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Perrigo Company Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: August 16, 2012 10:55AM
Perrigo Company (PRGO) filed Annual Report for the period ended 2012-06-30. Perrigo Company has a market cap of $10.79 billion; its shares were traded at around $106.1 with a P/E ratio of 24.4 and P/S ratio of 3.9. The dividend yield of Perrigo Company stocks is 0.3%. Perrigo Company had an annual average earning growth of 18.3% over the past 10 years. GuruFocus rated Perrigo Company the business predictability rank of 2.5-star.
Highlight of Business Operations:The Company launched various new products in fiscal 2012, most notably lansoprazole 15 mg capsules, loratadine-D 12 hour extended release tablets and minoxidil 5% foam, which compete with the national brands Prevacid® 15 mg capsules, Claritin-D®12 hour extended release tablets and Rogaine® 5% foam, respectively. Net sales related to all new products were $101,700 for fiscal 2012, $54,200 for fiscal 2011 and $65,700 for fiscal 2010. A Consumer Healthcare product is considered new if it was added to the Company s product lines within 12 months prior to the end of the period for which net sales are being measured.
The Company recently launched several new generic or authorized generic prescription products, including ketoconazole foam, levocetirizine syrup, clobetasol lotion, epinistine HCl ophthalmic solution and clindamycin phosphate and benzoyl peroxide gel, which contain the same active ingredients present in the same dosage forms as Extina®, Xyzal®, Clobex®, Elestat® and Duac®, respectively. Net sales related to new products were approximately $35,100 for fiscal 2012, which includes $6,400 launched by the newly acquired Paddock business, $81,100 for fiscal 2011 and $34,600 for fiscal 2010. An Rx Pharmaceuticals product is considered new if it was added to the Company s product lines within 12 months prior to the end of the period for which net sales are being measured.
Current Year Results – Net sales from continuing operations for fiscal 2012 were $3,173,249, an increase of 15% over fiscal 2011. The increase was driven primarily by $245,400 of net sales attributable to the Paddock and CanAm Care, LLC ("CanAm") acquisitions and new product sales of $211,000, which excludes $6,400 of new products launched by the newly acquired Paddock business, partially offset by decreases in sales of certain existing products primarily in the Consumer Healthcare and Nutritionals segments. Gross profit of $1,095,598 was an increase of 16% over fiscal 2011. The gross profit percentage in fiscal 2012 was 34.5%, as compared to 34.3% last year. Operating expenses were $526,372, an increase of 16% over fiscal 2011, due primarily to the impact of acquisitions. As a percentage of net sales, operating expenses were 16.6%, relatively flat compared to 16.5% in fiscal 2011. Income from continuing operations was $392,974, an increase of 15% over fiscal 2011. Net income was $401,613, an increase of 18% over fiscal 2011. Fiscal 2012 included certain one-time charges related to the Paddock acquisition, including a $27,179 charge to cost of sales as a result of the step-up in value of inventory acquired and sold during the first quarter, as well as $9,400 of acquisition-related and severance charges.
Net sales for fiscal 2011 increased 7% or $111,189 compared to fiscal 2010. The increase was due primarily to an increase in sales of existing products of approximately $51,000, primarily in the analgesics and cough/cold categories, along with new product sales of approximately $54,200, primarily in the analgesics, gastrointestinal, feminine hygiene, smoking cessation and cough/cold categories. In addition, incremental net sales attributable to the acquisition of Orion Laboratories Pty Ltd. ("Orion") were approximately $21,700. These combined increases were partially offset by a decline of $22,000 in sales of existing products, primarily in the contract manufacturing and gastrointestinal categories. International sales of existing products in the U.K. and Mexico increased approximately $6,000. The changes discussed above also reflect the impact of favorable changes in foreign currency exchange rates, which increased net sales by approximately $6,900.
Operating expenses for fiscal 2011 increased 8% or $18,561 compared to fiscal 2010.The increase, which included $12,600 of incremental operating expenses from the acquisition of Orion, was related primarily to increases in selling expenses of $10,000, administrative expenses of $2,900 and research and development expenses of $2,300. Selling expenses increased due primarily to higher spending on sales and marketing promotions, along with the incremental selling expenses of Orion. The increase in administrative expenses was driven primarily by the incremental administrative expenses of Orion and an increase in bad debt expenses. Research and development expenses increased primarily as a result of the timing of clinical trials and incremental expenses of Orion. Fiscal 2011 included restructuring costs of $1,033 related to the Company's Florida production facility.
Stocks Discussed: PRGO,