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):

April 29, 2010

PERRIGO COMPANY

(Exact name of registrant as specified in its charter)

MICHIGAN	0-19725	38-2799573
(State of other	(Commission	(IRS Employer
Jurisdiction of	File Number)	Identification
Incorporation)	No.)

515 Eastern Avenue, Allegan, Michigan	49010
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:   (269) 673-8451

Not Applicable

(Former name or address, 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:

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

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

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

o 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 April 29, 2010, Perrigo Company (Company) released earnings for the third quarter of fiscal year 2010.

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 flow of the company.  Pursuant to the requirements of Regulation G, the Company has provided a reconciliation for gross profit, operating expenses, operating income, income from continuing operations and earnings per share from continuing operations within its earnings release to the most directly comparable U.S. GAAP measure 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 due to the unusual nature of these items.  The Company 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.

Items excluded from reported results and guidance:

Fiscal 2009 Results

-   A loss on asset exchange

-   Charges associated with the step-ups in value of inventory acquired

-   Impairment of fixed assets

-   A write-off of in-process research and development

-   An other-than-temporary impairment loss on investments

Fiscal 2010 Results

-   Charges associated with the step-ups in value of inventory acquired

-   A charge associated with acquired research and development

-   Restructuring charges for organizational improvements

-   Acquisition charges for pending and completed business acquisitions

Fiscal 2010 Guidance

-   Charges associated with the step-ups in value of inventory acquired

-   A charge associated with acquired research and development

-   Restructuring charges for organizational improvements

-   Acquisition charges for pending and completed business acquisitions

The press release related to the Company’s earnings is attached as Exhibit 99.1.

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 on April 29, 2010, 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.

	PERRIGO COMPANY (Registrant)
Dated: April 29, 2010	By:	/s/ Judy L. Brown
		Judy L. Brown
		Executive Vice President and Chief Financial Officer (Principal Accounting and Financial Officer)

 Exhibit Index

Exhibit 99.1 – Press Release issued by Perrigo Company on April 29, 2010, furnished solely pursuant to Item 2.02 of Form 8-K.

EX-99.1

FOR IMMEDIATE RELEASE

PERRIGO REPORTS RECORD THIRD QUARTER REVENUE, ALL-TIME RECORD EARNINGS, AND RAISES FULL YEAR ADJUSTED EPS GUIDANCE

·   Fiscal third quarter revenue from continuing operations increased $32 million, or 6%, to $538 million

·   Fiscal third quarter adjusted income from continuing operations increased 49% to $70 million, or $0.76 per diluted share

·   Fiscal third quarter GAAP income from continuing operations increased 29% to $60 million, or $0.65 per diluted share

·   Strong third quarter cash flow from operations of $57 million

·   Management raises full-year fiscal 2010 adjusted diluted earnings from continuing operations to $2.75-$2.80 per share from previously announced $2.55-$2.65 per share

ALLEGAN, Mich. – April 29, 2010 – Perrigo Company (Nasdaq: PRGO; TASE) today announced results for its third quarter and nine months ended March 27, 2010.

Perrigo’s Chairman and CEO Joseph C. Papa commented, “We are excited to announce another outstanding quarter. Consumers continue to realize the value of store brands; however, that is just one of numerous drivers that contributed to our strong performance. All of our segments executed above expectations. This quarter, both our adjusted consolidated gross and operating margins reached all-time highs of 34.6% and 18.2%, respectively. In addition to this strong day-to-day performance, our teams have been hard at work focusing on the future. During the quarter we announced two acquisitions, won a summary judgment in a patent litigation and launched two new products. Those achievements are just a few examples of the exciting opportunities we are working on in adjacent categories, product pipeline extensions and geographical expansions here at Perrigo.”

The Company’s reported results are summarized in the attached Condensed Consolidated Statements of Income, Balance Sheets and Cash Flows. As part of management’s continued strategic review of the Company’s portfolio of businesses, management committed to a plan to sell, and subsequently sold on February 26, 2010, the Company’s Israel Consumer Products business. The results of this business are reflected in the condensed consolidated financial statements as discontinued operations for all periods presented.

