Published in Health Care

CEO Kessler: Perrigo ‘hit on all cylinders’ in fourth quarter

BY Thursday, February 27, 2020 12:38pm

ALLEGAN — Perrigo Co. plc “hit on all cylinders” in the fourth quarter as sales growth picked up toward the end of 2019.

Perrigo today reported it generated $1.32 billion in quarterly net sales for the final three months of last year, up 10.7 percent from the same period a year earlier. The company’s largest division, Consumer Self-Care Americas, grew quarterly sales 15.2 percent to $710.5 million, and Consumer Self-Care International grew 8.2 percent to $356.4 million.

Perrigo CEO Murray Kessler COURTESY PHOTO

Organic growth and the $750 million acquisition last July of Ranir Global Holdings Inc., a maker of oral care products, combined to drive sales higher. Ranir contributed $74.4 million to net sales growth in the quarter. Minus the Ranir acquisition, net sales grew 6.4 percent.

The quarterly results follow a transformation plan President and CEO Murray Kessler put in place last spring for Perrigo to restore sales and earnings growth as a company focused on “self-care,” producing products for consumers to not only treat themselves with store-brand, over-the-counter medications but also to maintain their health and prevent illnesses.

“We believe multiple quarters of improving fundamentals demonstrates Perrigo is executing well against our new consumer, the self-care strategy is working and that our transformation initiatives are working,” Kessler told brokerage analysts in a conference call this morning to discuss quarterly results.

“Of course, we’re only nine months into a two- to three-year transformation, and there’s still much work to be done, but the drivers of growth, the quality of growth and the breadth of growth across businesses in Q4 provides strong evidence that we are on the right track,” Kessler said. “The company hit on all cylinders in Q4.”

Perrigo reported a net loss for the quarter of $19 million, or 14 cents per diluted share, which compares to net income of $82 million, or 60 cents per diluted share, a year earlier. The company attributed the quarterly loss primarily to a $142 million non-cash impairment charge related to the Rx generic drug division.

Minus that and other charges, Perrigo would have earned $145 million, or $1.06 per diluted share, in adjusted net income for the fourth quarter, versus $132 million, or 97 cents per diluted share, in the last three months of 2018.

For all of 2019, Perrigo recorded global net sales of $4.83 billion, up 2.2 percent, with higher net income of $146.1 million, or $1.07 per diluted share.

Perrigo projects 2020 sales growth of 6 percent to 7 percent, double its long-term goal, with diluted earnings per share of $3.95 to $4.15. The guidance includes exited businesses and what Kessler called “several structural cost increases,” as well as $50 million invested in the transformation plan.

“Looking forward, the company has momentum as we enter 2020 and we are encouraged by the transformation results so far,” Kessler said.

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