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 expense related primarily to acquired intangible assets |
• | Change in financial assets |
• | Operating results attributable to held-for-sale businesses |
• | Impairment charges |
• | Restructuring charges |
• | Gain/Loss on divestitures |
• | Acquisition charges and contingent consideration adjustments |
• | Entocort® operating results |
• | Non-GAAP tax adjustments |
• | Amortization expense primarily related to acquired intangible assets |
• | Change in financial assets |
• | Acquisition and integration-related charges and contingent consideration adjustments |
• | Impairment charges |
• | Operating results attributable to held-for-sale businesses |
• | Loss on early debt extinguishment |
• | Restructuring charges |
• | Entocort® operating results |
• | Belgium distribution sales |
• | Effect of dilution on weighted average shares outstanding |
• | Non-GAAP tax adjustments |
• | Amortization expense related primarily to acquired intangible assets |
• | Loss on early debt extinguishment |
• | Restructuring charges |
• | Impairment charges |
• | Change in financial assets |
• | Loss on hedges related to the extinguishment of debt |
• | Operating results attributable to exited or held-for-sale business |
• | Unusual litigation |
• | Acquisition charges and contingent consideration adjustments |
• | Gain on divestitures |
• | Tax effect of pretax Non-GAAP adjustments |
(d) | Exhibits |
Exhibit Number | Description | |
99.1 |
(Registrant) | ||||
PERRIGO COMPANY PLC | ||||
By: | /s/ Ronald L. Winowiecki | |||
Dated: | November 9, 2017 | Ronald L. Winowiecki | ||
Acting Chief Financial Officer | ||||
• | Delivered third quarter 2017 GAAP ("reported") net sales of $1.2 billion, reported net income of $45 million and reported diluted earnings per share ("EPS") of $0.31 compared to a loss per share of $11.10 last year |
• | Delivered third quarter adjusted net income of $197 million and adjusted diluted EPS of $1.39 compared to $1.23 last year, an increase of 13% |
• | CHC Americas segment reported third quarter net sales of $599 million with reported operating margin of 20.8%; delivered record third quarter adjusted operating margin of 23.2% |
• | CHC International segment reported third quarter net sales of $365 million, down 3% versus last year, with reported operating margin of 1.2%; excluding exited distribution businesses, net sales grew 5% versus last year on a constant currency basis, with a record third quarter adjusted operating margin of 16.4% |
• | RX segment reported third quarter operating margin of 32.8%; the segment's extended topical strategy yielded adjusted operating margin of 42.4% |
• | Year-to-date cash flow from operations was $482 million, or $604 million excluding a tax payment of $74 million and restructuring payments of $48 million |
• | Used balance sheet flexibility to repurchase approximately 1.9 million shares for approximately $133 million in the third quarter |
• | The Company now expects calendar year 2017 reported diluted EPS to be in the range of $0.74 to $0.89. Given continued positive execution across all business segments, the Company raised its calendar year 2017 adjusted diluted EPS guidance to be in the range of $4.80 to $4.95. |
