0001585364-16-000238.txt : 20160218 0001585364-16-000238.hdr.sgml : 20160218 20160218061548 ACCESSION NUMBER: 0001585364-16-000238 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20160218 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160218 DATE AS OF CHANGE: 20160218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERRIGO Co plc CENTRAL INDEX KEY: 0001585364 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 STATE OF INCORPORATION: L2 FISCAL YEAR END: 0627 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36353 FILM NUMBER: 161435946 BUSINESS ADDRESS: STREET 1: TREASURY BUILDING STREET 2: LOWER GRAND CANAL STREET CITY: DUBLIN STATE: L2 ZIP: 2 BUSINESS PHONE: 269-673-8451 MAIL ADDRESS: STREET 1: 515 EASTERN AVENUE CITY: ALLEGAN STATE: MI ZIP: 49010 FORMER COMPANY: FORMER CONFORMED NAME: PERRIGO Co Ltd DATE OF NAME CHANGE: 20130828 8-K 1 cy15stubperiodearningsrele.htm 8-K 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_______________________________________________
 FORM 8-K
_______________________________________________

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
February 18, 2016
_______________________________________________
Perrigo Company plc
(Exact name of registrant as specified in its charter)
_______________________________________________

Commission file number 001-36353

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)
+353 1 7094000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
________________________________________ 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]     Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)

[ ]     Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)

[ ]     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))

[ ]         Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))



ITEM 2.02.    Results of Operations and Financial Condition

On February 18, 2016, Perrigo Company plc (the “Company”) released earnings for the fourth calendar quarter of 2015. The press release related to the Company’s earnings is attached as Exhibit 99.1.

The earnings release contains certain non-GAAP measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP) in the statements of income, balance sheets or statements of cash flows of the company. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation for net sales on a constant currency basis, cost of sales, gross profit, operating expenses, operating income, interest expense, net, other expense, net, Loss on extinguishment of debt, income before income taxes, income tax expense, net income, diluted weighted average shares outstanding, diluted earnings per share, gross margin, operating margin and operating expenses as a percent of sales within its earnings release to the most directly comparable U.S. GAAP measures for these non-GAAP measures.

The Company excludes the items listed below in the applicable period when monitoring and evaluating the on-going financial results and trends of its business, and believes that presenting operating results excluding these items is also useful for investors, since it provides important insight into the Company's on-going core business operations on a normalized basis. Management uses adjusted financial data for planning and forecasting in future periods, including trending and analyzing the core operating performance of the Company’s business from period to period without the effect of the non-core business items indicated. Management also uses adjusted financial data to prepare operating budgets and forecasts and to measure the Company’s performance against those budgets and forecasts on a corporate and segment level.

Items excluded from reported results:

Fourth Calendar Quarter 2014 Results
•
Amortization of acquired intangible assets related to business combinations and asset acquisitions
•
Restructuring charges related to completed business acquisitions and for organizational improvements
•
Acquisition and integration-related charges
•
R&D Payment made in connection with collaborative arrangement
•
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

Fourth Calendar Quarter 2015 Results
•
Amortization of acquired intangible assets related to business combinations and asset acquisitions
•
Restructuring charges related to completed business acquisitions and for organizational improvements
•
Intangible asset impairment charges
•
Impairment charge on assets held for sale
•
Legal and consulting fees related to the Mylan N.V. ('Mylan") defense
•
Acquisition and integration-related charges
•
Restructuring charges related to completed business acquisitions and for organizational improvements
•
Impairment on investment securities


•
Equity method investment losses

Year-to-date Calendar 2014 Results
•
Amortization of acquired intangible assets related to business combinations and asset acquisitions
•
Restructuring charges related to completed business acquisitions and for organizational improvements
•
R&D Payment made in connection with collaborative arrangement
•
Acquisition and integration-related charges
•
Loss contingency accrual
•
Fair value adjustment to contingent consideration related to a previous acquisition
•
Litigation settlement charge
•
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

Year-to-date Calendar 2015 Results
•
Amortization of acquired intangible assets related to business combinations and asset acquisitions
•
R&D Payment made in connection with collaborative arrangement
•
Restructuring charges related to completed business acquisitions and for organizational improvements
•
Amortization of inventory and fixed asset step up related to an acquisition
•
Intangible asset impairment charges
•
Impairment charge on assets held for sale
•
Legal and consulting fees related to the Mylan defense
•
Acquisition and integration-related charges
•
Impairment on investment securities
•
Goodwill impairment charge
•
Equity method investment losses
•
Financing charges and extinguishment of debt incurred in connection with financing a pending acquisition

Calendar 2016 Guidance
•
Amortization of acquired intangible assets related to business combinations and asset acquisitions and impact of acquisitions on deferred tax balances
•
Integration and restructuring-related charges

The information in this Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.


    


ITEM 9.01.    Financial Statements and Exhibits

(d)
Exhibits

99.1
Press release issued by Perrigo Company plc on February 18, 2016, furnished solely pursuant to Item 2.02 of Form 8-K.






SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



 
 
 
(Registrant)

 
 
 
PERRIGO COMPANY PLC

 
 
 
 
 
 
 
 
By:
/s/ Judy L. Brown
Dated:
February 18, 2016
 
 
Judy L. Brown
 
 
 
 
Executive Vice President and
 
 
 
 
Chief Financial Officer
 
 
 
 
(Principal Accounting and Financial Officer)


         
                        
     


Exhibit Index

99.1
Press release issued by Perrigo Company plc on February 18, 2016, furnished solely pursuant to Item 2.02 of Form 8-K.



