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Perrigo Q3 net sales $1.05 billion, up 4 percent

Staff writer |
Perrigo Company plc announced results for its third quarter ended March 28, 2015. Net sales in the quarter were $1.05 billion, an increase of 4% over Q3 2014.

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This is primarily attributable to $81 million in new product sales and $29 million in incremental royalty sales of Tysabri. This increase was offset partially by $23 million in discontinued products, $21 million of unfavorable foreign currency movements, and lower sales volumes in VMS and Consumer Healthcare contract manufacturing.

Excluding some charges, third quarter fiscal 2015 adjusted net income increased 41% to $249 million or $1.85 per diluted share versus $1.31 for the same period last year.

Consumer Healthcare

Net sales were $537 million, flat with the prior year, reflecting new product sales of $25 million and an increase in sales of existing products of $28 million (primarily in the cough/cold, smoking cessation and analgesics categories). These increases were offset by a number of factors including a decline of $13 million in contract (OTC contract manufacturing categories), discontinued products of $13 million and $7 million in unfavorable foreign currency movements.

Adjusted gross profit percent to sales grew 90 basis points as a result of manufacturing efficiencies, purchasing savings and improved product mix.

Adjusted operating income of $102 million improved $10 million, or 11%, compared to the prior year due to 90 basis points improvement in operating profit and lower selling expenses.

Nutritionals

Net sales of $130 million, a decrease of $8 million over the prior year, included new product sales of $16 million, discontinued products of $9 million and $11 million in lower year-over-year sales in the VMS category.

Third quarter adjusted gross profit percent to sales grew 170 basis points due to product mix, manufacturing efficiencies and a $2 million insurance recovery in the quarter.

Adjusted operating income of $18 million improved $2 million, or 11%, compared to the prior year.

Rx Pharmaceuticals

Net sales of $252 million, an increase of $28 million over the prior year, were driven by new product sales of $40 million. The results were driven by the successful launches of clobetasol spray and testosterone 1.0%. Adjusted gross profit percent to sales increased 520 basis points as a result of higher margin new product sales and pricing initiatives enacted in the first quarter of fiscal 2015.

Adjusted operating income of $120 million improved $20 million, or 20%, compared to the prior year despite a $6 million investment in the specialty pharmaceuticals sales force.

API

Net sales of $31 million, a decrease of $1 million over the prior year, includes $2 million in unfavorable changes in foreign currency movements. Adjusted operating income of $11 million improved by $4 million, or 51%, due to product mix and management's actions to contain costs during the quarter.

Specialty Sciences

The Company recognized $82 million of royalty revenue related to Biogen's global sales of its Multiple Sclerosis drug Tysabri®. The increase over fiscal 2014 was driven by the higher royalty rate of 18% this year versus 12% last year and the absence of an R&D project.


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