Perrigo Company

(from continuing operations, in thousands, except per share amounts)

(see the attached Table II for reconciliation to GAAP numbers)

	Third Quarter				Nine Months
	2010		2009		2010		2009
Net Sales	$	538,306	$	505,902	$	1,649,475	$	1,498,653
Reported Income	$	60,138	$	46,469	$	174,399	$	108,818
Adjusted Income	$	70,218	$	46,999	$	196,453	$	127,710
Reported Diluted EPS	$	0.65	$	0.50	$	1.88	$	1.16
Adjusted Diluted EPS	$	0.76	$	0.50	$	2.12	$	1.36
Diluted Shares		92,589		93,153		92,819		93,747

Third Quarter Results

Net sales from continuing operations for the third quarter of fiscal 2010 were $538 million, an increase of 6%. Reported income from continuing operations was $60 million, or $0.65 per share, a strong increase over $46 million, or $0.50 per share, a year ago. Excluding the charges as outlined in Table II at the end of this release, third quarter fiscal 2010 adjusted income from continuing operations was $70 million, or $0.76 per share. Reported operating expenses included $7 million in restructuring charges, primarily related to the sale of the Company’s German API facility, and $3 million in acquisition costs related to the pending acquisition of PBM Holdings, Inc. (PBM).    

Nine Months Results

Net sales for the first nine months of fiscal 2010 were $1,649 million, an increase of 10% over fiscal 2009. The increase spanned all of the Company’s segments and included consolidated new product sales of approximately $65 million. Reported gross profit was $547 million, up 27%, and the reported gross margin was 33.2%, up from 28.8% last year. Reported operating margin increased 290 basis points to 15.7% and adjusted operating margin increased 400 basis points to 17.2%. Reported income from continuing operations was $174 million, an increase of 60%. Adjusted income from continuing operations was $196 million or an increase of 54% from fiscal 2009.

2

Consumer Healthcare

           Consumer Healthcare segment net sales in the third quarter were $436 million compared with $419 million in the third quarter last year, an increase of $17 million or 4%. The increase resulted from $18 million of new product sales and $11 million from higher sales volumes of existing products, primarily in the laxatives, analgesics, nutritional, and gastrointestinal categories, as well as from favorable changes in foreign currency exchange rates which increased sales by $3 million. These increases were partially offset by a decline of approximately $15 million in sales from existing products, primarily in smoking cessation and contract manufacturing categories. Reported operating income was $78 million, compared with $62 million a year ago, largely driven by favorable product mix and higher gross margins from the sale of new products. Reported operating margin increased 300 basis points to 17.9% due to improved operating expense leverage.

For the first nine months of fiscal year 2010, Consumer Healthcare net sales increased $120 million or 10%, compared to fiscal 2009.  The increase resulted from approximately $51 million of new product sales and a $63 million increase in sales of existing products, primarily in the gastrointestinal, cough/cold and analgesics categories, as well as incremental sales of $43 million from the Company’s acquisitions of J.B. Laboratories, Unico, and Diba. This growth was partially offset by approximately $27 million in decreased sales from existing products, primarily in the feminine hygiene, smoking cessation and contract manufacturing categories, as well as from exited products. Net sales were also reduced by approximately $9 million as a result of foreign currency exchange rates.

On February 12, 2010, the Company announced that a federal court had granted summary judgment in its favor in patent litigation involving Guaifenesin Extended-Release Tablets, 600mg, a generic version of Mucinex®.

On March 1, 2010, the Company announced that it had acquired Australia’s leading OTC store brand supplier, Orion Laboratories, for $49 million in cash.

On March 15, 2010, the Company announced that it launched Ketotifen Fumarate ophthalmic solution, 0.025%, a generic version of Zaditor™.

On March 23, 2010, the Company announced that it had signed a definitive merger agreement to acquire the world’s largest store brand infant formula manufacturer, PBM Holdings, for $808 million in cash.

3

Rx Pharmaceuticals

The Rx Pharmaceuticals segment third quarter net sales were approximately $51 million compared with $42 million a year ago, an increase of 22%. This increase was due primarily to an increase in non-product revenue, reduced downward pricing pressure and new product sales. Reported operating income was $17 million, an increase of $9 million from last year. The increase was due primarily to an increase in non-product revenue, greater operating expense leverage and improved operating efficiency. Operating margin increased 1400 basis points from last year to 33.1%.