 EX-99.1 2 cy15stubperiodex991pressre.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

                                         
FOR IMMEDIATE RELEASE

PERRIGO COMPANY PLC REPORTS RECORD FOURTH QUARTER & CALENDAR YEAR NET SALES AND ADJUSTED NET INCOME

•
Delivered record calendar year 2015 net sales of $5.35 billion, an increase of 28% compared to the prior year; with adjusted net income of $1.09 billion, an increase of 29% compared to the prior year; and adjusted earnings per share of $7.59, an increase of 21% compared to the prior year

•
Consumer Healthcare and Rx Pharmaceuticals segments delivered all-time record calendar year net sales of $2.82 billion and $1.07 billion, and adjusted operating income of $546.6 million and $491.1 million, respectively

•
Achieved record fourth quarter net sales of $1.42 billion, up 34% on a constant currency basis; with adjusted net income of $262 million, or $1.80 per diluted share

•
Achieved record fourth quarter adjusted gross margin of 47.1% with fourth quarter adjusted operating margin of 24.7%

•
Reported fourth quarter GAAP net loss of $(107) million and GAAP diluted loss per share of $(0.74), which includes pre-tax non-cash intangible impairment charges; GAAP gross margin of 39.3% and GAAP operating margin of (6.6)%

Outlook:

•
The Company expects calendar year 2016 adjusted earnings per diluted share range of $9.50 to $9.80, which reflects an increase of 25% to 29% over calendar year 2015 adjusted earnings per share of $7.59

Dublin, Ireland - February 18, 2016 - Perrigo Company plc (NYSE: PRGO; TASE) today announced results for the fourth quarter and calendar year ended December 31, 2015.

Perrigo’s Chairman and CEO Joseph C. Papa commented, “The team delivered record performance in the face of a busy year and the challenges associated with an eight month long unsolicited takeover attempt. I would like to thank our Consumer Healthcare (“CHC”) and Rx teams for achieving all-time record net sales for the calendar year, and the Rx team for surpassing $1 billion in net sales. Since we closed the Branded Consumer Healthcare (“BCH”) acquisition, Euro net sales have improved year over year, due to some

1

exciting new product launches and the acquisition of our new portfolio of leading OTC brands from GSK . Although the segment did not meet our internal expectations, we are taking specific actions to address this performance. We are confident that our durable business model and future growth prospects will continue to deliver value for our shareholders and provide Quality Affordable Healthcare Products® to our customers and patients worldwide.”

Refer to Tables I, II, III, and IV at the end of this press release for a reconciliation of non-GAAP adjustments to the current year and prior year periods and additional non-GAAP information. The Company’s reported results are summarized in the attached Condensed Consolidated Statements of Operations, which include selected balance sheet and cash flow data . All references in this press release to the fourth quarter are references to the fourth calendar quarter of the respective year.

Calendar Year 2015 Results

Perrigo Company plc
(in millions, except per share amounts)
(see the attached Table I for reconciliation to GAAP numbers)
(YoY % Change may not calculate due to rounding)

 
 
 
 
 
 
 
 
 
Calendar 2015
 
Calendar 2014

 
YoY

 
Constant Currency

 
12/31/2015
 
12/27/2014

 
% Change

 
% Change

Net Sales
 
 
 
 
 
 
 
Consumer Healthcare
$2,816.0
 
$2,786.5
 
1
 %
 
3
 %
Branded Consumer Healthcare
$1,029.1
 
—

 
—

 
—

Prescription Pharmaceuticals
$1,073.3
 
$947.9
 
13
 %
 
14
 %
Specialty Sciences
$334.0
 
$317.8
 
5
 %
 
12
 %
Other
$98.0
 
$119.3
 
-18
 %
 
-14
 %
Total Net Sales
$5,350.3
 
$4,171.6
 
28
 %
 
30
 %
 
 
 
 
 
 
 
 
Reported Net Income
$(32.8)
 
$346.3
 
NM

 
 
Adjusted Net Income
$1,088.6
 
$842.7
 
29
 %
 
 
Reported Diluted EPS
$(0.23)
 
$2.57
 
NM

 
 
Adjusted Diluted EPS
$7.59
 
$6.27
 
21
 %
 
 
Reported Diluted Shares
144.6
 
135.0

 
7
 %
 
 
Adjusted Diluted Shares
143.4
 
134.4

 
7
 %
 
 
    
Net sales for calendar year 2015 were $5.35 billion, an increase of 28% on a reported basis. On a constant currency basis, net sales for the year increased 30% over calendar year 2014, attributable primarily to $1.03 billion related to the inclusion of the BCH segment and 14% growth in the Rx segment on a constant currency basis. Legacy Perrigo new product sales were $365 million for the year. The increase in net sales was partially offset by $197 million in discontinued products and $80 million of unfavorable foreign currency movements.



2




Fourth Quarter Results

Perrigo Company plc
(in millions, except per share amounts)
(see the attached Table I for reconciliation to GAAP numbers)
(YoY % Change may not calculate due to rounding)

 
Calendar 2015
 
Calendar 2014

 
 
 
 
 
Fourth Quarter
Ended
 
Fourth Quarter
Ended

 
YoY

 
Constant Currency

 
12/31/2015
 
12/27/2014

 
% Change

 
% Change

Net Sales
 
 
 
 
 
 
 
Consumer Healthcare
$709.5
 
$678.5
 
5
 %
 
6
 %
Branded Consumer Healthcare
$325.7
 
—

 
—

 
—

Prescription Pharmaceuticals
$283.2
 
$276.6
 
2
 %
 
3
 %
Specialty Sciences
$83.9
 
$86.6
 
-3
 %
 
2
 %
Other
$22.5
 
$30.0
 
-25
 %
 
-24
 %
Total Net Sales
$1,424.8
 
$1,071.7
 
33
 %
 
34
 %
 
 
 
 
 
 
 
 
Reported Net Income
$(107.0)
 
$70.2
 
NM

 
 
Adjusted Net Income
$261.5
 
$244.9
 
7
 %
 
 
Reported Diluted EPS
$(0.74)
 
$0.51
 
NM

 
 
Adjusted Diluted EPS
$1.80
 
$1.82
 
-1
 %
 
 
Reported Diluted Shares
144.9
 
136.8

 
6
 %
 
 
Adjusted Diluted Shares
145.4
 
134.5

 
8
 %
 
 
    
Net sales in the quarter were $1.42 billion, an increase of 33% on a reported basis. On a constant currency basis, net sales in the quarter increased 34% over the fourth quarter of 2014, attributable primarily to $326 million related to the inclusion of the BCH segment and 6% growth in the CHC segment on a constant currency basis. Legacy Perrigo new product sales were $85 million. The increase in net sales was partially offset by $47 million in discontinued products.

Excluding charges as outlined in Table I at the end of this release, fourth quarter calendar year 2015 adjusted net income increased 7% to $262 million or $1.80 per diluted share versus $1.82 for the same period last year.


