-----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, RYMGjzWDBgEjNw6FKt0Rw3KxBnNiYj5m/fbdsSLC+z+kKrCjnq7UN61BDcA9jtkk PydBowizZ7c0VFvS8hslVA== 0001275287-05-004160.txt : 20051027 0001275287-05-004160.hdr.sgml : 20051027 20051027091527 ACCESSION NUMBER: 0001275287-05-004160 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051027 DATE AS OF CHANGE: 20051027 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: 051158598 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 pc3885.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): October 27, 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 October 27, 2005, the Perrigo Company released earnings for the first quarter of fiscal year 2006. 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 gross profit, 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 the step-up in value of inventory acquired when monitoring and evaluating the on-going financial results and trends of its business due to the non-recurring nature of this item. The Company believes this information is also useful for investors since excluding this non-recurring item 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 October 27, 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: October 27, 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 October 27, 2005, furnished solely pursuant to Item 2.02 of Form 8-K. EX-99.1 2 pc3885ex991.txt EXHIBIT 99.1 Exhibit 99.1 PERRIGO COMPANY REPORTS FIRST QUARTER FISCAL 2006 FINANCIAL RESULTS ALLEGAN, Mich., Oct. 27 /PRNewswire-FirstCall/ -- The Perrigo Company (Nasdaq: PRGO; TASE) today announced results for the first quarter of fiscal year 2006 ended Sept. 24, 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 operating results were first included in the consolidated results in the quarter ended June 25, 2005. Perrigo Company (in thousands, except per share amounts) Fiscal 2006 Fiscal 2005 1st Quarter Ended 1st Quarter Ended 9/24/05 9/25/04 ----------------- ----------------- Sales $ 319,734 $ 227,719 Net Income $ 12,911 $ 17,578 Diluted EPS $ 0.14 $ 0.24 Diluted Shares 94,314 73,043 Net sales for the first quarter of fiscal 2006 were $319.7 million, an increase of 40 percent from $227.7 million last year, reflecting the addition of Agis' product sales. Net income was $12.9 million, or $0.14 per share, compared with $17.6 million, or $0.24 per share, a year ago. Excluding the acquisition-related write-off of the step-up in the value of inventory acquired ($3.7 million after-tax, or $0.04 per share) and including a charge for product recalls ($3.3 million after-tax, or $0.03 per share), net income in the quarter was $16.6 million, or $0.18 per share. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. David T. Gibbons, Perrigo Chairman, President and Chief Executive Officer, stated, "As anticipated, we began to realize the impact of the market transition of certain pseudoephedrine-based cough/cold products moving to a merchandising position behind the pharmacy counter. We reacted early in the quarter to pull production volumes down to reduce our inventory exposure. The retailers' shift away from pseudoephedrine products on the shelf resulted in lower cough/cold product sales and put downward pressures on gross margin. As we work through the pseudoephedrine-related challenges this cough/cold and flu season, we remain confident in the basic strength of our Consumer Healthcare business and encouraged by the results in our new Rx Pharmaceuticals and API businesses, which turned in strong results in the quarter. Our balance sheet remains strong, with manageable debt and cash flow from operations of $18 million this quarter versus a use of cash of $23 million in the first quarter last year. We repurchased 496,000 shares for $7.0 million during the first quarter as part of a previously announced stock repurchase plan." Consumer Healthcare Consumer Healthcare segment sales in the quarter were $228.6 million compared with $227.7 million in the first quarter last year. These results included topical OTC product sales of $19 million related to the Agis acquisition and new product sales, primarily in the smoking cessation category, offset by a decline of $23 million of pseudoephedrine-based cough and cold products. Reported operating income was $13.1 million, compared with $27.9 million a year ago, reflecting the incremental sales of lower-margin topical OTC products acquired in the Agis acquisition and the sales decline of higher- margin pseudoephedrine-based products. