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Perrigo Company Reports Operating Results (10-Q)

May 08, 2012 | About:
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10qk

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Perrigo Company (PRGO) filed Quarterly Report for the period ended 2012-03-31.

Perrigo Company has a market cap of $9.86 billion; its shares were traded at around $97.92 with a P/E ratio of 24.1 and P/S ratio of 3.6. 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:

Current Year Results – Net sales for the third quarter of fiscal 2012 were $778,017, an increase of 13% over fiscal 2011. The increase was driven primarily by new product sales of $64,400 and $69,700 of net sales attributable to the Paddock and CanAm Care, LLC (CanAm) acquisitions, partially offset by decreases in sales of certain existing products primarily in the Consumer Healthcare and Nutritionals segments. Gross profit was $279,273, an increase of 17% over fiscal 2011. The gross profit percentage in the third quarter of fiscal 2012 was 35.9%, as compared to 34.6% last year. Operating expenses in the third quarter of fiscal 2012 were $133,203, an increase of 15% over fiscal 2011. As a percentage of net sales, operating expenses were 17.1%, slightly up from 16.8% in the third quarter of fiscal 2011. Income from continuing operations was $115,727, an increase of 26% over fiscal 2011. Net income was $115,727, an increase of 30% over fiscal 2011.

Year-to-date net sales for fiscal 2012 were $2,341,482, an increase of 14% over fiscal 2011. The increase was driven primarily by new product sales of $160,000 and $177,200 of net sales attributable to the Paddock and CanAm acquisitions, partially offset by decreases in sales of certain existing products primarily in the Consumer Healthcare and Nutritionals segments. Gross profit was $801,727, an increase of 14% over fiscal 2011. The gross profit percentage in the first nine months of fiscal 2012 was 34.2%, as compared to 34.3% last year. Operating expenses were $393,437, an increase of 17% over fiscal 2011. As a percentage of net sales, operating expenses were 16.8%, up from 16.4% in fiscal 2011. Income from continuing operations was $285,924, an increase of 12% over fiscal 2011. Net income was $285,924, an increase of 13% over fiscal 2011. During the first nine months of fiscal 2012, the Company recorded 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.

Third quarter net sales for fiscal 2012 increased 6% or $23,823 compared to fiscal 2011. The increase was due primarily to new product sales of $34,200, mainly in the cough/cold and dermatological categories, along with an increase in sales of existing products of $5,000, primarily in the smoking cessation category. In addition, net sales attributable to the Company's acquisition of CanAm in the third quarter of fiscal 2012 were approximately $7,800. These combined increases were partially offset by a decline of $22,300 in sales of existing products within the analgesics and contract manufacturing product categories. The decrease in net sales within the analgesics category was due primarily to a relatively mild cough/cold season compared to fiscal 2011. In addition, fiscal 2011 net sales in the analgesics category benefited from a branded competitor in the OTC market experiencing periodic interruptions of distribution of certain of its adult and pediatric analgesic products. The decrease in the contract manufacturing category was driven by increased competition. Net sales were also negatively impacted by $1,100 of unfavorable changes in foreign currency exchange rates.

Year-to-date operating expenses for fiscal 2012 increased 8% or $14,705 compared to fiscal 2011. The increase, which included $2,000 of incremental operating expenses from the acquisition of CanAm, was related primarily to increases in selling expenses of $9,500 and research and development expenses of $1,300. Selling expenses increased due primarily to higher spending on sales and marketing promotions in anticipation of future product launches, while research and development expenses increased due primarily to increased spending on developmental materials.

Year-to-date net sales for fiscal 2012 increased 7% or $8,447 compared to fiscal 2011. This increase was due primarily to an increase in new product sales of $5,900 and sales of existing products of approximately $1,400. The increase in net sales was also due to an increase of $1,100 related to favorable changes in foreign currency exchange rates.

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10qk
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