Net Sales from Continuing Operations Were a
Fourth Quarter and Fiscal Year Record
Delivered Fiscal Year 2023 Double-Digit
Improvement in Gross Profit, Operating Income and EPS,
Year-Over-Year
Achieved Sixth Consecutive Quarter of
Year-Over-Year Gross Margin Expansion
Launching 'Project Energize' Investment and
Efficiency Program to Drive the Company's One Perrigo Sustainable,
Value Accretive Growth Strategy
DUBLIN, Feb. 27, 2024 /PRNewswire/ --
Fourth Quarter 2023 Highlights:
- Fourth quarter net sales of $1.2 billion grew 0.1% versus the prior year
quarter. Organic1 net sales decreased 0.6%, including
-2.4 percentage points impact from purposeful SKU prioritization
actions to enhance margins as part of the Company's Supply Chain
Reinvention Program and the final quarter of HRA Pharma ("HRA")
distributor transitions.
- Consumer Self-Care International ("CSCI") net sales
increased 5.9% compared to the prior year quarter and organic net
sales increased 2.9%, including -0.4 percentage points impact from
the HRA distributor transitions. Consumer Self-Care Americas
("CSCA") net sales decreased 2.8% compared to the prior year
quarter, including -3.4 percentage points impact from SKU
prioritization actions.
- Fourth quarter GAAP ("reported") gross margin was 36.9%, a
380 basis points improvement compared to the prior year quarter,
and a 30 basis points improvement compared to the third quarter of
2023. Non-GAAP ("adjusted") gross margin was 39.8%, a 140 basis
points improvement compared to the prior year quarter, and a 30
basis points improvement compared to the third quarter of
2023.
- Fourth quarter reported loss per share was
$(0.20), compared to a loss of
$(0.09) in the prior year
quarter.
- Adjusted diluted earnings per share ("EPS") was $0.86, compared to $0.75 in the prior year quarter, an increase of
14.7%.
- Fourth quarter operating cash flow was $209 million, leading to an operating cash flow
conversion2 of 178%; cash3 on the balance
sheet closed at $751
million.
Fiscal Year 2023 Highlights:
- Fiscal year 2023 net sales were $4.7
billion, an increase of 4.6% versus the prior year. Organic
net sales increased 1.7%, including -2.0 percentage points impact
from purposeful SKU prioritization actions and the HRA distributor
transitions.
- CSCI net sales of $1.7 billion
grew 11.0% versus the prior year, with organic growth of 7.4%,
including -0.6 percentage points impact from the HRA distributor
transitions. CSCA net sales of $3.0
billion grew 1.2% compared to the prior year, while organic
net sales decreased 1.3%, including -2.8 percentage points impact
from purposeful SKU prioritization actions.
- Fiscal year 2023 reported gross margin was 36.1%, a 340
basis points improvement compared to the prior year. Adjusted gross
margin was 38.8%, a 260 basis points improvement compared to the
prior year.
- Fiscal year 2023 reported loss per share was $(0.03), as compared to a loss per share of
$(0.97) in the prior year.
- Fiscal year 2023 adjusted diluted EPS was $2.58, as compared to $2.07 in the prior year period, an increase of
24.6%. Adjusted diluted EPS included an unfavorable impact of
$0.15 from the HRA distributor
transitions.
- Fiscal year 2023 operating cash flow was $406 million, leading to an operating cash flow
conversion2 of 115%.
Fiscal Year 2024 Outlook Highlights:
- Company issues its fiscal 2024 organic net sales and total
net sales growth outlook of 1.0%-3.0% and flat, respectively,
versus the prior year. The Company also issues its fiscal 2024
adjusted diluted EPS range outlook of $2.50-$2.65 (see
Fiscal 2024 Outlook section below), resulting in mid-teens adjusted
diluted EPS growth, excluding infant formula. Actions the Company
is taking to augment and strengthen its infant formula business
leads to adjusted diluted EPS relatively in-line with the prior
year.
The Company cannot reconcile its expected
adjusted diluted earnings per share to diluted earnings per share
under "Fiscal 2024 Outlook" without unreasonable effort because
certain items that impact net income and other reconciling metrics
are out of the Company's control and/or cannot be reasonably
predicted at this time. These items include, but are not limited to
uncertainty of non-recurring infant formula related charges and
timing of restructuring charges.
|
(1) See attached
Appendix for details. Change in net sales on an organic basis, also
referred to as an increase or decrease in organic net sales,
excludes the effects of acquisitions, divestitures, exited product
lines and the impact of currency.
|
(2) See attached
Appendix for details. Operating cash flow conversion is calculated
as operating cash flow as a percentage of adjusted net income.
There is no meaningful GAAP operating cash flow conversion ratio
because net income was negative.
|
(3) We have $7.0
million of restricted cash as of December 31, 2023 in Cash, cash
equivalents and restricted cash on the Consolidated Balance Sheets.
We entered into an agreement to extend a credit line to an existing
customer in exchange for a cash security deposit. The agreement
requires the cash to be held in a separate account and will be
returned to the customer at the expiration of the agreement
provided all credits have been paid as agreed.
|
(4) All tables and
data may not add due to rounding. Percentages are based on
actuals.
|
|
Perrigo Company plc (NYSE: PRGO) ("Perrigo" or
the "Company"), a leading provider of Consumer Self-Care
Products, today announced financial results from continuing
operations for the fourth quarter and fiscal year ended
December 31, 2023. All comparisons are against the prior year
fiscal fourth quarter and fiscal year, unless otherwise noted.
President and CEO, Patrick Lockwood-Taylor commented, "During 2023,
we made meaningful progress on our blueprint to build One Perrigo by advancing analyses of portfolio
configuration, investment and operations. We are working towards
establishing sustainable, value accretive growth through a
blended-branded business model that will position us to win in
self-care. To accelerate One
Perrigo, we are implementing an investment and efficiency
program called Project Energize. This program is designed to
consumerize, simplify and scale our organization, driving the next
evolution of global capabilities and organizational agility."
Lockwood-Taylor concluded, "We exited 2023 with our
international business firing on all cylinders and our U.S. OTC
business performing well amid a normalizing consumer environment.
In addition, our accretive initiatives, which helped drive
meaningful year-over-year financial results, remain on track.
Heading into 2024, while we expect these positive trends to
continue they will be balanced against headwinds from actions we
are taking to augment and strengthen our infant formula business
with stabilization expected in the second half of 2024. Though
these actions will negatively impact our 2024 financial
performance, I am confident we will augment and strengthen this
business in 2024, which is the right thing to do for our
consumers, customers and investors."
Refer to Tables I through VII at the end of this
press release for a reconciliation of non-GAAP adjustments to the
current year and prior year periods and additional non-GAAP
information. The Company's reported results are included in the
attached Consolidated Statements of Operations, Balance Sheets and
Statements of Cash Flows.
Project Energize
Perrigo has successfully transformed into a
pure-play consumer self-care company and is now embarking on the
next stage of its self-care journey - evolving to One Perrigo. This evolution will create
sustainable, value accretive growth through a blended-branded
business model that better positions the Company to win in
self-care.
As part of the Company's sustainable, value
accretive growth strategy, the Company is launching Project
Energize - a global investment and efficiency program to drive the
next evolution of capabilities and organizational agility. This
three-year program is expected to produce significant benefits in
the Company's long-term business performance by enabling our
One Perrigo growth strategy,
increasing organizational agility and mitigating impacts from
augmenting and strengthening the infant formula business.
Project Energize will be initiated in Q1 2024,
subject to local law and consultation requirements, and is expected
to deliver an annualized pre-tax savings in the range of
$140 million to $170 million by 2026. The Company expects to
reinvest $40 million to $60 million of these savings to drive its
blended-branded business model. Restructuring and related charges
associated with these actions are estimated to be in the range of
$140 million to $160 million, including $20 million to $40
million in investments to enhance capabilities and are
expected to be substantially incurred by the end of 2026.
Restructuring activities as part of Project Energize are expected
to result in the net reduction of approximately 6% of total Perrigo
roles. The Company will provide additional details about
Project Energize on today's earnings webcast and conference
call.
Perrigo Fourth Quarter 2023 Results from
Continuing Operations
Fourth Quarter 2023 Net Sales Change Compared to Prior
Year(4)
|
|
Reported
Net Sales
Growth
|
Foreign
Exchange
Impact
|
Constant
Currency Net
Sales
|
Net
Divestitures,
Acquisitions,
& Product
Line Exits
|
Organic
Net Sales
Growth
|
CSCA
|
(2.8) %
|
— %
|
(2.8) %
|
0.4 %
|
(2.4) %
|
CSCI
|
5.9 %
|
(4.1) %
|
1.8 %
|
1.1 %
|
2.9 %
|
Total Perrigo
|
0.1 %
|
(1.4) %
|
(1.2) %
|
0.7 %
|
(0.6) %
|
Reported net sales of $1.2
billion increased $2 million, or 0.1%, driven primarily
by 1) +1.4 percentage points from foreign currency translation, and
2) +0.6 percentage points of inorganic growth stemming from the
acquisition of the Gateway infant formula facility and the U.S. and
Canadian Good Start® infant formula brand
("Gateway"), which closed on November 1,
2022. This growth was partially offset by 1) -1.3 percentage
points from exited product lines, and 2) a decrease in organic net
sales of 0.6%, including -2.4 percentage points from purposeful SKU
prioritization actions and HRA distributor transitions.
Organic net sales included strategic pricing
actions of +3.9 percentage points and volume/mix of -4.2 percentage
points. Product category growth was driven by Healthy Lifestyle,
Digestive Health and Pain and Sleep Aids, offset by
U.S. Nutrition and U.S. Oral Care. E-commerce and new
products contributed to category growth in addition to higher net
sales of cough cold products compared to the prior year.
Reported gross margin was 36.9%, a 380 basis
points increase versus the prior year quarter. Adjusted gross
margin expanded 140 basis points to 39.8% driven by strategic
pricing actions, benefits from purposeful SKU prioritization
actions and higher margin new products. These positive initiatives
were partially offset by higher cost of goods sold inflation in the
E.U. and lower manufacturing productivity in U.S. Nutrition.
These same factors drove gross profit growth versus the prior year
quarter.
Reported operating loss of $(16) million, a decreased of $47 million compared to operating income of
$31 million in the prior year period,
due primarily to $90 million in
goodwill impairment charges related to the HRA Rare Diseases
reporting unit in the CSCI segment, which was partially offset by
higher gross profit. Adjusted operating income grew $11 million, or 7.1%, to $167 million driven by gross profit flow-through
described above, in addition to favorable currency translation,
cost synergies from the acquisition of HRA and lower distribution
expenses. These benefits were partially offset by higher operating
expenses, including advertising and promotional investments and the
addition of Gateway.
Reported net loss was $(28) million, or
($0.20) per diluted share, compared
to a reported net loss of $(13)
million, or ($0.09) per
diluted share, in the prior year. Excluding certain charges as
outlined in Table I, fourth quarter 2023 adjusted net income was
$117 million, or $0.86 per diluted share, compared to
$102 million, or $0.75 per
diluted share, in the prior year. Fourth quarter adjusted EPS
included an unfavorable impact of $0.01 due to the HRA distributor transitions.