Segment Results

Consumer Healthcare

Net sales in the fourth quarter were $710 million, a 6% increase on a constant currency basis, reflecting new product sales of $60 million and an increase in sales of existing products of $32 million (primarily in the infant formula, cough/cold and smoking cessation categories). These increases were partially offset by discontinued products of

3

$47 million and a decline of $19 million in existing products (primarily in the analgesics and diabetes categories). Net sales were impacted by $10 million of unfavorable foreign currency movements.

Record fourth quarter adjusted gross profit margin of 33.4% increased 140 basis points compared to last year primarily due to product mix, improved commodity costs and manufacturing efficiencies.

Adjusted operating income of $127 million in the fourth quarter improved $15 million, or 14%, compared to the prior year due to higher gross profit contribution and relatively flat operating expenses.

Branded Consumer Healthcare

Net sales of $326 million in the fourth quarter included new product sales of $32 million, highlighted by the launch of Bronchostop® cough/cold syrup. Additionally, the Top 20 Brands grew 6% year-over-year.

Fourth quarter adjusted gross profit percent to sales was 53.9% and adjusted operating income was $42 million, or 12.8%.
 
Rx Pharmaceuticals

Net sales in the fourth quarter of $283 million, an increase of 2% over a record prior year, were driven by new product sales of $25 million, which were offset by a decrease in sales of existing products of $24 million.

Fourth quarter adjusted operating income of $124 million decreased by 3% compared to the prior year, driven by a full quarter of investments in the specialty pharmaceuticals sales force this year and marketing costs.

Specialty Sciences

The Company recognized $84 million of royalty revenue in the fourth quarter related to global sales of the Multiple Sclerosis drug Tysabri®. Net sales included $4 million in unfavorable foreign currency movements.

Asset Impairment

During the Company's impairment testing for the quarter ended December 31, 2015, the Company identified an impairment of certain indefinite-lived intangible assets based on management’s expectations for future revenues, profits and cash flows associated with these assets. The indefinite-lived intangible assets were purchased in conjunction with the Omega Pharma Invest NV acquisition and are included in the BCH segment. The assessment resulted in an impairment charge of $185 million, which represents the

4

difference between the carrying amount of the intangible assets and their estimated fair value. The primary assumptions supporting the fair value of these assets and cash flow projections assume revenue growth based on the Company's best estimates for product line extensions, product life cycle strategies and geographical expansion within the markets in which the BCH segment currently distributes products, and gross margins and advertising and promotion investments largely consistent with historical trends.

In addition, the Company began actively marketing its India API business during the fourth quarter and recorded an impairment charge of $29 million related to the assets held for sale.

Conclusion

Papa concluded, “Fourth quarter 2015 BCH financial performance was below our expectations. We are executing on our plan to drive improved BCH performance by taking select actions in the key areas of people, process, and products. First, we are changing the management structure of the BCH segment, incorporating Perrigo’s matrix leadership model in place, which will drive better transparency and accountability, sharpening our focus on performance metrics. Second we are improving our processes in order to align systems, connectivity and functional accountability of the BCH business to Perrigo standards - while continuing to leverage the powerful marketing platform that BCH has in place. Finally, we have conducted a portfolio review, and are taking actions in BCH to exit slower growing or underperforming brands to reallocate these resources to higher growth products. I am confident that these actions, when taken together, will result in improved operating performance and an acceleration of growth in the BCH segment. I want to stress our commitment and conviction around the long-term prospects for the BCH business and the European OTC marketplace as a whole.”

Guidance

The Company expects 2016 adjusted earnings to be between $9.50 and $9.80 per diluted share as compared to $7.59 in 2015, excluding the charges outlined in Table III at the end of this release. This range results in a year-over-year growth rate in adjusted earnings of 25% to 29% over 2015's adjusted earnings per diluted share. The Company also expects 2016 reported earnings to be between $5.55 and $5.85 per diluted share as compared to a loss of $0.23 in 2015. A reconciliation to GAAP measures is attached in Table III.

A conference call will begin at 8:00 a.m. (ET) live via webcast to interested parties in the investor relations section of the Perrigo website at http://perrigo.investorroom.com/events-webcasts or by phone at 877-248-9413, International 973-582-2737, and reference ID # 31741275. A taped replay of the call will be available beginning at approximately 4:00 p.m. (ET) on February 18, 2016 until midnight on March 4, 2016. To listen to the replay, dial 800-585-8367, International 404-537-3406, and use access code 31741275.

About Perrigo    

Perrigo Company plc, a top five global over-the-counter ("OTC") consumer goods and pharmaceutical company, offers patients and customers high quality products at

5

affordable prices. From its beginnings in 1887 as a packager of generic home remedies, Perrigo, headquartered in Ireland, has grown to become the world's largest manufacturer of OTC products and supplier of infant formulas for the store brand market. The Company is also a leading provider of generic extended topical prescription products and receives royalties from Multiple Sclerosis drug Tysabri®. Perrigo provides Quality Affordable Healthcare Products® across a wide variety of product categories and geographies primarily in North America, Europe, and Australia, as well as other markets, including Israel and China.

A copy of this announcement will be available on Perrigo's website at www.perrigo.com.

Calendar-Year Data

Calendar-year data for 2015 was derived from the Company’s audited results for the six-month period ended December 31, 2015 and unaudited results for the fiscal quarters ended March 28, 2015 and June 27, 2015. Calendar-year data for 2014 was derived from the Company’s unaudited results for the fiscal quarters ended March 29, 2014, June 28, 2014, September 27, 2014 and December 27, 2014.
    
Forward-Looking Statements

Certain statements in this presentation are forward-looking statements. These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or other comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control, including the timing, amount and cost of share repurchases, and the ability to execute and achieve the desired benefits of announced initiatives. These and other important factors, including those discussed under “Risk Factors” in the Company’s Form 10-K for the year ended June 27, 2015, as well as the Company’s subsequent filings with the SEC, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this presentation are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.





6

Non-GAAP Measures    

This press release contains non-GAAP measures. The reconciliation of these measures to the most comparable GAAP measures is included at the end of this press release. As a part of these non-GAAP measures, we report sales performance using the financial measure of "constant currency". We believe this provides meaningful information to assist our shareholders in understanding our financial results and true operational performance by assuming that foreign exchange rates had not changed between the prior and current period. The comparisons presented at constant currency reflect current year results translated at the prior year's exchange rates. This includes the royalty revenue related to Biogen Inc.'s sales of its Multiple Sclerosis drug Tysabri® included in the Specialty Sciences Segment.
    
