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Perrigo Company Q1 net sales $952 million

Staff writer |
Perrigo Company plc announced results for its first quarter ended September 27, 2014. Net sales in the quarter were $952 million, an increase of 2% over the first quarter of fiscal 2014.

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Perrigo's chairman, president and CEO Joseph C. Papa commented, "The team's financial performance for the quarter was generally in-line with our expectations, highlighted by record first quarter net sales, adjusted net income and adjusted margins.

"First quarter performance reflects expected lower year-over-year seasonal sales volume and contract sales in our Consumer Healthcare segment, planned Rx pricing programs and disappointing sales in the VMS Nutritional category, partially offset by 11% growth in the infant formula category.

"Our team remains focused on launching over 100 new products in fiscal year 2015, the majority of which will launch in the second half of the year, illustrating our continued commitment to make quality healthcare more affordable for consumers around the globe."

Net sales in the quarter were $952 million, an increase of 2% over the first quarter of fiscal 2014, primarily attributable to $92 million in sales from the acquisition of Elan Corporation plc and new product sales of $24 million. This increase was offset partially by lower sales volumes on certain existing products in the Consumer Healthcare and API segments, as well as net charges taken to meet contractual obligations associated with pricing programs in the Rx segment.

Excluding charges as outlined in Table I at the end of this release, first quarter fiscal 2015 adjusted net income increased 30% to $188 million or $1.40 per diluted share. Reported net income was $96 million, or $0.72 per diluted share. The difference between the reported net income and adjusted net income was attributable primarily to amortization expense and other items not related to the ongoing operations of the Company's business.

Consumer Healthcare segment net sales were $493 million, reflecting an increase in sales of existing products of $20 million (primarily in the smoking cessation category), $7 million in new product sales and $6 million attributable to the acquisition of OTC products from Aspen.

These combined increases were more than offset by a decline of $78 million in sales of existing products (primarily in the cough/cold, contract manufacturing and analgesics categories) due primarily to relatively higher seasonal purchases from retailers during last year's cough/cold and flu season, lower contract manufacturing sales and the absence of sales from guaifenesin 600mg ER this quarter versus last year.

Adjusted gross margin contracted 110 bps due to lower sales of higher margin products versus last year. Adjusted operating margin included increased R&D investments as more products move from prescription to over-the-counter status.

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