-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IYxPyYR+8KUc1mQEnqKKv8GkAQN1WZ82PWJVv+1KpzRhIumb9uDEHlVMA0XEQgrD mpPMnMm3mG4qo/m3QLVV0A== 0001275287-05-003459.txt : 20050907 0001275287-05-003459.hdr.sgml : 20050907 20050907084218 ACCESSION NUMBER: 0001275287-05-003459 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050907 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050907 DATE AS OF CHANGE: 20050907 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERRIGO CO CENTRAL INDEX KEY: 0000820096 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 382799573 STATE OF INCORPORATION: MI FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19725 FILM NUMBER: 051071724 BUSINESS ADDRESS: STREET 1: 515 EASTERN AVENUE CITY: ALLEGAN STATE: MI ZIP: 49010 BUSINESS PHONE: 6166738451 MAIL ADDRESS: STREET 1: 515 EASTERN AVENUE CITY: ALLEGAN STATE: MI ZIP: 49010 8-K 1 pc3524.txt FORM 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): September 7, 2005 PERRIGO COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) MICHIGAN 0-19725 38-2799573 ---------------------------- ------------ ------------------- (State of other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification 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: [ ] 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. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On September 7, 2005, the Perrigo Company released earnings for the fourth quarter and full year of fiscal year 2005. The earnings release contains non-GAAP measures which are defined as a financial measure of the Company's performance that excludes or includes amounts thereby differentiating it from the most directly comparable measure presented in the financial statements that are calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP). Pursuant to the requirements of Regulation G, the Company has provided a reconciliation for operating income, net income and earnings per share within its earnings release to the most directly comparable GAAP measure for these non-GAAP measures. The Company excludes a write-off of in-process research and development, restructuring costs, acquisition-related expenses, a write-off of the step-up in value of inventory acquired, settlements related to class action lawsuits and the Federal Trade Commission, and a one-time tax benefit when monitoring and evaluating the on-going financial results and trends of its business due to the non-recurring nature of these items. The Company believes this information is also useful for investors since excluding these non-recurring items provides important insight into the Company's on-going operations. The press release related to Perrigo's earnings is attached as Exhibit 99. The information in this Report is being furnished and shall not be deemed "filed" for the 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 (c) Exhibits 99.1 Press release issued by Perrigo Company on September 7, 2005, 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) By: /s/Douglas R. Schrank ---------------------------- Dated: September 7, 2005 Douglas R. Schrank Executive Vice President and Chief Financial Officer (Principal Accounting and Financial Officer) Exhibit Index Exhibit 99.1 - Press Release issued by Perrigo Company on September 7, 2005, furnished solely pursuant to Item 2.02 of Form 8-K. EX-99.1 2 pc3524ex991.txt EXHIBIT 99.1 Exhibit 99.1 PERRIGO COMPANY REPORTS FISCAL YEAR 2005 FINANCIAL RESULTS ALLEGAN, Mich., Sept. 7 /PRNewswire-FirstCall/ -- The Perrigo Company (Nasdaq: PRGO; TASE) today announced results for the full year and fourth quarter ended June 25, 2005. The acquisition of Agis Industries was completed on March 17, 2005. Agis was first included in the consolidated balance sheet as of March 26, 2005 and Agis' operating results are included in the consolidated results beginning in the fourth quarter of fiscal 2005. Perrigo Company (in thousands, except per share amounts) Fourth Quarter Year-To-Date --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Sales $ 324,538 $ 206,125 $ 1,024,098 $ 898,204 Net (Loss)/Income $ (6,963) $ 8,085 $ (352,983) $ 80,567 Diluted Shares 93,480 73,277 77,313 72,289 Diluted EPS $ (0.07) $ 0.11 $ (4.57) $ 1.11 Commenting on the past year, Perrigo Chairman, President and Chief Executive Officer, David T. Gibbons, said, "Fiscal 2005 was a busy, exciting and challenging period that brought many