Achieved Year-Over-Year and Sequential Gross
and Operating Margin Expansion
Delivered Strong Operating Income and EPS
Growth
Reaffirming 2023 Outlook
DUBLIN, Aug. 8, 2023
/PRNewswire/ --
Second Quarter 2023 Highlights:
- Second quarter net sales of $1.2 billion grew 6.4%, or 6.6% on a constant
currency1 basis, versus the prior year quarter.
Organic2 net sales grew 0.8%, including -2.7 percentage
points from purposeful SKU prioritization actions to enhance
margins as part of the Company's Supply Chain Reinvention
Program.
- Consumer Self-Care Americas ("CSCA") net sales grew 3.1%,
including -4.1 percentage points from purposeful SKU prioritization
actions. Consumer Self-Care International ("CSCI") net sales grew
12.4% compared to the prior year quarter, while organic net sales
increased 7.1%.
- Second quarter GAAP ("reported") gross margin was
35.9%, a 270 basis points improvement compared to the prior year
quarter. Non-GAAP ("adjusted") gross margin was 38.7%, a 220 basis
points improvement compared to the prior year quarter, and a 120
basis points improvement sequentially compared to the first quarter
of 2023.
- Second quarter reported earnings per share ("EPS")
was $0.06, compared to a loss of
$(0.48) in the prior year
quarter.
- Adjusted diluted EPS was $0.63, compared to $0.43 in the prior year quarter, an increase of
46.5%. Adjusted EPS included a favorable discrete tax benefit of
$0.08 from the resolution of various
tax matters related to prior years and an unfavorable impact of
$0.05 due to HRA Pharma ("HRA")
distributor transition sales returns as part of the integration
plan to capture synergies.
- Second quarter operating cash flow was $53 million, leading to cash and cash equivalents
on the balance sheet of $555 million
as of second quarter end.
- Perrigo reaffirms its fiscal 2023 organic net sales and
total net sales growth outlook range of 3.0%-6.0% and 7.0%-11.0%,
respectively, versus the prior year, and adjusted diluted EPS range
outlook of $2.50-$2.70.
- On June 30, 2023, Patrick Lockwood-Taylor began his tenure as
Perrigo President, CEO and member of the Board of
Directors.
- On July 13, 2023, Perrigo
announced that the U.S. Food and Drug Administration ("FDA")
approved Opill®, the first ever daily birth control pill
available over-the-counter ("OTC") for all ages, in the United States.
First Half 2023 Highlights:
- Net sales for the first half of 2023 were $2.4 billion, an increase of 8.1%, or 9.7% on a
constant currency basis, versus the prior year period. Organic net
sales increased 3.5%, including -1.4 percentage points from
purposeful SKU prioritization actions.
- CSCA first half net sales of $1.5
billion grew 5.3% compared to the prior year period, with
organic growth of 0.6%, including -2.0 percentage points from
purposeful SKU prioritization actions. CSCI first half net sales of
$860 million grew 13.5%, or 18.0% on
a constant currency basis, versus the prior year period, with
organic growth of 9.0%.
- Reported EPS for the first half of 2023 was $0.06, as compared to a loss of $(0.49) in the prior year period.
- Adjusted diluted EPS for the first half of 2023 was
$1.08, as compared to $0.76 in the prior year period, an increase of
42.1%.
(1)
|
See attached Appendix
for details. Constant currency net sales growth excludes the impact
of currency.
|
(2)
|
See attached Appendix
for details. Organic net sales growth excludes the effects of
acquisitions, divestitures, exited product lines and the impact of
currency. 'Organic' results do not include acquisitions for the
first 12 months post-closing of a transaction. Since the Company
closed the acquisition of HRA on April 29, 2022, the month of
April 2023 is not included in 'organic' results, while the
remaining two months of HRA financials (May 2023 and June 2023) are
included in the second quarter 2023 'organic' results.
|
Perrigo Company plc (NYSE: PRGO) ("Perrigo" or the "Company"), a
leading provider of Consumer Self-Care Products, today
announced financial results from continuing operations for the
second quarter ended July 1, 2023.
All comparisons are against the prior year fiscal second quarter,
unless otherwise noted.
President and CEO, Patrick
Lockwood-Taylor commented, "Perrigo is well positioned in
the consumer self-care industry with tremendous manufacturing scale
in the U.S. and strong customer relationships across the U.S. and
Europe. The Company has an
expansive product portfolio, with many opportunities to
differentiate against competition and win with consumers. After
nearly 40 days as CEO, I remain extremely excited about the
long-term potential for our business. There has been a lot of work
accomplished over the past five years to position Perrigo for
success, but there is still a lot of work to be done to build out
our framework for sustainable growth and consistently win with
consumers and customers."
Lockwood-Taylor continued, "Our second quarter earnings results
reflect the dedication and hard work of the entire Perrigo team,
who also continued to make meaningful progress against key
operational initiatives, including our Supply Chain Reinvention
Program, and integrating and synergizing both the HRA and infant
formula acquisitions."
"Our second quarter performance underscores the strength in our
global self-care categories as we delivered solid financial
results," commented Eduardo Bezerra,
Executive Vice President and CFO. "Importantly, margins expanded
compared to the prior year and sequentially, and both adjusted
operating income growth and cash on the balance sheet were strong.
As global consumer consumption is normalizing and despite adding
pre-launch investments for Opill® into our plans
for the second half of 2023, we are reaffirming our 2023 adjusted
EPS outlook range."
Refer to Tables I through VI at the end of this press release
for a reconciliation of non-GAAP adjustments to the current year
and prior year periods and additional non-GAAP information. The
Company's reported results are included in the attached
Consolidated Statements of Operations, Balance Sheets and
Statements of Cash Flows.
Second Quarter Perrigo 2023 Results from Continuing
Operations
Second Quarter 2023 Net Sales Change
Compared to Prior Year
|
|
Reported
Net Sales
Growth
|
Foreign
Exchange
Adjustment
|
Constant
Currency Net
Sales
|
Net Acquisitions
& Divestitures
Adjustment
|
Organic
Net Sales
Growth
|
CSCA
|
3.1 %
|
0.1 %
|
3.2 %
|
(5.9) %
|
(2.7) %
|
CSCI
|
12.4 %
|
0.4 %
|
12.8 %
|
(5.7) %
|
7.1 %
|
Total
Perrigo
|
6.4 %
|
0.2 %
|
6.6 %
|
(5.8) %
|
0.8 %
|
Reported net sales of $1.2 billion
increased $71 million, or 6.4%, and constant currency net
sales increased 6.6%. Reported net sales growth was driven by 1)
+4.0 percentage points from the acquisition of the Gateway infant
formula facility and U.S. & Canadian Good
Start® infant formula brand ("Gateway"), 2) +2.3
percentage points of growth from the acquisition of HRA, including
an unfavorable impact of -0.9 percentage points related to
distributor transition sales returns as part of the integration
plan to capture synergies, and 3) -0.2 percentage points from
foreign currency translation.
Organic net sales growth of 0.8% was driven primarily by 1) +4.8
percentage points from strategic pricing actions, and 2) new
products sales and growth in e-commerce. This growth was partially
offset by 1) -2.7 percentage points from purposeful SKU
prioritization actions to enhance margins as part of the Company's
Supply Chain Reinvention Program, and 2) -1.1 percentage points
from a weaker allergy season in the U.S. compared to the prior
year.
Reported gross margin was 35.9%, a 270 basis point increase
versus the prior year quarter. Adjusted gross margin expanded 220
basis points to 38.7% driven by higher margin acquisitions,
strategic pricing actions and benefits from the purposeful SKU
prioritization actions noted above. These positive factors were
partially offset by the impacts from inflation and lower
manufacturing productivity in the U.S. Nutrition business
stemming from the FDA's evolving regulations on infant formula
manufacturing.
Reported operating income was $57
million compared to a loss of $7
million in the prior year period. Adjusted operating income
grew $21 million, or 17.9%, to
$137 million driven by higher gross
profit flow-through from acquisitions and strategic pricing
actions. These increases were partially offset by 1) higher
operating expenses, driven primarily by the addition of HRA and
Gateway, 2) the unfavorable impact from inflation, 3) lower
manufacturing productivity in the U.S. Nutrition business,
and 4) $9 million from the HRA
distributor transition sales returns.