Fourth Quarter 2023 Business Segment Results
from Continuing Operations
Consumer Self-Care Americas Segment
Fourth Quarter 2023 Net Sales Change Compared to Prior
Year(4)
|
|
Reported
Net Sales
Growth
|
Foreign
Exchange
Impact
|
Constant
Currency Net
Sales
|
Net Divestitures,
Acquisitions, &
Product Line Exits
|
Organic
Net Sales Growth
|
CSCA
|
(2.8) %
|
— %
|
(2.8) %
|
0.4 %
|
(2.4) %
|
CSCA reported net sales of $744 million
decreased 2.8%, including -1.4 percentage points from exited
product lines, partially offset by +0.9 percentage points related
to one month of inorganic growth from the acquisition of Gateway,
which closed on November 1, 2022.
Organic net sales decreased 2.4%, including -3.4 percentage points
from purposeful SKU prioritization actions, as product category
growth in Healthy Lifestyle and Digestive Health were
more than offset by Nutrition and Oral Care.
Reported gross margin was 33.5%, a 320 basis
points increase versus the prior year quarter. Adjusted gross
margin expanded 250 basis points to 34.1% driven by 1) strategic
pricing actions, 2) productivity improvements in OTC and
Oral Care, and 3) benefits from SKU prioritization actions.
These benefits were partially offset by lower manufacturing
productivity in Nutrition. These factors also drove adjusted
gross profit growth compared to the prior year.
Reported operating income was $118 million
compared to $126 million in the prior year quarter. Adjusted
operating income decreased $1 million, or (0.6)%, to
$143 million driven by gross profit
flow-described above, offset by higher operating expenses, driven
primarily by one month of inorganic expenses from the acquisition
of Gateway and Opill® pre-launch investments.
Consumer Self-Care International Segment
Fourth Quarter 2023 Net Sales Change Compared to Prior
Year(4)
|
|
Reported
Net Sales Growth
|
Foreign
Exchange Impact
|
Constant
Currency Net
Sales
|
Net Divestitures,
Acquisitions, &
Product Line
Exits
|
Organic
Net Sales
Growth
|
CSCI
|
5.9 %
|
(4.1) %
|
1.8 %
|
1.1 %
|
2.9 %
|
CSCI reported net sales growth was 5.9%,
including +4.1 percentage points from foreign currency translation
and -1.1 percentage points stemming from exited products. Organic
net sales increased 2.9%, including -0.4 percentage points from HRA
distributor transitions, as product category growth in Pain
& Sleep-Aids and VMS were partially offset by
Upper Respiratory.
Reported gross margin was 43.2%, a decrease of
460 basis points compared to the prior year quarter. Adjusted gross
margin decreased 180 basis points to 50.0% as strategic pricing
actions, new products and improved manufacturing productivity were
more than offset by higher cost of goods sold inflation and
unfavorable product mix.
Reported operating loss was $(79) million for the quarter compared to a loss
of $(49) million in the prior year.
Adjusted operating income increased $12
million, or 21.5%, to $65
million due primarily to the same positive drivers as
adjusted gross margin, in addition to favorable currency
translation and lower operating expenses driven by operating
synergies as part of HRA integration actions. These benefits were
partially offset by higher advertising and promotional
investments.
Perrigo Fiscal Year 2023 Results from
Continuing Operations
Fiscal Year 2023 Net Sales Change Compared to Prior
Year(4)
|
|
Reported
Net Sales
Growth
|
Foreign
Exchange
Impact
|
Constant
Currency Net
Sales
|
Net Divestitures,
Acquisitions, &
Product Line
Exits
|
Organic
Net Sales
Growth
|
CSCA
|
1.2 %
|
0.1 %
|
1.3 %
|
(2.6) %
|
(1.3) %
|
CSCI
|
11.0 %
|
(0.3) %
|
10.7 %
|
(3.2) %
|
7.4 %
|
Total Perrigo
|
4.6 %
|
(0.1) %
|
4.5 %
|
(2.8) %
|
1.7 %
|
Reported net sales of $4.7
billion increased $204
million, or 4.6%, driven primarily by 1) +2.6 and +2.3
percentage points from the acquisitions of Gateway and HRA,
respectively, and 2) organic net sales growth of 1.7%, including
-1.8 percentage points from purposeful SKU prioritization actions.
Reported growth was partially offset by divested businesses and
exited product lines of -1.6 percentage points, and -0.7 percentage
points from HRA distributor transitions.
Organic net sales included strategic pricing
actions of +4.8 percentage points and volume/mix of -3.2 percentage
points. Product category growth was driven by Skin Care,
Health Lifestyle and Upper Respiratory. E-commerce
and new products also contributed to growth. These categories were
partially offset by lower net sales in legacy U.S.
Nutrition, SKU prioritization actions and HRA distributor
transitions.
Reported gross margin was 36.1%, a 340 basis
points increase versus the prior year. Adjusted gross margin
expanded 260 basis points to 38.8% driven by strategic pricing
actions, higher margin acquisitions and benefits from SKU
prioritization actions. These positive initiatives were partially
offset by higher cost of goods sold inflation in the E.U. and lower
manufacturing productivity in U.S. Nutrition. These same
factors drove gross profit growth versus the prior
year.
Reported operating income was $152 million in 2023 compared to $79 million in 2022. Adjusted operating income
grew $82 million, or 16.7%, to
$574 million driven by gross profit
flow-through described above and cost synergies from the
acquisition of HRA. These benefits more than offset higher
operating expenses, driven primarily by the addition of
Gateway.
Reported net loss was $(4)
million, or a loss of $(0.03)
per diluted share, compared to a reported net loss of $(131) million, or $(0.97) per diluted share, in the prior year.
Excluding certain charges as outlined in Table I, fiscal 2023
adjusted net income was $352 million,
or $2.58 per diluted share, compared
to $281 million, or $2.07 per diluted share, in the prior year. Full
year adjusted EPS included an unfavorable impact of $0.15 due to the HRA distributor transitions.
Fiscal Year 2023 Business Segment Results from
Continuing Operations
Consumer Self-Care Americas Segment
Fiscal Year 2023 Net Sales Change Compared to Prior
Year(4)
|
|
Reported
Net Sales
Growth
|
Foreign
Exchange
Impact
|
Constant
Currency Net
Sales
|
Net Divestitures,
Acquisitions, &
Product Line Exits
|
Organic
Net Sales Growth
|
CSCA
|
1.2 %
|
0.1 %
|
1.3 %
|
(2.6) %
|
(1.3) %
|
CSCA reported net sales of $3.0 billion increased 1.2%, including +4.0 and
+0.4 percentage points from the addition of Gateway and HRA,
respectively. This growth was partially offset by 1) -1.8
percentage points from divested businesses and exited product
lines, and 2) a decrease in organic net sales of 1.3%, including
-2.8 percentage points due to purposeful SKU prioritization
actions.
Reported gross margin was 30.7%, a 380 basis
points increase versus the prior year. Adjusted gross margin
expanded 300 basis points to 31.3% driven by 1) strategic pricing
actions, 2) productivity savings in OTC and Oral Care, 3)
benefits from SKU prioritization actions, and 4) the addition of
the higher margin Gateway and HRA acquisitions. These benefits were
partially offset by lower manufacturing productivity in U.S.
Nutrition. These factors also drove adjusted gross profit
growth compared to the prior year.
Reported operating income was $390 million in 2023 compared to $366 million in 2022, an increase of 6.4%.
Adjusted operating income increased $24
million, or 5.5%, to $464
million driven by gross profit flow-through described above.
These benefits were partially offset by higher operating expenses,
driven primarily by the addition of operating expenses related to
Gateway and Opill® pre-launch investments.
Consumer Self-Care International Segment
Fiscal Year 2023 Net Sales Change Compared to Prior
Year(4)
|
|
Reported
Net Sales Growth
|
Foreign
Exchange Impact
|
Constant
Currency Net
Sales
|
Net Divestitures,
Acquisitions, &
Product Line
Exits
|
Organic
Net Sales
Growth
|
CSCI
|
11.0 %
|
(0.3) %
|
10.7 %
|
(3.2) %
|
7.4 %
|
CSCI reported net sales increased 11.0%,
including +5.8 percentage points from the acquisition of HRA and
+0.3 percentage points related to foreign currency translation,
partially offset by -1.9 percentage points related to HRA
distributor transitions and -1.3 percentage points from exited
businesses. Organic net sales increased 7.4%.
Reported gross margin was 45.6%, an increase of
180 basis points compared to the prior year. Adjusted gross margin
increased 50 basis points to 52.1% as strategic pricing actions and
the acquisition of higher margin HRA products was partially offset
by less favorable product mix and cost of goods sold
inflation. These factors also drove adjusted gross profit growth
compared to the prior year.
Reported operating loss was $(35) million for 2023 compared to a loss of
$(30) million in 2022. Adjusted
operating income increased $63
million, or 28.1%, to $285
million due primarily to the same factors as adjusted gross
profit, in addition to the impact from HRA distributor transitions.
Operating expenses increased due primarily to the addition of
HRA.
Cash Flow and Balance Sheet
Fiscal year 2023 cash from operations was
$406 million compared to $307 million last year. Capital expenditures in
2023 were $102 million compared to
$96 million in the prior year. The
Company returned $150 million to
shareholders through dividends during the year. Cash, cash
equivalents and restricted cash3 on the balance sheet at
the end of 2023 was $751 million.
Total debt was $4 billion as of
December 31, 2023, flat compared to the prior year.
Fiscal 2024 Outlook
The Company's fiscal year 2024 outlook is
provided below:
- Organic net sales growth of 1.0% to 3.0% compared to the prior
year
- Reported net sales flat compared to the prior year
- Interest expense of approximately $180
million,
- Full year adjusted tax rate of approximately ~20.5%,
- Adjusted diluted EPS range of between $2.50 to $2.65
including
- Mid-teens adj. EPS growth, excluding U.S. infant formula from
both years, and
- Operating cash flow conversion (operating cash flow as a
percentage of adjusted net income) of approximately 90% -
100%.
About Perrigo
Perrigo Company plc (NYSE: PRGO) is a leading
provider of Consumer Self-Care Products and over-the-counter (OTC)
health and wellness solutions that enhance individual well-being by
empowering consumers to proactively prevent or treat conditions
that can be self-managed. Visit Perrigo online at
www.perrigo.com.
Webcast and Conference Call
Information
The earnings conference call will be available
live on Tuesday, February 27, 2024 at
8:30 A.M. (EST) via webcast to
interested parties in the investor relations section of the Perrigo
website at http://perrigo.investorroom.com/events-webcasts or by
phone at 888-664-6383, International 617-892-4906, and reference ID
# 73063681. A taped replay of the call will be available beginning
at approximately 12:00 P.M. (EST)
Tuesday, February 27, until midnight Tuesday, March 5, 2024. To listen to the replay,
dial 888-390-0541, International 416-764-8677, and use access code
063681#.