changes to Perrigo Company. We gained entry into the generic prescription drug and Active Pharmaceutical Ingredient markets with the acquisition of Agis, providing us a platform for future growth and expanded research and development and manufacturing capabilities. The integration is moving forward quickly and the two management teams are working well together. The acquisition also brought the added complexity of new purchase accounting requirements and new segment reporting. With several unusual items this year and last year, financial comparisons are difficult." The reconciliation tables at the end of this release exclude key non-recurring items to provide insight into our on-going operations. Fiscal Year 2005 Sales for the twelve months ended June 25, 2005 were $1,024.1 million, compared with $898.2 million last year, an increase of 14 percent. The Company reported a loss of $353.0 million, or $4.57 per share, which included charges associated with the Agis acquisition and class action lawsuit expenses as follows:
Pre-Tax After-Tax --------- --------- * Write-off of in-process research and development $ 386.8 $ 386.8 * Charge for Consumer Healthcare operational improvements and asset impairments 6.4 4.1 * Expense of acquisition related legal, audit and integration costs 5.6 3.6 * Write-off of the step-up in the value of inventory acquired 23.4 18.2 * Estimated settlement of class action lawsuits 4.5 2.9 $ 426.7 $ 415.6
Net income was also impacted by charges for the loratadine and infant drop product recalls of $6.6 million after-tax, or $0.09 per share. Excluding the charges associated with the acquisition and the class action expense, but including the recall charges against operating income, net income was $62.6 million, or $0.81 per share. Reported net income in fiscal 2004 was $80.6 million, or $1.11 per share. Excluding a one-time tax benefit ($13.1 million after-tax, or $0.18 per share) and an FTC settlement cost ($3.4 million after-tax, or $0.05 per share), net income was $70.9 million, or $0.98 per share. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. Fiscal Fourth Quarter For the fourth quarter, sales were $324.5 million, an increase of 57 percent, compared with $206.1 million last year, reflecting the consolidation of Agis' product sales in the current quarter. The Company reported a net loss of $7.0 million, or $0.07 per share, compared with net income of $8.1 million, or $0.11 per share a year ago. Excluding non-recurring charges consisting primarily of the acquisition-related write-off of the step-up in the value of inventory acquired ($18.2 million after-tax, or $0.20 per share) and the estimated class action settlement charge ($2.9 million after-tax, or $0.03 per share) and including a charge for the infant drops product recall ($1.3 million after-tax, or $0.01 per share), net income in the current quarter was $13.0 million, or $0.14 per share. Excluding a charge for an FTC settlement ($3.4 million after-tax, or $0.05 per share), net income in the prior year fourth quarter was $0.16 per share. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. New Segment Reporting The Company realigned segment reporting following the Agis acquisition, primarily by product, as follows: Consumer Healthcare, Rx Pharmaceuticals and API as well as an Other category. The Consumer Healthcare segment now includes the U.S., U.K. and Mexico Operations. The Other category consists of two operating segments with sales of consumer, pharmaceutical and medical diagnostic products, primarily for the Israeli market. Segment information is shown in Table I at the end of this press release. Consumer Healthcare "The Consumer Healthcare business had a particularly challenging year. The cough and cold season started slowly and peaked late with lower severity, which reduced our unit production and pressured margins. We had two retail-level product recalls, loratadine syrup and infant drops, that reduced operating income by $10.3 million. We are reviewing and enhancing our quality processes for new products, which were the focus of the recalls," said Gibbons. Consumer Healthcare segment sales for fiscal 2005 were $933.3 million, an increase of four percent, compared with $898.2 million in fiscal 2004. The sales increase reflects the incremental sales volume from the Agis acquisition, a full year of sales from Perrigo U.K., acquired in fiscal 2004, and