Perrigo's Sales Increase 7 Percent

November 22, 2006
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ALLEGAN — Perrigo Co. sales for the first quarter of fiscal 2007 were up 7 percent over last year to $340.9 million. Net income was $17.5 million, or 19 cents per share, compared with $12.9 million, or 14 cents per share, a year ago

The first quarter was a good start for Perrigo, with year-over-year sales increases in all segments of the business, said President and CEO Joseph Papa. New product launches accounted for more than $11 million in sales in the quarter, right on the tail of record new product sales in 2005.

“Since the beginning of last year, we have introduced into the market more than 50 new products in reformulation,” Papa said. “New products will continue to be a primary focus for us. We are funding R&D to keep on this pace, and we expect new products and reformulations to add over $100 million in revenue in FY ’07.”

Perrigo began shipping over-the-counter Famotidine tablets on Sept. 25, for example, and just last week began shipping its “exclusive” store brand of coated nicotine mint gum that’s equivalent to Nicorette Fresh Mint gum.

New product launches led by the smoking cessation category continue to drive the performance of the Perrigo Consumer Healthcare business, which benefited from the introduction of $7.3 million in new products in the just-passed quarter. Sales in the quarter were $242.5 million, compared with $227.1 million in the year-ago quarter, and all the growth was organic, CFO Judy Brown noted. The segment’s Mexican and U.K. operations grew 19 percent to $5.1 million.

Perrigo’s Rx Pharmaceutical and API (active pharmaceutical ingredients) segments fared well “in a challenging pricing environment,” Papa said. Rx Pharmaceuticals was up 8 percent to $31.4 million and API sales grew 11 percent to $26.8 million.

Brown said for the 13 weeks ended Oct. 1, the overall cough and cold market was up 10 percent. The growth in that category is reflective of the changing environment since the withdrawal of pseudoephedrine from over-the-counter products. Perrigo is in the process of launching more than 20 newly reformulated cough/cold products in order to meet retailers’ and consumers’ needs in the current season.

“While we wish everyone good health, we’re actively preparing for what we hope to be a busy cough and cold and flu season,” Papa said.

The company’s Israel Consumer Products and Israel Pharmaceutical and Diagnostic Products business segments reported sales of $37.2 million, up from $36.7 million a year ago.

Papa said the results show that Perrigo’s broad health care solutions portfolio is working in a challenging marketplace.

“Perrigo offers the market an affordable solution for store brand and generic prescription products by focusing on quality with a low-cost position, which we supplement with our vertically integrated API business,” he said. “Looking toward the future, we will continue to invest today in the innovative niche product opportunities in both Rx and API that will help us drive our future profitability.”    

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