Reported net income was $9 million, or $0.06 per diluted share, compared to a reported
net loss of $65 million, or
($0.48) per diluted share, in the
prior year. Excluding certain charges as outlined in Table I,
second quarter 2023 adjusted net income was $87 million, or $0.63 per diluted share, compared to
$59 million, or $0.43 per
diluted share, in the prior year. Second quarter adjusted EPS
included a discrete tax benefit of $0.08 from the resolution of various tax matters
related to prior years and an unfavorable impact of $0.05 due to the HRA distributor transition sales
returns.
Second Quarter 2023 Business Segment Results from Continuing
Operations
Consumer Self-Care Americas Segment
Second Quarter 2023 Net Sales Change
Compared to Prior Year
|
|
Reported
Net Sales
Growth
|
Foreign
Exchange
Adjustment
|
Constant
Currency Net
Sales
|
Net Acquisitions
& Divestitures
Adjustment
|
Organic
Net Sales
Growth
|
CSCA
|
3.1 %
|
0.1 %
|
3.2 %
|
(5.9) %
|
(2.7) %
|
CSCA reported net sales increased 3.1% to $751 million.
Reported net sales growth was driven by +6.2 percentage points from
the addition of Gateway. Organic net sales decreased 2.7% as
strategic pricing actions and new product sales were more than
offset by 1) -4.1 percentage points due to purposeful SKU
prioritization actions to enhance margins as part of the Company's
Supply Chain Reinvention Program, 2) a weaker allergy season
compared to the prior year adversely impacting net sales by -1.8
percentage points, and 3) lower sales volumes in contract
manufacturing. Primary category drivers are provided below.
Nutrition
Net sales of $165
million increased 31.7% due primarily to the Gateway
acquisition and growth in legacy infant formula products. This
growth was partially offset by lower net sales in store brand oral
electrolytes and the discontinuation of nutritional drinks.
Upper Respiratory
Net sales of
$138 million decreased 5.6% due primarily to lower net sales
of allergy products driven by a weaker allergy season compared to
the prior year. This headwind was partially offset by higher net
sales of cough cold products, including store brand Cough DM
and Guaifenesin-based offerings.
Digestive Health
Net sales of $127 million
increased 1.3% due primarily to higher net sales of store brand
Omeprazole and new products, including Polyethylene
Glycol 3350 Orange, which were partially offset by lower net
sales from contract manufacturing.
Pain & Sleep-Aids
Net sales of $97 million
decreased 5.1% due primarily to purposeful SKU prioritization in
adult analgesic offerings to focus capacity on higher margin
products, partially offset by higher demand for children's
analgesics products.
Oral Care
Net sales of $77 million increased 0.4%
due primarily to higher net sales of Plackers®
and store brand teeth whitening products, which were mostly offset
by lower sales of manual toothbrushes, including branded
Firefly® and REACH®, and store
brand offerings.
Healthy Lifestyle
Net sales of $67 million were flat due primarily to increased
consumer demand for store brand smoking cessation products being
offset by lost distribution at a specific customer.
Skin Care
Net sales of $51 million increased 4.5%
due primarily to the addition of HRA brands, including
Mederma® and Compeed®.
Women's Health
Net sales of $13 million increased
4.2% due primarily to the addition of HRA brands, including
ella®.
Vitamins, Minerals, and Supplements ("VMS") and
Other
Net sales of $17 million decreased 32.7% due
primarily to purposeful SKU prioritization actions.
Reported gross margin was 29.9%, a 350 basis points increase
versus the prior year quarter. Adjusted gross margin expanded 260
basis points versus the prior year quarter to 30.5% as strategic
pricing actions, higher margin acquisitions and benefits from SKU
prioritization actions more than offset lower manufacturing
productivity in the U.S. Nutrition business and an
unfavorable impact from inflation.
Reported operating income was $98
million compared to $86
million in the prior year quarter. Adjusted operating income
increased $9 million, or 9.0%, to
$114 million as gross profit
flow-through and lower distribution costs were partially offset by
higher operating expenses, driven primarily by the addition of
Gateway.
Consumer Self-Care International Segment
Second Quarter 2023 Net Sales Change
Compared to Prior Year
|
|
Reported
Net Sales
Growth
|
Foreign
Exchange
Adjustment
|
Constant
Currency
Net Sales
|
Net Acquisitions
& Divestitures
Adjustment
|
Organic
Net Sales
Growth
|
CSCI
|
12.4 %
|
0.4 %
|
12.8 %
|
(5.7) %
|
7.1 %
|
CSCI reported net sales increased 12.4% and constant currency
net sales increased 12.8%. Reported net sales growth benefited from
+5.7 percentage points from the acquisition of HRA, including an
unfavorable impact of -2.7 percentage points related to distributor
transition sales returns, and -0.4 percentage points related to
foreign currency translation. Organic net sales increased 7.1%
driven by strategic pricing actions and favorable volume/mix,
including benefits from new products. Primary category drivers are
provided below.
Skin Care
Net sales of $123 million increased
20.0%, or an increase of 23.3% excluding the impact of currency,
driven primarily by the brands Sebamed and Biodermal,
and the addition of HRA brands, including
Compeed®.
Upper Respiratory
Net sales of $65 million
increased 10.4%, or 9.4% excluding the impact of currency, due
primarily to higher demand for cough cold products, including
Bronchostop and Coldrex. Net sales of the U.K.
allergy brand Beconase were also higher compared to the
prior year period.
Healthy Lifestyle
Net sales of $61 million
increased 2.5%, or 1.9% excluding the impact of currency, due
primarily to higher net sales of anti-parasite offerings that
continue to outpace strong category growth. This growth was
partially offset by lower category consumption in weight loss,
impacting XLS Medical.
Pain & Sleep-Aids
Net sales of
$53 million increased 7.5%, or an increase of 6.9% excluding
the impact of currency, due primarily to higher demand for
Solpadeine and Nytol.
VMS
Net sales of $42 million decreased 1.9%, or
3.5% excluding the impact of currency, due primarily to lower
category consumption, impacting sales of Davitamon and
Abtei.
Women's Health
Net sales of $32 million increased
36.9%, or 35.2% excluding the impact of currency, due primarily to
the addition of HRA brands, including ellaOne®
and NorLevo®.
Oral Care
Net sales of $22 million increased 4.9%, or 4.4% excluding the
impact of currency, due primarily to higher category consumption,
improved product mix and new products.
Digestive Health and Other
Net sales of
$46 million increased 21.3%, or 23.2% excluding the impact of
currency, due primarily to the addition of the HRA Rare Diseases
portfolio in the Other category.
Reported gross margin was 46.0%, an increase of 30 basis points
compared to the prior year quarter. Adjusted gross margin expanded
30 basis points versus the prior year quarter to 52.6% due
primarily to strategic pricing actions, the higher margin HRA
acquisition and favorable volume/mix. These drivers were partially
offset by cost of goods sold inflation .
Reported operating income was $9
million for the quarter compared to $2 million in the prior year. Adjusted operating
income increased $16 million, or
29.7%, to $70 million due primarily
to strategic pricing actions, the addition of HRA and favorable
volume/mix. This growth was partially offset by cost of goods
sold inflation and increased operating expenses, primarily driven
by the inclusion of HRA.
Fiscal 2023 Outlook
The Company's fiscal year 2023 outlook is provided below:
- Reported net sales growth of 7.0% to 11.0% compared to the
prior year,
- Organic net sales growth of 3.0% to 6.0% compared to the prior
year,
- Interest expense of approximately $180
million,
- Adjusted tax rate for the second half of 2023 is expected to be
approximately 19.5%, leading to a full year adjusted tax rate for
2023 of 17.0%, which includes the second quarter adjusted EPS
discrete tax benefit of $0.08,
- Adjusted diluted EPS range of between $2.50 to $2.70,
including pre-launch investments for Opill®
following FDA approval, and
- Operating cash flow conversion (operating cash flow as a
percentage of adjusted net income) of approximately 100%.
