.3 | 55 | % | 51 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 51.5 | % | 53.0 | % | 43.6 | % | 45.3 | % | |||||||||||||||||||||
Operating expenses | 17.3 | % | 17.3 | % | 22.6 | % | 22.6 | % | |||||||||||||||||||||
Operating income | 34.1 | % | 35.6 | % | 21.0 | % | 22.7 | % | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||
API | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 85.5 | $ | — | $ | 85.5 | $ | 105.2 | $ | — | $ | 105.2 | -19 | % | -19 | % | |||||||||||||
Cost of sales | 43.6 | 1.5 | (a) | 42.1 | 44.9 | 1.6 | (a) | 43.3 | -3 | % | -3 | % | |||||||||||||||||
Gross profit | 41.9 | 1.5 | 43.4 | 60.3 | 1.6 | 61.9 | -30 | % | -30 | % | |||||||||||||||||||
Operating expenses | 17.0 | — | 17.0 | 22.9 | — | 22.9 | -26 | % | -26 | % | |||||||||||||||||||
Operating income | $ | 24.9 | $ | 1.5 | $ | 26.4 | $ | 37.4 | $ | 1.6 | $ | 39.0 | -33 | % | -32 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 49.1 | % | 50.8 | % | 57.4 | % | 58.9 | % | |||||||||||||||||||||
Operating expenses | 19.9 | % | 19.9 | % | 21.8 | % | 21.8 | % | |||||||||||||||||||||
Operating income | 29.2 | % | 30.9 | % | 35.5 | % | 37.0 | % | |||||||||||||||||||||
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||||||||||||||||
(a) Acquisition-related amortization |
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Specialty Sciences | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 81.9 | $ | — | $ | 81.9 | $ | 53.4 | $ | — | $ | 53.4 | 53 | % | 53 | % | |||||||||||||
Cost of sales | 72.5 | 72.5 | (a) | — | 76.3 | 76.3 | (a) | — | -5 | % | NM | ||||||||||||||||||
Gross profit | 9.3 | 72.5 | 81.9 | (22.9 | ) | 76.3 | 53.4 | 141 | % | 53 | % | ||||||||||||||||||
Operating expenses | 3.9 | 0.5 | (a,b) | 3.4 | 31.6 | 16.9 | (b) | 14.7 | -88 | % | -77 | % | |||||||||||||||||
Operating income (loss) | $ | 5.5 | $ | 73.0 | $ | 78.5 | $ | (54.5 | ) | $ | 93.2 | $ | 38.7 | -110 | % | 103 | % | ||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 11.4% | 100.0% | (42.9)% | 100.0% | |||||||||||||||||||||||||
Operating expenses | 4.7% | 4.2% | 59.1% | 27.5% | |||||||||||||||||||||||||
Operating income (loss) | 6.7% | 95.8% | (102.1)% | 72.5% | |||||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||
Specialty Sciences | March 28, 2015 | March 29, 2014 (3) | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 260.4 | $ | — | $ | 260.4 | $ | 60.8 | $ | — | $ | 60.8 | 328 | % | 328 | % | |||||||||||||
Cost of sales | 217.6 | 217.6 | (a) | — | 85.0 | 85.0 | (a) | — | 156 | % | NM | ||||||||||||||||||
Gross profit | 42.8 | 217.6 | 260.4 | (24.2 | ) | 85.0 | 60.8 | -277 | % | 328 | % | ||||||||||||||||||
Operating expenses | 13.0 | 1.6 | (a,b) | 11.4 | 49.3 | 31.4 | (a,b) | 17.9 | -74 | % | -37 | % | |||||||||||||||||
Operating income (loss) | $ | 29.8 | $ | 219.2 | $ | 249.0 | $ | (73.5 | ) | $ | 116.4 | $ | 42.9 | -141 | % | 479 | % | ||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 16.4% | 100.0% | (39.8)% | 100.0% | |||||||||||||||||||||||||
Operating expenses | 5.0% | 4.3% | 81.0% | 29.3% | |||||||||||||||||||||||||
Operating income (loss) | 11.5% | 95.7% | (120.8)% | 70.7% | |||||||||||||||||||||||||
