The Perrigo Company (NASDAQ: PRGO) today announced results for the first quarter of fiscal 2003 ended September 28, 2002.
Perrigo Company (NASDAQ: PRGO)
(In thousands, except per share amounts)
Fiscal 2003 Fiscal 2002
1st Quarter Ended 1st Quarter Ended
9/28/02 9/29/01
Sales $213,215 $217,116
Net Income $20,011 $13,090
Diluted Shares 72,136 76,925
Diluted EPS $0.28 $0.17
Net sales for fiscal 2003's first quarter were $213.2 million, a decrease of two percent from $217.1 million last year. Net income was $20.0 million, or $0.28 per share, including a lawsuit settlement of $2.0 million after-tax, or $0.03 per share. Excluding the lawsuit settlement, net income in the quarter was $18.0 million, or $0.25 per share compared with $13.1 million, or $0.17 per share, a year ago.
"We are pleased with the excellent results recorded in our fiscal first quarter," stated David T. Gibbons, Perrigo's President and Chief Executive Officer. "The strong start to fiscal 2003 was achieved despite a difficult sales comparison from the successful new product sell-in of famotidine (Pepcid®) a year ago. Earnings reflect the execution of our key strategies and the collective positive effect from several factors. Among the key factors this quarter were the operational improvement initiatives begun last year. Our continuing focus on manufacturing efficiencies and costs have benefited margins. Other key factors were a favorable product mix, improved net pricing, and excellent inventory management. Inventories declined $7.4 million, or four percent from last year's first quarter, allowing us to manage inventory obsolescence expense closely."
Mr. Gibbons also noted, "With operational improvements taking hold, we continue to generate cash and our balance sheet remains very strong. In the quarter, our cash position and operating cash flow of $8.8 million helped us buy back 3.1 million shares of the Company's common stock under our ongoing share repurchase program.
"We have had a great start to the year and feel confident that we will continue to make progress toward meeting our long-term financial goals. The cough, cold and flu season, however, still lies ahead, and the timing and magnitude of the season are not yet clear. It's off to a slow start so far. Until we begin to see signs as to how this cough, cold and flu season will compare with last year's, we are reluctant to change our relatively flat operating earnings expectations for fiscal 2003."
Continuing, Gibbons said, "Another concern is the impact on our store brand allergy business of the likely switch of Claritin® from prescription to over-the-counter (OTC) status. While this switch will benefit us in fiscal 2004, a switch to OTC in December or January will impact the sales of existing allergy products during the third and fourth quarters of fiscal 2003. We do, however, remain confident the strategies that have helped us to this point will help us grow our store brand market leadership position in the future. Specifically, we continue to improve upon our low-cost producer status, invest in research and development, and generate cash."
"Relatively flat" earnings expectations for fiscal 2003 are prior to accounting for $0.03 per share from this quarter's lawsuit settlement income and an additional $0.02 to $0.03 per share for the year since there will be fewer shares outstanding as a result of the share repurchase program.
Perrigo will host a conference call to discuss first quarter fiscal 2003 results at 11:00 a.m. (EDT) today. The call and replay will be available via webcast on the Company's web site at www.perrigo.com/investor or by phone, toll free, 888-489-0147. A taped replay of the call will be available beginning at approximately 2:30 p.m. (EDT) Thursday, October 24. To listen to the replay, call 800-642-1687, access code 6217377 (outside the United States, call 706-645-9291).