About Perrigo
Perrigo Company plc (NYSE: PRGO) is a leading provider of
Consumer Self-Care Products and over-the-counter (OTC) health and
wellness solutions that enhance individual well-being by empowering
consumers to proactively prevent or treat conditions that can be
self-managed. Visit Perrigo online at www.perrigo.com.
Webcast and Conference Call Information
The earnings conference call will be available live on
Tuesday August 8, 2023 at
8:30 A.M. (EST) via webcast to
interested parties in the investor relations section of the Perrigo
website at http://perrigo.investorroom.com/events-webcasts or by
phone at 888-317-6003, International 412-317-6061, and reference ID
# 6916237. A taped replay of the call will be available beginning
at approximately 12:00 P.M. (EST)
Tuesday, August 8, until midnight Tuesday, August 15, 2023. To listen to the
replay, dial 877-344-7529, International 412-317-0088, and use
access code 4782572.
Forward-Looking Statements
Certain statements in this press release are "forward-looking
statements." These statements relate to future events or the
Company's future financial performance and involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, levels of activity, performance or achievements of
the Company or its industry to be materially different from those
expressed or implied by any forward-looking statements. In some
cases, forward-looking statements can be identified by terminology
such as "may," "will," "could," "would," "should," "expect,"
"forecast," "plan," "anticipate," "intend," "believe," "estimate,"
"predict," "potential" or the negative of those terms or other
comparable terminology. The Company has based these forward-looking
statements on its current expectations, assumptions, estimates and
projections. While the Company believes these expectations,
assumptions, estimates and projections are reasonable, such
forward-looking statements are only predictions and involve known
and unknown risks and uncertainties, many of which are beyond the
Company's control, including: supply chain impacts on the Company's
business, including those caused or exacerbated by armed conflict,
trade and other economic sanctions and/or disease; general
economic, credit, and market conditions; the impact of the war in
Ukraine and any escalation
thereof, including the effects of economic and political sanctions
imposed by the United States,
United Kingdom, European Union,
and other countries related thereto; the outbreak or escalation of
conflict in other regions where we do business; future impairment
charges, if we determine that the carrying amount of specific
assets may not be recoverable from the expected future cash flows
of such assets; customer acceptance of new products; competition
from other industry participants, some of whom have greater
marketing resources or larger market shares in certain product
categories than the Company does; pricing pressures from customers
and consumers; resolution of uncertain tax positions and any
litigation relating thereto, ongoing or future government
investigations and regulatory initiatives; uncertainty regarding
the Company's ability to obtain and maintain its regulatory
approvals; potential costs and reputational impact of product
recalls or sales halts; potential adverse changes to U.S. and
foreign tax, healthcare and other government policy; the effect of
the coronavirus (COVID-19) pandemic and its variants; the timing,
amount and cost of any share repurchases (or the absence thereof);
fluctuations in currency exchange rates and interest rates; the
Company's ability to achieve the benefits expected from the sale of
its Rx business and the risk that potential costs or liabilities
incurred or retained in connection with that transaction may exceed
the Company's estimates or adversely affect the Company's business
or operations; the Company's ability to achieve the benefits
expected from the acquisitions of Héra SAS ("HRA Pharma") and
Nestlé's Gateway infant formula plant along with the U.S. and
Canadian rights to the GoodStart® infant formula brand and other
related formula brands ("Gateway") and/or the risks that the
Company's synergy estimates are inaccurate or that the Company
faces higher than anticipated integration or other costs in
connection with the acquisitions; risks associated with the
integration of HRA Pharma and Gateway, including the risk that
growth rates are adversely affected by any delay in the integration
of sales and distribution networks; the consummation and success of
other announced and unannounced acquisitions or dispositions, and
the Company's ability to realize the desired benefits thereof; and
the Company's ability to execute and achieve the desired benefits
of announced cost-reduction efforts and other strategic initiatives
and investments, including the Company's ability to achieve the
expected benefits from its Supply Chain Reinvention Program.
Adverse results with respect to pending litigation could have a
material adverse impact on the Company's operating results, cash
flows and liquidity, and could ultimately require the use of
corporate assets to pay damages, reducing assets that would
otherwise be available for other corporate purposes. These and
other important factors, including those discussed under "Risk
Factors" in the Company's Form 10-K for the year ended December 31, 2022, as well as the Company's
subsequent filings with the United States Securities and Exchange
Commission, may cause actual results, performance or achievements
to differ materially from those expressed or implied by these
forward-looking statements. The forward-looking statements in this
press release are made only as of the date hereof, and 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.
Non-GAAP Measures
This press release contains certain non-GAAP measures. A
"non-GAAP financial measure" is defined as a numerical measure of a
company's financial performance that excludes or includes amounts
different from the most directly comparable measure calculated and
presented in accordance with U.S. Generally Accepted Accounting
Principles (GAAP) in the statements of operations, balance sheets
or statements of cash flows of the Company. Pursuant to the
requirements of the U.S. Securities and Exchange Commission, the
Company has provided reconciliations to the most directly
comparable U.S. GAAP measures for the following non-GAAP financial
measures referred to in this press release:
- net sales growth on an organic basis, which excludes
acquisitions, divested businesses, and the impact of currency,
- adjusted gross profit,
- adjusted net income,
- adjusted operating income,
- adjusted diluted earnings per share,
- constant currency net sales growth, adjusted operating income
and adjusted diluted earnings per share,
- adjusted gross margin, and
- adjusted operating margin.
These non-GAAP financial measures should be considered as
supplements to the GAAP reported measures, should not be considered
replacements for, or superior to the GAAP measures and may not be
comparable to similarly named measures used by other companies.
The Company provides non-GAAP financial measures as additional
information that it believes is useful to investors and analysts in
evaluating the performance of the Company's ongoing operating
trends, facilitating comparability between periods and, where
applicable, with companies in similar industries and assessing the
Company's prospects for future performance. These non-GAAP
financial measures exclude items, such as impairment charges,
restructuring charges, and acquisition and integration-related
charges, that by their nature affect comparability of operational
performance or that we believe obscure underlying business
operational trends. The intangible asset amortization excluded from
these non-GAAP financial measure represents the entire amount
recorded within the Company's GAAP financial statements and is
excluded because the amortization, unlike the related revenue, is
not affected by operations of any particular period unless an
intangible asset becomes impaired or the estimated useful life of
an intangible asset is revised. The revenue generated by the
associated intangible assets has not been excluded from the related
non-GAAP financial measure. The non-GAAP measures the Company
provides are consistent with how management analyzes and assesses
the operating performance of the Company, and disclosing them
provides investor insight into management's view of the business.
Management uses these adjusted financial measures for planning and
forecasting in future periods, and evaluating segment and overall
operating performance. In addition, management uses certain of the
profit measures as factors in determining compensation.
Non-GAAP measures related to profit measurements, which include
adjusted gross profit, adjusted net income, adjusted diluted EPS,
constant currency adjusted diluted EPS, constant currency adjusted
operating income, adjusted gross margin and adjusted operating
margin are useful to investors as they provide them with
supplemental information to enhance their understanding of the
Company's underlying business performance and trends, and enhance
the ability of investors and analysts to compare the Company's
period-to-period financial results. Management believes that
adjusted gross margin and adjusted operating margin are useful to
investors, in addition to the reasons discussed above, by allowing
them to more easily compare and analyze trends in the Company's
peer business group and assisting them in comparing the Company's
overall performance to that of its competitors. The Company also
discloses net sales growth excluding the impact of currency on an
organic basis. The Company believes these supplemental financial
measures provide investors with consistency in financial reporting,
enabling meaningful comparisons of past and present underlying
operating results, and also facilitate analysis of the Company's
operating performance and acquisition and divestiture trends.
A copy of this press release, including the reconciliations, is
available on the Company's website at www.perrigo.com.