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||||||||||||||||
(3) Only includes activity from December 18, 2013 to December 28, 2013 | |||||||||||||||||||||||||||||
NM - Calculations are not meaningful | |||||||||||||||||||||||||||||
(a) Acquisition-related amortization | |||||||||||||||||||||||||||||
(b) Restructuring and other integration-related charges |
Table II continued | |||||||||||||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||||||||||||
REPORTABLE SEGMENTS | |||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||
Other | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 17.7 | $ | — | $ | 17.7 | $ | 20.2 | $ | — | $ | 20.2 | -13 | % | -13 | % | |||||||||||||
Cost of sales | 11.8 | 0.4 | (a) | 11.4 | 13.5 | 0.5 | (a) | 13.0 | -13 | % | -13 | % | |||||||||||||||||
Gross profit | 5.9 | 0.4 | 6.3 | 6.7 | 0.5 | 7.2 | -12 | % | -13 | % | |||||||||||||||||||
Operating expenses | 4.6 | — | 4.6 | 5.9 | — | 5.9 | -22 | % | -22 | % | |||||||||||||||||||
Operating income | $ | 1.3 | $ | 0.4 | $ | 1.7 | $ | 0.8 | $ | 0.5 | $ | 1.3 | 56 | % | 30 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 33.5 | % | 35.5 | % | 33.3 | % | 35.5 | % | |||||||||||||||||||||
Operating expenses | 26.1 | % | 26.1 | % | 29.2 | % | 29.1 | % | |||||||||||||||||||||
Operating income | 7.4 | % | 9.5 | % | 4.2 | % | 6.4 | % | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||
Other | March 28, 2015 | March 29, 2014 | % Change | ||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments | As Adjusted | GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | GAAP | As Adjusted | ||||||||||||||||||||||
Net sales | $ | 57.7 | $ | — | $ | 57.7 | $ | 58.3 | $ | — | $ | 58.3 | -1 | % | -1 | % | |||||||||||||
Cost of sales | 38.6 | 1.1 | (a) | 37.5 | 39.2 | 1.3 | (a) | 37.9 | -2 | % | -1 | % | |||||||||||||||||
Gross profit | 19.0 | 1.1 | 20.1 | 19.1 | 1.3 | 20.4 | — | % | -1 | % | |||||||||||||||||||
Operating expenses | 15.7 | — | 15.7 | 16.5 | — | 16.5 | -4 | % | -4 | % | |||||||||||||||||||
Operating income | $ | 3.4 | $ | 1.1 | $ | 4.5 | $ | 2.6 | $ | 1.3 | $ | 3.9 | 27 | % | 13 | % | |||||||||||||
Selected ratios as a percentage of net sales (2) | |||||||||||||||||||||||||||||
Gross profit | 33.0 | % | 35.0 | % | 32.7 | % | 35.0 | % | |||||||||||||||||||||
Operating expenses | 27.2 | % | 27.2 | % | 28.2 | % | 28.2 | % | |||||||||||||||||||||
Operating income | 5.8 | % | 7.8 | % | 4.5 | % | 6.8 | % | |||||||||||||||||||||
(1) Amounts may not sum or cross-foot due to rounding | |||||||||||||||||||||||||||||
(2) Ratios as a % to net sales may not calculate due to rounding | |||||||||||||||||||||||||||||
(a) Acquisition-related amortization |
Table III | |||||||||||
PERRIGO COMPANY PLC | |||||||||||
REPORTABLE SEGMENTS | |||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||
(in millions) | |||||||||||
(unaudited) | |||||||||||
Twelve Months Ended | |||||||||||
Consolidated | December 27, 2014 | ||||||||||
GAAP (1) | Non-GAAP Adjustments (1) | As Adjusted (1) | |||||||||
Net sales | $ | 4,171.6 | $ | — | $ | 4,171.6 | |||||
Cost of sales | 2,735.3 | 395.5 | (a) | 2,339.7 | |||||||
Gross profit | 1,436.3 | 395.5 | 1,831.9 | ||||||||