new product sales in the smoking cessation, feminine hygiene and foot care product categories. The increase was offset partially by sales returns due to the product recalls and price and volume declines in the cough/cold, analgesic and gastrointestinal product categories. Reported operating income was $86.6 million compared with $107.9 million last year reflecting lower production levels, increased material costs related to oil pricing, and a reduction of $10.3 million due to the product recalls. Excluding one-time costs for operational improvements and asset impairments ($6.4 million) and the estimated settlements of class action lawsuits ($4.5 million), but including the recall charges against operating income, operating income in fiscal 2005 was $98.3 million compared with $112.6 million in fiscal 2004. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. Rx Pharmaceuticals Results for fiscal 2005 largely reflect the operations of the Agis business, consolidated with Perrigo Pharmaceuticals for the first time in the fiscal fourth quarter. The Rx Pharmaceuticals segment reported sales of $32.6 million and an operating loss of $10.7 million compared with a loss of $5.0 million last year in our "greenfield" generic Rx start-up. Excluding the write-off of the step-up in the value of inventory acquired of $5.5 million, the operating loss in fiscal 2005 was $5.1 million. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. API Results for fiscal 2005 reflect the operations of the Agis business, reported for the first time in the fiscal fourth quarter. The API segment reported sales of $23.4 million and an operating loss of $7.2 million. Excluding the write-off of the step-up in the value of inventory acquired of $12.5 million, the API segment had operating income of $5.4 million. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. Other The Other category consists of Agis' Israel Consumer and Israel Pharmaceutical and Diagnostics Products segments, reported for the first time in the fiscal fourth quarter. The Other category reported sales of $34.8 million and an operating loss of $4.6 million. Excluding the write-off of the step-up in the value of inventory acquired of $4.4 million, the Other category had an operating loss of $0.2 million. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. Fiscal 2006 Outlook Pseudoephedrine Pseudoephedrine, the active ingredient in many of our Consumer Healthcare cough and cold products, has received significant media and legislative attention. Pseudoephedrine, which is a safe and effective active ingredient, can be used for the manufacturing of the illegal drug methamphetamine. State governments are rapidly approving legislation requiring retailers to remove pseudoephedrine-based products from retail shelves and move them behind the pharmacy counter in an effort to reduce the production of methamphetamine. As retailer actions to move pseudoephedrine behind the counter have accelerated in the last two months, the expected demand for pseudoephedrine products has been sharply reduced. Perrigo's pseudoephedrine-containing product sales totaled $182 million in fiscal 2005. Today, the Company estimates fiscal 2006 sales of approximately $110 - $120 million, down $62 - $72 million from fiscal 2005. The Company is working on the reformulation and validation of phenylephrine-based products, which are substitutes for pseudoephedrine. Reformulated products will be introduced throughout the fiscal 2006 cough, cold and flu season. At this time, many of the brands do not currently have phenylephrine-based products available on the shelf, which makes it difficult to create national brand equivalent formulations. Mr. Gibbons stated that, "The decline of pseudoephedrine sales year-over-year will unfortunately offset a very strong new product portfolio that includes Smoking Cessation, Acetaminophen Arthritis Pain Relief and Acetaminophen Extended Release Pain Relief. New products are estimated to contribute sales in excess of $90 million. "Consumer Healthcare sales are expected to be $1.0 billion, up by approximately $70 million in 2006 with the addition of a full year of Agis OTC product sales," said Gibbons, "and operating income should approximate $105 million, or slightly above last year before non-recurring charges. This is not where we wanted to be, but a good result given the uncontrollable outside factors. "Sales