PERRIGO COMPANY
PLC
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except
per share amounts)
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
Net sales
|
$
1,193.1
|
|
$
1,121.7
|
|
$
2,374.8
|
|
$
2,196.2
|
Cost of
sales
|
765.1
|
|
749.6
|
|
1,532.9
|
|
1,486.3
|
Gross
profit
|
428.0
|
|
372.1
|
|
841.9
|
|
709.9
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Distribution
|
28.6
|
|
29.5
|
|
57.2
|
|
53.9
|
Research and
development
|
32.2
|
|
31.5
|
|
63.3
|
|
60.8
|
Selling
|
171.1
|
|
150.8
|
|
339.0
|
|
286.4
|
Administration
|
132.6
|
|
157.8
|
|
267.6
|
|
280.1
|
Restructuring
|
6.7
|
|
9.5
|
|
10.2
|
|
13.1
|
Other operating
(income) expense, net
|
—
|
|
(0.1)
|
|
(0.8)
|
|
0.8
|
Total operating
expenses
|
371.2
|
|
379.0
|
|
736.5
|
|
695.1
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
56.8
|
|
(6.9)
|
|
105.4
|
|
14.8
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
44.0
|
|
38.3
|
|
87.6
|
|
74.1
|
Other (income) expense,
net
|
(9.7)
|
|
53.8
|
|
(9.0)
|
|
52.7
|
Income (loss) from
continuing operations before income taxes
|
22.5
|
|
(108.3)
|
|
26.8
|
|
(121.3)
|
Income tax expense
(benefit)
|
13.6
|
|
(43.4)
|
|
19.0
|
|
(55.1)
|
Income (loss) from
continuing operations
|
8.9
|
|
(64.9)
|
|
7.8
|
|
(66.2)
|
Income (loss) from
discontinued operations, net of tax
|
(0.5)
|
|
(0.2)
|
|
(2.4)
|
|
(1.4)
|
Net income
(loss)
|
$
8.4
|
|
$
(65.1)
|
|
$
5.4
|
|
$
(67.6)
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.07
|
|
$
(0.48)
|
|
$
0.06
|
|
$
(0.49)
|
Discontinued
operations
|
—
|
|
—
|
|
(0.02)
|
|
(0.01)
|
Basic earnings (loss)
per share
|
$
0.06
|
|
$
(0.48)
|
|
$
0.04
|
|
$
(0.50)
|
Diluted
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.06
|
|
$
(0.48)
|
|
$
0.06
|
|
$
(0.49)
|
Discontinued
operations
|
—
|
|
—
|
|
(0.02)
|
|
(0.01)
|
Diluted earnings
(loss) per share
|
$
0.06
|
|
$
(0.48)
|
|
$
0.04
|
|
$
(0.50)
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
135.3
|
|
134.6
|
|
135.1
|
|
134.3
|
Diluted
|
136.6
|
|
134.6
|
|
136.5
|
|
134.3
|
PERRIGO COMPANY
PLC
CONSOLIDATED BALANCE
SHEETS
(in millions, except
per share amounts)
(unaudited)
|
|
|
July 1,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
555.2
|
|
$
600.7
|
Accounts receivable,
net of allowance for credit losses of $8.1 and $6.8,
respectively
|
754.1
|
|
697.1
|
Inventories
|
1,167.5
|
|
1,150.3
|
Prepaid expenses and
other current assets
|
296.2
|
|
271.8
|
Total current
assets
|
2,773.0
|
|
2,719.9
|
Property, plant and
equipment, net
|
918.3
|
|
926.3
|
Operating lease
assets
|
206.9
|
|
217.1
|
Goodwill and
indefinite-lived intangible assets
|
3,657.8
|
|
3,549.0
|
Definite-lived
intangible assets, net
|
3,030.8
|
|
3,230.2
|
Deferred income
taxes
|
6.3
|
|
7.1
|
Other non-current
assets
|
371.6
|
|
367.7
|
Total non-current
assets
|
8,191.7
|
|
8,297.4
|
Total
assets
|
$
10,964.7
|
|
$
11,017.3
|
Liabilities and
Shareholders' Equity
|
|
|
|
Accounts
payable
|
$
470.5
|
|
$
537.3
|
Payroll and related
taxes
|
104.4
|
|
136.4
|
Accrued customer
programs
|
174.3
|
|
139.1
|
Other accrued
liabilities
|
261.7
|
|
250.2
|
Accrued income
taxes
|
7.6
|
|
14.4
|
Current
indebtedness
|
38.4
|
|
36.2
|
Total current
liabilities
|
1,056.9
|
|
1,113.6
|
Long-term debt, less
current portion
|
4,055.9
|
|
4,070.4
|
Deferred income
taxes
|
344.6
|
|
368.2
|
Other non-current
liabilities
|
658.7
|
|
623.0
|
Total non-current
liabilities
|
5,059.2
|
|
5,061.6
|
Total
liabilities
|
6,116.1
|
|
6,175.2
|
Contingencies -
Refer to Note 16
|
|
|
|
Shareholders'
equity
|
|
|
|
Controlling
interests:
|
|
|
|
Preferred shares,
$0.0001 par value per share, 10 shares authorized
|
—
|
|
—
|
Ordinary shares,
€0.001 par value per share, 10,000 shares authorized
|
6,890.9
|
|
6,936.7
|
Accumulated other
comprehensive income
|
19.9
|
|
(27.0)
|
Retained earnings
(accumulated deficit)
|
(2,062.2)
|
|
(2,067.6)
|
Total shareholders'
equity
|
4,848.6
|
|
4,842.1
|
Total liabilities and
shareholders' equity
|
$
10,964.7
|
|
$
11,017.3
|
|
|
|
|
Supplemental
Disclosures of Balance Sheet Information
|
|
|
|
Preferred shares,
issued and outstanding
|
—
|
|
—
|
Ordinary shares,
issued and outstanding
|
135.4
|
|
134.7
|
PERRIGO COMPANY
PLC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
millions)
(unaudited)
|
|
|
Six Months
Ended
|
|
July 1,
2023
|
|
July 2,
2022
|
Cash Flows From (For)
Operating Activities
|
|
|
|
Net income
(loss)
|
$
5.4
|
|
$
(67.6)
|
Adjustments to derive
cash flows:
|
|
|
|
Depreciation and
amortization
|
182.6
|
|
153.0
|
Share-based
compensation
|
43.5
|
|
37.3
|
Restructuring
charges
|
10.2
|
|
13.1
|
Amortization of debt
discount (premium)
|
1.4
|
|
(4.3)
|
Foreign currency
remeasurement loss
|
—
|
|
39.4
|
Loss on sale of
business
|
—
|
|
1.4
|
Deferred income
taxes
|
(1.8)
|
|
12.6
|
Gain on sale of
assets
|
(4.0)
|
|
(5.8)
|
Other non-cash
adjustments, net
|
1.6
|
|
(4.8)
|
Subtotal
|
238.9
|
|
174.3
|
Increase (decrease) in
cash due to:
|
|
|
|
Accounts
receivable
|
(72.5)
|
|
(56.4)
|
Accounts
payable
|
(68.8)
|
|
64.2
|
Payroll and related
taxes
|
(42.5)
|
|
(38.8)
|
Accrued income
taxes
|
(33.2)
|
|
(99.9)
|
Inventories
|
(11.1)
|
|
(50.5)
|
Accrued
liabilities
|
(0.3)
|
|
14.2
|
Prepaid expenses and
other current assets
|
10.9
|
|
29.5
|
Accrued customer
programs
|
35.1
|
|
16.9
|
Other operating,
net
|
15.8
|
|
8.7
|
Subtotal
|
(166.6)
|
|
(112.1)
|
Net cash from
operating activities
|
72.3
|
|
62.2
|
Cash Flows From (For)
Investing Activities
|
|
|
|
