EX-99 3 e17597ex99.txt PRESS RELEASE Exhibit 99 Perrigo Company Reports Third Quarter Fiscal 2004 Earnings Revenues Increase 14 Percent; Net Income Increases 26 Percent To $17.7 Million ALLEGAN, Mich., April 23 /PRNewswire-FirstCall/ -- The Perrigo Company (Nasdaq: PRGO) today announced results for the third quarter and nine months of fiscal 2004 ended March 27, 2004. Perrigo Company (in thousands, except per share amounts) Third Quarter Year-To-Date 2004 2003 2004 2003 Sales $230,740 $202,616 $685,639 $643,352 Net Income $17,739 $14,132 $72,482 $49,724 Diluted Shares 72,598 70,601 72,035 70,967 Diluted EPS $0.24 $0.20 $1.01 $0.70 Net sales for the third quarter were $230.7 million, compared with $202.6 million last year, an increase of 14 percent. Net income was $17.7 million, or $0.24 per share, compared with net income of $14.1 million, or $0.20 per share, a year ago. Commenting on third quarter results, Perrigo Chairman, President and Chief Executive Officer, David T. Gibbons, said, "Our third quarter results were driven by strong growth in revenues, coming primarily from new products launched earlier in the year, new products shipping in the current period, and revenue from Peter Black Pharmaceuticals, a United Kingdom-based nutritional business acquired in December 2003. In the quarter, we recorded strong sales of loratadine D24, the store brand equivalent to Claritin-D(R) 24; had strong initial shipments of loratadine syrup and loratadine quick dissolve tablets; and experienced growth in the vitamin category. "We are pleased with the excellent results for the quarter and the past nine months. Sales volume to date has exceeded expectations as new products have been well received and we were able to refill the cough and cold product pipeline following December's unusually high peak in demand. The incremental volume has translated into greater leverage with operating income improving by 15 percent to $90.6 million from $78.6 million last year. Both sales and profit growth contributed to operating cash flow to date of $104 million up 27 percent from $82 million last year." Net sales for the nine months ended March 27, 2004 were $685.6 million, an increase of seven percent, compared with $643.4 million last year. Net income for the nine months was $72.5 million, or $1.01 per share, compared with $49.7 million, or $0.70 per share, last year. Excluding a tax benefit of $13.1 million, or $0.18 per share, in the current year and a favorable lawsuit settlement of $2 million after-tax, or $0.03 per share, last year, net income was $59.4 million, or $0.83 per share, compared with $47.7 million, or $0.67 per share, a year ago. In the third quarter, the Company received final approval from the U.S. Food and Drug Administration (FDA) for three new products granted through the FDA's Abbreviated New Drug Application (ANDA) process. 1. Ibuprofen Chewable Tablets - In January 2004, the FDA determined that Ibuprofen Chewable Tablets, 50 mg and 100 mg, produced by Perrigo, are bioequivalent to Children's Motrin(R) Tablets, 50 mg, and Junior Strength Motrin(R) Tablets, 100 mg, marketed by McNeil Consumer Products Company. With this approval, Perrigo is eligible for 180 days of market exclusivity. Annual retail sales for the branded products are approximately $21 million. 2. Naproxen Sodium/Pseudoephedrine Tablets - In March 2004, the FDA determined that Naproxen Sodium and Pseudoephedrine Hydrocholoride Extended- release Tablets, 200 mg/120 mg, produced by Perrigo, are bioequivalent to Aleve(R) Cold and Sinus Extended-release Tablets, 200 mg/120 mg, marketed by Bayer Healthcare, LLC. Annual retail sales for the branded product exceed $20 million. 