Forward-Looking Statements
Certain statements in this press release are
"forward-looking statements." These statements relate to future
events or the Company's future financial performance and involve
known and unknown risks, uncertainties and other factors that may
cause the actual results, levels of activity, performance or
achievements of the Company or its industry to be materially
different from those expressed or implied by any forward-looking
statements. In some cases, forward-looking statements can be
identified by terminology such as "may," "will," "could," "would,"
"should," "expect," "forecast," "plan," "anticipate," "intend,"
"believe," "estimate," "predict," "potential" or the negative of
those terms or other comparable terminology. The Company has based
these forward-looking statements on its current expectations,
assumptions, estimates and projections. While the Company believes
these expectations, assumptions, estimates and projections are
reasonable, such forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, many of
which are beyond the Company's control, including: supply chain
impacts on the Company's business, including those caused or
exacerbated by armed conflict, trade and other economic sanctions
and/or disease; general economic, credit, and market conditions;
the impact of the war in Ukraine
and any escalation thereof, including the effects of economic and
political sanctions imposed by the United
States, United Kingdom,
European Union, and other countries related thereto; the outbreak
or escalation of conflict in other regions where we do business;
future impairment charges, if we determine that the carrying amount
of specific assets may not be recoverable from the expected future
cash flows of such assets; customer acceptance of new products;
competition from other industry participants, some of whom have
greater marketing resources or larger market shares in certain
product categories than the Company does; pricing pressures from
customers and consumers; resolution of uncertain tax positions and
any litigation relating thereto, ongoing or future government
investigations and regulatory initiatives; uncertainty regarding
the Company's ability to obtain and maintain its regulatory
approvals; potential costs and reputational impact of product
recalls or sales halts; potential adverse changes to U.S. and
foreign tax, healthcare and other government policy; the effect of
the coronavirus (COVID-19) pandemic and its variants, or other
epidemic or pandemic disease; the timing, amount and cost of any
share repurchases (or the absence thereof) and/or any refinancing
of outstanding debt at or prior to maturity; fluctuations in
currency exchange rates and interest rates; the Company's ability
to achieve the benefits expected from the sale of its Rx business
and the risk that potential costs or liabilities incurred or
retained in connection with that transaction may exceed the
Company's estimates or adversely affect the Company's business or
operations; the Company's ability to achieve the benefits expected
from the acquisitions of Héra SAS ("HRA Pharma") and Nestlé's
Gateway infant formula plant along with the U.S. and Canadian
rights to the GoodStart® infant formula brand and other related
formula brands ("Gateway") and/or the risks that the Company's
synergy estimates are inaccurate or that the Company faces higher
than anticipated integration or other costs in connection with the
acquisitions; risks associated with the integration of HRA Pharma
and Gateway, including the risk that growth rates are adversely
affected by any delay in the integration of sales and distribution
networks; the consummation and success of other announced and
unannounced acquisitions or dispositions, and the Company's ability
to realize the desired benefits thereof; and the Company's ability
to execute and achieve the desired benefits of announced
cost-reduction efforts and other strategic initiatives and
investments, including the Company's ability to achieve the
expected benefits from its ongoing restructuring programs
described herein. Adverse results with respect to the
Company's appeal of any material outstanding tax assessments or
pending litigation could have a material adverse impact on the
Company's operating results, cash flows and liquidity, and could
ultimately require the use of corporate assets to pay damages,
reducing assets that would otherwise be available for other
corporate purposes. These and other important factors, including
those discussed under "Risk Factors" in the Company's Form 10-K for
the year ended December 31, 2023, as
well as the Company's subsequent filings with the United States
Securities and Exchange Commission, may cause actual results,
performance or achievements to differ materially from those
expressed or implied by these forward-looking statements. The
forward-looking statements in this press release are made only as
of the date hereof, and unless otherwise required by applicable
securities laws, the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.
Non-GAAP Measures
This press release contains certain non-GAAP
measures. A "non-GAAP financial measure" is defined as a numerical
measure of a company's financial performance that excludes or
includes amounts different from the most directly comparable
measure calculated and presented in accordance with U.S. Generally
Accepted Accounting Principles (GAAP) in the statements of
operations, balance sheets or statements of cash flows of the
Company. Pursuant to the requirements of the U.S. Securities and
Exchange Commission, the Company has provided reconciliations to
the most directly comparable U.S. GAAP measures for the following
non-GAAP financial measures referred to in this press release:
- net sales growth on an organic basis, which excludes
acquisitions, divested businesses, exited product lines, and the
impact of currency,
- adjusted gross profit,
- adjusted net income,
- adjusted operating income,
- adjusted diluted earnings per share,
- constant currency net sales growth, adjusted operating income
and adjusted diluted earnings per share,
- adjusted gross margin, and
- operating cash flow conversion.
These non-GAAP financial measures should be
considered as supplements to the GAAP reported measures, should not
be considered replacements for, or superior to the GAAP measures
and may not be comparable to similarly named measures used by other
companies. The Company presents these non-GAAP financial measures
in order to provide transparency to our investors because they are
measures that management uses to assess both management performance
and the financial performance of our operations and to allocate
resources. In addition, management believes that these measures may
assist investors with understanding and evaluating our initiatives
to drive improved financial performance and enables investors to
supplementally compare our operating performance with the operating
performance of our competitors including with those of our
competitors having different capital structures. While we have
excluded certain of these items from historical non-GAAP financial
measures, there is no guarantee that the items excluded from
non-GAAP financial measures will not continue into future
periods. For instance, we expect to continue to experience charges
for facility exit and impairment charges and inventory write-downs
related to store closures as the Company continues to complete a
multi-year strategic initiative designed to improve overall
performance. We also expect to continue to experience and report
restructuring-related charges associated with continued execution
of our strategic initiatives.
The Company provides non-GAAP financial measures
as additional information that it believes is useful to investors
and analysts in evaluating the performance of the Company's ongoing
operating trends, facilitating comparability between periods and,
where applicable, with companies in similar industries and
assessing the Company's prospects for future performance. These
non-GAAP financial measures exclude items, such as impairment
charges, restructuring charges, and acquisition and
integration-related charges, that by their nature affect
comparability of operational performance or that we believe obscure
underlying business operational trends. The intangible asset
amortization excluded from these non-GAAP financial measure
represents the entire amount recorded within the Company's GAAP
financial statements and is excluded because the amortization,
unlike the related revenue, is not affected by operations of any
particular period unless an intangible asset becomes impaired or
the estimated useful life of an intangible asset is revised. The
revenue generated by the associated intangible assets has not been
excluded from the related non-GAAP financial measure. The non-GAAP
measures the Company provides are consistent with how management
analyzes and assesses the operating performance of the Company, and
disclosing them provides investor insight into management's view of
the business. Management uses these adjusted financial measures for
planning and forecasting in future periods, and evaluating segment
and overall operating performance. In addition, management uses
certain of the profit measures as factors in determining
compensation.
Non-GAAP measures related to profit measurements,
which include adjusted gross profit, adjusted net income, adjusted
diluted EPS, constant currency adjusted diluted EPS, constant
currency adjusted operating income, adjusted gross margin and
adjusted operating margin are useful to investors as they provide
them with supplemental information to enhance their understanding
of the Company's underlying business performance and trends, and
enhance the ability of investors and analysts to compare the
Company's period-to-period financial results. Management believes
that adjusted gross margin and adjusted operating margin are useful
to investors, in addition to the reasons discussed above, by
allowing them to more easily compare and analyze trends in the
Company's peer business group and assisting them in comparing the
Company's overall performance to that of its competitors. The
Company also discloses net sales growth excluding the impact of
currency on an organic basis. The Company believes these
supplemental financial measures provide investors with consistency
in financial reporting, enabling meaningful comparisons of past and
present underlying operating results, and also facilitate analysis
of the Company's operating performance and acquisition and
divestiture trends.
A copy of this press release, including the
reconciliations, is available on the Company's website at
www.perrigo.com.