For the first nine months of fiscal year 2010, net sales for the Rx Pharmaceuticals segment increased 33% over fiscal 2009. Net sales increased due to higher sales of existing products and over-the-counter Rx (ORx), less downward pricing pressure, new product sales and an increase in non-product revenue.

On February 18, 2010, the Company announced that it had received final approval from the U.S. Food and Drug Administration (FDA) to manufacture and market Ciclopirox Shampoo, 1%, a generic version of LOPROX® Shampoo.

On April 5, 2010, the Company announced, that together with its partner Cobrek Pharmaceuticals, Inc. (Cobrek), final approval had been received from the FDA to manufacture and market Clindamycin Phosphate Foam 1%, a generic version of Evoclin® Foam 1% produced by Stiefel Laboratories, a GSK Company. As the abbreviated new drug application (ANDA) was first to file with a Paragraph IV certification against Evoclin®, 180 days of generic exclusivity was granted by the FDA.

Also on April 5, 2010, the Company announced that, together with its partner Cobrek, it had agreed to settle all Hatch-Waxman litigation relating to Betamethasone Valerate Foam, a generic equivalent of Luxiq® Foam, brought by Stiefel, against Cobrek by taking a royalty bearing license under all relevant patents. Under the terms of the settlement, the Company can launch a generic version of Luxiq® Foam on January 15, 2013, or earlier under certain circumstances.

On April 13, 2010, the Company announced that it had settled all patent litigation with Graceway Pharmaceuticals related to the Company’s ANDA filing for a generic version of Aldara®. The Company has been named Graceway’s authorized generic distributor for Aldara® through February 24, 2011.

On April 15, 2010, the Company announced that it had been named as an authorized generic partner by Ferndale Laboratories and had launched an authorized generic of Analpram HC® Cream.

4

API

The API segment reported third quarter net sales of $34 million compared with $31 million a year ago. The increase was due primarily to new product sales, dossier sales and favorable changes in the foreign currency exchange rates. Reported operating income decreased approximately $6 million due primarily to charges related to the restructuring in Germany. Adjusted operating income increased $1 million. Adjusted operating margin increased 180 basis points to 15.8%.

For the first nine months of fiscal year 2010, net sales increased 4% or $4 million, compared to fiscal 2009. Adjusted operating margin increased 880 basis points to 14.8% from last year’s 6%.

Other

Continuing operations for the Other category, consisting of the Israel Pharmaceutical and Diagnostic Products operating segment, reported third quarter net sales of $17 million compared with $14 million a year ago. The operating segment reported operating income of approximately $2 million, compared to operating income of approximately $3 million for fiscal 2009. Year-to-date net sales for fiscal 2010 decreased 22% compared to fiscal 2009. The decrease was due primarily to approximately $18 million related to the loss of a customer contract.

On March 1, 2010, the Company announced that on February 26, 2010 it had closed its previously announced sale of the Israel Consumer Products business to Emilia Group.

Guidance

Chairman and CEO Joseph C. Papa concluded, “Strong performance and execution across our businesses continued during the third quarter. As a result of these positive factors, we now expect reported fiscal 2010 diluted earnings from continuing operations to be between $2.42 and $2.47 per share. Excluding the charges outlined in Table II at the end of this release, we now expect fiscal 2010 adjusted diluted earnings from continuing operations to be between $2.75 and $2.80 per share, up from our previously announced $2.55 to $2.65 per share. This new range implies a year-over-year growth rate of adjusted earnings from continuing operations of 47% to 50% over fiscal 2009 adjusted diluted EPS.”

Perrigo will host a conference call to discuss fiscal 2010 third quarter results at 10:00 a.m. (ET) on Thursday, April 29. The conference call will be available live via webcast to interested parties on the Perrigo website http://www.perrigo.com or by phone 877-248-9413, International 973-582-2737 and reference ID# 69498517. A taped replay of the call will be available beginning at approximately 2:00 p.m. (ET) Thursday, April 29, until midnight Thursday, May 13, 2010. To listen to the replay, call 800-642-1687, International 706-645-9291, access code 69498517.