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. Rx Pharmaceuticals Results for the current quarter largely reflect the operations of the Agis business. The Rx Pharmaceuticals segment reported sales of $29.1 million and operating income of $3.8 million, which included a charge of $2.8 million before-tax for the recall of mesalamine suspension product. Last year Rx Pharmaceuticals reported an operating loss of $1.3 million as the Company invested in the start-up of the generics business. API The API segment reported sales of $26.8 million and operating income of $6.6 million. Excluding the write-off of the step-up in the value of inventory acquired of $1.7 million, the API segment had operating income of $8.3 million. A reconciliation of non-GAAP measures is shown in Table II at the end of this press release. Other The Other category, which consists of Israel Consumer Products and Israel Pharmaceutical and Diagnostic Products segments, reported sales of $35.2 million and an operating loss of $0.7 million. Excluding the write-off of the step-up in the value of inventory acquired of $2.7 million, the Other category had an operating profit of $2.0 million. A reconciliation of non-GAAP measure is shown in Table II at the end of this press release. Unallocated expense was $2.2 million including on-going corporate costs of $1.6 million and one-time integration costs of $0.6 million. Perrigo will host a conference call to discuss fiscal 2006 first quarter results at 10 a.m. (ET) Thursday, Oct. 27. 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 1-866-425-6195, International, 973-935-2981. A taped replay of the call will be available beginning at approximately 2:30 p.m. (ET) Thursday, Oct. 27 until midnight Wednesday, Nov. 2. To listen to the replay, call 1-877-519-4471, International 973-341-3080, access code 6603770. 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 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 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) First Quarter --------------------------- 2006 2005 ------------ ------------ Net sales $ 319,734 $ 227,719 Cost of sales 232,818 163,006 Gross profit 86,916 64,713 Operating expenses Distribution 7,150 4,193 Research and development 12,649 6,354 Selling and administration 46,388 27,540 Total 66,187 38,087 Operating income 20,729 26,626 Interest and other, net 2,780 (840) Income before income taxes 17,949 27,466 Income tax expense 5,038 9,888 Net income $ 12,911 $ 17,578 Earnings per share Basic $ 0.14 $ 0.25 Diluted $ 0.14 $ 0.24 Weighted average shares outstanding Basic 93,188 70,948 Diluted 94,314 73,043 PERRIGO COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
September 24, June 25, September 25, 2005 2005 2004 ------------- ------------- ------------- (unaudited) (unaudited) Assets Current assets Cash and cash equivalents $ 25,118 $ 16,707 $ 9,734 Investment securities 15,823 17,761 132,080 Accounts receivable 212,433 210,308 112,624 Inventories 269,695 272,980 181,837 Current deferred income taxes 49,870 55,987 29,306 Prepaid expenses and other current assets 39,270 35,064 11,017 Total current assets 612,209 608,807 476,598 Property and equipment 594,464 586,306 463,241 Less accumulated depreciation 275,758 262,505 240,144 318,706 323,801 223,097 Restricted cash 400,000 400,000 - Goodwill 144,362 150,293 35,919 Other intangible assets 144,315 147,967 8,039 Non-current deferred income taxes 26,828 26,964 8,761 Other non-current assets 44,617 47,144 9,716 $ 1,691,037 $ 1,704,976 $ 762,130 Liabilities and Shareholders' Equity Current liabilities Accounts payable $ 142,361 $ 142,789 $ 83,516 Notes payable 19,303 25,345 9,465 Payroll and related taxes 37,788 42,326 20,857 Accrued customer programs 40,129 41,666 16,210 Accrued liabilities 56,821 57,532 28,541 Accrued income taxes 25,903 21,225 7,417 Current deferred income taxes 10,980 9,659 4,044 Total current liabilities 333,285 340,542 170,050 Non-current liabilities Long-term debt 670,814 656,128 - Non-current deferred income taxes 56,586 74,379 29,259 Other non-current liabilities 37,715 43,090 6,898 Total non-current liabilities 765,115 773,597 36,157 Shareholders' equity Preferred stock, without par value, 10,000 shares authorized - - - Common stock, without par value, 200,000 shares authorized 523,093 527,748 108,321 Accumulated other comprehensive income (loss) (4,402) (1,687) 2,817 Retained earnings 73,946 64,776 444,785 Total shareholders' equity 592,637 590,837 555,923 $ 1,691,037 $ 1,704,976 $ 762,130 Supplemental Disclosures of Balance Sheet Information Allowance for doubtful accounts $ 10,207 $ 10,370 $ 7,971 Allowance for inventory $ 37,164 $ 34,028 $ 21,124 Working capital $ 278,924 $ 268,265 $ 306,548 Preferred stock, shares issued - - - Common stock, shares issued 93,561 93,903 71,208