for the Rx Pharmaceuticals, API and Other Israeli business are forecasted to be approximately $390 million in fiscal 2006 versus $91 million in fiscal 2005. Fiscal 2006 operating income is estimated to be $42 million, which excludes $5 million for the write-off of inventory step-up, which will occur in the first quarter. This operating income will include approximately $9.0 million for intangible amortization. "On a consolidated basis, sales will total approximately $1.4 billion, up $370 million, or 36 percent. Net income is estimated at $72 - $76 million and EPS at $0.74 - $0.78 per share, including additional integration costs at approximately $8 million, and before a write-off of the step-up in the value of inventory acquired of $0.04 per share that will be expensed in the first quarter of fiscal 2006." Mr. Gibbons concluded, "Our earnings forecast has been lowered by $0.20 per share in the past month due to the current expectations of a steeper decline in the sale of pseudoephedrine-based products. We cannot control the external factors impacting the cough and cold product segment, but we are doing all we can to adjust to the new legislation and the acceleration of retailer actions. We believe the pseudoephedrine situation is primarily a one season issue. In addition, because this is our first year of integration, we will incur one-time costs of approximately $8 million, which will not recur in future years. "We are disappointed that what had appeared to be coming together as a very good fiscal 2006 has been impacted so severely by the pseudoephedrine issues. We will work through these challenges as we continue to build on our core strengths to create a strong future. Those core strengths continue to exist in our Consumer Healthcare business, and we are very encouraged so far at what we see in our newly acquired Rx Pharmaceuticals and API business, which is off to a very good start." Perrigo will host a conference call to discuss fiscal 2005 full year and fourth quarter results at 11 a.m. (ET) Wednesday, September 7. The call and replay will be available via webcast on the Company's Web site at http://www.perrigo.com/investor/ , or by phone, at 800-473-6123, International, 973-582-2745. A taped replay of the call will be available beginning at approximately 2:30 p.m. (ET) Wednesday, September 7 until midnight Friday, September 16. To listen to the replay, call 877-519-4471, International 973-341-3080, access code 6430187. The Perrigo Company is a leading global healthcare supplier and the world's largest manufacturer of over-the-counter (OTC) pharmaceutical and nutritional products for the store brand market. Store brand products are sold by food, drug, mass merchandise, dollar store and club store retailers under their own labels. The Company also develops, manufactures and markets prescription generic drugs, active pharmaceutical ingredients and consumer products, and operates manufacturing facilities in the United States, Israel, United Kingdom, Mexico and Germany. 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. Please see the "Cautionary Note Regarding Forward-Looking Statements" on pages 33 - 41 of the Company's Form 10-K to be filed today, for the year ended June 25, 2005 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. PERRIGO COMPANY CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts)
Fiscal Year ------------------------------------------ 2005 2004 2003 ------------ ------------ ------------ Net sales $ 1,024,098 $ 898,204 $ 834,100 Cost of sales 763,709 630,240 596,076 Gross profit 260,389 267,964 238,024 Operating expenses Distribution 18,680 15,154 15,563 Research and development 38,419 27,721 23,315 Selling and administration 140,581 122,193 117,096 Subtotal 197,680 165,068 155,974 Write-off of in-process research and development 386,800 - - Restructuring 6,382 - - Unusual litigation - - (3,128) Total 590,862 165,068 152,846 Operating income (loss) (330,473) 102,896 85,178 Interest and other, net 220 (3,087) (1,080) Income (loss) before income taxes (330,693) 105,983 86,258 Income tax expense 22,290 25,416 32,210 Net income (loss) $ (352,983) $ 80,567 $ 54,048 Earnings (loss) per share Basic $ (4.57) $ 1.15 $ 0.77 Diluted $ (4.57) $ 1.11 $ 0.76 Weighted average shares outstanding Basic 77,313 70,206 69,746 Diluted 77,313 72,289 71,158 Dividends declared per share $ 0.155 $ 0.13 $ 0.05