5

Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes OTC and generic prescription (Rx) pharmaceuticals, nutritional products, and active pharmaceutical ingredients (API), and pharmaceutical and medical diagnostic products.  The Company is the world’s largest manufacturer of OTC pharmaceutical products for the store brand market. The Company’s primary markets and locations of manufacturing and logistics operations are the United States, Australia, Israel, Mexico and the United Kingdom. Visit Perrigo on the Internet (http://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. 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. These and other important factors, including those discussed under “Risk Factors” in the Company’s Form 10-K for the year ended June 27, 2009, as well as the Company’s subsequent filings with the Securities and Exchange Commission, 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 press release 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.

Arthur J. Shannon, Vice President, Investor Relations and Communication

(269) 686-1709

    E-mail: ajshannon@perrigo.com

Daniel B. Willard, Manager, Investor Relations and Communication

(269) 686-1597

    E-mail: dbwillard@perrigo.com

6

PERRIGO COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

	Third Quarter						Year-to-Date
	2010			2009			2010			2009
Net sales	$	538,306		$	505,902		$	1,649,475		$	1,498,653
Cost of sales		352,440			356,310			1,102,670			1,066,509
Gross profit		185,866			149,592			546,805			432,144
Operating expenses
Distribution		7,960			6,167			21,493			18,513
Research and development		17,467			17,890			56,699			56,036
Selling and administration		65,658			53,638			188,795			165,533
Subtotal		91,085			77,695			266,987			240,082
Write-off of in-process
research and development		-			-			14,000			279
Restructuring		7,474			-			7,474			-
Total		98,559			77,695			288,461			240,361
Operating income		87,307			71,897			258,344			191,783
Interest, net		5,989			6,966			18,203			20,465
Other (income) expense, net		(1,327	)		1,160			(1,557	)		2,565
Investment impairment		-			-			-			15,104
Income from continuing operations before
income taxes		82,645			63,771			241,698			153,649
Income tax expense		22,507			17,302			67,299			44,831
Income from continuing operations		60,138			46,469			174,399			108,818
Income (loss) from discontinued operations,
net of tax		768			(572	)		(1,301	)		30
Net income	$	60,906		$	45,897		$	173,098		$	108,848
Earnings (loss) per share (1)
Basic
Continuing operations	$	0.66		$	0.51		$	1.91		$	1.18
Discontinued operations		0.01			(0.01	)		(0.01	)		0.00
Basic earnings per share	$	0.67		$	0.50		$	1.89		$	1.18
Diluted
Continuing operations	$	0.65		$	0.50		$	1.88		$	1.16
Discontinued operations		0.01			(0.01	)		(0.01	)		0.00
Diluted earnings per share	$	0.66		$	0.49		$	1.86		$	1.16
Weighted average shares outstanding
Basic		91,179			91,967			91,428			92,251
Diluted		92,589			93,153			92,819			93,747
Dividends declared per share	$	0.0625		$	0.0550		$	0.1800		$	0.1600

(1) The sum of individual per share amounts may not equal due to rounding.