Perrigo Company is the nation's largest manufacturer of over-the-counter (non-prescription) pharmaceutical and nutritional products sold by supermarket, drug, and mass merchandise chains under their own labels. The Company's products include over-the-counter pharmaceuticals such as analgesics, cough and cold remedies, gastrointestinal, and feminine hygiene products, and nutritional products, such as vitamins, nutritional supplements and nutritional drinks. Visit Perrigo on the Internet (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. Please see the "Cautionary Note Regarding Forward-Looking Statements" on pages 23-27 of the Company's Form 10-K for the year ended June 29, 2002 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
2003 2002
Net sales $213,215 $217,116
Cost of sales 151,536 164,777
Gross profit 61,679 52,339
Operating expenses
Distribution 4,027 4,017
Research and development 5,448 5,296
Selling and administration 24,270 22,576
Subtotal 33,745 31,889
Unusual litigation (3,128) -
Total 30,617 31,889
Operating income 31,062 20,450
Interest and other, net (208) (163)
Income before income taxes 31,270 20,613
Income tax expense 11,259 7,523
Net income $20,011 $13,090
Earnings per share
Basic $0.28 $0.18
Diluted $0.28 $0.17
Weighted average shares outstanding:
Basic 70,719 74,314
Diluted 72,136 76,925
PERRIGO COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 28, June 29, September 29,
2002 2002 2001
Assets: (unaudited) (unaudited)
Current assets
Cash and cash equivalents $49,214 $76,824 $297
Accounts receivable, net of
allowances 105,777 82,560 120,525
Inventories, net of
allowances 163,704 155,611 171,119
Prepaid expenses and other
current assets 8,635 6,896 11,536
Current deferred income
taxes 19,863 19,860 19,203
Assets held for sale - - 16,207
Total current assets 347,193 341,751 338,887
Property and equipment 405,258 399,461 382,055
Less accumulated
depreciation 195,486 188,417 171,990
209,772 211,044 210,065
Goodwill, net 35,919 35,919 47,045
Other 4,295 5,073 3,820
$597,179 $593,787 $599,817
Liabilities and Shareholders'
Equity:
Current liabilities
Accounts payable $78,431 $74,449 $84,862
Notes payable 8,729 8,338 8,979
Payrolls and related taxes 23,232 31,338 18,934
Accrued expenses 39,740 32,721 31,141
Income taxes 17,864 8,088 19,097
Total current
liabilities 167,996 154,934 163,013
Deferred income taxes 21,143 20,313 17,784
Long-term debt - - 21,380
Other long-term liabilities 3,079 2,396 2,353
Shareholders' equity
Preferred stock, without par
value, 10,000 shares
authorized - - -
Common stock, without par
value, 200,000 shares
authorized 57,340 89,222 105,497
Unearned compensation (499) (608) (1,017)
Accumulated other
comprehensive income 952 373 757
Retained earnings 347,168 327,157 290,050
Total shareholders'
equity 404,961 416,144 395,287
$597,179 $593,787 $599,817
Supplemental Disclosures of
Balance Sheet Information:
Allowance for doubtful
accounts $8,050 $7,569 $6,902
Allowance for inventory $20,714 $21,360 $30,722
Working capital $179,197 $186,817 $175,874
Preferred stock, shares
issued - - -
Common stock, shares issued 69,424 72,550 73,996
PERRIGO COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
First Quarter
2003 2002
Cash Flows From (For) Operating
Activities:
Net income $20,011 $13,090
Depreciation and amortization 6,812 6,808
26,823 19,898
Accounts receivable (23,219) (24,697)
Inventories (8,111) (10,007)
Current and deferred income taxes 10,587 (1,115)
Accounts payable 3,998 477
Payrolls and related taxes (8,106) (7,187)
Other 6,798 2,522
Net cash from (for)
operating activities 8,770 (20,109)
Cash Flows For Investing Activities:
Additions to property and equipment (4,950) (4,786)
Net cash for investing
activities (4,950) (4,786)
Cash Flows From (For) Financing
Activities:
Borrowings of long-term debt - 21,380
Borrowings/(repayments) of
short-term debt 393 (3,780)
Issuance of common stock 143 9,785
Repurchase of common stock (32,025) (13,240)
Other 59 31
Net cash (for) from
financing activities (31,430) 14,176
Net Decrease in Cash and Cash
Equivalents (27,610) (10,719)
Cash and Cash Equivalents, at
Beginning of Period 76,824 11,016
Cash and Cash Equivalents, at End
of Period $49,214 $297
Supplemental Disclosures of Cash
Flow Information:
Interest paid $257 $604
Income taxes paid $657 $8,344
SOURCE: Perrigo Company
CONTACT: Ernest J. Schenk, Manager, Investor Relations and Communication
of Perrigo Company, +1-269-673-9212, or E-mail: Investor@perrigo.com
Web site: http://www.perrigo.com/investor
Web site: http://www.perrigo.com/
Company News On-Call: http://www.prnewswire.com/comp/699550.html