Perrigo Reports Record Quarterly Revenue and Earnings, Raises Full Year Guidance

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The Allegan generic drug and health and beauty supplies maker Perrigo Co. (Nasdaq: PRGO) reported record revenue of $691.6 million in its third fiscal quarter ended March 26, up from $537.6 million in the same quarter a year earlier.

Net income was $91.5 million or 98 cents a share, up from $61.5 million or 66 cents a share in the same quarter of the prior fiscal year.

Management boosted its guidance on its full-year fiscal 2011 adjusted diluted earnings from continuing operations to $3.90 to $4 per share, up from the previously announced $3.75 to $3.90 per share.

Said Perrigo chairman and CEO Joseph C. Papa: “The main contributors to this strong performance were $44 million of new product sales, continued operational execution in our prescription and API segments and another solid quarter in nutritionals. In consumer health care, revenue grew 13 percent in the quarter as we continue to see very strong demand for our products. At the same time, we have been experiencing some throughput pressure in manufacturing, but we are in the process of making investments that we believe will enhance output in the near future.”

Papa also noted that a resolution of an FDA warning letter in April, “in less than one year is a major achievement. We are convinced that this process has made us a better company, as it helped us to further enhance the quality of our production. Our retailers and consumers continue to realize the value proposition of Perrigo’s high quality, affordable healthcare products and we look forward to increasing our production volumes further to meet their growing demand.” 

For the first nine months of the fiscal year, revenue was $2.05 billion, up from $1.65 billion a year earlier. Net income was $255 million, or $2.73 a share, up from $175.4 million or $1.89 a share a year aerlier.

The company had 93.5 million shares outsanding in the current quarter, up from 92.6 million a year earlier.

The company said its sales increase in the third quarter was driven primarily by its acquisitions of PBM Holdings Inc. and Orion Laboratories Pty. Ltd. as well as $44 million in new product sales. For the nine months, the increase was driven primarily by strong results in the prescription and nutritionals segments and included consolidated new product sales of approximately $156 million.

Consumer healthcare segment net sales for the third quarter were $425 million compared with $377 million for the third quarter last year, an increase of 13 percent. The increase resulted from approximately $36 million in additional existing product sales, primarily in the analgesics and cough/cold categories, as well as $9 million from new product sales and $7 million of incremental sales from the acquisition of Orion. These increases were partially offset by a decline of $5 million in sales of existing products, primarily in the feminine hygiene and contract manufacturing categories.

For the first nine months of fiscal 2011, Consumer healthcare net sales increased $76 million, or 6 percent, compared to fiscal 2010.  The increase resulted from $51 million in additional existing product sales, primarily in the analgesics and cough/cold categories, and $36 million of new product sales, as well as incremental sales of approximately $21 million from the Company’s acquisition of Orion. This growth was partially offset by approximately $32 million in decreased sales of existing products, primarily in the contract manufacturing and gastrointestinal categories.      

Nutritionals segment net sales for the third quarter were $124 million, compared with $59 million for the third quarter last year, an increase of 111 percent. The increase was due primarily to additional sales of approximately $81 million attributable to the acquisition of PBM. The increase was partially offset by a decrease in sales of existing products of approximately $14 million.

For the first nine months of fiscal 2011, Nutritionals net sales increased $205 million, or 117 percent, compared to fiscal 2010.  The increase resulted from $242 million of sales attributable to the acquisition of PBM and $5 million of new product sales in the vitamins, minerals and supplements category. This growth was partially offset by $39 million in decreased sales of existing products in the VMS category.  

The prescription pharmaceuticals segment third quarter net sales were $84 million, compared with $51 million a year ago, an increase of 66 percent. This increase was due primarily to new product sales of $23 million related to the authorized generic of Aldara and the generic version of Xyzal, as well as $6 million of increased sales volume in the company’s existing products.

For the first nine months of fiscal 2011, net sales for the Rx Pharmaceuticals segment increased 62 percemt from fiscal 2010 to $251 million. Net sales increased due primarily to $72 million in new product sales and an increase of $16 million in sales of existing products.  

The API segment reported third quarter net sales of $41 million compared with $33 million a year ago, an increase of 26 percent. The increase was due primarily to additional sales of existing products of $8 million and new product sales of $5 million led by European sales of temozolomide. The increase was partially offset by an approximately $4 million decrease in revenues related to the sale of dossier agreements.

For the first nine months of fiscal 2011, net sales increased 18 percent to approximately $119 million, compared to $101 million in fiscal 2010.

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 $18 million a year ago. The decrease was due primarily to a decrease in sales of existing products of $2 million, partially offset by new product sales. Year-to-date net sales for fiscal 2011 increased 16 percent compared to fiscal 2010. The increase was due primarily to $7 million in new product sales, partially offset by a decrease of $1 million due to unfavorable changes in foreign currency exchange rates. 

To listen to a taped replay of the conference call discussing these results, call (800) 642-1687 in the United States or (706) 645-9291 elsewhere, using access code 61044320.

Perrigo is a leading global healthcare supplier that develops, manufactures and distributes OTC and generic prescription pharmaceuticals, infant formulas, nutritional products and active pharmaceutical ingredients. The company is the world’s largest store brand manufacturer of OTC pharmaceutical products and infant formulas. The company’s primary markets and locations of manufacturing and logistics operations are the United States, Israel, Mexico, the United Kingdom and Australia.

More at www.perrigo.com.

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