ALLEGAN, Mich., April 23 /PRNewswire-FirstCall/ -- The Perrigo Company (NASDAQ:PRGO) today announced results for the third quarter and nine months of fiscal 2003 ended March 29, 2003.
Net sales for the third quarter were $202.6 million, an increase of two percent compared with $198.5 million last year. Net income was $14.1 million, or $0.20 per share, compared with net income of $17.9 million, or $0.24 per share a year ago, which included income from the settlement of a lawsuit of $5.0 million after-tax, or $0.07 per share. Without the lawsuit settlement, earnings on an operating basis were $12.9 million, or $0.17 per share, last year.
Commenting on the third quarter, David T. Gibbons, Perrigo President and Chief Executive Officer, said, "We delivered excellent results this quarter. Our improved operational efficiency and rising productivity were significant contributors to higher gross profits. Higher-than-anticipated sales volume and good product mix also helped profits. Lastly, we benefited from good expense control and improved results at our Mexican operation. Cash flow from operations was $45 million during the quarter and stands at $82 million year-to-date. We continue to be virtually debt-free and remain in a very strong financial position."
Net sales for the nine months ended March 29, 2003, were $643.4 million compared with $644.3 million a year ago. Net income for the nine months improved to $49.7 million, or $0.70 per share, from $44.9 million, or $0.60 per share for last year. Excluding proceeds from a lawsuit settlement in the first quarter this year of $2.0 million after-tax, or $0.03 per share, and income from the settlement of a lawsuit last year of $5.0 million after-tax, or $0.07 per share, net income on an operating basis increased 20 percent to $47.7 million, or $0.67 per share, from $39.9 million, or $0.53 per share, for the prior year.
Commenting further, Mr. Gibbons stated, "Over the past few quarters, our earnings have been driven by operational benefits, specifically, improved operating efficiencies and supply chain management. We have been making good progress, not driven by any single initiative, but from contributions across many functional areas. I am very proud of our employees' combined efforts, and I'm pleased that we continue to outpace our own goals. We feel very good about our operational momentum, and look forward to the upcoming launch of store brand equivalents to the branded allergy medication Claritin(R).
"In line with our historical seasonal pattern, we anticipate sequentially lower fourth-quarter sales and margins and expect earnings of $0.04 to $0.05 per share. With year-to-date results of $0.70 per share, we now project earnings of $0.74 to $0.75 for the full year, compared with $0.60 per share for fiscal 2003, restated for expensing of stock options."
The Company noted that, effective with the fiscal second quarter ended December 28, 2002, it elected to expense stock option compensation. All prior periods have been restated to reflect the compensation cost that would have been recognized had the stock option expense been applied to all awards granted after July 1, 1995. Please refer to the restated results in the summary table at the end of this announcement.
The Company is furnishing this earnings release to the Securities and Exchange Commission via Form 8-K and it is hereby incorporated by reference. The information provided on Form 8-K includes a summary of each non-GAAP financial measure included in this earnings release and the reasons management believes these non-GAAP financial measures are useful to investors.
Perrigo will host a conference call to discuss third 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) Wednesday, April 23. To listen to the replay, call 800-642-1687, access code 9713471.
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. 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," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or other comparable terminology. 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.