Third Quarter Ended | Third Quarter Ended | YoY | Constant Currency | |||||||
9/30/2017 | 10/1/2016 | % change | % Change | |||||||
Reported Net Sales | $1,231 | $1,262 | (2 | )% | ||||||
Reported Net Income (Loss) | $45 | $(1,590) | (103 | )% | ||||||
Reported Diluted Earnings (Loss) per Share | $0.31 | $(11.10) | (103 | )% | ||||||
Reported Diluted Shares | 141.7 | 143.3 | (1 | )% | ||||||
Adjusted Net Sales(1) | $1,215 | $1,240 | (2 | )% | (3 | )% | ||||
Adjusted Net Income | $197 | $176 | 12 | % | ||||||
Adjusted Diluted Earnings per Share | $1.39 | $1.23 | 13 | % | ||||||
Adjusted Diluted Shares | N/A | 143.6 | (1 | )% |
(1) | Third quarter 2017 net sales have been adjusted to exclude approximately $17 million of sales attributable to the Israel API held-for-sale business. Third quarter 2016 net sales have been adjusted to exclude approximately $22 million of sales attributable to divested businesses, primarily the U.S. Vitamins, Minerals, and Supplements ("VMS") business. |
Third Quarter Ended | Third Quarter Ended | YoY | Constant Currency | ||||||||
9/30/2017 | 10/1/2016 | % change | % Change | ||||||||
Reported Net Sales | $599 | $611 | (2 | )% | |||||||
Reported Gross Profit | $206 | $199 | 3 | % | |||||||
Reported Gross Margin | 34.4 | % | 32.6 | % | 180 bps | ||||||
Reported Operating Income | $124 | $99 | 26 | % | |||||||
Reported Operating Margin | 20.8 | % | 16.2 | % | 460 bps | ||||||
Adjusted Net Sales(1) | N/A | $590 | 1 | % | 1 | % | |||||
Adjusted Gross Profit | $218 | $209 | 4 | % | |||||||
Adjusted Gross Margin(2) | 36.4 | % | 35.4 | % | 100 bps | ||||||
Adjusted Operating Income | $139 | $125 | 11 | % | |||||||
Adjusted Operating Margin(2) | 23.2 | % | 21.2 | % | 200 bps |
(1) | Third quarter 2016 net sales have been adjusted to exclude approximately $21 million of sales attributable to the U.S. VMS business, which was sold in the third quarter 2016. |
Third Quarter Ended | Third Quarter Ended | YoY | Constant Currency | ||||||||
9/30/2017 | 10/1/2016 | % change | % Change | ||||||||
Reported Net Sales | $365 | $377 | (3)% | (6 | )% | ||||||
Reported Gross Profit | $166 | $155 | 7% | ||||||||
Reported Gross Margin | 45.4 | % | 41.1 | % | 430 bps | ||||||
Reported Operating Income (Loss) | $5 | $(1,616) | NM | ||||||||
Reported Operating Margin | 1.2 | % | (428.1 | )% | NM | ||||||
Adjusted Gross Profit | $188 | $172 | 9% | ||||||||
Adjusted Gross Margin | 51.4 | % | 45.7 | % | 570 | bps | |||||
Adjusted Operating Income | $60 | $41 | 48% | ||||||||
Adjusted Operating Margin | 16.4 | % | 10.7 | % | 570 | bps |
Third Quarter Ended | Third Quarter Ended | YoY | Constant Currency | ||||||||
9/30/2017 | 10/1/2016 | % change | % Change | ||||||||
Reported Net Sales | $251 | $252 | (1 | )% | — | % | |||||
Reported Gross Profit | $117 | $121 | (3 | )% | |||||||
Reported Gross Margin | 46.6 | % | 48.0 | % | (140) bps | ||||||
Reported Operating Income | $82 | $74 | 10 | % | |||||||
Reported Operating Margin | 32.8 | % | 29.5 | % | 330 bps | ||||||
Adjusted Gross Profit | $138 | $148 | (7 | )% | |||||||
Adjusted Gross Margin | 54.9 | % | 58.7 | % | (380) bps | ||||||
Adjusted Operating Income | $106 | $107 | — | % | |||||||