PERRIGO COMPANY
PLC
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except
per share amounts)
(unaudited)
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
Net sales
|
$
1,156.9
|
|
$
1,155.2
|
|
$
4,655.6
|
|
$
4,451.6
|
Cost of
sales
|
729.6
|
|
772.6
|
|
2,975.2
|
|
2,996.2
|
Gross
profit
|
427.3
|
|
382.6
|
|
1,680.4
|
|
1,455.4
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Distribution
|
25.5
|
|
28.5
|
|
110.5
|
|
113.0
|
Research and
development
|
29.7
|
|
32.6
|
|
122.5
|
|
123.1
|
Selling
|
152.5
|
|
153.8
|
|
641.8
|
|
584.8
|
Administration
|
128.6
|
|
126.3
|
|
522.3
|
|
512.3
|
Impairment
charges
|
90.0
|
|
—
|
|
90.0
|
|
—
|
Restructuring
|
16.5
|
|
10.4
|
|
42.2
|
|
42.5
|
Other operating
(income) expense, net
|
—
|
|
—
|
|
(0.8)
|
|
0.8
|
Total operating
expenses
|
442.8
|
|
351.6
|
|
1,528.5
|
|
1,376.5
|
|
|
|
|
|
|
|
|
Operating
income
|
(15.5)
|
|
31.0
|
|
151.9
|
|
78.9
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
42.6
|
|
40.8
|
|
173.8
|
|
156.0
|
Other (income) expense,
net
|
(0.6)
|
|
4.4
|
|
(10.4)
|
|
53.1
|
(Gain) loss on
extinguishment of debt
|
(3.1)
|
|
—
|
|
(3.2)
|
|
8.9
|
Income (loss) from
continuing operations before income taxes
|
(54.4)
|
|
(14.2)
|
|
(8.3)
|
|
(139.1)
|
Income tax (benefit)
expense
|
(26.7)
|
|
(1.6)
|
|
(3.9)
|
|
(8.2)
|
Income (loss) from
continuing operations
|
(27.7)
|
|
(12.6)
|
|
(4.4)
|
|
(130.9)
|
Income (loss) from
discontinued operations, net of tax
|
(4.6)
|
|
(11.0)
|
|
(8.3)
|
|
(9.7)
|
Net income
(loss)
|
$
(32.3)
|
|
$
(23.6)
|
|
$
(12.7)
|
|
$
(140.6)
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.20)
|
|
$
(0.09)
|
|
$
(0.03)
|
|
$
(0.97)
|
Discontinued
operations
|
(0.04)
|
|
(0.08)
|
|
(0.06)
|
|
(0.07)
|
Basic earnings (loss)
per share
|
$
(0.24)
|
|
$
(0.17)
|
|
$
(0.09)
|
|
$
(1.04)
|
Diluted
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.20)
|
|
$
(0.09)
|
|
$
(0.03)
|
|
$
(0.97)
|
Discontinued
operations
|
(0.04)
|
|
(0.08)
|
|
(0.06)
|
|
(0.07)
|
Diluted earnings
(loss) per share
|
$
(0.24)
|
|
$
(0.17)
|
|
$
(0.09)
|
|
$
(1.04)
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
135.5
|
|
134.6
|
|
135.3
|
|
134.5
|
Diluted
|
135.5
|
|
134.6
|
|
135.3
|
|
134.5
|
PERRIGO COMPANY
PLC
CONSOLIDATED
BALANCE SHEETS
(in millions, except
per share amounts)
(unaudited)
|
|
December 31,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Cash, cash equivalents
and restricted cash
|
$
751.3
|
|
$
600.7
|
Accounts receivable,
net of allowance for credit losses of $7.8 and $6.8,
respectively
|
739.6
|
|
697.1
|
Inventories
|
1,140.9
|
|
1,150.3
|
Prepaid expenses and
other current assets
|
201.1
|
|
271.8
|
Total current
assets
|
2,832.9
|
|
2,719.9
|
Property, plant and
equipment, net
|
916.4
|
|
926.3
|
Operating lease
assets
|
183.6
|
|
217.1
|
Goodwill and
indefinite-lived intangible assets
|
3,534.4
|
|
3,549.0
|
Definite-lived
intangible assets, net
|
2,980.8
|
|
3,230.2
|
Deferred income
taxes
|
25.8
|
|
7.1
|
Other non-current
assets
|
335.2
|
|
367.7
|
Total non-current
assets
|
7,976.2
|
|
8,297.4
|
Total
assets
|
$
10,809.1
|
|
$
11,017.3
|
Liabilities and
Shareholders' Equity
|
|
|
|
Accounts
payable
|
$
477.7
|
|
$
537.3
|
Payroll and related
taxes
|
127.0
|
|
136.4
|
Accrued customer
programs
|
163.5
|
|
139.1
|
Other accrued
liabilities
|
335.4
|
|
250.2
|
Accrued income
taxes
|
42.1
|
|
14.4
|
Current
indebtedness
|
440.6
|
|
36.2
|
Total current
liabilities
|
1,586.3
|
|
1,113.6
|
Long-term debt, less
current portion
|
3,632.8
|
|
4,070.4
|
Deferred income
taxes
|
262.3
|
|
368.2
|
Other non-current
liabilities
|
559.8
|
|
623.0
|
Total non-current
liabilities
|
4,454.9
|
|
5,061.6
|
Total
liabilities
|
6,041.2
|
|
6,175.2
|
Contingencies - Refer to Note
19
|
|
|
|
Shareholders'
equity
|
|
|
|
Controlling
interests:
|
|
|
|
Preferred shares,
$0.0001 par value per share, 10 shares authorized
|
—
|
|
—
|
Ordinary shares,
€0.001 par value per share, 10,000 shares authorized
|
6,837.5
|
|
6,936.7
|
Accumulated other
comprehensive income
|
10.7
|
|
(27.0)
|
Retained earnings
(accumulated deficit)
|
(2,080.3)
|
|
(2,067.6)
|
Total shareholders'
equity
|
4,767.9
|
|
4,842.1
|
Total liabilities and
shareholders' equity
|
$
10,809.1
|
|
$
11,017.3
|
|
|
|
|
Supplemental
Disclosures of Balance Sheet Information
|
|
|
|
Preferred shares,
issued and outstanding
|
—
|
|
—
|
Ordinary shares,
issued and outstanding
|
135.5
|
|
134.7
|
PERRIGO COMPANY
PLC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
millions)
(unaudited)
|
|
Year Ended
|
|
December 31, 2023
|
|
December 31, 2022
|
|
December 31, 2021
|
Cash Flows From (For)
Operating Activities
|
|
|
|
|
|
Net income
(loss)
|
$
(12.7)
|
|
$
(140.6)
|
|
$
(68.9)
|
Adjustments to derive
cash flows:
|
|
|
|
|
|
Depreciation and
amortization
|
359.5
|
|
338.6
|
|
312.2
|
Impairment
charges
|
90.0
|
|
—
|
|
173.1
|
Share-based
compensation
|
68.8
|
|
54.9
|
|
60.1
|
Restructuring
charges
|
41.1
|
|
42.5
|
|
16.9
|
Amortization of debt
discount (premium)
|
2.3
|
|
(0.7)
|
|
(3.8)
|
Loss on sale of
business
|
—
|
|
—
|
|
(47.5)
|
Foreign currency
remeasurement loss
|
—
|
|
39.4
|
|
—
|
Gain on sale of
assets
|
(4.1)
|
|
—
|
|
—
|
Deferred income
taxes
|
(106.6)
|
|
(50.5)
|
|
9.4
|
Other non-cash
adjustments, net
|
25.7
|
|
3.7
|
|
0.2
|
Subtotal
|
464.0
|
|
287.3
|
|
451.7
|
Increase (decrease) in
cash due to:
|
|
|
|
|
|
Accounts
receivable
|
(57.1)
|
|
0.1
|
|
(159.7)
|
Inventories
|
19.4
|
|
(76.7)
|
|
(2.4)
|
Prepaid expenses and
other current assets
|
47.5
|
|
25.9
|
|
—
|
Accounts
payable
|
(65.9)
|
|
100.3
|
|
(7.9)
|
Payroll and related
taxes
|
(52.8)
|
|
(38.2)
|
|
(53.0)
|
Accrued customer
programs
|
23.2
|
|
11.2
|
|
1.4
|
Accrued
liabilities
|
6.6
|
|
10.1
|
|
(21.4)
|
Accrued income
taxes
|
(12.9)
|
|
(47.9)
|
|
(47.7)
|
Other operating,
net
|
33.5
|
|
35.2
|
|
(4.7)
|
Subtotal
|
(58.5)
|
|
20.0
|
|
(295.4)
|
Net cash from
operating activities
|
405.5
|
|
307.3
|
|
156.3
|
Cash Flows From (For)
Investing Activities
|
|
|
|
|
|
Proceeds from royalty
rights
|
19.8
|
|
3.3
|
|
3.8
|
Acquisitions of
businesses, net of cash acquired
|
—
|
|
(2,011.4)
|
|
—
|
Asset acquisitions
(sales), net
|
4.4
|
|
25.5
|
|
(70.6)
|
Settlement of
acquisition-related foreign currency derivatives
|
—
|
|
61.7
|
|
—
|
Additions to property,
plant and equipment
|
(101.7)
|
|
(96.4)
|
|
(152.1)
|
Net proceeds from sale
of businesses
|
—
|
|
58.7
|
|
1,491.9
|
Other investing,
net
|
—
|
|
—
|
|
2.8
|
Net cash (for) from
investing activities
|
(77.5)
|
|
(1,958.6)
|
|
1,275.8
|
Cash Flows From (For)
Financing Activities
|
|
|
|
|
|
Issuances of long-term
debt
|
295.1
|
|
1,587.3
|
|
—
|
Payments on long-term
debt
|
(325.3)
|
|
(970.6)
|
|
(30.6)
|
Premiums on early debt
retirement
|
—
|
|
(12.2)
|
|
—
|
Payments for debt
issuance costs
|
—
|
|
(20.9)
|
|
—
|
Borrowings
(repayments) of revolving credit agreements and other financing,
net
|
—
|
|
—
|
|
—
|
Cash
dividends
|
(149.7)
|
|
(142.4)
|
|
(129.6)
|
Other financing,
net
|
(7.3)
|
|
(19.6)
|
|
(18.5)
|
Net cash (for) from
financing activities
|
(187.2)
|
|
421.6
|
|
(178.7)
|
Effect of exchange rate
changes on cash and cash equivalents
|
9.8
|
|
(48.9)
|
|
(15.6)
|
Net increase
(decrease) in cash and cash equivalents
|
150.6
|
|
(1,278.6)
|
|
1,237.8
|
Cash and cash
equivalents of continuing operations, beginning of
period
|
600.7
|
|
1,864.9
|
|
631.5
|
Cash and cash
equivalents held for sale, beginning of period
|
—
|
|
14.4
|
|
10.0
|
Less cash and cash
equivalents held for sale, end of period
|
—
|
|
—
|
|
(14.4)
|
Cash, cash equivalents
and restricted cash of continuing operations, end of
period
|
$
751.3
|
|
$
600.7
|
|
$
1,864.9
|
TABLE
I
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
Three Months Ended December 31,
2023
|
|
Three Months Ended December 31,
2022
|
Consolidated Continuing
Operations
|
Gross
Profit
|
Operating
Income
|
Income (Loss)
from Continuing
Operations(1)
|
Diluted
Earnings
(Loss) per
Share(1)
|
|
Gross
Profit
|
Operating
Income
|
Income (Loss)
from Continuing
Operations(1)
|
Diluted
Earnings
(Loss) per
Share(1)
|
Reported
|
$
427.3
|
$
(15.5)
|
$
(27.7)
|
$
(0.20)
|
|
$
382.6
|
$
31.0
|
$
(12.6)
|
$
(0.09)
|
As a % of reported net
sales(2)
|
36.9 %
|
(1.3) %
|
(2.4) %
|
|
|
33.1 %
|
2.7 %
|
(1.1) %
|
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Impairment charges
(3)
|
—
|
90.0
|
90.0
|
0.66
|
|
—
|
—
|
—
|
—
|
Amortization expense
related primarily to acquired intangible assets
|
32.7
|
66.4
|
67.5
|
0.49
|
|
38.9
|
74.4
|
74.9
|
0.55
|
Restructuring charges
and other termination benefits
|
0.3
|
15.9
|
15.9
|
0.12
|
|
—
|
10.4
|
10.4
|
0.08
|
Unusual
litigation
|
—
|
4.2
|
4.2
|
0.03
|
|
—
|
4.5
|
4.5
|
0.03
|
Acquisition and
integration-related charges and
contingent
consideration adjustments
|
—
|
1.7
|
1.7
|
0.01
|
|
22.1
|
35.7
|
37.4
|
0.27
|
(Gain) loss on
investment securities
|
—
|
—
|
0.3
|
—
|
|
—
|
—
|
(0.2)
|
—
|
(Gain) loss on early
debt extinguishment
|
—
|
—
|
(3.2)
|
(0.02)
|
|
—
|
—
|
—
|
—
|
Other
(4)
|
—
|
4.5
|
4.5
|
0.03
|
|
—
|
—
|
—
|
—
|
Non-GAAP tax
adjustments(5)
|
—
|
—
|
(35.8)
|
(0.26)
|
|
—
|
—
|
(12.9)
|
(0.09)
|
Adjusted
|
$
460.3
|
$
167.1
|
$
117.4
|
$
0.86
|
|
$
443.6
|
$
156.0
|
$
101.5
|
$
0.75
|
As a % of reported net
sales(2)
|
39.8 %
|
14.4 %
|
10.1 %
|
|
|
38.4 %
|
13.5 %
|
8.8 %
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding (in
millions)
|
|
|
|
|
|
|
|
|
|
Reported
|
135.5
|
|
|
|
|
134.6
|
Effect of dilution as
reported amount was a loss, while adjusted amount was
income(6)
|
1.5
|
|
|
|
|
1.6
|
|
|
|
Adjusted
|
137.0
|
|
|
|
|
136.2
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Individual pre-tax
line item adjustments have not been tax effected, as tax expense on
these items are aggregated in the "Non-GAAP tax adjustments" line
item.