A copy of this press release, including the reconciliations, is available on our website at www.perrigo.com.

Contacts

Bradley Joseph, Vice President, Global Investor Relations
(269) 686-3373
E-mail: bradley.joseph@perrigo.com

Arthur J. Shannon, Vice President, Global Corporate Affairs and European Investor Relations
(269) 686-1709
E-mail: ajshannon@perrigo.com




7

PERRIGO COMPANY PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(unaudited)
 
Six Months Ended
 
Fiscal Year Ended
 
December 31, 2015
 
June 27,
2015
 
June 28,
2014
 
June 29,
2013
Net sales
$
2,769.5

 
$
4,603.9

 
$
4,060.8

 
$
3,539.8

Cost of sales
1,661.4

 
2,891.4

 
2,613.1

 
2,259.8

Gross profit
1,108.1

 
1,712.5

 
1,447.7

 
1,280.0

 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
Distribution
47.9

 
67.7

 
55.3

 
47.5

Research and development
88.2

 
187.8

 
152.5

 
115.2

Selling
325.9

 
319.0

 
208.6

 
186.1

Administration
309.1

 
385.2

 
411.3

 
240.2

Impairment charges
215.6

 
—

 
—

 
—

Write-off of in-process research and development
—

 
—

 
6.0

 
9.0

Restructuring
26.9

 
5.1

 
47.0

 
2.9

Total operating expenses
1,013.6

 
964.8

 
880.7

 
600.9

 
 
 
 
 
 
 
 
Operating income
94.5

 
747.7

 
567.0

 
679.1

 
 
 
 
 
 
 
 
Interest expense, net
89.9

 
146.0

 
103.5

 
65.8

Other expense, net
26.9

 
343.2

 
25.1

 
5.6

Loss on extinguishment of debt
0.9

 
10.5

 
165.8

 
—

Income (loss) before income taxes
(23.2
)
 
248.0

 
272.6

 
607.7

Income tax expense (benefit)
(28.8
)
 
120.0

 
67.3

 
165.8

Net income
$
5.6

 
$
128.0

 
$
205.3

 
$
441.9

 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.92

 
$
1.78

 
$
4.71

Diluted
$
0.04

 
$
0.92

 
$
1.77

 
$
4.68

 
 
 
 
 
 
 
 
Weighted-average shares outstanding
 
 
 
 
 
 
 
Basic
145.6

 
139.3

 
115.1

 
93.9

Diluted
146.1

 
139.8

 
115.6

 
94.5

 
 
 
 
 
 
 
 
Dividends declared per share
$
0.25

 
$
0.46

 
$
0.39

 
$
0.35




8

PERRIGO COMPANY PLC
SELECTED BALANCE SHEET DATA
(in millions)

 
December 31, 2015
 
June 27,
2015
 
(unaudited)
 
 
Cash and cash equivalents
$
417.8

 
$
785.6

 
 
 
 
Current indebtedness
$
1,018.3

 
$
64.6

Long-term debt, less current portion
4,971.6

 
5,246.9

Total debt
$
5,989.9

 
$
5,311.5






PERRIGO COMPANY PLC
SELECTED CASH FLOW DATA
(in millions)
(unaudited)

 
Three Months Ended
 
Twelve Months Ended
 
March 28,
2015
 
June 27,
2015
 
September 26,
2015
 
December 31,
2015
 
December 31,
2015
 
 
 
 
 
 
 
 
 
 
Net cash from operating activities
$
267.9

 
$
462.7

 
$
136.1

 
$
187.1

 
$
1,053.8

Net cash for investing activities
(333.9
)
 
(2,156.3
)
 
(448.8
)
 
(425.7
)
 
(3,364.7
)
Net cash from (for) financing activities
(31.6
)
 
(953.6
)
 
43.7

 
150.0

 
(791.5
)
Effect of exchange rate changes on cash
(68.1
)
 
2.4

 
(10.1
)
 
(0.1
)
 
(75.9
)
Net increase (decrease) in cash and cash equivalents
(165.7
)
 
(2,644.8
)
 
(279.1
)
 
(88.7
)
 
(3,178.3
)
Cash and cash equivalents, beginning of period
3,596.1

 
3,430.4

 
785.6

 
506.5

 
3,596.1

Cash and cash equivalents, end of period
$
3,430.4

 
$
785.6

 
$
506.5

 
$
417.8

 
$
417.8



9

Table I
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
(in millions, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
Consolidated
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As
Adjusted
 
GAAP
 
Non-GAAP
Adjustments
 
As
Adjusted
 
GAAP
 
As Adjusted
Net sales
$
1,424.8

 
$
—

 
$
1,424.8

 
$
1,071.7

 
$
—

 
$
1,071.7

 
33
 %
 
33
 %
Cost of sales
865.5

 
111.3

(a)
754.2

 
687.9

 
100.8

(a)
587.1

 
26
 %
 
28
 %
Gross profit
559.3

 
111.3

 
670.6

 
383.8

 
100.8

 
484.6

 
46
 %
 
38
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution
23.0

 
—

 
23.0

 
14.8

 
—

 
14.8

 
55
 %
 
55
 %
Research and development
46.6

 
0.2


46.4

 
53.2

 
10.0

(g)
43.2

 
-12
 %
 
7
 %
Selling
157.9

 
15.5

(a)
142.4

 
44.9

 
5.5

(a)
39.4

 
252
 %
 
261
 %
Administration
185.5

 
79.1

(a,c)
106.4

 
84.1

 
13.6

(a,d,h)
70.5

 
121
 %
 
51
 %
Impairment charges
215.6

 
215.6

(b)
—

 
—

 
—

 
—

 
—
 %
 
—
 %
Restructuring
24.7

 
24.7

(d)
—

 
2.4

 
2.4

(d)
—

 
912
 %
 
—
 %
Total operating expenses
653.3

 
335.1

 
318.2

 
199.4

 
31.5

 
167.9

 
228
 %
 
90
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
(94.0
)
 