Adjusted Operating Margin | 42.4 | % | 42.3 | % | 10 bps |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Net sales | $ | 1,231.3 | $ | 1,261.6 | $ | 3,663.1 | $ | 3,949.3 | |||||||
Cost of sales | 733.5 | 777.1 | 2,196.4 | 2,385.2 | |||||||||||
Gross profit | 497.8 | 484.5 | 1,466.7 | 1,564.1 | |||||||||||
Operating expenses | |||||||||||||||
Distribution | 21.5 | 21.6 | 64.2 | 65.9 | |||||||||||
Research and development | 38.4 | 50.2 | 120.8 | 142.5 | |||||||||||
Selling | 143.5 | 154.6 | 454.1 | 506.9 | |||||||||||
Administration | 123.3 | 105.4 | 326.9 | 317.2 | |||||||||||
Impairment charges | 7.8 | 1,614.4 | 47.4 | 2,028.8 | |||||||||||
Restructuring | 3.8 | 6.6 | 54.7 | 17.9 | |||||||||||
Other operating income | (2.9 | ) | — | (41.0 | ) | — | |||||||||
Total operating expenses | 335.4 | 1,952.8 | 1,027.1 | 3,079.2 | |||||||||||
Operating income (loss) | 162.4 | (1,468.3 | ) | 439.6 | (1,515.1 | ) | |||||||||
Change in financial assets | 2.6 | 377.4 | 24.2 | 1,492.6 | |||||||||||
Interest expense, net | 34.7 | 54.6 | 133.1 | 163.2 | |||||||||||
Other (income) expense, net | (3.6 | ) | 1.0 | (1.1 | ) | 32.4 | |||||||||
Loss on extinguishment of debt | — | 0.7 | 135.2 | 1.1 | |||||||||||
Income (loss) before income taxes | 128.7 | (1,902.0 | ) | 148.2 | (3,204.4 | ) | |||||||||
Income tax expense (benefit) | 84.2 | (311.8 | ) | 101.8 | (550.7 | ) | |||||||||
Net income (loss) | $ | 44.5 | $ | (1,590.2 | ) | $ | 46.4 | $ | (2,653.7 | ) | |||||
Earnings (loss) per share | |||||||||||||||
Basic | $ | 0.31 | $ | (11.10 | ) | $ | 0.33 | $ | (18.53 | ) | |||||
Diluted | $ | 0.31 | $ | (11.10 | ) | $ | 0.32 | $ | (18.53 | ) | |||||
Weighted-average shares outstanding | |||||||||||||||
Basic | 141.3 | 143.3 | 142.5 | 143.2 | |||||||||||
Diluted | 141.7 | 143.3 | 142.8 | 143.2 | |||||||||||
Dividends declared per share | $ | 0.160 | $ | 0.145 | $ | 0.480 | $ | 0.435 |
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 775.9 | $ | 622.3 | |||
Accounts receivable, net of allowance for doubtful accounts of $6.2 million and $6.3 million, respectively | 1,076.6 | 1,176.0 | |||||
Inventories | 821.9 | 795.0 | |||||
Prepaid expenses and other current assets | 297.4 | 212.0 | |||||
Total current assets | 2,971.8 | 2,805.3 | |||||
Property, plant and equipment, net | 822.3 | 870.1 | |||||
Financial assets | — | 2,350.0 | |||||
Goodwill and other indefinite-lived intangible assets | 4,255.4 | 4,163.9 | |||||
Other intangible assets, net | 3,347.4 | 3,396.8 | |||||
Non-current deferred income taxes | 22.4 | 72.1 | |||||
Other non-current assets | 423.3 | 211.9 | |||||
Total non-current assets | 8,870.8 | 11,064.8 | |||||
Total assets | $ | 11,842.6 | $ | 13,870.1 | |||
Liabilities and Shareholders’ Equity | |||||||
Accounts payable | $ | 477.1 | $ | 471.7 | |||
Payroll and related taxes | 133.4 | 115.8 | |||||
Accrued customer programs | 368.8 | 380.3 | |||||
Accrued liabilities | 274.6 | 263.3 | |||||
Accrued income taxes | 61.5 | 32.4 | |||||
Current indebtedness | 417.1 | 572.8 | |||||
Total current liabilities | 1,732.5 | 1,836.3 | |||||
Long-term debt, less current portion | 3,275.7 | 5,224.5 | |||||
Non-current deferred income taxes | 357.7 | 389.9 | |||||
Other non-current liabilities | 434.9 | 461.8 | |||||
Total non-current liabilities | 4,068.3 | 6,076.2 | |||||