3. Miconazole Nitrate Cream - In March 2004, the FDA determined that Miconazole Nitrate Cream USP, 4%/2% Combination Pack, produced by Perrigo, is bioequivalent to Monistat(R) 3 Combination Pack, marketed by McNeil Personal Products Company. Annual retail sales for the branded product are approximately $18 million. Over the past seven months, seven approvals have been granted to the Company and its alliance partners for ANDA products. Annual retail sales for the equivalent national brand products currently exceed $220 million. Commenting on the outlook for the fourth quarter and full year, Mr. Gibbons stated, "Consistent with historical seasonality, we expect sequentially lower fourth quarter sales and profits and expect earnings to range from $0.07 to $0.09 per share. With year-to-date earnings of $1.01 per share, including an income tax benefit of $0.18 per share, we now expect earnings of $1.08 to $1.10 for the full year, compared with $0.76 per share for fiscal 2003, an increase of more than 40 percent. Perrigo will host a conference call to discuss third quarter fiscal 2004 results at 11:00 a.m. (ET) today. The call and replay will be available via webcast on the Company's Web site at www.perrigo.com/investor/ or by phone, toll free, 888-489-0147. A taped replay of the call will be available beginning at approximately 2:30 p.m. (ET) Friday, April 23 until midnight Friday, April 30. To listen to the replay, call 800-642-1687, access code 6891689. The Company is furnishing this earnings release to the Securities and Exchange Commission via Form 8-K and it is hereby incorporated by reference. The information provided on Form 8-K includes a summary of each non-GAAP financial measure included in this earnings release and the reasons management believes these non-GAAP financial measures are useful to investors. Perrigo Company is the nation's largest manufacturer of over-the-counter (non-prescription) pharmaceutical and nutritional products sold by supermarket, drug, and mass merchandise chains under their own labels. The Company's products include over-the-counter pharmaceuticals such as analgesics, cough and cold remedies, gastrointestinal, and feminine hygiene products, and nutritional products, such as vitamins, nutritional supplements and nutritional drinks. Visit Perrigo on the Internet (www.perrigo.com ). Note: Certain statements in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. 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. Please see the "Cautionary Note Regarding Forward-Looking Statements" on pages 25 - 30 of the Company's Form 10-K for the year ended June 28, 2003 for a discussion of certain important factors that relate to forward-looking statements contained in this press release. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. 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. Claritin(R) is a registered trademark of Schering-Plough Corporation. Motrin(R) is a registered trademark of McNeil Consumer Products Company. Aleve(R) is a registered trademark of Bayer Healthcare, LLC. Monistat(R) is a registered trademark of McNeil Personal Products Company. PERRIGO COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) Third Quarter Year-To-Date 2004 2003 2004 2003 Net sales $230,740 $202,616 $685,639 $643,352 Cost of sales 164,108 143,910 487,125 458,671 Gross profit 66,632 58,706 198,514 184,681 Operating expenses Distribution 4,117 3,814 11,472 11,924 Research and development 6,685 5,468 18,584 16,237 Selling and administration 29,318 26,899 77,831 81,049 Subtotal 40,120 36,181 107,887 109,210 Unusual litigation - - - (3,128) Total 40,120 36,181 107,887 106,082 Operating income 26,512 22,525 90,627 78,599 Interest and other, net (1,206) (373) (2,159) (1,095) Income before income taxes 27,718 22,898 92,786 79,694 Income tax expense 9,979 8,766 20,304 29,970 Net income $17,739 $14,132 $72,482 $49,724 Earnings per share Basic $0.25 $0.20 $1.03 $0.71 Diluted $0.24 $0.20 $1.01 $0.70 Weighted average shares outstanding Basic 70,296 69,337 70,103 69,781 Diluted 72,598 70,601 72,035 70,967 Dividends declared per share $0.04 $0.03 $0.10 $0.03 PERRIGO COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) March 27, June 28, March 29, 2004 2003 2003 Assets (unaudited) (unaudited) Current assets Cash and cash equivalents $156,417 $93,827 $105,233 Accounts receivable 102,299 87,018 84,973 Inventories 154,847 160,326 156,043 Current deferred income taxes 30,041 32,643 26,828 Prepaid expenses and other current assets 19,846 5,383 6,064 Total current assets 463,450 379,197 379,141 Property and equipment 468,056 429,115 417,673 Less accumulated depreciation 241,724 210,337 206,907 226,332 218,778 210,766 Goodwill 35,919 35,919 35,919 Non-current