Perrigo Sales Flat Record Earnings

August 15, 2003
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ALLEGAN — Perrigo Co., the country's largest manufacturer of over-the-counter pharmaceutical and nutritional products, reported $182.6 million in sales for the fourth quarter, up slightly more than one-half million dollars over the same quarter a year ago.

Fourth quarter net income of $4.3 million, or 6 cents per share, was comparable to last year's fourth quarter.

Store brand health care segment sales of $165 million for the quarter were down about 1 percent from last year, noted Douglas Schrank, vice president and CFO. Within that segment, Perrigo recorded quarterly gains in its cough/cold, laxatives and feminine hygiene categories and experienced declines in sales of analgesics and vitamins.

Sales for the 12 months ended June 28 were $826 million, or $300,000 less than for fiscal 2002.

Net income increased 21 percent to $54 million, or 76 cents per share, for the fiscal year, up from $44.8 million or 60 cents per share, last year. Net income included after-tax income of $2 million from a vitamin litigation settlement.

"In fiscal 2003 we realized the benefit of investments made in quality processes and manufacturing operations over the past two years," said CEO David Gibbons. "We continue to be a really strong cash generator. In 2003 we had $8 million in cash flow from operations. This enabled us to repurchase $3.3 million shares and to begin paying our first cash dividend."

Quality initiatives have reduced customer complaints by 15 percent from last year, he noted.

Gibbons said the company's two core businesses — non-prescription pharmaceuticals and nutritional products — remain strong and that the company anticipates new initiatives will increase revenues by 3 percent to 5 percent this year.

The company also announced last week that its board elected Gibbons chairman on top of his CEO responsibilities, replacing Michael Jandernoa, who has been chairman since 1991. Jandernoa continues to serve as Perrigo's director.

In a statement, Jandernoa said the board felt that giving one person the responsibilities of both chairman and CEO would provide effective and focused leadership.

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