7

PERRIGO COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

	March 27,			June 27,			March 28,
	2010			2009			2009
Assets
Current assets
Cash and cash equivalents	$	314,924		$	316,133		$	197,817
Investment securities		562			3			5
Accounts receivable, net		322,329			325,810			331,307
Inventories		417,580			384,794			383,010
Current deferred income taxes		40,689			41,941			40,447
Income taxes refundable		-			8,926			12,191
Prepaid expenses and other current assets		33,218			23,658			26,904
Current assets of discontinued operations		9,507			51,699			45,796
Total current assets		1,138,809			1,152,964			1,037,477
Property and equipment		821,564			763,951			724,242
Less accumulated depreciation		(441,283	)		(409,634	)		(385,780	)
		380,281			354,317			338,462
Restricted cash		400,000			400,000			400,000
Goodwill and other indefinite-lived intangible assets		292,030			268,819			249,960
Other intangible assets, net		219,288			214,207			208,093
Non-current deferred income taxes		60,440			74,438			70,610
Other non-current assets		52,633			49,756			45,101
Non-current assets of discontinued operations		-			21,854			22,181
	$	2,543,481		$	2,536,355		$	2,371,884
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable	$	235,085		$	271,537		$	232,875
Payroll and related taxes		70,588			54,196			51,949
Accrued customer programs		53,788			54,461			52,789
Accrued liabilities		54,520			61,704			49,435
Accrued income taxes		6,958			3,334			-
Current deferred income taxes		15,431			18,528			16,120
Current portion of long-term debt		-			17,181			15,869
Current liabilities of discontinued operations		17,363			19,620			18,975
Total current liabilities		453,733			500,561			438,012
Non-current liabilities
Long-term debt, less current portion		825,000			875,000			875,000
Non-current deferred income taxes		108,748			139,916			133,955
Other non-current liabilities		104,118			86,476			74,222
Non-current liabilities of discontinued operations		-			11,933			9,391
Total non-current liabilities		1,037,866			1,113,325			1,092,568
Shareholders' equity
Controlling interest shareholders' equity:
Preferred stock, without par value, 10,000 shares authorized		-			-			-
Common stock, without par value, 200,000 shares authorized		413,683			452,243			448,589
Accumulated other comprehensive income		60,717			50,592			8,111
Retained earnings		575,619			419,086			384,056
		1,050,019			921,921			840,756
Noncontrolling interest		1,863			548			548
Total shareholders' equity		1,051,882			922,469			841,304
	$	2,543,481		$	2,536,355		$	2,371,884
Supplemental Disclosures of Balance Sheet Information
Related to Continuing Operations
Allowance for doubtful accounts	$	10,818		$	11,394		$	9,750
Working capital	$	692,932		$	620,324		$	572,644
Preferred stock, shares issued and outstanding		-			-			-
Common stock, shares issued and outstanding		91,356			92,209			92,171

8

PERRIGO COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Year-to-Date
	2010			2009
Cash Flows From (For) Operating Activities
Net income	$	173,098		$	108,848
Adjustments to derive cash flows
Write-off of in-process research and development		14,000			279
Depreciation and amortization		53,673			50,906
Restructuring		7,474			-
Asset impairments		-			16,704
Share-based compensation		11,184			7,322
Gain on sale of business		(750	)		-
Income tax benefit from exercise of stock options		(905	)		(2,673	)
Excess tax benefit of stock transactions		(5,730	)		(2,970	)
Deferred income taxes (credit)		(18,108	)		811
Sub-total		233,936			179,227
Changes in operating assets and liabilities, net of asset and business
acquisitions and disposition
Accounts receivable		10,172			(6,053	)
Inventories		(33,660	)		(9,007	)
Accounts payable		(32,124	)		(4,219	)
Payroll and related taxes		18,760			(21,258	)
Accrued customer programs		(1,005	)		(580	)
Accrued liabilities		(8,246	)		(16,907	)
Accrued income taxes		32,476			9,109
Other		(4,108	)		(28,729	)
Sub-total		(17,735	)		(77,644	)
Net cash from operating activities		216,201			101,583
Cash Flows (For) From Investing Activities
Cash acquired in asset exchange		-			2,115
Proceeds from sale of business		35,980			-
Acquisitions of businesses, net of cash acquired		(58,885	)		(88,248	)
Acquired research and development		(14,000	)		-
Acquisitions of assets		(10,262	)		(1,000	)
Additions to property and equipment		(32,233	)		(32,020	)
Net cash for investing activities		(79,400	)		(119,153	)
Cash Flows (For) From Financing Activities
Repayments of short-term debt, net		-			(13,736	)
Repayments of long-term debt		(67,771	)		(31,380	)
Bridge loan financing costs		(3,500	)		-
Excess tax benefit of stock transactions		5,730			2,970
Issuance of common stock		14,593			9,434
Repurchase of common stock		(70,972	)		(62,347	)
Cash dividends		(16,566	)		(14,786	)
Net cash for financing activities		(138,486	)		(109,845	)
Effect of exchange rate changes on cash		472			6,632
Net decrease in cash and cash equivalents		(1,213	)		(120,783	)
Cash and cash equivalents of continuing operations, beginning of period		316,133			318,599
Cash balance of discontinued operations, beginning of period		4			5
Cash and cash equivalents, end of period		314,924			197,821
Less cash balance of discontinued operations, end of period		-			(4	)
Cash and cash equivalents of continuing operations, end of period	$	314,924		$	197,817
Supplemental Disclosures of Cash Flow Information
Cash paid/received during the period for:
Interest paid	$	31,928		$	33,829
Interest received	$	15,851		$	18,872
Income taxes paid	$	50,185		$	60,105
Income taxes refunded	$	1,159		$	3,627