PERRIGO COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) First Quarter ----------------------- 2006 2005 ---------- ---------- Cash Flows From (For) Operating Activities Net income $ 12,911 $ 17,578 Adjustments to derive cash flows Depreciation and amortization 14,296 7,092 Share-based compensation 2,403 1,578 Deferred income taxes (1,072) (410) Changes in operating assets and liabilities Accounts receivable (1,559) (25,543) Inventories 3,776 (6,676) Accounts payable (723) (5,463) Payroll and related taxes (4,631) (20,535) Accrued customer programs (1,537) 2,999 Accrued liabilities (2,938) (1,937) Accrued income taxes 2,757 7,422 Other (5,961) 918 Net cash from (for) operating activities 17,722 (22,977) Cash Flows (For) From Investing Activities Purchase of securities (19,438) (29,900) Proceeds from sales of securities 21,372 60,950 Additions to property and equipment (8,228) (2,394) Acquisition of assets - (5,000) Net cash (for) from investing activities (6,294) 23,656 Cash (For) From Financing Activities Repayments of short-term debt, net (6,104) (92) Borrowings of long-term debt 15,000 - Tax (expense) benefit of stock transactions (500) 118 Issuance of common stock 2,000 3,101 Repurchase of common stock (8,558) (122) Cash dividends (3,741) (2,487) Net cash (for) from financing activities (1,903) 518 Net increase in cash and cash equivalents 9,525 1,197 Cash and cash equivalents, at beginning of period 16,707 8,392 Effect of exchange rate changes on cash (1,114) 145 Cash and cash equivalents, at end of period $ 25,118 $ 9,734 Supplemental Disclosures of Cash Flow Information Cash paid/received during the period for: Interest paid $ 9,210 $ 141 Interest received $ 5,641 $ 562 Income taxes paid $ 2,928 $ 815 Income taxes refunded $ 4,866 $ 4,062 Table I PERRIGO COMPANY SEGMENT INFORMATION (in thousands) (unaudited) First Quarter ----------------------- 2006 2005 ---------- ---------- Segment Sales Consumer Healthcare $ 228,633 $ 227,719 Rx Pharmaceuticals 29,094 - API 26,791 - Other 35,216 - Total $ 319,734 $ 227,719 Segment Operating Income (Loss) Consumer Healthcare $ 13,122 $ 27,925 Rx Pharmaceuticals 3,836 (1,299) API 6,586 - Other (659) - Unallocated expenses (2,156) - Total $ 20,729 $ 26,626 Table II PERRIGO COMPANY RECONCILIATION OF NON-GAAP MEASURES (in thousands, except per share amounts) (unaudited) First Quarter ----------------------- 2006 2005 ---------- ---------- Net Sales $ 319,734 $ 227,719 Reported gross profit $ 86,916 $ 64,713 Inventory step-up 4,762 - Adjusted gross profit $ 91,678 $ 64,713 Adjusted gross profit % 28.7% 28.4% Reported operating income $ 20,729 $ 26,626 Inventory step-up 4,762 - Adjusted operating income $ 25,491 $ 26,626 Reported net income $ 12,911 $ 17,578 Inventory step-up (1) 3,714 - Adjusted net income $ 16,625 $ 17,578 Diluted earnings per share Reported $ 0.14 $ 0.24 Adjusted $ 0.18 $ 0.24 Diluted weighted average shares outstanding 94,314 73,043 (1) Net of taxes at 22% Table II (Continued) REPORTABLE SEGMENTS RECONCILIATION OF NON-GAAP MEASURES (in thousands, except per share amounts) (unaudited) First Quarter ----------------------- 2006 2005 ---------- ---------- Consumer Healthcare Net Sales $ 228,633 $ 227,719 Reported gross profit $ 52,791 $ 64,713 Inventory step-up 318 - Adjusted gross profit $ 53,109 $ 64,713 Adjusted gross profit % 23.2% 28.4% Reported operating income $ 13,122 $ 27,925 Inventory step-up 318 - Adjusted operating income $ 13,440 $ 27,925 API Net Sales $ 26,791 $ - Reported gross profit $ 12,004 $ - Inventory step-up 1,747 - Adjusted gross profit $ 13,751 $ - Adjusted gross profit % 51.3% - Reported operating income $ 6,586 $ - Inventory step-up 1,747 - Adjusted operating income $ 8,333 $ - Other Net Sales $ 35,216 $ - Reported gross profit $ 10,496 $ - Inventory step-up 2,697 - Adjusted gross profit $ 13,193 $ - Adjusted gross profit % 37.5% - Reported operating loss $ (659) $ - Inventory step-up 2,697 - Adjusted operating income $ 2,038 $ - SOURCE Perrigo Company -0- 10/27/2005 /CONTACT: Ernest J. Schenk, Manager, Investor Relations and Communication of Perrigo Company, +1-269-673-9212, or 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-----