Operating expenses | |||||||||||
Distribution | 57.2 | — | 57.2 | ||||||||
Research and development | 172.6 | 10.0 | (b) | 162.6 | |||||||
Selling | 206.4 | 22.4 | (a) | 184.0 | |||||||
Administration | 343.7 | 44.8 | (a,c,d,e,f) | 298.9 | |||||||
Restructuring | 34.1 | 34.1 | (g) | — | |||||||
Total operating expenses | 814.0 | 111.3 | 702.7 | ||||||||
Operating income | 622.3 | 506.8 | 1,129.2 | ||||||||
Interest expense, net | 109.2 | 5.0 | (h) | 104.2 | |||||||
Other expense, net | 69.3 | 63.6 | (i,j,k) | 5.7 | |||||||
Loss on sale of investment | 12.7 | 12.7 | — | ||||||||
Loss on extinguishment of debt | 9.6 | 9.6 | (l) | — | |||||||
Income before income taxes | 421.5 | 597.7 | 1,019.3 | ||||||||
Income tax expense | 75.2 | 101.5 | (m) | 176.6 | |||||||
Net income | $ | 346.3 | $ | 496.2 | $ | 842.7 | |||||
Diluted earnings per share | $ | 2.57 | $ | 6.27 | |||||||
Diluted weighted average shares outstanding | 135.0 | (0.6 | ) | (n) | 134.4 | ||||||
(1) Amounts may not sum or cross-foot due to rounding. | |||||||||||
(a) Acquisition-related amortization expense | |||||||||||
(b) R&D payment of $10.0 million made in connection with collaborative arrangement | |||||||||||
(c) Acquisition and integration-related charges totaling $15.8 million related primarily to Omega and Elan | |||||||||||
(d) Write-up of contingent consideration of $5.8 million | |||||||||||
(e) Litigation settlement of $2.0 million | |||||||||||
(f) Loss contingency accrual of $15.0 million | |||||||||||
(g) Restructuring and other integration-related charges due primarily to Elan | |||||||||||
(h) Omega financing fees |
(i) Elan equity method investment losses totaling $11.4 million | ||||||||||||
(j) Loss on derivatives associated with the pending Omega acquisition totaling $64.7 million | ||||||||||||
(k) Income of $12.5 million from transfer of a rights agreement | ||||||||||||
(l) Bridge fees and extinguishment of debt in connection with Omega financing | ||||||||||||
(m) Tax effect of non-GAAP adjustments | ||||||||||||
(n) Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the pending Omega acquisition | ||||||||||||
Calculation of adjusted diluted EPS guidance growth | ||||||||||||
Calendar Year 2014 adjusted diluted EPS | $6.27 | |||||||||||
Calendar Year 2015 adjusted diluted EPS range (1) | $7.50 - $8.00 | |||||||||||
% change | 20% - 28% | |||||||||||
(1) Non-GAAP guidance for calendar 2015 excludes amortization of intangibles, restructuring, unusual litigation charges, along with transaction and financing costs related to the Omega acquisition. At this time, a reconciliation to GAAP earnings per share guidance for calendar 2015 is not available without unreasonable effort. The Company expects that the unavailable reconciling items, which primarily include the amortization of intangibles and non-cash charges related to Omega, along with other expenses not related to our core operations, which may be related to the integration of Omega, the Company’s change in fiscal year and a recent indication of interest for the acquisition of the Company, could significantly impact its financial results. | ||||||||||||