Total liabilities | 5,800.8 | 7,912.5 | |||||
Commitments and contingencies - Note 14 | |||||||
Shareholders’ equity | |||||||
Controlling interest: | |||||||
Preferred shares, $0.0001 par value, 10 million shares authorized | — | — | |||||
Ordinary shares, €0.001 par value, 10 billion shares authorized | 7,900.1 | 8,135.0 | |||||
Accumulated other comprehensive income (loss) | 191.2 | (81.8 | ) | ||||
Retained earnings (accumulated deficit) | (2,049.6 | ) | (2,095.1 | ) | |||
Total controlling interest | 6,041.7 | 5,958.1 | |||||
Noncontrolling interest | 0.1 | (0.5 | ) | ||||
Total shareholders’ equity | 6,041.8 | 5,957.6 | |||||
Total liabilities and shareholders' equity | $ | 11,842.6 | $ | 13,870.1 | |||
Supplemental Disclosures of Balance Sheet Information | |||||||
Ordinary shares, issued and outstanding (in millions) | 140.8 | 143.4 |
Nine Months Ended | |||||||
September 30, 2017 | October 1, 2016 | ||||||
Cash Flows From (For) Operating Activities | |||||||
Net income (loss) | $ | 46.4 | $ | (2,653.7 | ) | ||
Adjustments to derive cash flows | |||||||
Depreciation and amortization | 333.1 | 338.4 | |||||
Share-based compensation | 28.1 | 15.3 | |||||
Impairment charges | 47.4 | 2,028.8 | |||||
Change in financial assets | 24.2 | 1,492.6 | |||||
Loss on extinguishment of debt | 135.2 | 1.1 | |||||
Restructuring charges | 54.7 | 17.9 | |||||
Deferred income taxes | (16.3 | ) | (674.1 | ) | |||
Amortization of debt premium | (18.4 | ) | (24.6 | ) | |||
Other non-cash adjustments, net | (27.2 | ) | 34.5 | ||||
Subtotal | 607.2 | 576.2 | |||||
Increase (decrease) in cash due to: | |||||||
Accounts receivable | 38.4 | 113.0 | |||||
Inventories | (28.3 | ) | 25.1 | ||||
Accounts payable | (6.0 | ) | (57.7 | ) | |||
Payroll and related taxes | (36.7 | ) | (40.0 | ) | |||
Accrued customer programs | (15.8 | ) | (73.7 | ) | |||
Accrued liabilities | (18.8 | ) | (90.0 | ) | |||
Accrued income taxes | (61.5 | ) | 5.2 | ||||
Other, net | 3.5 | (9.4 | ) | ||||
Subtotal | (125.2 | ) | (127.5 | ) | |||
Net cash from operating activities | 482.0 | 448.7 | |||||
Cash Flows From (For) Investing Activities | |||||||
Proceeds from royalty rights | 86.4 | 259.5 | |||||
Acquisitions of businesses, net of cash acquired | — | (436.8 | ) | ||||
Asset acquisitions | — | (65.1 | ) | ||||
Additions to property, plant and equipment | (55.2 | ) | (84.6 | ) | |||
Net proceeds from sale of business and other assets | 46.7 | 58.5 | |||||
Proceeds from sale of the Tysabri® financial asset | 2,200.0 | — | |||||
Other investing, net | (5.8 | ) | (1.0 | ) | |||
Net cash from (for) investing activities | 2,272.1 | (269.5 | ) | ||||
Cash Flows From (For) Financing Activities | |||||||
Issuances of long-term debt | — | 1,190.3 | |||||
Payments on long-term debt | (2,243.7 | ) | (545.8 | ) | |||
Borrowings (repayments) of revolving credit agreements and other financing, net | — | (803.6 | ) | ||||
Deferred financing fees | (4.2 | ) | (2.8 | ) | |||
Premium on early debt retirement | (116.1 | ) | (0.6 | ) | |||
Issuance of ordinary shares | 0.5 | 8.2 | |||||
Repurchase of ordinary shares | (191.5 | ) | — | ||||
Cash dividends | (68.7 | ) | (62.4 | ) | |||
Other financing | 2.7 | (17.4 | ) | ||||
