Allegan-based Perrigo Co. (Nasdaq: PRGO) Monday reported sharply higher sales and profits for its first fiscal quarter ended Sept. 26.
Perrigo also announced the divestment of its Israeli cosmetics business.
Revenue was $528 million, up from $455.5 million a year earlier. Net income was $61 million, or 66 cents a sahre, up from $38 million, or 40 cents a share, a year earlier.
"We delivered record earnings for the quarter, with strong performance across all business segments," said Perrigo chairman and CEO Joseph C. Papa. "Cash flow from operations continues to be strong as we generated $38 million during a period when we are preparing for the cough, cold, flu season. Store brands grew nearly 13 percent during a period when the over-the-counter category grew only 3 percent. Prescription sales continued to gain market share as a result of our strong investment in quality and high customer service levels along with the continued growth of over-the-counter prescription sales. We continue to make quality healthcare more affordable at a time when consumers need to save money more than ever."
Consumer Healthcare segment net sales in the first quarter were $437 million compared with $366 million in the first quarter last year, an increase of $71 million or 19 percent. The increase resulted from approximately $49 million of new products and higher volume of existing products primarily in the gastrointestinal, smoking cessation, analgesics, and cough and cold categories and approximately $36 million of incremental sales from the acquisitions of JB Laboratories, Unico and Diba.
The Prescription Pharmaceuticals segment first quarter net sales were $47 million compared with $33 million a year ago, an increase of 42 percent. The increase in sales was driven by increased volume of existing products and strong performance in the over-the-counter prescription business.
The API segment reported first quarter net sales of $30 million compared with $34 million a year ago. The decrease was due primarily to a decline of existing product sales and unfavorable changes in foreign currency exchange rates. The decreases were partially offset by new product sales.
Continuing operations for the Other category, consisting of the Israel Pharmaceutical and Diagnostic Products operating segment, reported first quarter net sales of approximately $14 million compared with $22 million a year ago. The decrease was due primarily to the loss of a customer contract, as well as a $1 million impact from unfavorable foreign currency exchange rates.
The company offered guidance of reported fiscal 2010 earnings between $2.22 and $2.32 a share, with adjusted earnings from continuing operations between $2.35 and $2.45 a share.
To listen in on a replay of a conference call discussing the results, call (800) 642-1687 in the United States or (706) 645-9291 elsewhere, using the access code 35823113.
As for the cosmetics business, Perrigo said it had signed a definitive agreement to sell its Israel Consumer Products business along with the related production assets in Israel to Emilia Group, a subsidiary of O. Feller Holdings Ltd., for 205 million New Israeli Shekels (approximately $54 million).
The transaction will close in the first calendar quarter of 2010. Under the terms of the agreement, Perrigo will provide distribution and support services for the related United States private label cosmetics business for twelve months after the close of the transaction.
"We are very pleased with the team's ability to find the right buyer in a timely manner, executing on our previously announced decision to exit this business," Papa said. "This reflects our on-going process of optimizing our portfolio based on our stringent ROIC guidelines."
More at www.perrigo.com.
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