446.4

 
352.4

 
184.4

 
132.3

 
316.7

 
-151
 %
 
11
 %
Interest expense, net
46.5

 
—


46.5

 
30.8

 
5.0

(i)
25.8

 
51
 %
 
80
 %
Other expense, net
14.0

 
13.6

(e)
0.4

 
59.3

 
56.4

(j)
2.9

 
-76
 %
 
-86
 %
Loss on extinguishment of debt
0.9

 
0.9


—

 
9.6

 
9.6

(k)
—

 
-91
 %
 
—
 %
Income (loss) before income taxes
(155.4
)
 
460.9

 
305.5

 
84.7

 
203.3

 
288.0

 
-283
 %
 
6
 %
Income tax expense (benefit)
(48.4
)
 
92.4

(f)
44.0

 
14.5

 
28.6

(f)
43.1

 
-433
 %
 
2
 %
Net income (loss)
$
(107.0
)
 
$
368.5

 
$
261.5

 
$
70.2

 
$
174.7

 
$
244.9

 
NM

 
7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$
(0.74
)
 
 
 
$
1.80

 
$
0.51

 
 
 
$
1.82

 
NM

 
-1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding
144.9

 
 
 
145.4

 
136.8

 
(2.3
)
(l)
134.5

 
6
 %
 
8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
39.3
 %
 
 
 
47.1
%
 
35.8
%
 
 
 
45.2
%
 
 
 
 
         Operating expenses
45.9
 %
 
 
 
22.3
%
 
18.6
%
 
 
 
15.7
%
 
 
 
 
         Operating income
(6.6
)%
 
 
 
24.7
%
 
17.2
%
 
 
 
29.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10

Fourth Calendar Quarter Tickmark Legend
Tickmark
 
Description
 
 
 
(1)
 
Ratios calculated using exact numbers
NM
 
Calculations are not meaningful
 
 
 
(a)
 
Acquisition-related amortization expense
 
 
 
(b)
 
Primarily a $185.1 million intangible asset impairment charge related to our BCH segment and a $29.0 million impairment charge on our India API held for sale assets
 
 
 
(c)
 
Mylan defense-related fees of $71.3 million and acquisition and integration-related charges of $7.8 million
 
 
 
(d)
 
Restructuring charges
 
 
 
(e)
 
Investment impairment of $10.7 million, and equity method investment losses of $2.7 million
 
 
 
(f)
 
Tax effect of non-GAAP adjustments and impact of acquisitions on deferred taxes
 
 
 
(g)
 
R&D payment of $10.0 million made in connection with collaborative arrangement
 
 
 
(h)
 
Omega transaction expenses totaling $11.6 million
 
 
 
(i)
 
Omega financing fees
 
 
 
(j)
 
Loss on derivatives associated with the Omega acquisition totaling $64.7 million, and equity method investment losses of $3.0 million, partially offset by income of a $12.5 million from transfer of rights agreement
 
 
 
(k)
 
Bridge fees and extinguishment of debt in connection with the Omega financing
 
 
 
(l)
 
Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the pending Omega acquisition



11

Table I (continued)
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
(in millions, except per share amounts)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
Consolidated
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As
Adjusted
 
GAAP (1)
 
Non-GAAP
Adjustments (1)
 
As
Adjusted (1)
 
GAAP
 
As Adjusted
Net sales
$
5,350.3

 
$
—

 
$
5,350.3

 
$
4,171.6

 
$
—

 
$
4,171.6

 
28
 %
 
28
%
Cost of sales
3,235.2

 
447.1

(a,b)
2,788.1

 
2,735.3

 
395.5

(a)
2,339.7

 
18
 %
 
19
%
Gross profit
2,115.1

 
447.1

 
2,562.2

 
1,436.3

 
395.5

 
1,831.9

 
47
 %
 
40
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution
86.3

 
—

 
86.3

 
57.2

 
—

 
57.2

 
51
 %
 
51
%
Research and development
186.3

 
18.4

(c)
167.9

 
172.6

 
10.0

(i)
162.6

 
8
 %
 
3
%
Selling
549.6

 
91.7

(a)
457.9

 
206.4

 
22.4

(a)
184.0

 
166
 %
 
149
%
Administration
528.8

 
139.6

(a,d)
389.2

 
343.7

 
44.8

(a,j)
298.9

 
54
 %
 
30
%
Impairment charges
215.6

 
215.6

(e)
—

 
—

 
—

 
—

 
—
 %
 
—
%
Restructuring
27.8

 
27.8

 
—

 
34.1

 
34.1


—

 
-18
 %
 
—
%
Total operating expenses
1,594.4

 
493.1

 
1,101.3

 
814.0

 
111.3

 
702.7

 
96
 %
 
57
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
520.7

 
940.2

 
1,460.9

 
622.3

 
506.8


1,129.2

 
-16
 %
 
29
%
Interest expense, net
179.1

 
18.7

(f)
160.4

 
109.2

 
5.0

(f)
104.2

 
64
 %
 
54
%
Other expense, net
308.2

 
298.5

(g)
9.7

 
82.0

 
76.3

(k)
5.7

 
276
 %
 
70
%
Loss on extinguishment of debt
1.8

 
1.8

 
—

 
9.6

 
9.6

(l)
—

 
-81
 %
 
—
%
Income before income taxes
31.6

 
1,259.2

 
1,290.8

 
421.5

 
597.7

 
1,019.3

 
-93
 %
 
27
%
Income tax expense
64.4

 
137.8

(h)
202.2

 
75.2

 
101.5

(h)
176.6

 
-14
 %
 
14
%
Net income (loss)
$
(32.8
)
 
$
1,121.4

 
$
1,088.6

 
$
346.3

 
$
496.2

 
$
842.7

 
NM

 
29
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share
$
(0.23
)
 
 
 
$
7.59

 
$
2.57

 
 
 
$
6.27

 
NM

 
21
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding
144.6

 
 

143.4

 
135.0

 
(0.6
)
(m)
134.4

 
7
 %
 
7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
39.5
%
 
 
 
47.9
%
 
34.4
%
 
 
 
43.9
%
 
 
 
 
         Operating expenses
29.8
%
 
 
 
20.6
%
 
19.5
%
 
 
 
16.8
%
 
 
 
 
         Operating income
9.7
%
 
 
 
27.3
%
 
14.9
%
 
 
 
27.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

12

2015 Calendar Year-To-Date Tickmark Legend
Tickmark
 
Description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
 
Amounts may not sum or cross-foot due to rounding
 
 
 