Additions to property,
plant and equipment
|
(43.2)
|
|
(48.7)
|
Acquisitions of
businesses, net of cash acquired
|
—
|
|
(1,901.4)
|
Settlement of
acquisition-related foreign currency derivatives
|
—
|
|
(37.1)
|
Asset
acquisitions
|
—
|
|
(10.0)
|
Net proceeds from sale
of businesses
|
—
|
|
58.7
|
Proceeds from sale of
assets
|
1.8
|
|
24.8
|
Proceeds from royalty
rights
|
17.4
|
|
2.0
|
Net cash for investing
activities
|
(24.0)
|
|
(1,911.7)
|
Cash Flows From (For)
Financing Activities
|
|
|
|
Cash
dividends
|
(73.2)
|
|
(69.6)
|
Payments on long-term
debt
|
(14.9)
|
|
(958.9)
|
Issuances of long-term
debt
|
—
|
|
1,587.7
|
Payments for debt
issuance costs
|
—
|
|
(19.5)
|
Premiums on early debt
retirement
|
—
|
|
(12.2)
|
Other financing,
net
|
(11.2)
|
|
(20.4)
|
Net cash (for) from
financing activities
|
(99.3)
|
|
507.1
|
Effect of exchange rate
changes on cash and cash equivalents
|
5.5
|
|
(51.6)
|
Net decrease in cash
and cash equivalents
|
(45.5)
|
|
(1,394.0)
|
Cash and cash
equivalents of continuing operations, beginning of
period
|
600.7
|
|
1,864.9
|
Cash and cash
equivalents held for sale, beginning of period
|
—
|
|
14.4
|
Less cash and cash
equivalents held for sale, end of period
|
—
|
|
—
|
Cash and cash
equivalents of continuing operations, end of period
|
$
555.2
|
|
$
485.3
|
TABLE
I
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
Three Months Ended
July 1, 2023
|
Consolidated
Continuing Operations
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
Operating
Income
|
Interest and
Other
|
Income Tax
Expense
|
Income from
Continuing
Operations(1)
|
Diluted Earnings
per Share(1)
|
Reported
|
$
1,193.1
|
$
428.0
|
$
32.2
|
$
332.3
|
$
6.7
|
$ 56.8
|
$
34.3
|
$
13.6
|
$
8.9
|
$
0.06
|
As a % of reported net
sales
|
|
35.9 %
|
2.7 %
|
27.9 %
|
0.6 %
|
4.8 %
|
2.9 %
|
1.1 %
|
0.7 %
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
60.5 %
|
|
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
|
33.7
|
(0.2)
|
(35.7)
|
—
|
69.7
|
(0.5)
|
—
|
70.1
|
0.51
|
Restructuring charges
and other termination benefits
|
|
0.1
|
—
|
—
|
(5.7)
|
5.8
|
—
|
—
|
5.8
|
0.04
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
|
—
|
—
|
(2.9)
|
—
|
2.9
|
—
|
—
|
2.9
|
0.02
|
Unusual
litigation
|
|
—
|
—
|
(2.1)
|
—
|
2.1
|
—
|
—
|
2.1
|
0.02
|
(Gain) loss on
investment securities
|
|
—
|
—
|
—
|
—
|
—
|
(0.1)
|
—
|
0.1
|
—
|
Milestone payments
received related to royalty rights
|
|
—
|
—
|
—
|
—
|
—
|
10.0
|
—
|
(10.0)
|
(0.07)
|
Non-GAAP tax
adjustments(2)
|
|
—
|
—
|
—
|
—
|
—
|
—
|
(6.8)
|
6.8
|
0.05
|
Adjusted
|
|
$
461.8
|
$
32.0
|
$
291.6
|
$
1.0
|
$
137.3
|
$
43.8
|
$
6.8
|
$
86.7
|
$
0.63
|
As a % of reported net
sales
|
|
38.7 %
|
2.7 %
|
24.4 %
|
|
11.5 %
|
3.7 %
|
0.5 %
|
7.3 %
|
|
Adjusted effective tax
rate
|
|
|
|
|
|
|
|
7.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
|
|
Reported
|
136.6
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
(1)
|
Individual pre-tax line
item adjustments have not been tax effected, as tax expense on
these items are aggregated in the "Non-GAAP tax adjustments" line
item.
|
(2)
|
The non-GAAP tax
adjustments are primarily due to (1) $14.3 million of tax expense
related to pre-tax non-GAAP adjustments and the interim tax
accounting requirements in ASC740 - Income Taxes, offset by the
removal of (2) $20.6 million of tax expense related to audit
settlements during the second quarter 2023.
|
TABLE I
(CONTINUED)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
Three Months Ended
July 2, 2022
|
Consolidated
Continuing Operations
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
Operating
Income (Loss)
|
Interest
and Other
|
Income Tax
Expense
(Benefit)
|
Income (Loss)
from Continuing
Operations(1)
|
Diluted
Earnings (Loss)
per Share(1)
|
Reported
|
$
1,121.7
|
$
372.1
|
$
31.5
|
$
338.1
|
$
9.4
|
$
(6.9)
|
$ 101.4
|
$
(43.4)
|
$
(64.9)
|
$
(0.48)
|
As a % of reported net
sales
|
|
33.2 %
|
2.8 %
|
30.1 %
|
0.8 %
|
(0.6) %
|
9.0 %
|
(3.9) %
|
(5.8) %
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
40.1 %
|
|
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
|
6.5
|
—
|
(42.3)
|
—
|
48.8
|
(52.5)
|
—
|
101.3
|
0.75
|
Amortization expense
primarily related to acquired intangible assets
|
|
30.8
|
(0.3)
|
(31.5)
|
—
|
62.6
|
(0.6)
|
—
|
63.2
|
0.46
|
Restructuring charges
and other termination benefits
|
|
—
|
—
|
—
|
(9.4)
|
9.4
|
—
|
—
|
9.4
|
0.07
|
Loss on early debt
extinguishment
|
|
—
|
—
|
—
|
—
|
—
|
(9.3)
|
—
|
9.3
|
0.07
|
Unusual
litigation
|
|
—
|
—
|
(2.5)
|
—
|
2.5
|
—
|
—
|
2.5
|
0.02
|
Non-GAAP tax
adjustments(2)
|
|
—
|
—
|
—
|
—
|
—
|
—
|
61.9
|
(61.9)
|
(0.46)
|
Adjusted
|
|
$
409.4
|
$
31.2
|
$
261.8
|
$
—
|
$
116.4
|
$ 39.0
|
$
18.5
|
$
58.9
|
$
0.43
|
As a % of reported net
sales
|
|
36.5 %
|
2.8 %
|
23.3 %
|
|
10.4 %
|
3.5 %
|
1.6 %
|
5.3 %
|
|
Adjusted effective tax
rate
|
|
|
|
|
|
|
|
23.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
|
|
Reported
|
134.6
|
|
Effect of dilution as
reported amount was a loss, while adjusted amount was
income(3)
|
1.3
|
|
|
|
|
|
|
|
|
|
Adjusted
|
135.9
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
(1)
|
Individual pre-tax line
item adjustments have not been tax effected, as tax expense on
these items are aggregated in the "Non-GAAP tax adjustments" line
item.
|
(2)
|
The non-GAAP tax
adjustments are primarily related to pre-tax non-GAAP
adjustments.
|
(3)
|
In the period of a net
loss, reported diluted shares outstanding equal basic shares
outstanding.