|
(2) Reported net sales
for the three months ended December 31, 2023 and
December 31, 2022 were $1,156.9 million and $1,155.2 million,
respectively.
|
(3) During the three
months ended December 31, 2023, we determined goodwill related
to our Rare Diseases reporting unit was impaired by $90.0 million
and recorded the charge within our CSCI segment.
|
(4) Other pre-tax
adjustments include $1.3 million related to professional consulting
fees for potential divestitures, $2.0 million related to an Irish
VAT settlement and $1.2 million related to Infant Formula
remediation costs.
|
(5) Non-GAAP tax
adjustments for the three months ended December 31, 2023 are
primarily due to $22.3 million of tax expense related to pre-tax
non-GAAP adjustments, plus the removal of (1) $6.3m of tax benefit
related to audit settlements and (2) $7.2m of tax benefit related
to tax law changes. Non-GAAP tax adjustments for the three
months ended December 31, 2022 are primarily due to $20.3
million tax expense related to pre-tax non-GAAP adjustments, and
the removal of the following reported tax items: (1) $11.5 million
tax benefit on release of reserves related to Base Erosion and
Anti-Abuse Tax (BEAT), offset by (2) $7.0 million of tax expense
impact of law changes, mainly in Belgium and (3) $9.8 million tax
expense related to disposition of entities.
|
(6) In the period of a
net loss, reported diluted shares outstanding equal basic shares
outstanding.
|
TABLE I
(Continued)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
Twelve Months Ended December 31,
2023
|
|
Twelve Months Ended December 31,
2022
|
Consolidated Continuing
Operations
|
Gross
Profit
|
Operating
Income
|
Income (Loss)
from Continuing
Operations(1)
|
Diluted
Earnings
(Loss) per
Share(1)
|
|
Gross
Profit
|
Operating
Income
|
Income (Loss)
from Continuing
Operations(1)
|
Diluted
Earnings
(Loss) per
Share(1)
|
Reported
|
$
1,680.4
|
$
151.9
|
$
(4.4)
|
$
(0.03)
|
|
$
1,455.4
|
$
78.9
|
$
(130.9)
|
$
(0.97)
|
As a % of reported net
sales(2)
|
36.1 %
|
3.3 %
|
(0.1) %
|
|
|
32.7 %
|
1.8 %
|
(2.9) %
|
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
127.9
|
269.9
|
272.0
|
2.00
|
|
125.7
|
254.0
|
256.2
|
1.89
|
Impairment charges
(3)
|
—
|
90.0
|
90.0
|
0.66
|
|
—
|
4.6
|
4.6
|
0.04
|
Restructuring charges
and other termination benefits
|
0.4
|
40.2
|
40.2
|
0.29
|
|
—
|
43.8
|
43.8
|
0.32
|
Unusual
litigation
|
—
|
11.9
|
11.9
|
0.09
|
|
—
|
8.1
|
8.1
|
0.06
|
Acquisition and
integration-related charges and
contingent
consideration adjustments
|
—
|
8.8
|
8.8
|
0.06
|
|
32.3
|
106.7
|
164.4
|
1.21
|
(Gain) loss on early
debt extinguishment
|
—
|
—
|
(3.1)
|
(0.02)
|
|
—
|
—
|
8.9
|
0.07
|
(Gain) loss on
divestitures and investment securities
|
—
|
(4.6)
|
(4.4)
|
(0.03)
|
|
—
|
(3.8)
|
(2.2)
|
(0.02)
|
Milestone payments
received related to royalty rights
|
—
|
—
|
(10.0)
|
(0.07)
|
|
—
|
—
|
—
|
—
|
Other(4)
|
—
|
6.3
|
6.4
|
0.05
|
|
—
|
—
|
—
|
—
|
Non-GAAP tax
adjustments(5)
|
—
|
—
|
(55.3)
|
(0.41)
|
|
—
|
—
|
(72.0)
|
(0.53)
|
Adjusted
|
$
1,808.5
|
$
574.3
|
$
352.0
|
$
2.58
|
|
$
1,613.4
|
$
492.3
|
$
280.9
|
$
2.07
|
As a % of reported net
sales(2)
|
38.8 %
|
12.3 %
|
7.6 %
|
|
|
36.2 %
|
11.1 %
|
6.3 %
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding (in
millions)
|
|
|
|
|
|
|
|
|
|
Reported
|
135.3
|
|
|
|
|
134.5
|
Effect of dilution as
reported amount was a loss, while adjusted amount was
income(6)
|
1.4
|
|
|
|
|
1.3
|
|
|
|
Adjusted
|
136.7
|
|
|
|
|
135.8
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Individual pre-tax
line item adjustments have not been tax effected, as tax expense on
these items are aggregated in the "Non-GAAP tax adjustments" line
item.
|
(2) Reported net sales
for the twelve months ended December 31, 2023 and
December 31, 2022 were $4,655.6 million and $4,451.6 million,
respectively.
|
(3) During the three
months ended December 31, 2023, we determined goodwill related
to our Rare Diseases reporting unit was impaired by $90.0 million
and recorded the charge within our CSCI segment.
|
(4) Other pre-tax
adjustments include $2.3 million related to professional consulting
fees for potential divestitures, $2.0 million related to an Irish
VAT settlement, $1.2 million related to Infant Formula remediation
costs and $0.8 million related to a foreign jurisdiction transfer
tax payment.
|
(5) Non-GAAP tax
adjustments for the twelve months ended December 31, 2023 are
primarily due to $61.6 million of tax expense related to pre-tax
non-GAAP adjustments, plus the removal of (1) $11.4 million of tax
expense related to audit settlements (2) $2.1 million of tax
expense related to valuation allowance and (3) $7.2 million of tax
benefit related to tax law changes. Non-GAAP tax adjustments for
the twelve months ended December 31, 2022 are primarily due to
$66.2 million of tax expense related to pre-tax non-GAAP
adjustments, and the removal of the following reported tax items:
(1) $7.4 million tax benefit on dispositions of entities, (2) $11.5
million tax benefit on release of reserves related to Base Erosion
and Anti-Abuse Tax (BEAT), offset by (3) $6.0 million tax expense
for non-recurring legal entity restructuring and (4) $6.8 million
tax expense impact of law changes, mainly in Belgium.
|
(6) In the period of a
net loss, reported diluted shares outstanding equal basic shares
outstanding.
|
TABLE
II
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
Three Months Ended December 31,
2023
|
|
Three Months Ended December 31,
2022
|
Consolidated Continuing
Operations
|
R&D Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
|
R&D Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
Reported
|
$
29.7
|
$
306.6
|
$
106.5
|
|
$
32.6
|
$
308.6
|
$
10.4
|
As a % of reported net
sales(1)
|
2.6 %
|
26.5 %
|
9.2 %
|
|
2.8 %
|
26.7 %
|
0.9 %
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
(0.2)
|
(33.4)
|
—
|
|
0.3
|
(35.8)
|
—
|
Restructuring charges
and other termination benefits
|
—
|
—
|
(15.6)
|
|
—
|
—
|
(10.4)
|
Acquisition and
integration-related charges and
contingent
consideration adjustments
|
—
|
(1.7)
|
—
|
|
—
|
(13.6)
|
—
|
Unusual
litigation
|
—
|
(4.2)
|
—
|
|
—
|
(4.5)
|
—
|
Impairment charges
(2)
|
—
|
—
|
(90.0)
|
|
—
|
—
|
—
|
Other
(3)
|
—
|
(4.5)
|
—
|
|
—
|
—
|
—
|
Adjusted
|
$
29.4
|
$
262.9
|
$
0.9
|
|
$
32.9
|
$
254.7
|
$
—
|
As a % of reported net
sales (1)
|
2.5 %
|
22.7 %
|
0.1 %
|
|
2.8 %
|
22.0 %
|
— %
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Reported net sales
for the three months ended December 31, 2023 and
December 31, 2022 were $1,156.9 million and $1,155.2 million,
respectively.
|
(2) During the three
months ended December 31, 2023, we determined goodwill related
to our Rare Diseases reporting unit was impaired by $90.0 million
and recorded the charge within our CSCI segment.
|
(3) Other pre-tax
adjustments include $2.0 million related to an Irish VAT
settlement, $1.3 million related to professional consulting fees
for potential divestitures and $1.2 million related to Infant
Formula remediation costs.
|
TABLE II
(Continued)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
Twelve Months Ended December 31,
2023
|
|
Twelve Months Ended December 31,
2022
|
Consolidated Continuing
Operations
|
R&D Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
|
R&D Expense
|
DSG&A
Expense
|
Restructuring
and Other
|
Reported
|
$
122.5
|
$
1,274.6
|
$
131.4
|
|
$
123.1
|
$
1,210.1
|
$
43.3
|
As a % of reported net
sales (1)
|
2.6 %
|
27.4 %
|
2.8 %
|
|
2.8 %
|
27.2 %
|
1.0 %
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
(0.5)
|
(141.5)
|
—
|
|
(1.1)
|
(127.2)
|
—
|
Restructuring charges
and other termination benefits
|
—
|
(0.8)
|
(39.0)
|
|
—
|
(1.3)
|
(42.5)
|
Acquisition and
integration-related charges and
contingent
consideration adjustments
|
—
|
(8.8)
|
—
|
|
—
|
(74.4)
|
—
|
Unusual
litigation
|
—
|
(11.9)
|
—
|
|
—
|
(8.1)
|
—
|
Impairment charges
(2)
|
—
|
—
|
(90.0)
|
|
—
|
—
|
(4.6)
|
Loss on divestitures
and investment securities
|
—
|
4.6
|
—
|
|
—
|
—
|
3.8
|
Other(3)
|
—
|
(6.4)
|
—
|
|
—
|
—
|
—
|
Adjusted
|
$
122.0
|
$
1,109.8
|
$
2.4
|
|
$
122.0
|
$
999.1
|
$
—
|
As a % of reported net
sales (1)
|
2.6 %
|
23.8 %
|
0.1 %
|
|
2.7 %
|
22.4 %
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Reported net sales
for the twelve months ended December 31, 2023 and
December 31, 2022 were $4,655.6 million and $4,451.6 million,
respectively.
|
(2) During the three
months ended December 31, 2023, we determined goodwill related
to our Rare Diseases reporting unit was impaired by $90.0 million
and recorded the charge within our CSCI segment.
|
(3) Other pre-tax
adjustments include $2.3 million related to professional consulting
fees for potential divestitures, $2.0 million related to an Irish
VAT settlement, $1.2 million related to Infant Formula remediation
costs and $0.8 million related to a foreign jurisdiction transfer
tax payment.
