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» Perrigo's CEO Discusses Q1 2012 Results - Earnings Call Transcript
Before we proceed with the call, I’d like to remind everyone that the Safe Harbor language contained in today’s press release also pertains to this conference call. Certain statements in this call are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and are subject to the Safe Harbor created thereby. Please see the cautionary note regarding forward-looking statements on Page 1 of the company’s Form 10-K for the year ended June 25, 2011.I’d like to now turn over the call over to Perrigo’s Chairman and CEO, Joe Papa. Joe? Joe Papa Thank you, Art, and welcome everyone to Perrigo’s year-end fiscal 2012 earnings conference call. Joining me today is also Judy Brown, Perrigo’s Executive Vice President and Chief Financial Officer. For our agenda today, I’ll provide a brief perspective on the year and the continued strength in store brand growth. Next, Judy will walk through the detailed financial for the fiscal fourth quarter and through the details of our fiscal 2013 earnings guidance, then I’ll give you an update on our new product pipeline plus an overview of our expectations for the coming year. Finally, all of this will be followed by an opportunity for Q&A. First, I want to thank the entire Perrigo team for their tremendous efforts and the excellent results we have achieved this year our 125th year as a company. I also would like to say a special congratulations to Judy Brown for being named as a top 25 CFO by the Wall Street Journal. It's quite an honor and I must say very well deserved. Now, let’s discuss Perrigo’s results. My overall comment on the year-end, we continue to execute on our long-term plans while continue to expand the breadth and reach of our product portfolio. In fiscal 2012, we met or surpassed all consolidated continuing operations basis financials goal we set last August.
Looking to Slide 3, you can see that we grew revenue 15% from last year to $3.2 billion; this was driven in large part by the impressive full-year Rx revenue growth of 80%. Our August 2012 guidance range for adjusted consolidated operating margin was between 20 and 22%, we met that goal by achieving a consolidated adjusted operating margin of 21.6%, a 200 basis point increase from just last year.Adjusted EPS from continuing operations far surpassed our original fiscal year growth target of 450 to 465 achieving $4.99. Our strong net earnings allowed us to also be our original operating cash flow goal with $513 million for the full-year. We achieved these record results while improving our quality and production processes and continuing to do that in research and development. Every time we speak about Perrigo, we say that quality is our highest priority, we don’t take it lightly, the FDA is continuing to raise the quality standards globally to ensure the highest product safety for consumers. Here at Perrigo we invest necessary resources to make sizeable additional investments in quality and a continuous effort to meet the FDAs expectations. On Slide 5, you can see the consolidated results for the fiscal fourth quarter. Judy will give you the business unit details but I want to point out a couple of items. First, this is a great quarter, we grew consolidated net sales of 18%, adjusted gross margin grew by 130 basis points and adjusted operating margin by 240 basis points to 21.9%. If you turn to Slide 6, you will see the net sales breakdown by business segment for the fiscal fourth quarter. Consumer Healthcare and Nutritionals both grew double-digits. CHC was aided by a strong allergy season and the Nutritionals segment approximately half of the sales growth in the infant formula category came from new sales through our Chinese supply agreement.
After Judy’s comments I’ll go into more depth about where we see these markets for fiscal 2013, but my opinion both Consumer Healthcare and Nutritionals were able to achieve a strong finish to a challenging year. The Rx group had another great quarter as adjusted operating income grew 54%.Now turning to Slide 7, you can see the continue market share gains for store brand in every OTC categories, store brand outperformed both the brand and the overall categories growth, but the gastrointestinal category leading the way at over 11% growth. As you can also see, store brand analgesics products gained nearly 7%. Now let me turn the call over to Judy to go through the fourth quarter results. Judy. Judy Brown Thanks Joe. Good morning everyone. As you just heard we once again delivered strong results for the quarter and concluded another great year. On a consolidated basis the team delivered results which performed in accordance with our own high expectations. I’ll provide a brief overview of the adjusted results from continuing operations for the fiscal fourth quarter by business segment and then I’ll walk you through the consolidated and segment earnings guidance for fiscal 2013. Read the rest of this transcript for free on seekingalpha.com