Perrigo Reports Record Earnings, Raises EPS Guidance
The Allegan generic pharmaceutical and health products maker Perrigo Co. (Nasdaq: PRGO) Tuesday reported net income of $74.4 million or 80 cents a share in its fiscal first quarter ended Sept. 25. That's a record, and up 43 percet from a year ago, when net income was $51.9 million, or 56 cents a sahre.
First quarter revenue was up 21 percnet to $641.3 million from $528.3 million a year earlier.
Management raised its expected full-year fiscal 2011 adjusted diluted earnings from continuing operations to a range of $3.60 to $3.75 per share, an increase of 19 percent to 24 percent compared to fiscal 2010 adjusted diluted EPS
"We have started fiscal 2011 well, delivering record earnings for the quarter," said Perrigo chairman and CEO Joseph C. Papa. "The market for store brands continues to grow, now representing approximately 29 percent of over-the-counter and nutritional sales dollars at retail and up 400 basis points in the past two years. Our prescription segment continued its strong performance, which was driven by new product sales and growth in over-the-counter prescription combined with our continued focus on quality and R&D. Our value proposition continues to resonate well with consumers in all economic conditions."
Following the acquisition of PBM Holdings Inc., the company has realigned its reportable segments to include a new reportable segment, Nutritionals. The financial information in this press release, including the attached tables, reflects the realignment of the Company's reportable segments, as well as the elimination of the prior one-month reporting lag in international subsidiaries.
Consumer healthcare segment sales in the first quarter were $396 million, up 4 percent from $381 million in the first quarter last year. The increase resulted from approximately $18 million of sales in existing products, primarily in cough/cold and analgesics plus $17 million of new product sales. These increases were partially offset by the impact of competition in the smoking cessation category, as well as a decrease in contract manufacturing. Reported operating income was $71 million, compared to $74 million a year ago, largely as a result of decreased sales in smoking cessation.
The nutritionals segment, which consists of infant formulas, infant and toddler foods, vitamins, minerals and supplements, as well as oral electrolyte solutions, reported first quarter net sales of $123 million, compared with $56 million a year ago. The increase in sales was primarily the result of the acquisition of PBM. Adjusted operating income was $24 million compared to a loss of $2 million last year due to the addition of higher margin PBM sales and improved productivity in the company's operations.
The prescription pharmaceuticals segment first quarter net sales were $69 million compared with $47 million a year ago, an increase of 47 percent. The increase in sales was driven by new product sales, primarily as a result of the company obtaining the generic distribution rights to Aldara, as well as by higher volumes on existing products. Adjusted operating income was $20 million, an increase of $3 million from last year.
The active pharmaceutical ingredient segment reported first quarter net sales of $37 million compared with $33 million a year ago. The increase was due primarily to sales of temozolomide in Europe, partially offset by a decline in existing products and $2 million in unfavorable changes in foreign currency exchange rates. Adjusted operating income increased $6 million or 141 percent due to strong gross margins.
Continuing operations for the "other" category, consisting of the Israel pharmaceutical and diagnostic products operating segment, reported first quarter net sales of $16 million, compared with $12 million a year ago. The increase was due to increased sales of new and existing products, slightly offset by unfavorable changes in foreign currency exchange rates. Adjusted operating income was $1 million, up 42 percent from last year.
To listen in on a taped conference call discussing the results, call (800) 642-1687 in the United States or (706) 645-9291 elsewhere, using access code 17701913. The call will also be at www.perrigo.com.
Perrigo develops, manufactures and distributes over-the-counter and generic prescription pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients (API) and pharmaceutical and medical diagnostic products.
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