Net cash (for) financing activities | (2,621.0 | ) | (234.1 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 20.5 | (0.2 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 153.6 | (55.1 | ) | ||||
Cash and cash equivalents, beginning of period | 622.3 | 417.8 | |||||
Cash and cash equivalents, end of period | $ | 775.9 | $ | 362.7 |
TABLE I | |||||||||
PERRIGO COMPANY PLC | |||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||
SELECTED CONSOLIDATED INFORMATION | |||||||||
(in millions, except per share amounts) | |||||||||
(unaudited) | |||||||||
Three Months Ended September 30, 2017 | |||||||||
Consolidated | Net Sales | Net Income | Diluted Earnings per Share | ||||||
Reported | $ | 1,231.3 | $ | 44.5 | $ | 0.31 | |||
Adjustments: | |||||||||
Amortization expense related primarily to acquired intangible assets | $ | — | $ | 90.1 | $ | 0.63 | |||
Restructuring charges | — | 3.8 | 0.03 | ||||||
Change in financial assets | — | 2.6 | 0.02 | ||||||
Gain/Loss on divestitures | — | (1.9 | ) | (0.01 | ) | ||||
Impairment charges | — | 7.8 | 0.06 | ||||||
Acquisition charges and contingent consideration adjustments | — | (2.9 | ) | (0.02 | ) | ||||
Operating results attributable to held-for-sale business* | (16.5 | ) | (4.1 | ) | (0.03 | ) | |||
Non-GAAP tax adjustments** | — | 57.3 | 0.40 | ||||||
Adjusted | $ | 1,214.8 | $ | 197.2 | $ | 1.39 | |||
Diluted weighted average shares outstanding | |||||||||
Reported | 141.7 | ||||||||
*Held-for-sale business includes the Israel API business. | |||||||||
**The non-GAAP tax adjustments include the following: (1) $(23.2) million of tax effects of pretax non-GAAP adjustments that are calculated based upon the specific rate of the applicable jurisdiction of the pretax item; (2) a $36.2 million effect on non-GAAP income taxes related to the interim tax accounting requirements within ASC 740, Income Taxes; (3) $10.0 million net impact related to valuation allowances on deferred tax assets commensurate with non-GAAP pre-tax measures; (4) $(5.4) million of tax adjustments related to the divestiture of the Tysabri® financial asset; (5) $12.8 million related to an IRS audit settlement; and (6) $26.9 million of tax related to the sale of our Israel API business. |
TABLE I (CONTINUED) | |||||||||
PERRIGO COMPANY PLC | |||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||
SELECTED CONSOLIDATED INFORMATION | |||||||||
(in millions, except per share amounts) | |||||||||
(unaudited) | |||||||||
Three Months Ended October 1, 2016 | |||||||||
Consolidated | Net Sales | Net Income (Loss) | Diluted Earnings (Loss) per Share | ||||||
Reported | $ | 1,261.6 | $ | (1,590.2 | ) | $ | (11.10 | ) | |
Adjustments: | |||||||||
Impairment charges | $ | — | $ | 1,614.4 | $ | 11.25 | |||
Change in financial assets | — | 377.4 | 2.63 | ||||||
Amortization expense primarily related to acquired intangible assets | — | 91.5 | 0.64 | ||||||
Restructuring charges | — | 6.6 | 0.05 | ||||||
Acquisition and integration-related charges and contingent consideration adjustments | — | 5.6 | 0.04 | ||||||
Operating results attributable to held-for-sale businesses* | (21.9 | ) | 3.9 | 0.03 | |||||
Loss on early debt extinguishment | — | 0.7 | 0.01 | ||||||
Non-GAAP tax adjustments*** | — | (333.5 | ) | (2.32 | ) | ||||
Adjusted | $ | 1,239.7 | $ | 176.4 | $ | 1.23 | |||