9

Table I

PERRIGO COMPANY

SEGMENT INFORMATION

(in thousands)

(unaudited)

	Third Quarter*						Year-to-Date*
	2010			2009			2010			2009
Segment Net Sales
Consumer Healthcare	$	436,259		$	419,148		$	1,352,022		$	1,231,761
Rx Pharmaceuticals		50,838			41,747			153,500			115,323
API		34,251			30,953			101,294			97,062
Other		16,958			14,054			42,659			54,507
Total	$	538,306		$	505,902		$	1,649,475		$	1,498,653
Segment Operating Income (Loss)
Consumer Healthcare	$	78,081		$	62,278		$	237,832		$	177,697
Rx Pharmaceuticals		16,815			7,982			33,497			16,938
API		(1,350	)		4,344			8,225			5,842
Other		1,556			2,726			1,992			5,327
Unallocated expenses		(7,795	)		(5,433	)		(23,202	)		(14,021	)
Total	$	87,307		$	71,897		$	258,344		$	191,783

*All information based on continuing operations.

10

Table II

PERRIGO COMPANY

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, except per share amounts)

(unaudited)

	Third Quarter*									Year-to-Date*
	2010			2009			% Change			2010			2009			% Change
Net sales	$	538,306		$	505,902			6	%	$	1,649,475		$	1,498,653			10	%
Reported gross profit	$	185,866		$	149,592			24	%	$	546,805		$	432,144			27	%
Inventory step-ups		322			736						1,031			2,923
Impairment of fixed assets		-			-						-			1,600
Adjusted gross profit	$	186,188		$	150,328			24	%	$	547,836		$	436,667			25	%
Adjusted gross profit %		34.6	%		29.7	%					33.2	%		29.1	%
Reported operating income	$	87,307		$	71,897			21	%	$	258,344		$	191,783			35	%
Inventory step-ups		322			736						1,031			2,923
Write-offs of in-process R&D		-			-						14,000			279
Impairment of fixed assets		-			-						-			1,600
Restructuring charges		7,474			-						7,474			-
Acquisition costs		3,052			-						3,052			-
Loss on asset exchange		-			-						-			639
Adjusted operating income	$	98,155		$	72,633			35	%	$	283,901		$	197,224			44	%
Adjusted operating income %		18.2	%		14.4	%					17.2	%		13.2	%
Reported income from continuing operations	$	60,138		$	46,469			29	%	$	174,399		$	108,818			60	%
Inventory step-ups (1)		241			530						773			1,956
Restructuring charges - Florida (1)		431			-						431			-
Restructuring charges - Germany (2)		6,775			-						6,775			-
Acquisition costs - Orion (2)		600			-						600			-
Acquisition costs - PBM (1)		2,033			-						2,033			-
Write-offs of in-process R&D (1)		-			-						11,442			201
Impairment of fixed assets (1)		-			-						-			992
Investment impairment (1)		-			-						-			15,104
Loss on asset exchange (1)		-			-						-			639
Adjusted income from continuing operations	$	70,218		$	46,999			49	%	$	196,453		$	127,710			54	%
Diluted earnings per share from continuing operations
Reported	$	0.65		$	0.50			30	%	$	1.88		$	1.16			62	%
Adjusted	$	0.76		$	0.50			52	%	$	2.12		$	1.36			56	%
Diluted weighted average shares outstanding		92,589			93,153						92,819			93,747

(1)	Net of taxes
(2)	Not tax affected

*All information based on continuing operations.