PERRIGO COMPANY CONSOLIDATED BALANCE SHEETS (in thousands) June 25, June 26, 2005 2004 ------------ ------------ Assets Current assets Cash and cash equivalents $ 16,707 $ 8,392 Investment securities 17,761 163,308 Accounts receivable 210,308 86,040 Inventories 272,980 174,253 Current deferred income taxes 55,987 29,877 Prepaid expenses and other current assets 35,064 10,359 Total current assets 608,807 472,229 Property and equipment Land 14,638 14,359 Building 231,402 196,029 Machinery and equipment 340,266 251,797 586,306 462,185 Less accumulated depreciation 262,505 234,544 323,801 227,641 Restricted cash 400,000 - Goodwill 150,293 35,919 Other intangible assets 147,967 4,163 Non-current deferred income taxes 26,964 8,137 Other non-current assets 47,144 11,005 $ 1,704,976 $ 759,094 Liabilities and Shareholders' Equity Current liabilities Accounts payable $ 142,789 $ 88,858 Notes payable 25,345 9,528 Payroll and related taxes 42,326 41,387 Accrued customer programs 41,666 13,212 Accrued liabilities 57,532 30,477 Accrued income taxes 21,225 - Current deferred income taxes 9,659 4,024 Total current liabilities 340,542 187,486 Non-current liabilities Long-term debt 656,128 - Non-current deferred income taxes 74,379 29,606 Other non-current liabilities 43,090 5,770 Total non-current liabilities 773,597 35,376 Shareholders' equity Preferred stock, without par value, 10,000 shares authorized - - Common stock, without par value, 200,000 shares authorized 534,518 104,160 Unearned compensation (6,770) (514) Accumulated other comprehensive income (loss) (1,687) 2,892 Retained earnings 64,776 429,694 Total shareholders' equity 590,837 536,232 $ 1,704,976 $ 759,094 Supplemental Disclosures of Balance Sheet Information Allowance for doubtful accounts $ 10,370 $ 8,296 Allowance for inventory $ 34,028 $ 22,888 Working capital $ 268,265 $ 284,743 Preferred stock, shares issued - - Common stock, shares issued 93,903 70,882 PERRIGO COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Fiscal Year ------------------------------------------ 2005 2004 2003 ------------ ------------ ------------ Cash Flows From Operating Activities Net income (loss) $ (352,983) $ 80,567 $ 54,048 Adjustments to derive cash flows Write-off of in-process research and development 386,800 - - Depreciation and amortization 34,813 28,452 26,126 Share-based compensation 8,056 5,560 5,852 Deferred income taxes (9,834) 3,366 (6,847) Acquisition related expenses incurred by acquiree (10,002) - - Changes in operating assets and liabilities, net of a business acquisition and a restructuring Accounts receivable (16,903) 4,075 (4,427) Inventories 40,528 (6,168) (4,656) Accounts payable (6,736) 10,891 (2,329) Payrolls and related taxes (21,515) 1,072 9,185 Accrued income taxes 9,932 (5,552) (2,516) Accrued customer programs 7,966 2,483 356 Accrued liabilities 8,820 3,567 3,513 Other (1,298) (9,786) 1,929 Net cash from operating activities 77,644 118,527 80,234 Cash Flows For Investing Activities Purchase of securities (157,353) (191,339) (102,695) Proceeds from sales of securities 334,465 111,115 33,350 Additions to property and equipment (26,824) (28,294) (32,296) Acquisition of assets (5,562) - - Acquisition of a business, net of cash (381,570) (12,061) - Acquisition-related dividends (12,574) - - Increase in restricted cash (400,000) - - Investment in equity subsidiaries - (2,000) - Other - - (980) Net cash for investing activities (649,418) (122,579) (102,621) Cash From (For) Financing Activities Borrowings of short-term debt, net 6,421 702 640 Borrowings of long-term debt 648,000 - - Repayments of long-term debt (63,000) - - Increase in deferred debt issue costs (959) - - Tax benefit (expense) of stock transactions 650 1,725 (481) Issuance of common stock 7,031 11,083 7,231 Repurchase of common stock (3,021) (2,766) (33,682) Cash dividends (11,935) (9,136) (3,484) Other - (128) (52) Net cash from (for) financing activities 583,187 1,480 (29,828) Net increase (decrease) in cash and cash equivalents 11,413 (2,572) (52,215) Cash and cash equivalents, at beginning of period 8,392 10,392 62,734 Effect of exchange rate changes on cash (3,098) 572 (127) Cash and cash equivalents, at end of period $ 16,707 $ 8,392 $ 10,392 Supplemental Disclosures of Cash Flow Information Cash paid during the year for: Interest $ 5,248 $ 591 $ 1,257 Income taxes $ 19,026 $ 31,079 $ 43,417
Table I PERRIGO COMPANY SEGMENT INFORMATION (in thousands) (unaudited)