Diluted weighted average shares outstanding | |||||||||
Reported | 143.3 | ||||||||
Effect of dilution as reported amount was a loss, while adjusted amount was income** | 0.3 | ||||||||
Adjusted | 143.6 | ||||||||
*Held-for-sale businesses include the U.S. VMS business, European sports brand, and India API business. | |||||||||
**In the period of a net loss, diluted shares outstanding equal basic shares outstanding. | |||||||||
***The non-GAAP tax adjustments include the following: (1) $(313.1) million of tax effects of pretax non-GAAP adjustments that are calculated based upon the specific rate of the applicable jurisdiction of the pretax item; (2) $2.0 million of tax effects on non-GAAP income taxes related to the interim tax accounting requirements within ASC 740, Income Taxes; and (3) $(22.4) million of discrete income tax adjustments related to jurisdictional tax rate changes in Italy, France and Germany. The GAAP tax benefit recorded in the current quarter related to these items has been excluded from non-GAAP net income. |
TABLE II | |||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||
SELECTED SEGMENT INFORMATION | |||||||||||||||||||
(in millions) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||
September 30, 2017 | October 1, 2016 | ||||||||||||||||||
Consumer Healthcare Americas | Net Sales | Gross Profit | Operating Income | Net Sales | Gross Profit | Operating Income | |||||||||||||
Reported | $ | 598.8 | $ | 206.1 | $ | 124.3 | $ | 611.2 | $ | 199.2 | $ | 99.0 | |||||||
As a % of reported net sales | 34.4 | % | 20.8 | % | 32.6 | % | 16.2 | % | |||||||||||
Adjustments: | |||||||||||||||||||
Amortization expense related primarily to acquired intangible assets | $ | 12.1 | $ | 16.9 | $ | — | $ | 12.5 | $ | 17.6 | |||||||||
Impairment charges | — | 0.5 | — | — | 3.7 | ||||||||||||||
Operating results attributable to held-for-sale business* | — | — | (21.0 | ) | (3.4 | ) | (0.1 | ) | |||||||||||
Restructuring charges | — | (0.8 | ) | — | — | 3.9 | |||||||||||||
Acquisition charges and contingent consideration adjustments | — | (2.0 | ) | — | 0.8 | 1.1 | |||||||||||||
Adjusted | $ | 218.2 | $ | 138.9 | $ | 590.2 | $ | 209.1 | $ | 125.2 | |||||||||
As a % of reported net sales (2017) / As a % of adjusted net sales (2016) | 36.4 | % | 23.2 | % | 35.4 | % | 21.2 | % | |||||||||||
*Held-for-sale business includes the U.S. VMS business, which was sold in Q3 2016. | |||||||||||||||||||
TABLE II (CONTINUED) | |||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||
SELECTED SEGMENT INFORMATION | |||||||||||||||||||
(in millions) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||
September 30, 2017 | October 1, 2016 | ||||||||||||||||||
Consumer Healthcare International | Net Sales | Gross Profit | Operating Income | Net Sales | Gross Profit | Operating Income (Loss) | |||||||||||||
Reported | $ | 365.4 | $ | 165.9 | $ | 4.6 | $ | 377.4 | $ | 155.2 | $ | (1,615.5 | ) | ||||||
As a % of reported net sales | 45.4 | % | 1.2 | % | 41.1 | % | (428.1 | )% | |||||||||||
Adjustments: | |||||||||||||||||||
Amortization expense related primarily to acquired intangible assets | $ | 21.9 | $ | 51.8 | $ | — | $ | 16.9 | $ | 46.3 | |||||||||
Impairment charges | — | — | — | — | 1,604.5 | ||||||||||||||