|
TABLE
III
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
Three Months Ended December 31,
2023
|
|
Three Months Ended December 31,
2022
|
Consolidated Continuing
Operations
|
Interest and Other
|
Income Tax Expense
(Benefit)
|
|
Interest and Other
|
Income Tax Expense
(Benefit)
|
Reported
|
$
38.9
|
$
(26.7)
|
|
$
45.2
|
$
(1.6)
|
As a % of reported net
sales (1)
|
3.4 %
|
(2.3) %
|
|
3.9 %
|
(0.1) %
|
Effective tax
rate
|
|
49.1 %
|
|
|
11.4 %
|
Pre-tax adjustments:
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
(1.1)
|
—
|
|
(0.5)
|
—
|
Acquisition and
integration-related charges and
contingent
consideration adjustments
|
—
|
—
|
|
(1.7)
|
—
|
(Gain) loss on
investment securities
|
(0.3)
|
—
|
|
0.2
|
—
|
(Gain) loss on early
debt extinguishment
|
3.2
|
—
|
|
—
|
—
|
Non-GAAP tax
adjustments(2)
|
—
|
35.8
|
|
—
|
12.9
|
Adjusted
|
$
40.6
|
$
9.1
|
|
$
43.2
|
$
11.3
|
As a % of reported net
sales (1)
|
3.5 %
|
0.8 %
|
|
3.7 %
|
1.0 %
|
Adjusted effective tax
rate
|
|
7.2 %
|
|
|
10.0 %
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Reported net sales
for the three months ended December 31, 2023 and
December 31, 2022 were $1,156.9 million and $1,155.2 million,
respectively.
|
(2) Non-GAAP tax
adjustments for the three months ended December 31, 2023 are
primarily due to $22.3 million of tax expense related to pre-tax
non-GAAP adjustments, plus the removal of (1) $6.3m of tax benefit
related to audit settlements and (2) $7.2m of tax benefit related
to tax law changes. Non-GAAP tax adjustments for the three months
ended December 31, 2022 are primarily due to $20.3
million of tax expense related to pre-tax non-GAAP adjustments, and
the removal of the following reported tax items: (1) $11.5 million
tax benefit on release of reserves related to Base Erosion and
Anti-Abuse Tax (BEAT), offset by (2) $7.0 million tax expense
impact of law changes, mainly in Belgium and (3) $9.8 million tax
expense related to disposition of entities.
|
TABLE III
(Continued)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED
CONSOLIDATED INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
Twelve Months Ended December 31,
2023
|
|
Twelve Months Ended December 31,
2022
|
Consolidated Continuing
Operations
|
Interest and Other
|
Income Tax Expense
(Benefit)
|
|
Interest and Other
|
Income Tax Expense
(Benefit)
|
Reported
|
$
160.2
|
$
(3.9)
|
|
$
218.0
|
$
(8.2)
|
As a % of reported net
sales (1)
|
3.4 %
|
(0.1) %
|
|
4.9 %
|
(0.2) %
|
Effective tax
rate
|
|
47.2 %
|
|
|
5.9 %
|
Pre-tax adjustments:
|
|
|
|
|
|
Acquisition and
integration-related charges and
contingent
consideration adjustments
|
—
|
—
|
|
(57.7)
|
—
|
Amortization expense
primarily related to acquired intangible assets
|
(2.2)
|
—
|
|
(2.2)
|
—
|
(Gain) loss on early
debt extinguishment
|
3.1
|
—
|
|
(8.9)
|
—
|
(Gain) loss on
divestitures and investment securities
|
(0.2)
|
—
|
|
(1.6)
|
—
|
Milestone payments
received related to royalty rights
|
10.0
|
—
|
|
—
|
—
|
Non-GAAP tax
adjustments(2)
|
—
|
55.3
|
|
—
|
72.0
|
Adjusted
|
$
171.0
|
$
51.3
|
|
$
147.6
|
$
63.8
|
As a % of reported net
sales (1)
|
3.7 %
|
1.1 %
|
|
3.3 %
|
1.4 %
|
Adjusted effective tax
rate
|
|
12.7 %
|
|
|
18.5 %
|
|
|
|
|
|
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Reported net sales
for the twelve months ended December 31, 2023 and
December 31, 2022 were $4,655.6 million and $4,451.6 million,
respectively.
|
(2) Non-GAAP tax
adjustments for the twelve months ended December 31, 2023 are
primarily due to $61.6 million of tax expense related to pre-tax
non-GAAP adjustments, plus the removal of (1) $11.4 million of tax
expense related to audit settlements (2) $2.1 million of tax
expense related to valuation allowance and (3) $7.2 million of tax
benefit related to tax law changes. Non-GAAP tax adjustments for
the twelve months ended December 31, 2022 are primarily due to
$66.2 million of tax expense related to pre-tax non-GAAP
adjustments, and the removal of the following reported tax items:
(1) $7.4 million tax benefit on dispositions of entities, (2) $11.5
million tax benefit on release of reserves related to Base Erosion
and Anti-Abuse Tax (BEAT), offset by (3) $6.0 million tax expense
for non-recurring legal entity restructuring and (4) $6.8 million
tax expense impact of law changes, mainly in Belgium.
|
TABLE
IV
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED SEGMENT
INFORMATION
(in
millions)
(unaudited)
|
|
Three Months Ended December 31,
2023
|
|
Three Months Ended December 31,
2022
|
Consumer Self-Care Americas
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
$
249.1
|
$ 15.9
|
$
107.3
|
$
117.6
|
|
$
232.2
|
$ 16.3
|
$ 94.2
|
$
126.1
|
As a % of reported net
sales(1)
|
33.5 %
|
2.1 %
|
14.4 %
|
15.8 %
|
|
30.3 %
|
2.1 %
|
12.3 %
|
16.5 %
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
4.5
|
—
|
(10.1)
|
14.6
|
|
7.7
|
—
|
(7.4)
|
15.1
|
Restructuring charges
and other termination benefits
|
0.3
|
—
|
—
|
8.2
|
|
(0.1)
|
—
|
—
|
(4.4)
|
Acquisition and
integration-related charges and contingent
consideration
adjustments
|
—
|
—
|
(1.3)
|
1.3
|
|
2.1
|
—
|
(5.1)
|
7.1
|
Other
(2)
|
—
|
—
|
(1.2)
|
1.2
|
|
—
|
—
|
—
|
—
|
Adjusted
|
$
253.9
|
$ 15.9
|
$ 94.6
|
$
143.0
|
|
$
241.9
|
$ 16.3
|
$ 81.7
|
$
143.9
|
As a % of reported net
sales
|
34.1 %
|
2.1 %
|
12.7 %
|
19.2 %
|
|
31.6 %
|
2.1 %
|
10.7 %
|
18.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
2023
|
|
Three Months Ended December 31,
2022
|
Consumer Self-Care
International
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
$
178.2
|
$ 13.8
|
$
151.0
|
$
(78.8)
|
|
$
150.4
|
$ 16.3
|
$
161.8
|
$
(49.0)
|
As a % of reported net
sales(1)
|
43.2 %
|
3.3 %
|
36.6 %
|
(19.1) %
|
|
38.6 %
|
4.2 %
|
41.5 %
|
(12.6) %
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Impairment charges
(3)
|
—
|
—
|
—
|
90.0
|
|
—
|
—
|
—
|
—
|
Amortization expense
related primarily to acquired intangible assets
|
28.2
|
(0.2)
|
(23.3)
|
51.8
|
|
31.2
|
0.2
|
(28.4)
|
59.3
|
Restructuring charges
and other termination benefits
|
—
|
—
|
—
|
2.2
|
|
0.1
|
—
|
—
|
21.4
|
Acquisition and
integration-related charges and contingent
consideration
adjustments
|
—
|
—
|
—
|
—
|
|
20.0
|
—
|
(1.9)
|
21.9
|
Adjusted
|
$
206.3
|
$ 13.6
|
$
127.6
|
$ 65.1
|
|
$
201.7
|
$ 16.5
|
$
131.5
|
$ 53.6
|
As a % of reported net
sales
|
50.0 %
|
3.3 %
|
30.9 %
|
15.8 %
|
|
51.8 %
|
4.2 %
|
33.8 %
|
13.8 %
|
|
|
|
|
|
|
|
|
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) CSCA reported net
sales for the three months ended December 31, 2023 and
December 31, 2022 were $744.4 million and $765.6 million,
respectively. CSCI reported net sales for the three months ended
December 31, 2023 and December 31, 2022 were $412.6
million and $389.6 million, respectively.
|
(2) Other pre-tax
adjustments include $1.2 million related to Infant Formula
remediation costs.
|
|
|
TABLE IV
(CONTINUED)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED SEGMENT
INFORMATION
(in
millions)
(unaudited)
|
|
Twelve Months Ended December 31,
2023
|
|
Twelve Months Ended December 31,
2022
|
Consumer Self-Care Americas
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
$
908.4
|
$ 70.4
|
$
435.4
|
$
389.6
|
|
$
787.2
|
$ 68.2
|
$
354.2
|
$
366.1
|
As a % of reported net
sales (1)
|
30.7 %
|
2.4 %
|
14.7 %
|
13.2 %
|
|
26.9 %
|
2.3 %
|
12.1 %
|
12.5 %
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired intangible assets
|
17.3
|
—
|
(40.4)
|
57.7
|
|
26.3
|
—
|
(29.4)
|
55.7
|
Restructuring charges
and other termination benefits
|
0.4
|
—
|
—
|
12.7
|
|
(0.1)
|
—
|
(0.5)
|
2.9
|
Acquisition and
integration-related charges and contingent
consideration
adjustments
|
—
|
—
|
(3.1)
|
3.1
|
|
12.8
|
—
|
(6.7)
|
19.5
|
(Gain) loss on
divestitures
|
—
|
—
|
—
|
—
|
|
—
|
—
|
—
|
(3.8)
|
Other
(2)
|
—
|
—
|
(1.2)
|
1.2
|
|
—
|
—
|
—
|
—
|
Adjusted
|
$
926.1
|
$ 70.4
|
$
390.6
|
$
464.4
|
|
$
826.2
|
$ 68.2
|
$
317.6
|
$
440.4
|
As a % of reported net
sales (1)
|
31.3 %
|
2.4 %
|
13.2 %
|
15.7 %
|
|
28.2 %
|
2.3 %
|
10.9 %
|
15.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31,
2023
|
|
Twelve Months Ended December 31,
2022
|
Consumer Self-Care
International
|
|
|
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
|
Gross
Profit
|
R&D
Expense
|
DSG&A
Expense
|
Operating
Income
|
Reported
|
|
|
|
$
772.0
|
$ 52.1
|
$
644.4
|
$
(35.2)
|
|
$
668.2
|
$ 54.9
|
$
614.0
|
$
(30.0)
|
As a % of reported net
sales (1)
|
|
|
|
45.6 %
|
3.1 %
|
38.1 %
|
(2.1) %
|
|
43.8 %
|
3.6 %
|
40.2 %
|
(2.0) %
|
Pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
related primarily to acquired
intangible
assets
|
|
|
|
110.6
|
(0.5)
|
(101.1)
|
212.1
|
|
99.4
|
(1.1)
|
(97.8)
|
198.4
|
Impairment charges
(3)
|
|
|
|
—
|
—
|
—
|
90.0
|
|
—
|
—
|
—
|
—
|
Restructuring charges
and other termination benefits
|
|
|
|
—
|
—
|
(0.8)
|
21.4
|
|
0.1
|
—
|
—
|
29.5
|
Acquisition and
integration-related charges and contingent
consideration
adjustments
|
|
|
|
—
|
—
|
(1.5)
|
1.5
|
|
19.5
|
—
|
(5.3)
|
24.7
|
(Gain) loss on
divestitures
|
|
|
|
—
|
—
|
4.6
|
(4.6)
|
|
—
|
—
|
—
|
—
|
Adjusted
|
|
|
|
$
882.5
|
$ 51.6
|
$
545.7
|
$
285.1
|
|
$
787.2
|
$ 53.8
|
$
510.9
|
$
222.6
|
As a % of reported net
sales (1)
|
|
|
|
52.1 %
|
3.0 %
|
32.2 %
|
16.8 %
|
|
51.6 %
|
3.5 %
|
33.5 %
|
14.6 %
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) CSCA reported net
sales for the twelve months ended December 31, 2023 and
December 31, 2022 were $2,962.3 million and $2,925.9 million,
respectively. CSCI reported net sales for the twelve months ended
December 31, 2023 and December 31, 2022 were $1,693.3
million and $1,525.7 million, respectively.