|
TABLE I
(CONTINUED)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
Six Months Ended
July 1, 2023
|
Consolidated
Continuing Operations
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
Operating
Income
|
Interest
and Other
|
Income Tax
Expense
|
Income from
Continuing
Operations(1)
|
Diluted
Earnings
per Share(1)
|
Reported
|
$
2,374.8
|
$
841.9
|
$
63.3
|
$
663.8
|
$
9.4
|
$
105.4
|
$
78.6
|
$
19.0
|
$
7.8
|
$
0.06
|
As a % of reported net
sales
|
|
35.5 %
|
2.7 %
|
28.0 %
|
0.4 %
|
4.4 %
|
3.3 %
|
0.8 %
|
0.3 %
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
70.8 %
|
|
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
|
62.7
|
—
|
(72.5)
|
—
|
135.2
|
(1.1)
|
—
|
136.3
|
1.00
|
Restructuring charges
and other termination benefits
|
|
0.1
|
—
|
(0.7)
|
(8.4)
|
9.2
|
—
|
—
|
9.2
|
0.07
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
|
—
|
—
|
(6.4)
|
—
|
6.4
|
—
|
—
|
6.4
|
0.05
|
Unusual
litigation
|
|
—
|
—
|
(5.2)
|
—
|
5.2
|
—
|
—
|
5.2
|
0.04
|
(Gain) loss on
divestitures and investment securities
|
|
—
|
—
|
4.6
|
—
|
(4.6)
|
0.1
|
—
|
(4.7)
|
(0.03)
|
Milestone payments
received related to royalty rights
|
|
—
|
—
|
—
|
—
|
—
|
10.0
|
—
|
(10.0)
|
(0.07)
|
Non-GAAP tax
adjustments(2)
|
|
—
|
—
|
—
|
—
|
—
|
—
|
2.6
|
(2.6)
|
(0.02)
|
Adjusted
|
|
$
904.7
|
$
63.3
|
$
583.6
|
$
1.0
|
$
256.8
|
$
87.6
|
$
21.6
|
$
147.7
|
$
1.08
|
As a % of reported net
sales
|
|
38.1 %
|
2.7 %
|
24.6 %
|
— %
|
10.8 %
|
3.7 %
|
0.9 %
|
6.2 %
|
|
Adjusted effective tax
rate
|
|
|
|
|
|
|
|
12.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
|
|
Reported
|
136.5
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
(1)
|
Individual pre-tax line
item adjustments have not been tax effected, as tax expense on
these items are aggregated in the "Non-GAAP tax adjustments" line
item.
|
(2)
|
The non-GAAP tax
adjustments are primarily due to $26.7 million of tax expense
related to pre-tax non-GAAP adjustments and the interim tax
accounting requirements in ASC740 - Income Taxes, offset by the
removal of (1) $20.6 million of tax expense related to audit
settlements during the second quarter 2023 and (2) $3.0 million of
tax expense related to a valuation allowance.
|
TABLE I
(CONTINUED)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
Six Months Ended
July 2, 2022
|
Consolidated
Continuing Operations
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
Operating
Income
|
Interest
and Other
|
Income Tax
Expense
(Benefit)
|
Income (Loss)
from Continuing
Operations(1)
|
Diluted
Earnings (Loss)
per Share(1)
|
Reported
|
$
2,196.2
|
$
709.9
|
$
60.8
|
$
620.4
|
$
13.9
|
$
14.8
|
$
136.1
|
$
(55.1)
|
$
(66.2)
|
$
(0.49)
|
As a % of reported net
sales
|
|
32.3 %
|
2.8 %
|
28.2 %
|
0.6 %
|
0.7 %
|
6.2 %
|
(2.5) %
|
(3.0) %
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
45.4 %
|
|
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
|
6.5
|
—
|
(53.7)
|
—
|
60.2
|
(55.9)
|
—
|
116.1
|
0.86
|
Amortization expense
primarily related to acquired intangible assets
|
|
52.3
|
(0.8)
|
(58.4)
|
—
|
111.5
|
(1.0)
|
—
|
112.5
|
0.83
|
Restructuring charges
and other termination benefits
|
|
—
|
—
|
—
|
(13.0)
|
13.0
|
—
|
—
|
13.0
|
0.10
|
Loss on early debt
extinguishment
|
|
—
|
—
|
—
|
—
|
—
|
(9.3)
|
—
|
9.3
|
0.07
|
Impairment
charges
|
|
—
|
—
|
—
|
(4.6)
|
4.6
|
—
|
—
|
4.6
|
0.03
|
Unusual
litigation
|
|
—
|
—
|
(2.8)
|
—
|
2.8
|
—
|
—
|
2.8
|
0.02
|
(Gain) loss on
divestitures and investment securities
|
|
—
|
—
|
—
|
3.7
|
(3.7)
|
(1.9)
|
—
|
(1.8)
|
(0.02)
|
Non-GAAP tax
adjustments(2)
|
|
—
|
—
|
—
|
—
|
—
|
—
|
86.6
|
(86.6)
|
(0.64)
|
Adjusted
|
|
$
768.7
|
$
60.0
|
$
505.5
|
$
—
|
$
203.2
|
$
68.0
|
$
31.5
|
$
103.7
|
$
0.76
|
As a % of reported net
sales
|
|
35.0 %
|
2.7 %
|
23.0 %
|
— %
|
9.3 %
|
3.1 %
|
1.4 %
|
4.7 %
|
|
Adjusted effective tax
rate
|
|
|
|
|
|
|
|
23.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
|
|
Reported
|
134.3
|
|
|
|
Effect of dilution as
reported amount was a loss, while adjusted amount was
income(3)
|
1.3
|
|
|
|
|
|
|
|
|
|
Adjusted
|
135.6
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
(1)
|
Individual pre-tax line
item adjustments have not been tax effected, as tax expense on
these items are aggregated in the "Non-GAAP tax adjustments" line
item.
|
(2)
|
The non-GAAP tax
adjustments are primarily due to $75.0 million tax expense related
to pre-tax non-GAAP adjustments and the removal of the following
reported items: (1) $17.2 million tax benefit on dispositions of
entities, offset by (2) $6.0 million tax expense for non-recurring
legal entity restructuring.
|
(3)
|
In the period of a net
loss, reported diluted shares outstanding equal basic shares
outstanding.
|
TABLE II
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED SEGMENT
INFORMATION
(in
millions)
(unaudited)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
July 1,
2023
|
|
July 2,
2022
|
Consumer Self-Care
Americas
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
$
750.8
|
$
224.5
|
$
16.9
|
$
108.7
|
$
97.7
|
|
$
728.0
|
$
192.3
|
$
17.6
|
$
88.5
|
$
86.3
|
As a % of reported net
sales
|
|
29.9 %
|
2.3 %
|
14.5 %
|
13.0 %
|
|
|
26.4 %
|
2.4 %
|
12.2 %
|
11.9 %
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
|
4.5
|
—
|
(10.2)
|
14.7
|
|
|
6.3
|
—
|
(7.3)
|
13.6
|
Restructuring charges
and other termination benefits
|
|
—
|
—
|
—
|
1.2
|
|
|
—
|
—
|
—
|
—
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
|
—
|
—
|
(0.5)
|
0.5
|
|
|
4.8
|
—
|
—
|
4.8
|
Adjusted
|
|
$
229.0
|
$ 16.9
|
$ 98.0
|
$
114.1
|
|
|
$
203.4
|
$ 17.6
|
$ 81.2
|
$
104.7
|
As a % of reported net
sales
|
|
30.5 %
|
2.3 %
|
13.1 %
|
15.2 %
|
|
|
27.9 %
|
2.4 %
|
11.2 %
|
14.4 %
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
July 1,
2023
|
|
July 2,
2022
|
Consumer Self-Care
International
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
$
442.4
|
$
203.6
|
$
15.3
|
$
173.7
|
$
8.8
|
|
$
393.7
|
$
179.8
|
$