Operating results attributable to held-for-sale business* | — | — | (0.2 | ) | 0.2 | 3.0 | |||||||||||||
Restructuring charges | — | 3.6 | — | — | 2.5 | ||||||||||||||
Acquisition charges and contingent consideration adjustments | — | — | — | — | (0.3 | ) | |||||||||||||
Adjusted | $ | 187.8 | $ | 60.0 | $ | 377.2 | $ | 172.3 | $ | 40.5 | |||||||||
As a % of reported net sales (2017) / As a % of adjusted net sales (2016) | 51.4 | % | 16.4 | % | 45.7 | % | 10.7 | % | |||||||||||
*Held-for-sale business includes the European sports brand, which was sold in Q4 2016. |
TABLE II (CONTINUED) | |||||||||||||||||||
PERRIGO COMPANY PLC | |||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||||||||
SELECTED SEGMENT INFORMATION | |||||||||||||||||||
(in millions) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||
September 30, 2017 | October 1, 2016 | ||||||||||||||||||
Prescription Pharmaceuticals | Net Sales | Gross Profit | Operating Income | Net Sales | Gross Profit | Operating Income | |||||||||||||
Reported | $ | 250.6 | $ | 116.7 | $ | 82.1 | $ | 251.9 | $ | 120.9 | $ | 74.4 | |||||||
As a % of net sales | 46.6 | % | 32.8 | % | 48.0 | % | 29.5 | % | |||||||||||
Adjustments: | |||||||||||||||||||
Amortization expense related primarily to acquired intangible assets | $ | 20.9 | $ | 21.0 | $ | 27.1 | $ | 27.1 | |||||||||||
Restructuring charges | — | 0.1 | — | — | |||||||||||||||
Impairment charges | — | 4.0 | — | — | |||||||||||||||
Acquisition charges and contingent consideration adjustments | — | (0.9 | ) | — | 5.0 | ||||||||||||||
Adjusted | $ | 137.6 | $ | 106.3 | $ | 148.0 | $ | 106.5 | |||||||||||
As a % of net sales | 54.9 | % | 42.4 | % | 58.7 | % | 42.3 | % |
TABLE III | |||||||||||||
PERRIGO COMPANY PLC | |||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | |||||||||||||
CONSTANT CURRENCY | |||||||||||||
(in millions) | |||||||||||||
(unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
September 30, 2017 | October 1, 2016 | Total Change | FX Change | Constant Currency Change | |||||||||
Net sales | |||||||||||||
Consolidated* | $ | 1,214.8 | $ | 1,239.7 | (2)% | (1)% | (3)% | ||||||
CHCA* | 598.8 | 590.2 | 1% | —% | 1% | ||||||||
CHCI* | 365.4 | 377.2 | (3)% | (3)% | (6)% | ||||||||
RX | 250.6 | 251.9 | (1)% | 1% | —% | ||||||||
*2016 net sales are adjusted to exclude sales attributable to held-for-sale businesses. See Tables I and II for non-GAAP reconciliations. |
TABLE IV | |||
PERRIGO COMPANY PLC | |||
RECONCILIATION OF NON-GAAP MEASURES | |||
2017 GUIDANCE | |||
(unaudited) | |||
Full Year | |||
2017 EPS Guidance | |||
Reported | $.74 - $.89 | ||
Amortization expense related primarily to acquired intangible assets | 2.52 | ||
Loss on early debt extinguishment | 0.95 | ||
Restructuring charges | 0.42 | ||
Impairment charges | 0.33 | ||
Change in financial assets | 0.17 | ||
Loss on hedges related to the extinguishment of debt | 0.04 | ||
Operating results attributable to held-for-sale business(1) | (0.02) | ||
Unusual litigation | (0.06) | ||
Acquisition charges and contingent consideration adjustments | (0.13) | ||
Gain on divestitures | (0.17) | ||
Tax effect of non-GAAP adjustments(2) | 0.01 | ||
Adjusted | $4.80 - $4.95 | ||
(1) | Held-for-sale business includes the Israel API business. | ||
