Published in Finance

Perrigo reports progress on transformation plan

BY Thursday, August 08, 2019 10:20am

ALLEGAN — Perrigo Co. plc reaffirmed its 2019 earnings guidance and reported a slight decline in net sales resulting from unfavorable currency translations and exited businesses.

The company this morning reported net sales of $1.14 billion for the second quarter, off 3 percent from the $1.18 billion in the same period a year earlier. When adjusted for currency translations, plus the animal health business held for sale in the second quarter and sale of the infant foods business, sales grew 1 percent.

Murray Kessler, Perrigo, President and CEO COURTESY PHOTO

Perrigo reported net income of $9 million, or 7 cents per diluted share. Minus charges in the quarter, adjusted net income totaled $117 million, or 86 cents per diluted share, versus adjusted net income of $169 million, or 1.22 per diluted share, in the second quarter of 2018.

Perrigo is now at a “critically important execution phase” of a transformation plan unveiled in May, said President and CEO Murray Kessler. The transformation plan seeks to shift Perrigo (NYSE: PRGO) — which is domiciled in Dublin, Ireland, but run from Allegan — into a “self-care” company focused on consumer health care products and medications.

The company made “significant progress” on the plan in the second quarter with “robust” over-the-counter store-brand medication sales in the U.S., “solid” sales globally of new branded products, and “a return to strong customer service levels” in the U.S., Murray said in Perrigo’s quarterly earnings statement. The company also finalized a plan to generate $100 million in cost savings, he said.

“This marks the third consecutive quarter Perrigo has delivered on our stated financial goals, which we believe is integral to the re-establishment of management credibility,” Kessler said of the second quarter results. “Transformation activities will help Perrigo return to year-over-year growth for the balance of the year.”

Under the transformation plan, Perrigo closed in July on the $750 million cash acquisition of Grand Rapids-based Ranir Global Holdings LLC, a maker of oral care products, and the sale of its animal health business for $185 million to PetIQ LLC, an Eagle, Idaho-based pet health and wellness company. 

In today’s earnings report, Perrigo reaffirmed guidance for full-year earnings per share of $1.23 to $1.53, and adjusted earnings of $3.75 to $4.05 per share.

“The company expects an acceleration of net sales growth in the second half of the year driven by Ranir,” according to the earnings report.


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