13.9
|
$
162.9
|
$
1.5
|
As a % of reported net
sales
|
|
46.0 %
|
3.5 %
|
39.3 %
|
2.0 %
|
|
|
45.7 %
|
3.5 %
|
41.4 %
|
0.4 %
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
|
29.2
|
(0.2)
|
(25.5)
|
55.0
|
|
|
24.5
|
(0.3)
|
(24.2)
|
49.0
|
Restructuring charges
and other termination benefits
|
|
—
|
—
|
—
|
5.9
|
|
|
—
|
—
|
—
|
1.5
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
|
—
|
—
|
(0.4)
|
0.4
|
|
|
1.7
|
—
|
(0.3)
|
2.0
|
Adjusted
|
|
$
232.8
|
$ 15.0
|
$
147.7
|
$ 70.1
|
|
|
$
206.0
|
$ 13.6
|
$
138.4
|
$ 54.0
|
As a % of reported net
sales
|
|
52.6 %
|
3.4 %
|
33.4 %
|
15.8 %
|
|
|
52.3 %
|
3.5 %
|
35.2 %
|
13.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
TABLE II
(CONTINUED)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED SEGMENT
INFORMATION
(in
millions)
(unaudited)
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
July 1,
2023
|
|
July 2,
2022
|
Consumer Self-Care
Americas
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
$
1,514.4
|
$ 435.3
|
$
34.9
|
$
217.1
|
$
181.0
|
|
$
1,438.0
|
$
364.8
|
$
35.2
|
$
168.4
|
$
164.8
|
As a % of reported net
sales
|
|
28.7 %
|
2.3 %
|
14.3 %
|
12.0 %
|
|
|
25.4 %
|
2.4 %
|
11.7 %
|
11.5 %
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
|
8.3
|
—
|
(20.3)
|
28.6
|
|
|
11.4
|
—
|
(14.7)
|
26.1
|
Restructuring charges
and other termination benefits
|
|
0.1
|
—
|
—
|
2.4
|
|
|
—
|
—
|
—
|
—
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
|
—
|
—
|
(1.3)
|
1.3
|
|
|
4.8
|
—
|
—
|
4.8
|
(Gain) loss on
investment securities
|
|
—
|
—
|
—
|
—
|
|
|
—
|
—
|
—
|
(3.7)
|
Adjusted
|
|
$ 443.7
|
$ 34.9
|
$
195.5
|
$
213.2
|
|
|
$
381.0
|
$ 35.2
|
$
153.7
|
$
192.0
|
As a % of reported net
sales
|
|
29.3 %
|
2.3 %
|
12.9 %
|
14.1 %
|
|
|
26.5 %
|
2.4 %
|
10.7 %
|
13.4 %
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
July 1,
2023
|
|
July 2,
2022
|
Consumer Self-Care
International
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Net
Sales
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
$
860.4
|
$
406.6
|
$
28.3
|
$
342.3
|
$
30.0
|
|
$
758.2
|
$
345.1
|
$
25.5
|
$
300.2
|
$
17.7
|
As a % of reported net
sales
|
|
47.3 %
|
3.3 %
|
39.8 %
|
3.5 %
|
|
|
45.5 %
|
3.4 %
|
39.6 %
|
2.3 %
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired
intangible
assets
|
|
54.4
|
—
|
(52.3)
|
106.7
|
|
|
40.9
|
(0.7)
|
(43.9)
|
85.5
|
Restructuring charges
and other termination benefits
|
|
—
|
—
|
(0.7)
|
6.7
|
|
|
—
|
—
|
—
|
1.6
|
Acquisition and
integration-related charges and contingent
consideration
adjustments
|
|
—
|
—
|
(1.5)
|
1.5
|
|
|
1.7
|
—
|
(0.2)
|
2.0
|
(Gain) loss on
divestitures and investment securities
|
|
—
|
—
|
4.6
|
(4.6)
|
|
|
—
|
—
|
—
|
—
|
Adjusted
|
|
$
461.0
|
$ 28.3
|
$
292.3
|
$
140.3
|
|
|
$
387.7
|
$ 24.8
|
$
256.1
|
$
106.8
|
As a % of reported net
sales
|
|
53.6 %
|
3.3 %
|
34.0 %
|
16.3 %
|
|
|
51.1 %
|
3.3 %
|
33.8 %
|
14.1 %
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
TABLE
III
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
CONSOLIDATED AND
SELECTED SEGMENT INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
Consolidated
Continuing Operations
|
July 1,
2023
|
|
July 2,
2022
|
|
%
Change
|
|
July 1,
2023
|
|
July 2,
2022
|
|
%
Change
|
Net Sales
|
$
1,193.1
|
|
$
1,121.7
|
|
6.4 %
|
|
$
2,374.8
|
|
$
2,196.2
|
|
8.1 %
|
Less: Currency
impact(1)
|
(2.3)
|
|
—
|
|
0.2 %
|
|
(35.1)
|
|
—
|
|
1.6 %
|
Constant currency net
sales
|
$
1,195.4
|
|
$
1,121.7
|
|
6.6 %
|
|
$
2,409.9
|
|
$
2,196.2
|
|
9.7 %
|
Less:
Divestitures(2)
|
—
|
|
—
|
|
— %
|
|
—
|
|
19.3
|
|
0.9 %
|
Less: Exited product
lines(3)
|
1.2
|
|
6.5
|
|
(0.1) %
|
|
1.2
|
|
6.5
|
|
0.3 %
|
Less:
Acquisitions(4)
|
70.3
|
|
—
|
|
(6.3) %
|
|
161.9
|
|
—
|
|
(7.7) %
|
Organic net
sales
|
$
1,123.9
|
|
$
1,115.2
|
|
0.8 %
|
|
$
2,246.9
|
|
2,170.4
|
|
3.5 %
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
Consumer Self-Care
Americas
|
July 1,
2023
|
|
July 2,
2022
|
|
%
Change
|
|
July 1,
2023
|
|
July 2,
2022
|
|
%
Change
|
Net Sales
|
$
750.8
|
|
$
728.0
|
|
3.1 %
|
|
$
1,514.4
|
|
$
1,438.0
|
|
5.3 %
|
Less: Currency
impact(1)
|
(0.7)
|
|
—
|
|
0.1 %
|
|
(1.2)
|
|
—
|
|
0.1 %
|
Constant currency net
sales
|
$
751.4
|
|
$
728.0
|
|
3.2 %
|
|
$
1,515.6
|
|
$
1,438.0
|
|
5.4 %
|
Less:
Divestitures(2)
|
—
|
|
—
|
|
— %
|
|
—
|
|
19.3
|
|
1.4 %
|
Less: Exited product
lines(3)
|
1.2
|
|
6.5
|
|
0.8 %
|
|
1.2
|
|
6.5
|
|
0.4 %
|
Less:
Acquisitions(4)
|
48.0
|
|
—
|
|
(6.7) %
|
|
93.6
|
|
—
|
|
(6.6) %
|
Organic net
sales
|
$
702.2
|
|
$
721.5
|
|
(2.7) %
|
|
$
1,420.8
|
|
$
1,412.2
|
|
0.6 %
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
Consumer Self-Care
International
|
July 1,
2023
|
|
July 2,
2022
|
|
%
Change
|
|
July 1,
2023
|
|
July 2,
2022
|
|
%
Change
|
Net Sales
|
$
442.4
|
|
$
393.7
|
|
12.4 %
|
|
$
860.4
|
|
$
758.2
|
|
13.5 %
|
Less: Currency
impact(1)
|
(1.6)
|
|
—
|
|
0.4 %
|
|
(33.9)
|
|
—
|
|
4.5 %
|
Constant currency net
sales
|
$
444.0
|
|
$
393.7
|
|
12.8 %
|
|
$
894.3
|
|
$
758.2
|
|
18.0 %
|
Less:
Acquisitions(4)
|
22.3
|
|
—
|
|
(5.7) %
|
|
68.3
|
|
—
|
|
(9.0) %
|
Organic net
sales
|
$
421.7
|
|
$
393.7
|
|
7.1 %
|
|
$
826.1
|
|
$
758.2
|
|
9.0 %
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
(1)
|
Currency impact is
calculated using the exchange rates used to translate our financial
statements in the comparable prior year period to show what current
period US dollar results would have been if such currency exchange
rates had not changed.
|
(2)
|
Represents divestitures
of Latin American businesses
and ScarAway®.
|
(3)
|
Represents an exited
product line within Nutrition.
|
(4)
|
Represents acquisition
of HRA Pharma in CSCA and CSCI on a constant currency basis
(one month of sales during the second quarter 2023, and four months
of sales for the first half of 2023, as it was acquired on April
29, 2022) , and Nestlé's Gateway Infant Formula Plant and Good
Start® infant formula brand in CSCA.
