Perrigo Reports Record Revenue, Adjusted Earnings, Raises Guidance

ALLEGAN -- The generic prescription and over-the-counter drug and health products manufacturer Perrigo Co. Thursday reported record revenue of $725 million for the quarter ended Sept. 24, up 13 percent from a year earlier.

Net income was $70 million or 75 cents a share, down 4 percent from a year earlier. But that included acquisiton-related charges of 21 cents a share.

Company management raised full-year fiscal 2012 adjusted diluted earnings from continuing operations guidance to be in a range of $4.65 to $4.80 per share, from previous guidance of $4.50 to $4.65 a share.

"We have started fiscal 2012 well, delivering record revenue and adjusted earnings for the quarter," Perrigo chairman and CEO Joseph C. Papa said. "Our prescription segment continued its excellent performance, which was driven by the acquisition of Paddock Labs, new product sales and strong organic prescription results, combined with our continued focus on quality and R&D. Store brand OTC market share continued to grow. We believe our value proposition will continue to resonate well with consumers."

Refer to Table I at the end of this press release for adjustments in the current year and prior year periods and additional non-GAAP disclosure information.

Consumer Healthcare segment net sales in the first quarter were $412 million compared with $396 million in the first quarter last year, an increase of $16 million or 4 percent. The improvement was due primarily to an increase in sales of existing products of $9 million, primarily in the cough-and-cold and smoking cessation categories, along with new product sales of $15 million, primarily in the cough-and-cold and analgesics categories. In addition, net sales increased by $3 million due to favorable changes in foreign currency exchange rates. These combined increases were partially offset by a decline of $12 million in sales of existing products within the gastrointestinal product category driven by competitive pressures on a key product. Reported operating income was $64 million, compared to $71 million a year ago, largely as a result of increased competitive pressures within the gastrointestinal product category.

The Nutritionals segment reported first quarter net sales of $120 million, compared with $123 million a year ago. The decrease in sales was primarily the result of a decline in existing product sales in the vitamin, minerals and dietary supplements category driven by increased competition. Adjusted operating income was approximately $19 million compared to $24 million last year resulting from infant nutrition product mix, an increase in R&D due to the timing of clinical trials and a rise in infant nutrition commodities costs.

The Prescription Pharmaceuticals segment first quarter net sales were $128 million compared with $69 million a year ago, an increase of 84 percent. The increase in revenue was due primarily to sales of $39 million from the first quarter fiscal 2012 acquisition of Paddock Labs, new product sales of over $5 million and a lower degree of pricing pressures as compared to the prior year. Adjusted operating income was $61 million, an increase of $41 million from last year.

The Active Pharmaceutical Ingredients segment reported first quarter net sales of $48 million compared with $37 million a year ago. This increase was due primarily to a $5 million increase in sales of existing products and new product sales of $3 million, along with $2 million resulting from favorable changes in foreign currency exchange rates. Adjusted operating income grew to $15 million, or 31.7% of net sales, compared to $11 million, or 28.9% of net sales, a year ago.

Continuing operations for the Other category reported first quarter net sales of $18 million, compared with $16 million a year ago. This increase was due primarily to new product sales of $1 million, along with $1 million as a result of favorable changes in foreign currency exchange rates. Adjusted operating income was approximately $1 million, representing a decrease in adjusted operating margin of 290 basis points from last year due to product mix.

To listen to a replay of a conference call discussing the results, call (855) 859-2056 in the United States or (404) 537-3406, elsewhere, using access code 16311573.

Perrigo develops, manufactures and distributes over-the-counter and generic prescription  pharmaceuticals, infant formulas, nutritional products, and active pharmaceutical ingredients. The company is the world's largest manufacturer of OTC pharmaceutical products and infant formulas, both for the store brand market. 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.