 
 
 
 
 
 
 
(2)
 
Ratios calculated using exact numbers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
 
Acquisition-related amortization expense
 
 
 
 
 
 
 
(b)
 
Primarily amortization of inventory step-up related to the Omega acquisition of $15.6 million
 
 
 
 
 
 
 
(c)
 
R&D payment of $18.0 million made in connection with collaborative arrangement
 
 
 
 
 
 
 
(d)
 
Mylan defense-related fees of $100.3 million, integration-related charges of $32.5 million, and amortization of Omega fixed asset step-up of $5.1 million
 
 
 
 
 
(e)
 
Intangible asset impairment charge related to our BCH segment of $185.1 million and a $29.0 million impairment charge on our India API held for sale assets
 
 
 
 
 
(f)
 
Omega financing fees
 
 
 
 
 
 
 
(g)
 
Primarily $265.0 million in losses on acquisition-related foreign currency hedges, $12.4 million of impairments on investment securities, $10.8 million of equity method investment losses, and a $6.8 million goodwill impairment charge
 
 
 
 
 
(h)
 
Tax effect of non-GAAP adjustments and impact of acquisitions on deferred taxes
 
 
 
 
 
 
 
(i)
 
R&D payment of $10.0 million made in connection with collaborative arrangement
 
 
 
 
 
 
 
(j)
 
Acquisition and integration-related charges totaling $15.8 million related primarily to Omega and Elan, a loss contingency accrual of $15.0 million, fair value adjustment to contingent consideration of $5.8 million, and a litigation settlement of $2.0 million
 
 
 
 
 
(k)
 
Losses on derivatives associated with the Omega acquisition totaling $64.7 million and equity method investment losses totaling $11.4 million, partially off set by income of $12.5 million from transfer of a rights agreement
 
 
 
 
 
(l)
 
Bridge fees and extinguishment of debt in connection with Omega financing
 
 
 
 
 
 
 
(m)
 
Weighted average effect of 6.8 million shares issued on November 26, 2014 to finance the Omega acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







13

Table II
PERRIGO COMPANY PLC
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in millions)
(unaudited)
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
Consumer Healthcare
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
 
GAAP
 
Non-GAAP Adjustments
 
As
Adjusted
 
GAAP
 
As Adjusted
Net sales
$
709.5

 
$
—


$
709.5

 
$
678.5

 
$
—


$
678.5

 
5
 %
 
5
 %
Cost of sales
485.5

 
13.1

(a)
472.4

 
471.4

 
10.1

(a)
461.3

 
3
 %
 
2
 %
Gross profit
224.0

 
13.1

 
237.1

 
207.1

 
10.1

 
217.2

 
8
 %
 
9
 %
Operating expenses
132.0

 
21.7

(a,b)
110.3

 
123.9

 
18.3

(a,c)
105.6

 
7
 %
 
4
 %
Operating income
$
92.0

 
$
34.8

 
$
126.8

 
$
83.2

 
$
28.4

 
$
111.6

 
11
 %
 
14
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
31.6
%
 
 
 
33.4
%
 
30.5
%
 
 
 
32.0
%
 
 
 
 
         Operating expenses
18.6
%
 
 
 
15.5
%
 
18.3
%
 
 
 
15.6
%
 
 
 
 
         Operating income
13.0
%
 
 
 
17.9
%
 
12.3
%
 
 
 
16.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Ratios calculated using exact numbers
 
 
 
 
 
 
 
 
 
 
 
 
(a) Acquisition-related amortization expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(b) Restructuring and other integration-related charges of $13.2 million and an intangible asset impairment charge of $1.5 million
 
 
(c) Restructuring and other integration-related charges of $2.1 million and an R&D payment of $10.0 million made in connection with a collaborative arrangement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
Consumer Healthcare
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
 
GAAP (1)
 
Non-GAAP Adjustments (1)
 
As
Adjusted (1)
 
GAAP
 
As Adjusted
Net sales
$
2,816.0

 
$
—

 
$
2,816.0

 
$
2,786.5

 
$
—

 
$
2,786.5

 
1
 %
 
1
 %
Cost of sales
1,890.8

 
46.9

(a)
1,843.9

 
1,930.2

 
35.1

(a)
1,895.1

 
-2
 %
 
-3
 %
Gross profit
925.2

 
46.9

 
972.1

 
856.3

 
35.1

 
891.4

 
8
 %
 
9
 %
Operating expenses
468.3

 
42.8

(a,b)
425.5

 
487.5

 
46.0

(a,c)
441.5

 
-4
 %
 
-4
 %
Operating income (loss)
$
456.9

 
$
89.7

 
$
546.6

 
$
368.8

 
$
81.1

 
$
449.9

 
24
 %
 
22
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
32.9%
 
 
 
34.5%
 
30.7%
 
 
 
32.0%
 
 
 
 
Operating expenses
16.6%
 
 
 
15.1%
 
17.5%
 
 
 
15.8%
 
 
 
 
Operating income
16.2%
 
 
 
19.4%
 
13.2%
 
 
 
16.1%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Amounts may not sum or cross-foot due to rounding
 
 
 
 
 
 
 
 
 
 
 
 
 
(2) Ratios calculated using exact numbers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Acquisition-related amortization expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(b) Restructuring and other integrated-related charges and an intangible asset impairment charge of $1.5 million
 
 
 
 
 
 
(c) R&D payment of $10.0 million made in connection with a collaboration arrangement, restructuring and other integrated-related charges of $7.9 million, and a litigation settlement of $2.0 million

14

Table II continued
PERRIGO COMPANY PLC
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in millions)
(unaudited)
 
 
 
 
 
 
 
Three Months Ended
Branded Consumer Healthcare
December 31, 2015
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
Net sales
$
325.7

 
$
—

 
$
325.7

Cost of sales
156.5

 
6.2

(a)
150.3

Gross profit
169.2

 
6.2

 
175.4

Operating expenses
328.9

 
195.2

(a,b)
133.7

Operating income (loss)
$
(159.7
)
 
$
201.4

 
$
41.7

 
 
 
 
 
 
Selected ratios as a percentage of net sales (1)
 
 
 
 
         Gross profit
51.9
 %
 
 
 
53.9
%
         Operating expenses
101.0
 %
 
 
 