|
TABLE IV
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED SEGMENT INFORMATION
(in millions, except per share amounts)
(unaudited)
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
CSCA Net Sales
|
July 1,
2023
|
|
July 2,
2022
|
|
Total Change
|
|
July 1,
2023
|
|
July 2,
2022
|
|
% Change
|
|
Nutrition
|
$ 164.8
|
|
$ 125.1
|
|
$
39.7
|
|
31.7 %
|
|
$
304.7
|
|
$
252.3
|
|
20.8 %
|
|
Upper
Respiratory
|
137.7
|
|
145.9
|
|
(8.2)
|
|
(5.6) %
|
|
292.0
|
|
298.7
|
|
(2.2) %
|
|
Digestive
Health
|
126.7
|
|
125.1
|
|
1.6
|
|
1.3 %
|
|
250.9
|
|
243.7
|
|
3.0 %
|
|
Pain and
Sleep-Aids
|
97.4
|
|
102.6
|
|
(5.2)
|
|
(5.1) %
|
|
200.9
|
|
205.5
|
|
(2.2) %
|
|
Oral Care
|
76.9
|
|
76.6
|
|
0.3
|
|
0.4 %
|
|
161.3
|
|
147.0
|
|
9.7 %
|
|
Healthy
Lifestyle
|
67.3
|
|
67.3
|
|
—
|
|
— %
|
|
140.7
|
|
134.9
|
|
4.3 %
|
|
Skin Care
|
50.8
|
|
48.6
|
|
2.2
|
|
4.5 %
|
|
103.1
|
|
89.5
|
|
15.2 %
|
|
Women's
Health
|
12.5
|
|
12.0
|
|
0.5
|
|
4.2 %
|
|
24.4
|
|
20.2
|
|
20.8 %
|
|
VMS and Other
CSCA
|
16.7
|
|
24.8
|
|
(8.1)
|
|
(32.7) %
|
|
36.4
|
|
46.2
|
|
(21.2) %
|
|
Total CSCA Net
Sales
|
$ 750.8
|
|
$ 728.0
|
|
$
22.8
|
|
3.1 %
|
|
$
1,514.4
|
|
$
1,438.0
|
|
5.3 %
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
Constant
Currency
Change (1)
|
|
Six Months Ended
|
|
|
|
|
|
Constant
Currency
Change (1)
|
CSCI Net Sales
|
July 1,
2023
|
|
July 2,
2022
|
|
Total Change
|
|
Currency
Impact (1)
|
|
|
July 1, 2023
|
|
July 2, 2022
|
|
% Change
|
|
Currency
Impact (1)
|
|
Skin Care
|
$ 123.0
|
|
$ 102.5
|
|
$
20.5
|
|
20.0 %
|
|
3.3 %
|
|
23.3 %
|
|
$
206.4
|
|
$
176.4
|
|
17.0 %
|
|
7.5 %
|
|
24.5 %
|
Upper
Respiratory
|
64.9
|
|
58.8
|
|
6.1
|
|
10.4 %
|
|
(1.0) %
|
|
9.4 %
|
|
149.7
|
|
125.3
|
|
19.5 %
|
|
4.0 %
|
|
23.5 %
|
Healthy
Lifestyle
|
60.6
|
|
59.1
|
|
1.5
|
|
2.5 %
|
|
(0.6) %
|
|
1.9 %
|
|
127.0
|
|
118.0
|
|
7.6 %
|
|
2.0 %
|
|
9.6 %
|
Pain and
Sleep-Aids
|
52.8
|
|
49.1
|
|
3.7
|
|
7.5 %
|
|
(0.6) %
|
|
6.9 %
|
|
102.7
|
|
103.1
|
|
(0.4) %
|
|
3.8 %
|
|
3.4 %
|
VMS
|
41.5
|
|
42.3
|
|
(0.8)
|
|
(1.9) %
|
|
(1.6) %
|
|
(3.5) %
|
|
89.3
|
|
91.8
|
|
(2.7) %
|
|
1.8 %
|
|
(0.9) %
|
Women's
Health
|
31.9
|
|
23.3
|
|
8.6
|
|
36.9 %
|
|
(1.7) %
|
|
35.2 %
|
|
61.0
|
|
37.0
|
|
64.9 %
|
|
3.7 %
|
|
68.6 %
|
Oral Care
|
21.6
|
|
20.6
|
|
1.0
|
|
4.9 %
|
|
(0.5) %
|
|
4.4 %
|
|
50.7
|
|
49.5
|
|
2.4 %
|
|
3.5 %
|
|
5.9 %
|
Digestive Health and
Other CSCI
|
46.1
|
|
38.0
|
|
8.1
|
|
21.3 %
|
|
1.9 %
|
|
23.2 %
|
|
73.6
|
|
57.1
|
|
28.9 %
|
|
8.2 %
|
|
37.1 %
|
Total CSCI Net
Sales
|
$ 442.4
|
|
$ 393.7
|
|
$
48.7
|
|
12.4 %
|
|
0.4 %
|
|
12.8 %
|
|
$
860.4
|
|
$
758.2
|
|
13.5 %
|
|
4.5 %
|
|
18.0 %
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
(1) Currency impact is
calculated using the exchange rates used to translate our financial
statements in the comparable prior year period to show what current
period US dollar results would have been if such currency exchange
rates had not changed.
|
TABLE V
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
CONSOLIDATED AND SELECTED SEGMENT INFORMATION
(in millions, except per share amounts)
(unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
Consolidated Continuing
Operations
|
|
July 1,
2023
|
|
July 2,
2022
|
|
Total Change
|
|
July 1,
2023
|
|
July 2,
2022
|
|
Total Change
|
Adjusted gross
margin
|
|
38.7 %
|
|
36.5 %
|
|
|
|
220 bps
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$ 137.3
|
|
$ 116.4
|
|
$ 20.8
|
|
17.9 %
|
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
$ 0.63
|
|
$ 0.43
|
|
$ 0.20
|
|
46.5 %
|
|
$ 1.08
|
|
$ 0.76
|
|
0.32
|
|
42.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Self-Care
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$ 70.1
|
|
$ 54.0
|
|
$ 16.0
|
|
29.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Self-Care Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin
|
|
30.5 %
|
|
27.9 %
|
|
|
|
260 bps
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$ 114.1
|
|
$ 104.7
|
|
$
9.4
|
|
9.0 %
|
|
|
|
|
|
|
|
|
Sequential Comparison
|
|
Three Months
Ended
|
|
|
|
|
|
Consolidated
Continuing Operations
|
|
July 1,
2023
|
|
April 1,
2023
|
|
Total
Change
|
|
Net Sales
|
|
$
1,193.1
|
|
$
1,181.7
|
|
|
|
|
|
Adjusted gross
profit
|
|
$ 461.8
|
|
$ 442.8
|
|
$ 19.0
|
|
4.3 %
|
|
Adjusted gross
margin
|
|
38.7 %
|
|
37.5 %
|
|
|
|
120 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
July 1,
2023
|
|
April 1,
2023
|
|
July 1,
2023
|
|
Operating Cash
Flow
|
|
$ 52.9
|
|
$ 19.4
|
|
72.3
|
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
TABLE
VI
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
CONSOLIDATED AND
SELECTED SEGMENT INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
Full
Year
|
|
2023
Guidance
|
Reported Diluted
EPS
|
$0.50 -
$0.70
|
Pre-tax
adjustments:(1)
|
|
Amortization
expense primarily related to acquired intangible assets
|
2.00
|
Restructuring
charges and other termination benefits
|
0.26
|
Acquisition and
integration-related charges and contingent consideration
adjustments
|
0.07
|
Unusual
litigation
|
0.07
|
(Gain) loss on
divestitures and investment securities
|
(0.03)
|
Milestone payments
received related to royalty rights
|
(0.07)
|
Non-GAAP tax
adjustments(2)
|
(0.30)
|
Adjusted Diluted
EPS
|
$2.50 -
$2.70
|
|
|
Reported Net Sales
Growth
|
7.0% -
11.0%
|
Acquisitions,
Divestitures, and HRA 1x distribution transition
|
4.0% -
5.0%
|
Organic Net Sales
Growth
|
3.0% -
6.0%
|
|
|
Reported Effective
Tax Rate
|
28.8 %
|
Non-GAAP tax
adjustments
|
(11.8) %
|
Adjusted Effective Tax
Rate
|
17.0 %
|
|
Note: amounts may not
add due to rounding. Percentages are based on actuals.
|
(1)
|
Individual pre-tax line
item adjustments have not been tax effected, as tax expense on
these items are aggregated in the "Non-GAAP tax adjustments" line
item.
|
(2)
|
The non-GAAP tax
adjustments are tax effect of pre-tax non-GAAP
adjustments.
|
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SOURCE Perrigo Company plc