11

Table II (Continued)

REPORTABLE SEGMENTS

RECONCILIATION OF NON-GAAP MEASURES

(in thousands)

	Third Quarter*									Year-to-Date*
	2010			2009			% Change			2010			2009			% Change
Consumer Healthcare
Net sales	$	436,259		$	419,148			4	%	$	1,352,022		$	1,231,761			10	%
Reported gross profit	$	138,196		$	116,068			19	%	$	417,105		$	340,351			23	%
Inventory step-ups		-			736						-			2,923
Impairment of fixed assets		-			-						-			1,600
Adjusted gross profit	$	138,196		$	116,804			18	%	$	417,105		$	344,874			21	%
Adjusted gross profit %		31.7	%		27.9	%					30.9	%		28.0	%
Reported operating income	$	78,081		$	62,278			25	%	$	237,832		$	177,697			34	%
Restructuring charges - Florida		699			-						699			-
Inventory step-ups		-			736						-			2,923
Impairment of fixed assets		-			-						-			1,600
Loss on asset exchange		-			-						-			639
Adjusted operating income	$	78,780		$	63,014			25	%	$	238,531		$	182,859			30	%
Adjusted operating income %		18.1	%		15.0	%					17.6	%		14.8	%
Rx Pharmaceuticals
Net sales	$	50,838		$	41,747			22	%	$	153,500		$	115,323			33	%
Reported operating income	$	16,815		$	7,982			111	%	$	33,497		$	16,938			98	%
Write-off of in-process R&D - ANDA		-			-						14,000			-
Adjusted operating income	$	16,815		$	7,982			111	%	$	47,497		$	16,938			180	%
Adjusted operating income %		33.1	%		19.1	%					30.9	%		14.7	%
API
Net sales	$	34,251		$	30,953			11	%	$	101,294		$	97,062			4	%
Reported operating income (loss)	$	(1,350	)	$	4,344			-131	%	$	8,225		$	5,842			41	%
Restructuring charges - Germany		6,775			-						6,775			-
Adjusted operating income	$	5,425		$	4,344			25	%	$	15,000		$	5,842			157	%
Adjusted operating income %		15.8	%		14.0	%					14.8	%		6.0	%
Other
Net sales	$	16,958		$	14,054			21	%	$	42,659		$	54,507			-22	%
Reported gross profit	$	6,814		$	5,999			14	%	$	15,137		$	18,565			-18	%
Inventory step-ups - Asset acquisitions		322			-						1,031			-
Adjusted gross profit	$	7,136		$	5,999			19	%	$	16,168		$	18,565			-13	%
Adjusted gross profit %		42.1	%		42.7	%					37.9	%		34.1	%
Reported operating income	$	1,556		$	2,726			-43	%	$	1,992		$	5,327			-63	%
Inventory step-ups - Asset acquisitions		322			-						1,031			-
Adjusted operating income	$	1,878		$	2,726			-31	%	$	3,023		$	5,327			-43	%
Adjusted operating income %		11.1	%		19.4	%					7.1	%		9.8	%
Unallocated
Reported operating loss	$	(7,795	)	$	(5,433	)		43	%	$	(23,202	)	$	(14,021	)		65	%
Acquisition costs		3,052			-						3,052			-
Write-off of in-process R&D - Diba acquisition		-			-						-			279
Adjusted operating loss	$	(4,743	)	$	(5,433	)		-13	%	$	(20,150	)	$	(13,742	)		47	%

*All information based on continuing operations.

12

Table III

FY 2010 GUIDANCE AND FY 2009 EPS

RECONCILIATION OF NON-GAAP MEASURES

(unaudited)

	Full Year*
	Fiscal 2010 Guidance
FY10 reported diluted earnings per share from continuing operations range	$2.42 - $2.47
Charges associated with inventory step-ups	0.050
Charge associated with acquired research and development	0.123
Charges associated with acquisition costs	0.081
Charges associated with restructuring	0.078
FY10 adjusted diluted earnings per share from continuing operations range	$2.75 - $2.80
	Fiscal 2009*
FY09 reported diluted earnings per share from continuing operations	$1.67
Loss on asset exchange	0.007
Charges associated with inventory step-ups	0.021
Fixed asset impairment	0.011
Write-off of in-process R&D	0.002
Investment impairment	0.161
FY09 adjusted diluted earnings per share from continuing operations	$1.87

*All information based on continuing operations.

13