41.0
%
         Operating income
(49.0
)%
 
 
 
12.8
%
 
 
 
 
 
 
(1) Ratios calculated using exact numbers
 
(a) Acquisition-related amortization expense
 
(b) Acquisition and integration-related charges, an intangible asset impairment charge of $185.1 million, and a fixed asset step-up of $1.6 million
 
 
 
 
 
 
 
Twelve Months Ended
Branded Consumer Healthcare
December 31, 2015
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
Net sales
$
1,029.1

 
$
—

 
$
1,029.1

Cost of sales
505.4

 
33.8

(a,b)
471.6

Gross profit
523.7

 
33.8

 
557.5

Operating expenses
652.3

 
257.7

(a,c)
394.6

Operating income (loss)
$
(128.6
)
 
$
291.5

 
$
162.9

 
 
 
 
 
 
Selected ratios as a percentage of net sales (1)
 
 
 
 
 
Gross profit
50.9
 %
 
 
 
54.2
%
Operating expense
63.4
 %
 
 
 
38.3
%
Operating income
(12.5
)%
 
 
 
15.8
%
 
 
 
 
 
 
(1) Ratios calculated using exact numbers
 
 
 
 
 
(a) Acquisition-related amortization expense
(b) Inventory step-up of $15.6 million
(c) Acquisition and integration-related charges, an intangible asset impairment charge of $185.1 million, and a fixed asset step-up of $1.6 million

15

Table II continued
PERRIGO COMPANY PLC
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in millions)
(unaudited)
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
Rx Pharmaceuticals
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
 
GAAP
 
Non-GAAP Adjustments
 
As
Adjusted
 
GAAP
 
As Adjusted
Net sales
$
283.2

 
$
—


$
283.2

 
$
276.6

 
$
—


$
276.6

 
2
 %
 
2
 %
Cost of sales
138.3

 
18.5

(a)
119.8

 
127.1

 
17.8

(a)
109.3

 
9
 %
 
10
 %
Gross profit
144.9

 
18.5

 
163.4

 
149.5

 
17.8

 
167.3

 
-3
 %
 
-2
 %
Operating expenses
40.5

 
0.7

(a,b)
39.8

 
39.8

 
0.2

(a)
39.6

 
2
 %
 
1
 %
Operating income
$
104.4

 
$
19.2

 
$
123.6

 
$
109.7

 
$
18.0

 
$
127.7

 
-5
 %
 
-3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
51.2
%
 
 
 
57.7
%
 
54.0
%
 
 
 
60.5
%
 
 
 
 
         Operating expenses
14.3
%
 
 
 
14.1
%
 
14.4
%
 
 
 
14.3
%
 
 
 
 
         Operating income
36.9
%
 
 
 
43.6
%
 
39.6
%
 
 
 
46.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Ratios calculated using exact numbers
 
 
 
 
 
 
 
 
 
 
 
 
(a) Acquisition-related amortization expense
 
 
 
 
 
(b) Restructuring and other integration-related charges of $2.6 million, partially off set by a decrease in a litigation accrual of $2.0 million
 
 
 
Twelve Months Ended
 
 
 
 
Rx Pharmaceuticals
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
 
GAAP (1)
 
Non-GAAP Adjustments (1)
 
As
Adjusted (1)
 
GAAP
 
As Adjusted
Net sales
$
1,073.3

 
$
—

 
$
1,073.3

 
$
947.9

 
$
—

 
$
947.9

 
13
 %
 
13
 %
Cost of sales
495.0

 
73.9

(a)
421.1

 
453.5

 
69.5

(a)
384.0

 
9
 %
 
10
 %
Gross profit
578.3

 
73.9

 
652.2

 
494.4

 
69.5

 
563.9

 
17
 %
 
16
 %
Operating expenses
183.5

 
22.4

(a,b)
161.1

 
153.7

 
21.9

(a,c)
131.8

 
19
 %
 
22
 %
Operating income (loss)
$
394.8

 
$
96.3

 
$
491.1

 
$
340.7

 
$
91.4

 
$
432.1

 
16
 %
 
14
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
53.9
%
 
 
 
60.8
%
 
52.2
%
 
 
 
59.5
%
 
 
 
 
         Operating expenses
17.1
%
 
 
 
15.0
%
 
16.2
%
 
 
 
13.9
%
 
 
 
 
         Operating income
36.8
%
 
 
 
45.8
%
 
35.9
%
 
 
 
45.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Amounts may not sum or cross-foot due to rounding
 
 
(2) Ratios calculated using exact numbers
 
 
(a) Acquisition-related amortization expense
 
 
(b) Payment of $18.0 million made in connection with an R&D arrangement, restructuring and other integration-related charges, and fair value adjustment to contingent consideration of $1.0 million
(c) Loss contingency accrual of $15.0 million and a fair value adjustment to contingent consideration of $5.8 million

16


Table II continued
PERRIGO COMPANY PLC
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in millions)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
Specialty Sciences
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
 
GAAP
 
Non-GAAP Adjustments
 
As
Adjusted
 
GAAP
 
As Adjusted
Net sales
$
83.9

 
$
—

 
$
83.9

 
$
86.6

 
$
—

 
$
86.6

 
-3
 %
 
-3
 %
Cost of sales
73.0

 
73.0

(a)
—

 
72.5

 
72.5

(a)
—

 
1
 %
 
—
 %
Gross profit
10.9

 
73.0

 
83.9

 
14.1

 
72.5

 
86.6

 
-23
 %
 
-3
 %
Operating expenses
4.1

 
(0.3
)
(a)
4.4

 
4.6

 
0.8

(a,b)
3.8

 
-11
 %
 
16
 %
Operating income
$
6.8

 
$
72.7

 
$
79.5

 
$
9.5

 
$
73.3

 
$
82.8

 
-29
 %
 
-4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
12.9%
 
 
 
100.0%
 
16.3%
 
 
 
100.0%
 
 
 
 
         Operating expenses
4.9%
 
 
 
5.2%
 
5.3%
 
 
 
4.4%
 
 
 
 
         Operating income
8.1%
 
 
 
94.8%
 
11.0%
 
 
 
95.6%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Ratios calculated using exact numbers
 
 
 
 
 
 
 
 
 
 
(a) Acquisition-related amortization expense
 
 
 