|
(2) Other pre-tax
adjustments include $1.2 million related to Infant Formula
remediation costs.
|
(3) During the three
months ended December 31, 2023, we determined goodwill related
to our Rare Diseases reporting unit was impaired by $90.0 million
and recorded the charge within our CSCI segment.
|
|
TABLE V
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
CONSOLIDATED AND
SELECTED SEGMENT INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
Consolidated Continuing
Operations
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
Net Sales
|
$
1,156.9
|
|
$
1,155.2
|
|
0.1 %
|
|
$
4,655.6
|
|
$
4,451.6
|
|
4.6 %
|
Less: Currency
impact(1)
|
16.1
|
|
—
|
|
(1.4) %
|
|
3.5
|
|
—
|
|
(0.1) %
|
Constant currency net
sales
|
$
1,140.8
|
|
$
1,155.2
|
|
(1.2) %
|
|
$
4,652.2
|
|
$
4,451.6
|
|
4.5 %
|
Less:
Divestitures(2)
|
—
|
|
—
|
|
— %
|
|
—
|
|
19.3
|
|
0.4 %
|
Less: Exited product
lines(4)
|
0.6
|
|
15.4
|
|
1.3 %
|
|
9.7
|
|
59.6
|
|
1.1 %
|
Less:
Acquisitions(3)
|
7.0
|
|
—
|
|
(0.6) %
|
|
195.9
|
|
—
|
|
(4.4) %
|
Organic net
sales
|
$
1,133.2
|
|
$
1,139.8
|
|
(0.6) %
|
|
$
4,446.6
|
|
4,372.7
|
|
1.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
Consumer Self-Care Americas
|
|
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
Net Sales
|
|
|
$
744.4
|
|
$
765.6
|
|
(2.8) %
|
|
$
2,962.3
|
|
$
2,925.9
|
|
1.2 %
|
Less: Currency
impact(1)
|
|
|
—
|
|
—
|
|
— %
|
|
(1.4)
|
|
—
|
|
0.1 %
|
Constant currency net
sales
|
|
|
$
744.4
|
|
$
765.6
|
|
(2.8) %
|
|
$
2,963.8
|
|
$
2,925.9
|
|
1.3 %
|
Less:
Divestitures(2)
|
|
|
—
|
|
—
|
|
— %
|
|
—
|
|
19.3
|
|
0.7 %
|
Less: Exited product
lines(4)
|
|
|
0.4
|
|
10.9
|
|
1.4 %
|
|
8.5
|
|
41.0
|
|
1.1 %
|
Less:
Acquisitions(3)
|
|
|
7.0
|
|
|
|
(0.9) %
|
|
127.6
|
|
—
|
|
(4.4) %
|
Organic net
sales
|
|
|
$
737.0
|
|
$
754.7
|
|
(2.4) %
|
|
$
2,827.7
|
|
$
2,865.6
|
|
(1.3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
Consumer Self-Care
International
|
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
Net Sales
|
|
$
412.6
|
|
$
389.6
|
|
5.9 %
|
|
$
1,693.3
|
|
$
1,525.7
|
|
11.0 %
|
Less: Currency
impact(1)
|
|
16.1
|
|
—
|
|
(4.1) %
|
|
4.9
|
|
—
|
|
(0.3) %
|
Constant currency net
sales
|
|
$
396.5
|
|
$
389.6
|
|
1.8 %
|
|
$
1,688.4
|
|
$
1,525.7
|
|
10.7 %
|
Less:
Divestitures(2)
|
|
—
|
|
—
|
|
— %
|
|
—
|
|
—
|
|
— %
|
Less: Exited product
lines(4)
|
|
0.2
|
|
4.5
|
|
1.1 %
|
|
1.2
|
|
18.6
|
|
1.3 %
|
Less:
Acquisitions(3)
|
|
—
|
|
|
|
— %
|
|
68.3
|
|
—
|
|
(4.5) %
|
Organic net
sales
|
|
$
396.3
|
|
$
385.1
|
|
2.9 %
|
|
$
1,618.9
|
|
$
1,507.1
|
|
7.4 %
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Currency impact is
calculated using the exchange rates used to translate our financial
statements in the comparable prior year period to show what current
period US dollar results would have been if such currency exchange
rates had not changed.
|
(2) Represents
divestitures of Latin American businesses and
ScarAway®.
|
(3) Represents
acquisition of HRA Pharma in CSCA and CSCI on a constant currency
basis (four months of sales for the first half of 2023, as it was
acquired on April 29, 2022), and Nestlé's Gateway Infant Formula
Plant and Good Start® infant formula brand in
CSCA.
|
(4) Exited product
lines represents strategic actions taken across multiple product
categories as part of our Supply Chain Reinvention Program,
primarily driven by Nutritional drinks within the Nutrition
category.
|
TABLE
VI
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED SEGMENT
INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
CSCA Net Sales
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
|
December 31, 2023
|
|
December 31, 2022
|
|
% Change
|
|
Nutrition
|
$
127.8
|
|
$
143.7
|
|
(11.1) %
|
|
$
563.2
|
|
$
520.4
|
|
8.2 %
|
|
Upper
Respiratory
|
137.0
|
|
133.7
|
|
2.5 %
|
|
559.2
|
|
564.6
|
|
(1.0) %
|
|
Digestive
Health
|
137.4
|
|
132.2
|
|
3.9 %
|
|
505.3
|
|
495.5
|
|
2.0 %
|
|
Pain and
Sleep-Aids
|
101.5
|
|
102.7
|
|
(1.2) %
|
|
396.4
|
|
412.2
|
|
(3.8) %
|
|
Healthy
Lifestyle
|
91.6
|
|
80.2
|
|
14.2 %
|
|
311.7
|
|
288.9
|
|
7.9 %
|
|
Oral Care
|
76.2
|
|
82.3
|
|
(7.4) %
|
|
313.9
|
|
312.9
|
|
0.3 %
|
|
Skin Care
|
45.5
|
|
49.4
|
|
(7.9) %
|
|
196.2
|
|
187.8
|
|
4.5 %
|
|
Women's
Health
|
12.3
|
|
12.6
|
|
(2.4) %
|
|
46.9
|
|
45.2
|
|
3.8 %
|
|
VMS and Other
CSCA
|
15.2
|
|
28.8
|
|
(47.2) %
|
|
69.5
|
|
98.4
|
|
(29.4) %
|
|
Total CSCA Net
Sales
|
$
744.4
|
|
$
765.6
|
|
(2.8) %
|
|
$
2,962.3
|
|
$
2,925.9
|
|
1.2 %
|
|
Primary CSCA Fourth Quarter Category
Drivers:
- Upper Respiratory: Net sales of $137 million
increased 2.5% due primarily to higher net sales of cough cold
products stemming from increased supply of liquid-based store brand
products compared to the prior year and the new product launch of
store brand Cough Relief Liquid Honey. This increase was
partially offset by a category headwind of -2.5 percentage points
from exited product lines.
- Digestive Health: Net sales of $137 million
increased 3.9% due primarily to higher net sales of Proton Pump
Inhibitors, including the store brand versions of
omeprazole and esomeprazole.
- Nutrition: Net sales of $128 million decreased
11.1% due primarily to lower net sales in Good
Start® infant formula stemming from share losses,
lower manufacturing productivity stemming from the FDA's evolving
industry guidelines on infant formula manufacturing, and a headwind
of -3.1 percentage points from exited product lines. These factors
were partially offset by higher net sales of store brand infant
formula and one month of inorganic growth from the acquisition of
Gateway, which closed on October 1,
2022.
- Pain & Sleep-Aids: Net sales of $102 million
decreased 1.2% due primarily to purposeful SKU prioritization
actions in adult analgesic offerings equating to a category
headwind of -8.1 percentage points, which was mostly offset by new
products, including store brand Dual Action Acetaminophen
250mg and Ibuprofen 125mg Tablets, and higher demand for
children's analgesics products.
- Healthy Lifestyle: Net sales of $92 million
increased 14.2% due primarily to higher volumes and market share
gains in smoking cessation products in addition to timing of
customer orders.
- Oral Care: Net sales of $76 million decreased 7.4%
due primarily to purposeful SKU prioritization actions equating to
a category headwind of -5.9 percentage points and lost
distribution, partially offset by higher net sales of store brand
teeth whitening products and power toothbrush handles.
- Skin Care: Net sales of $46 million decreased 7.9%
due primarily to exited product lines equating to a category
headwind of -7.4 percentage points and lower net sales within the
store brand minoxidil franchise, partially offset by
double-digit growth of Mederma®.
- Women's Health: Net sales of $12 million decreased
2.4% due primarily to purposeful SKU prioritization actions in
feminine hygiene.
- Vitamins, Minerals, and Supplements ("VMS") and Other:
Net sales of $15 million decreased 47.2% due primarily to
purposeful SKU prioritization actions.