(2) | Includes tax effect of pretax non-GAAP adjustments calculated based upon the specific rate of the applicable jurisdiction of the pretax item and certain adjustments for discrete tax items in the first nine months of the year. |
TABLE V | ||||
PERRIGO COMPANY PLC | ||||
RECONCILIATION OF NON-GAAP MEASURES | ||||
(in millions) | ||||
(unaudited) | ||||
Consolidated adjusted net sales excluding Belgium distribution net sales, Entocort® net sales, and Fx | ||||
Q3 2017 consolidated reported net sales | $ | 1,231.3 | ||
Q3 2016 consolidated adjusted net sales | $ | 1,239.7 | ||
Less: Fx | 13.0 | |||
Less: Belgium distribution net sales | (41.7 | ) | ||
Less: Entocort® net sales | (10.2 | ) | ||
Q3 2016 consolidated adjusted net sales excluding Belgium distribution net sales, Entocort® net sales and Fx | $ | 1,200.8 | ||
Total change | 3 | % | ||
CHCI adjusted net sales excluding Belgium distribution net sales and Fx | ||||
Q3 2017 CHCI reported net sales | $ | 365.4 | ||
Q3 2016 CHCI reported net sales | $ | 377.4 | ||
Less: Fx | 11.6 | |||
Less: Belgium Distribution net sales | (41.7 | ) | ||
Q3 2016 CHCI net sales excluding Belgium distribution net sales and Fx | $ | 347.3 | ||
Total change | 5 | % |
TABLE V (CONTINUED) | ||||||||
PERRIGO COMPANY PLC | ||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||
(in millions) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
September 30, 2017 | October 1, 2016 | |||||||
RX reported net sales | $ | 250.6 | $ | 251.9 | ||||
Less: Entocort® net sales | (3.3 | ) | (13.7 | ) | ||||
RX net sales excluding Entocort® net sales | $ | 247.3 | $ | 238.2 | ||||
RX net sales growth excluding Entocort® | 4 | % | ||||||
Three Months Ended | ||||||||
September 30, 2017 | ||||||||
Operating cash flow | $ | 196.7 | ||||||
Less: Restructuring payments | 17.8 | |||||||
$ | 214.5 | |||||||
Adjusted net income | $ | 197.2 | ||||||
Cash conversion ratio | 109 | % |
TABLE VI | ||||||||||||
PERRIGO COMPANY PLC | ||||||||||||
RECONCILIATION OF NON-GAAP MEASURES | ||||||||||||
SELECTED CONSOLIDATED AND SEGMENT INFORMATION | ||||||||||||
(in millions, except per share amounts) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
September 30, 2017 | October 1, 2016 | Total Change | ||||||||||
Consolidated adjusted net sales | $ | 1,214.8 | $ | 1,239.7 | (2)% | |||||||
Consolidated adjusted net income | 197.2 | 176.4 | 12% | |||||||||
Consolidated adjusted EPS | 1.39 | 1.23 | 13% | |||||||||
Consolidated adjusted diluted shares | N/A | 143.6 | (1)% | |||||||||
Adjusted net sales | ||||||||||||
CHCA | N/A | $ | 590.2 | 1% | ||||||||
Adjusted operating income | ||||||||||||
CHCA | $ | 138.9 | $ | 125.2 | 11% | |||||||
CHCI | 60.0 | 40.5 | 48% | |||||||||
RX | 106.3 | 106.5 | —% | |||||||||
Adjusted operating margin | ||||||||||||
CHCA | 23.2 | % | 21.2 | % | 200 bps | |||||||
CHCI | 16.4 | % | 10.7 | % | 570 bps | |||||||
RX | 42.4 | % | 42.3 | % | 10 bps | |||||||
Adjusted gross profit | ||||||||||||
CHCA | $ | 218.2 | $ | 209.1 | 4% | |||||||
CHCI | 187.8 | 172.3 | 9% | |||||||||
RX | 137.6 | 148.0 | (7)% | |||||||||
Adjusted gross margin | ||||||||||||
CHCA | 36.4 | % | 35.4 | % | 100 bps | |||||||
CHCI | 51.4 | % | 45.7 | % | 570 bps | |||||||
RX | 54.9 | % | 58.7 | % | (380) bps |