 
 
 
 
(b) Restructuring and other integration-related charges
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
Specialty Sciences
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
 
GAAP (1)
 
Non-GAAP Adjustments (1)
 
As
Adjusted (1)
 
GAAP
 
As Adjusted
Net sales
$
334.0

 
$
—

 
$
334.0

 
$
317.8

 
$
—

 
$
317.8

 
5
 %
 
5
 %
Cost of sales
290.6

 
290.6

(a)
—

 
289.1

 
289.1

(a)
—

 
1
 %
 
NM

Gross profit
43.4

 
290.6

 
334.0

 
28.7

 
289.1

 
317.8

 
51
 %
 
5
 %
Operating expenses
15.7

 
0.9

(a,b)
14.8

 
53.9

 
23.9

(b)
30.0

 
-71
 %
 
-51
 %
Operating income (loss)
$
27.7

 
$
291.5

 
$
319.2

 
$
(25.2
)
 
$
313.0

 
$
287.8

 
-210
 %
 
11
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
13.0
 %
 
 
 
100.0
%
 
9.0
 %
 
 
 
100.0
%
 
 
 
 
         Operating expenses
4.7
 %
 
 
 
4.4
%
 
95.6
 %
 
 
 
9.4
%
 
 
 
 
         Operating income
8.3
 %
 
 
 
95.6
%
 
(7.9
)%
 
 
 
90.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Amounts may not sum or cross-foot due to rounding
 
 
 
 
 
 
 
 
 
 
(2) Ratios calculated using exact numbers.
 
 
 
 
 
 
 
 
 
 
(a) Acquisition-related amortization expense
 
 
 
 
 
 
 
 
 
 
(b) Restructuring and integration-related charges
 
 
 
 
 
 
 
 
 
 

17

Table II continued
PERRIGO COMPANY PLC
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in millions)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
Other
December 31, 2015
 
December 27, 2014
 
% Change
 
GAAP
 
Non-GAAP Adjustments
 
As Adjusted
 
GAAP
 
Non-GAAP Adjustments
 
As
Adjusted
 
GAAP
 
As Adjusted
Net sales
$
22.5

 
$
—

 
$
22.5

 
$
30.0

 
$
—

 
$
30.0

 
-25
 %
 
-25
 %
Cost of sales
12.1

 
0.5

(a)
11.6

 
16.8

 
0.5

(a)
16.3

 
-28
 %
 
-29
 %
Gross profit
10.4

 
0.5

 
10.9

 
13.2

 
0.5

 
13.7

 
-21
 %
 
-20
 %
Operating expenses
36.1

 
30.6

(b)
5.5

 
5.8

 
—

 
5.8

 
528
 %
 
-4
 %
Operating income (loss)
$
(25.7
)
 
$
31.1

 
$
5.4

 
$
7.4

 
$
0.5

 
$
7.9

 
-446
 %
 
-33
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios as a percentage of net sales (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         Gross profit
46.2
 %
 
 
 
48.3
%
 
43.9
 %
 
 
 
45.5
%
 
 
 
 
         Operating expenses
160.3
 %
 
 
 
24.6
%
 
19.2
 %
 
 
 
19.2
%
 
 
 
 
         Operating income
(114.1
)%
 
 
 
23.7
%
 
24.7
 %
 
 
 
26.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Ratios calculated using exact numbers
 
 
 
 
 
 
 
 
 
 
 
(a) Acquisition-related amortization expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(b) Impairment charge on our India API held for sale assets of $29.0 million and restructuring and other integration-related charges of $1.6 million






18

Table III
PERRIGO COMPANY PLC
2016 GUIDANCE
RECONCILIATION OF NON-GAAP MEASURES
(unaudited)
 
 
 
 
 
 
 
 
 
Full Year
 
 
 
 
2016 Guidance
 
 
 
2016 reported diluted EPS range
$5.55 - $5.85
 
 
 
Acquisition-related amortization and impact of acquisitions on deferred tax balances (1)
3.78
 
 
 
Integration and restructuring-related charges
0.17
 
 
 
2016 adjusted diluted EPS range
$9.50 - $9.80
 
 
 
 
 
 
 
 
2015 adjusted diluted EPS
$7.59
 
 
 
 
 
 
 
 
% change
25% - 29%
 
 
 
 
 
 
 
 
(1) Amortization of acquired intangible assets related to business combinations and asset acquisitions.
 


19

Table IV
PERRIGO COMPANY PLC
REPORTABLE SEGMENTS
RECONCILIATION OF NON-GAAP MEASURES
(in millions)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
 
 
 
December 31, 2015
 
December 27, 2014
 
YoY
% Change
 
Fx Impact
 
Constant Currency
% Change
Net Sales
 
 
 
 
 
 
 
 
 
Consumer Healthcare
$709.5
 
$678.5
 
5
 %
 
1
%
 
6
 %
Branded Consumer Healthcare
$325.7
 
—

 
—
 %
 
—
%
 
—
 %
Prescription Pharmaceuticals
$283.2
 
$276.6
 
2
 %
 
1
%
 
3
 %
Specialty Sciences
$83.9
 
$86.6
 
-3
 %
 
5
%
 
2
 %
Other
$22.5
 
$30.0
 
-25
 %
 
1
%
 
-24
 %
Consolidated Net Sales
$1,424.8
 
$1,071.7
 
33
 %
 
1
%
 
34
 %
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
 
 
 
 
December 31, 2015
 
December 27, 2014
 
YoY
% Change
 
Fx Impact
 
Constant Currency
% Change
Net Sales
 
 
 
 
 
 
 
 
 
Consumer Healthcare
$2,816.0
 
$2,786.5
 
1
 %
 
2
%
 
3
 %
Branded Consumer Healthcare
$1,029.1
 
—

 
—
 %
 
—
%
 
—
 %
Prescription Pharmaceuticals
$1,073.3
 
$947.9
 
13
 %
 
1
%
 
14
 %
Specialty Sciences
$334.0
 
$317.8
 
5
 %
 
7
%
 
12
 %
Other
$98.0
 
$119.3
 
-18
 %
 
4
%
 
-14
 %
Consolidated Net Sales
$5,350.3
 
$4,171.6
 
28
 %
 
2
%
 
30
 %
 
 
 
 
 
 
 
 
 
 


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