Primary CSCA Full Year 2023 Category
Drivers:
- Nutrition: Net sales of $563
million increased 8.2% driven by to the Gateway acquisition
and strong growth in contract infant formula, partially offset by
lower net sales in legacy infant formula and lower manufacturing
productivity stemming from the FDA's evolving industry guidelines
on infant formula manufacturing;
- Upper Respiratory: Net sales of $559 million decreased 1.0% due primarily to
lower net sales of allergy products driven by a weaker and later
start to the allergy season compared to the prior year, a voluntary
OTC product recall, the divested Latin American businesses and
exited product lines. These factors were partially offset by higher
net sales of cough cold products, led by store brand
Guaifenesin-based offerings, and the new product launch of
store brand Cough Relief Liquid Honey;
- Digestive Health: Net sales of $505 million increased 2.0% due primarily to
increased manufacturing capacity and demand for Polyethylene
Glycol 3350 as well as new products, including Omeprazole
Mini Capsules and Polyethylene Glycol 3350 Orange;
partially offset by the divested Latin American businesses;
- Pain and Sleep-Aids: Net sales of $396 million decreased 3.8% due primarily to
purposeful SKU prioritization actions in adult analgesic offerings
to focus capacity on higher margin products as well as the divested
Latin American businesses, partially offset by new products,
including store brand Dual Action Acetaminophen 250mg and
Ibuprofen 125mg Tablets, and higher demand for children's
analgesics products;
- Oral Care: Net sales of $314
million increased 0.3% due primarily to the normalization of
supply chain disruptions that impacted net sales in the prior year
and strong consumer demand for oral care products, partially offset
by purposeful SKU prioritization actions;
- Healthy Lifestyle: Net sales of $312 million increased 7.9% due primarily to
higher volumes and market share gains in smoking cessation
products;
- Skin Care: Net sales of $196
million increased 4.5% due primarily to the addition of HRA
Pharma brands, including Mederma® and
Compeed®, partially offset by unfavorable impacts
from the divested Latin American businesses and
ScarAway® brand, and exited product lines;
- Women's Health: Net sales of $47
million increased 3.8% due primarily to the addition of HRA
Pharma brands, including ella®, partially offset
by purposeful SKU prioritization actions in feminine hygiene;
- VMS and Other: Net sales of $70
million decreased 29.4% due primarily to the unfavorable
impact from the divested Latin American businesses and purposeful
SKU prioritization actions.
TABLE VI
(Continued)
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
SELECTED SEGMENT
INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Constant
Currency
Change (1)
|
|
Twelve Months Ended
|
|
|
|
|
|
Constant
Currency
Change (1)
|
CSCI Net Sales
|
December 31,
2023
|
|
December 31,
2022
|
|
%
Change
|
|
Currency
Impact (1)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
% Change
|
|
Currency
Impact (1)
|
|
Skin Care
|
$
79.4
|
|
$
77.1
|
|
3.0 %
|
|
(1.6) %
|
|
1.4 %
|
|
$
372.5
|
|
$
334.6
|
|
11.3 %
|
|
3.0 %
|
|
14.3 %
|
Upper
Respiratory
|
71.2
|
|
74.2
|
|
(4.0) %
|
|
(5.0) %
|
|
(9.0) %
|
|
299.1
|
|
268.7
|
|
11.3 %
|
|
(1.5) %
|
|
9.8 %
|
Pain and
Sleep-Aids
|
59.1
|
|
51.0
|
|
15.9 %
|
|
(6.3) %
|
|
9.6 %
|
|
222.9
|
|
200.2
|
|
11.3 %
|
|
(1.8) %
|
|
9.5 %
|
Healthy
Lifestyle
|
46.3
|
|
44.1
|
|
5.0 %
|
|
(4.5) %
|
|
0.5 %
|
|
225.7
|
|
209.7
|
|
7.6 %
|
|
(1.1) %
|
|
6.5 %
|
VMS
|
50.1
|
|
45.7
|
|
9.6 %
|
|
(5.2) %
|
|
4.4 %
|
|
185.5
|
|
183.9
|
|
0.9 %
|
|
(2.2) %
|
|
(1.3) %
|
Women's
Health
|
30.2
|
|
30.4
|
|
(0.7) %
|
|
(4.9) %
|
|
(5.6) %
|
|
119.7
|
|
96.1
|
|
24.6 %
|
|
(2.0) %
|
|
22.6 %
|
Oral Care
|
26.0
|
|
23.6
|
|
10.2 %
|
|
(5.5) %
|
|
4.7 %
|
|
101.5
|
|
94.8
|
|
7.1 %
|
|
(1.4) %
|
|
5.7 %
|
Digestive Health and
Other CSCI
|
50.1
|
|
43.5
|
|
15.2 %
|
|
(1.4) %
|
|
13.8 %
|
|
166.4
|
|
137.7
|
|
20.8 %
|
|
1.9 %
|
|
22.7 %
|
Total CSCI Net
Sales
|
$
412.6
|
|
$
389.6
|
|
5.9 %
|
|
(4.1) %
|
|
1.8 %
|
|
$
1,693.3
|
|
$
1,525.7
|
|
11.0 %
|
|
(0.3) %
|
|
10.7 %
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
|
(1) Currency impact is
calculated using the exchange rates used to translate our financial
statements in the comparable prior year period to show what current
period US dollar results would have been if such currency exchange
rates had not changed.
|
Primary CSCI Fourth Quarter Category
Drivers:
- Skin Care: Net sales of $79 million increased 3.0%,
or an increase of 1.4% excluding the impact of currency, driven
primarily by new distribution for Lucas PaPaw Remedies in
Australia and double-digit growth
for Sebamed, which were mostly offset by lower net
sales in the ACO brand franchise due to customer inventory
destocking.
- Upper Respiratory: Net sales of $71 million
decreased 4.0%, or 9.0% excluding the impact of currency, due
primarily to lower net sales of cough cold products stemming from
lower incidence of cough cold throughout the E.U. compared to the
prior year and capacity constraints on Bronchostop.
- Pain & Sleep-Aids: Net sales of $59 million
increased 15.9%, or an increase of 9.6% excluding the impact of
currency, due primarily to favorable SKU mix within the
Solpadeine brand franchise and higher net sales for
Nytol due to timing of customer sales.
- Healthy Lifestyle: Net sales of $46 million
increased 5.0%, or 0.5% excluding the impact of currency, due
primarily to higher demand and improved supply for NiQuintin
smoking cessation products, partially offset by lower category
consumption in weight loss, impacting XLS Medical, and less
favorable product sales mix within anti-parasite offerings.
- VMS: Net sales of $50 million increased 9.6%, or an
increase of 4.4% excluding the impact of currency, due primarily to
increased net sales of Davitamon and Abtei, which was
partially offset by a decline in Granufink due to short-term
supply constraints.
- Women's Health: Net sales of $30 million decreased
0.7%, or 5.6% excluding the impact of currency, due primarily to
lower net sales of contraceptive products, which were primarily
impacted by distributor transitions.
- Oral Care: Net sales of $26 million increased
10.2%, or 4.7% excluding the impact of currency, due primarily to
higher net sales of store brand offerings and
Plackers®.
- Digestive Health and Other: Net sales of
$50 million increased 15.2%, or 13.8% excluding the impact of
currency, due primarily to higher net sales of store brand
digestive health products and distribution brands.
Primary CSCI Full Year 2023 Category
Drivers:
- Skin Care: Net sales of $373
million increased 11.3%, inclusive of a 3.0% unfavorable
effect of currency translation, driven primarily by the addition of
HRA brands, including Compeed®, and strong sales
within the Sebamed and ACO brand lines;
- Upper Respiratory: Net sales of $299 million increased 11.3%, inclusive of a 1.5%
favorable effect of currency translation, due primarily to
increased demand for cough/cold products, including
Bronchostop and Coldrex stemming from a 2022/2023
strong cough/cold and flu season, and higher net sales of allergy
products, including Beconase;
- Healthy Lifestyle: Net sales of $226 million increased 7.6%, inclusive of a 1.1%
favorable effect of currency translation, due primarily to higher
net sales of anti-parasite offerings, including Paranix and
Jungle Formula, and higher demand for smoking cessation
products, partially offset by lower category consumption in weight
loss, impacting XLS Medical;
- Pain & Sleep-Aids: Net sales of $223 million increased 11.3%, inclusive of a 1.8%
favorable effect of currency translation, due primarily to higher
demand for Solpadeine, U.K. store brand products and higher
net sales for Nytol;
- VMS: Net sales of $186
million increased 0.9%, inclusive of a 2.2% favorable effect
of currency translation, due primarily to increased net sales of
Davitamon and Abtei, partially offset by lower
category consumption;
- Women's Health: Net sales of $120
million increased 24.6%, inclusive of a 2.0% favorable
effect of currency translation, due primarily to the addition of
HRA brands, including ellaOne® and
NorLevo®;
- Oral Care: Net sales of $102
million increased 7.1% inclusive of a 1.4% favorable effect
of currency translation, due primarily to strong growth of store
brand oral care products;
- Digestive Health and Other: Net sales of $166 million increased 20.8%, inclusive of a 1.9%
unfavorable effect of currency translation, due primarily to the
addition of the HRA Pharma Rare Diseases portfolio in the
Other category and higher net sales of store brand digestive
health products and distribution brands.
TABLE
VII
PERRIGO COMPANY
PLC
RECONCILIATION OF
NON-GAAP MEASURES
CONSOLIDATED AND
SELECTED SEGMENT INFORMATION
(in millions, except
per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
Consolidated Continuing
Operations
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Total Change
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Total Change
|
Adjusted gross
margin
|
|
39.8 %
|
|
38.4 %
|
|
|
|
140 bps
|
|
38.8 %
|
|
36.2 %
|
|
|
|
260 bps
|
Adjusted operating
income
|
|
$ 167.1
|
|
$ 156.0
|
|
$ 11.1
|
|
7.1 %
|
|
$
574.3
|
|
$
492.3
|
|
$
82.0
|
|
16.7 %
|
Adjusted EPS
|
|
$ 0.86
|
|
$ 0.75
|
|
|
|
14.7 %
|
|
$
2.58
|
|
$
2.07
|
|
0.51
|
|
24.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Self-Care
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin
|
|
50.0 %
|
|
51.8 %
|
|
|
|
(180) bps
|
|
52.1 %
|
|
51.6 %
|
|
|
|
50 bps
|
Adjusted operating
income
|
|
$ 65.1
|
|
$ 53.6
|
|
$ 11.5
|
|
21.5 %
|
|
$
285.1
|
|
$
222.6
|
|
$
62.6
|
|
28.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Self-Care Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin
|
|
34.1 %
|
|
31.6 %
|
|
|
|
250 bps
|
|
31.3 %
|
|
28.2 %
|
|
|
|
300 bps
|
Adjusted operating
income
|
|
$ 143.0
|
|
$ 143.9
|
|
$
(0.9)
|
|
(0.6) %
|
|
$
464.4
|
|
$
440.4
|
|
$
24.0
|
|
5.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Continuing
Operations
|
|
Three Months Ended
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
Cash Conversion
|
|
December 31, 2023
|
|
|
|
|
|
December 31, 2023
|
|
|
|
|
Adjusted net
income
|
|
$117.4
|
|
|
|
|
|
$352.0
|
|
|
|
|
Net cash from
operating activities
|
|
$208.6
|
|
|
|
|
|
$405.5
|
|
|
|
|
Cash
conversion
|
|
178 %
|
|
|
|
|
|
115 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sequential
Comparison
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Consolidated Continuing
Operations
|
|
December 31,
2023
|
|
September 30,
2023
|
|
Total Change
|
|
Adjusted gross
margin
|
|
39.8 %
|
|
39.5 %
|
|
|
|
30 bps
|
|
|
|
|
|
|
|
|
|
|
|
Note: amounts may not
add or recalculate due to rounding. Percentages are based on
actuals.
|
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SOURCE Perrigo Company plc