deferred income taxes 8,062 3,968 4,209 Other non-current assets 12,884 6,108 6,127 $746,647 $643,970 $636,162 Liabilities and Shareholders' Equity Current liabilities Accounts payable $89,289 $72,186 $73,489 Notes payable 9,746 8,980 8,741 Payroll and related taxes 35,530 40,535 34,539 Accrued expenses 49,308 36,590 36,469 Accrued income taxes - 5,568 8,815 Current deferred income taxes 4,095 2,683 3,225 Total current liabilities 187,968 166,542 165,278 Non-current deferred income taxes 26,315 25,484 29,355 Other non-current liabilities 5,490 3,520 3,193 Shareholders' equity Preferred stock, without par value, 10,000 shares authorized - - - Common stock, without par value, 200,000 shares authorized 99,622 88,990 82,564 Unearned compensation (631) (111) (262) Accumulated other comprehensive income 3,801 1,282 348 Retained earnings 424,082 358,263 355,686 Total shareholders' equity 526,874 448,424 438,336 $746,647 $643,970 $636,162 Supplemental Disclosures of Balance Sheet Information Allowance for doubtful accounts $7,606 $10,242 $9,907 Allowance for inventory $22,493 $21,717 $19,806 Working capital $275,482 $212,655 $213,863 Preferred stock, shares issued - - - Common stock, shares issued 70,595 70,034 69,425 PERRIGO COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Year-To-Date 2004 2003 Cash Flows From Operating Activities Net income $72,482 $49,724 Adjustments to derive cash flows Depreciation and amortization 21,270 19,777 Compensation - stock options 3,848 3,998 Deferred income taxes 35 3,108 Changes in operating assets and liabilities, net of amounts acquired in a business acquisition Accounts receivable (11,150) (2,845) Inventories 13,551 (712) Accounts payable 13,074 (750) Payroll and related taxes (5,001) 3,195 Accrued income taxes (5,572) 718 Accrued expenses 9,879 4,038 Other (8,208) 1,682 Net cash from operating activities 104,208 81,933 Cash Flows For Investing Activities Additions to property and equipment (18,638) (19,458) Issuance of note receivable (10,000) - Acquisition of a business (12,061) - Investment in equity subsidiaries (2,000) (1,233) Net cash for investing activities (42,699) (20,691) Cash Flows From (For) Financing Activities Borrowings (repayments) of short-term debt, net 789 776 Tax benefit of stock transactions 813 153 Issuance of common stock 7,911 1,353 Repurchase of common stock (1,940) (33,682) Cash dividends (6,664) (1,737) Net cash from (for) financing activities 909 (33,137) Net Increase in Cash and Cash Equivalents 62,418 28,105 Cash and Cash Equivalents at beginning of period 93,827 76,824 Effect of exchange rate changes on cash 172 304 Cash and Cash Equivalents at end of period $156,417 $105,233 Supplemental Disclosures of Cash Flow Information Cash paid during the year for Interest $467 $598 Income taxes $25,188 $26,854 PERRIGO COMPANY SEGMENT INFORMATION (in thousands) (unaudited) Third Quarter Year-To-Date 2004 2003 2004 2003 Segment Sales Consumer Healthcare $203,964 $183,560 $617,477 $583,913 UK Operations 21,789 11,039 49,417 36,223 Mexico Operations 4,987 8,017 18,745 23,216 Pharmaceuticals - - - - Total $230,740 $202,616 $685,639 $643,352 Segment Operating Income Consumer Healthcare $28,771 $21,020 $91,538 $74,360 UK Operations 159 624 1,493 2,402 Mexico Operations (771) 881 600 1,837 Pharmaceuticals (1,647) - (3,004) - Total $26,512 $22,525 $90,627 $78,599 PERRIGO COMPANY RECONCILIATION OF NON-GAAP MEASURES (in thousands, except per share amounts) (unaudited) Third Quarter Year-To-Date 2004 2003 2004 2003 Net income (GAAP) $17,739 $14,132 $72,482 $49,724 Less: income tax benefit - - 13,100 - Less: unusual litigation, net of tax - - - 2,000 Net income before income tax benefit and unusual litigation $17,739 $14,132 $59,382 $47,724 Earnings per share: Basic $0.25 $0.20 $0.85 $0.68 Diluted $0.24 $0.20 $0.83 $0.67 Weighted average shares outstanding: Basic 70,296 69,337 70,103 69,781 Diluted 72,598 70,601 72,035 70,967 SOURCE Perrigo Company -0- 04/23/2004 /CONTACT: Ernest J. Schenk, Manager, Investor Relations and Communication of Perrigo Company, +1-269-673-9212, E-mail: Investor@perrigo.com/ /Web site: http://www.perrigo.com / (PRGO) CO: Perrigo Company ST: Michigan IN: MTC SU: ERN ERP CCA MAV