Fourth Quarter Fiscal Year --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Segment Sales Consumer Healthcare $ 234,287 $ 206,125 $ 933,280 $ 898,204 Rx Pharmaceuticals 31,998 - 32,565 - API 23,412 - 23,412 - Other 34,841 - 34,841 - Total $ 324,538 $ 206,125 $ 1,024,098 $ 898,204 Segment Operating Income (Loss) Consumer Healthcare $ 12,862 $ 14,226 $ 86,570 $ 107,857 Rx Pharmaceuticals (5,155) (1,957) (10,692) (4,961) API (7,164) - (7,164) - Other (4,590) - (4,590) - Unallocated expenses (2,237) (2,237) Write-off of in process R&D 1,800 - (386,800) - Acquisition and integration costs (935) - (5,560) - Total $ (5,419) $ 12,269 $ (330,473) $ 102,896
Table II PERRIGO COMPANY RECONCILIATION OF NON-GAAP MEASURES (in thousands, except per share amounts) (unaudited)
Fourth Quarter Fiscal Year --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Reported gross profit $ 65,659 $ 63,010 $ 260,389 $ 267,964 Inventory step-up 23,392 - 23,392 - Adjusted gross profit $ 89,051 $ 63,010 $ 283,781 $ 267,964 Reported operating income (loss) $ (5,419) $ 12,269 $ (330,473) $ 102,896 Inventory step-up 23,392 - 23,392 - Settlements - Class action lawsuit / FTC 4,500 4,750 4,500 4,750 Perrigo operational improvements - - 3,150 - Perrigo asset impairments - - 3,232 - Write-off of in-process R&D (1,800) - 386,800 - Acquisition costs 935 - 5,560 - Adjusted operating income $ 21,608 $ 17,019 $ 96,161 $ 107,646 Reported net income (loss) $ (6,963) $ 8,085 $ (352,983) $ 80,567 One time tax benefit - - - (13,100) Inventory step-up (1) 18,246 - 18,246 - Class action lawsuit (2) (4) 2,880 3,400 2,880 3,400 Perrigo operational improvements (2) - - 2,016 - Perrigo asset impairments (2) - - 2,068 - Write-off of in-process R&D (3) (1,800) - 386,800 - Acquisition costs (2) 598 - 3,558 - Adjusted net income $ 12,961 $ 11,485 $ 62,586 $ 70,867 Diluted earnings (loss) per share Reported $ (0.07) $ 0.11 $ (4.57) $ 1.11 Adjusted $ 0.14 $ 0.16 $ 0.81 $ 0.98 Diluted weighted average shares outstanding 93,480 73,277 77,313 72,289
(1) Net of taxes at 22% (2) Net of taxes at 36% (3) Write-off of in-process research and development is a permanent difference for tax purposes and thus is not tax effected (4) Fiscal 2004 FTC settlement includes $1,000 of non-deductible expenses that are not tax effected Table II (Continued) REPORTABLE SEGMENTS RECONCILIATION OF NON-GAAP MEASURES (in thousands, except per share amounts) (unaudited)
Fourth Quarter Year-To-Date --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Consumer Healthcare Reported gross profit $ 53,871 $ 63,010 $ 248,369 $ 267,964 Inventory step-up 897 - 897 - Adjusted gross profit $ 54,768 $ 63,010 $ 249,266 $ 267,964 Reported operating income $ 12,862 $ 14,226 $ 86,570 $ 107,857 Inventory step-up 897 897 Settlements - Class action lawsuit / FTC 4,500 4,750 4,500 4,750 Perrigo operational improvements - - 3,150 - Perrigo asset impairments - - 3,232 - Adjusted operating income $ 18,259 $ 18,976 $ 98,349 $ 112,607 Rx Pharmaceuticals Reported gross profit $ 6,588 $ - $ 6,820 $ - Inventory step-up 5,546 - 5,546 - Adjusted gross profit $ 12,134 $ - $ 12,366 $ - Reported operating loss $ (5,155) $ (1,957) $ (10,692) $ (4,961) Inventory step-up 5,546 - 5,546 - Adjusted operating income (loss) $ 391 $ (1,957) $ (5,146) $ (4,961) API Reported gross profit $ (2,379) $ - $ (2,379) $ - Inventory step-up 12,542 - 12,542 - Adjusted gross profit $ 10,163 $ - $ 10,163 $ - Reported operating loss $ (7,164) $ - $ (7,164) $ - Inventory step-up 12,542 - 12,542 - Adjusted operating income $ 5,378 $ - $ 5,378 $ - Other Reported gross profit $ 7,579 $ - $ 7,579 $ - Inventory step-up 4,407 - 4,407 - Adjusted gross profit $ 11,986 $ - $ 11,986 $ - Reported operating loss $ (4,590) $ - $ (4,590) $ - Inventory step-up 4,407 - 4,407 - Adjusted operating loss $ (183) $ - $ (183) $ - Unallocated Reported operating loss $ (1,372) $ - $ (394,597) $ - Write-off of in-process R&D (1,800) - 386,800 - Acquisition costs 935 - 5,560 - Adjusted operating loss $ (2,237) $ - $ (2,237) $ -
SOURCE Perrigo Company -0- 09/07/2005 /CONTACT: Ernest J. Schenk, Manager, Investor Relations and Communication of Perrigo Company, +1-269-673-9212, E-mail: eschenk@perrigo.com / /First Call Analyst: / /FCMN Contact: phooker@perrigo.com / /Web site: http://www.perrigo.com http://www.perrigo.com/investor / (PRGO) -----END PRIVACY-ENHANCED MESSAGE-----