Table Of ContentThere’s Never Been a Better Time for Perrigo’s Quality, Affordable Healthcare Products.
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515 Eastern Avenue N
Allegan, Michigan 49010
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(269) 673-8451
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www.perrigo.com
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Our unique
contribution to
retailer profits and
consumer value
strongly positions us
in the healthcare
marketplace.
2009 Annual Report
©2009 Perrigo Company All rights reserved
Perrigo products
save consumers
Shareholder Information
more than
$1 billion a year. Directors Executive Officers Independent Accountants
Joseph C. Papa Through Fiscal 2008
Chairman, President and BDO Seidman, LLP
Chief Executive Officer Grand Rapids, Michigan
Judy L. Brown Commencing Fiscal 2009
Executive Vice President and Ernst & Young LLP
Chief Financial Officer Grand Rapids, Michigan
Thomas M. Farrington
Senior Vice President and
Fiscal 2009 Cash
Chief Information Officer
Dividend Data
John T. Hendrickson
Executive Vice President, Fiscal Record Payable Per Share
Global Operations and Supply Chain Quarter Date Date Amount
Moshe Arkin Laurie Brlas Gary M. Cohen Todd W. Kingma 1st 8/22/08 9/16/08 $0.050
Former Vice Chairman, Senior Vice President, Executive Vice President, Executive Vice President,
Perrigo Company Chief Financial Officer Becton, Dickinson and Company General Counsel and Secretary 2nd 11/28/08 12/16/08 $0.055
Director since 2005 and Treasurer, Director since 2003
Cleveland-Cliffs, Inc. Sharon Kochan 3rd 2/27/09 3/17/09 $0.055
Director since 2003 Executive Vice President, U.S. Generics
4th 5/29/09 6/16/09 $0.055
Refael Lebel
Executive Vice President and President,
Perrigo Israel
Shareholder
Jeffrey R. Needham Account Information
Senior Vice President,
Commercial Business Development
Shareholders with requests for
information regarding their share
Dr. Jatin Shah
position, stock certificates, address
Senior Vice President and
changes and other related matters
Chief Scientific Officer
should contact:
Michael R. Stewart
National City Bank
Senior Vice President,
Corporate Trust Operations
Global Human Resources
P.O. Box 92301
Cleveland, Ohio 44193-0900
James C. Tomshack
(800) 622-6757
Senior Vice President,
Consumer Healthcare Sales
David T. Gibbons Ran Gottfried Ellen R. Hoffing Michael J. Jandernoa Financial Information
Dr. Louis W. Yu
Former Chairman of the Board, Consultant and Director President and Chief Former Chairman of the Board,
Senior Vice President,
Perrigo Company for public and private Executive Officer, Applied Perrigo Company Annual reports, news releases,
Global Quality and Compliance
Director since 2000 companies in Israel NeuroSolutions, Inc. Director since 1981 earnings announcements, dividend
Director since 2006 Director since 2008 announcements, Form 10-K, 10-Q
and 8-K reports and other financial
Share Information
information may be obtained by visiting
the investor relations section of our
Perrigo Company common stock is traded
Web site: www.perrigo.com/investors.
on The NASDAQ Global Select Market®
and the Tel Aviv Stock Exchange (TASE)
under the symbol PRGO. Shares
Investor Relations Contacts
outstanding at June 27, 2009: 92,209,480
Arthur J. Shannon
Vice President – Investor Relations
Annual Meeting
and Global Communications
(269) 686-1709
The Annual Meeting of Shareholders
Corporate Profile will be held at the Allegan County Area
Dan Willard
Technical & Education Center,
Manager – Investor Relations
2891 116th Avenue (M-222),
and Global Communications
Allegan, Michigan, on October 29, 2009,
(269) 686-1597
Perrigo Company is a leading global healthcare supplier that develops, manufactures and distributes at 10:00 a.m. (EST)
Creative services by
over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, nutritional products, active Strategic Communication Advisors
and Anderson Design
pharmaceutical ingredients (API) and pharmaceutical and medical diagnostic products. Perrigo is Gary K. Kunkle, Jr. Herman Morris, Jr. Joseph C. Papa Ben-Zion Zilberfarb Grand Rapids, Michigan
Retired Chairman and Private practice of law, Chairman, President and Professor of Economics
the world’s largest manufacturer of OTC pharmaceutical products for the store brand market. Chief Executive Officer, Memphis, Tennessee Chief Executive Officer, at Bar-Ilan University
DENTSPLY International Inc. Director since 1999 Perrigo Company and consultant
Director since 2002 Director since 2006 Director since 2007
2 Financial Highlights
3 Letter To Shareholders
10 Business Portfolio
12 Financial Reconciliation
Inside Back Cover
Shareholder Information
Every day, we help
millions of people reduce
their healthcare costs.
Financial Highlights
Year Ended
Financial Results – June 28, June 27, %
Reported (GAAP) (1) 2008 (2) 2009 (2) Change
In millions, except shares and Net Sales $ 1,729.9 $ 2,006.9 16.0
per share amounts Operating Income $ 194.9 $ 247.3 26.9
Income from Continuing Operations $ 140.2 $ 141.1 0.6
Diluted Earnings Per Share
from Continuing Operations $ 1.47 $ 1.51 2.3
Average Diluted Shares Outstanding (000’s) 95,210 93,629 (1.7)
Year Ended
Financial Results – June 28, June 27, %
Adjusted (Non-GAAP) (1) 2008 (2,3) 2009 (2,3) Change
In millions, except shares and Net Sales $ 1,729.9 $ 2,006.9 16.0
per share amounts (unaudited) Operating Income $ 216.1 $ 267.4 23.8
Income from Continuing Operations $ 154.5 $ 174.6 13.0
Diluted Earnings Per Share
from Continuing Operations $ 1.62 $ 1.87 15.0
Average Diluted Shares Outstanding (000’s) 95,210 93,629 (1.7)
2,006.9 267.4 174.6 1.87
1,729.9 216.1 154.5 1.62
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09 provides important insight into Perrigo’s ongoing core business operations on a normalized basis.
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Dear Shareholders,
Fiscal 2009 was an extraordinary year for the Perrigo Company, particularly in light of
the widespread global economic turmoil and the uncertainty it created for many people.
That climate created both challenges and opportunities for Perrigo as our retail customers
responded to rapidly changing market dynamics and consumers sought greater value.
The Perrigo business model has while maintaining our high quality consumers more than $1 billion
proven itself to be durable, enabling and proactively managing the cost in annual healthcare costs when
us to deliver consistent, steady growth side of our business. compared to higher priced national
even in an economically challenging brands. In addition, Perrigo store
This year’s performance validates
climate. During fiscal 2009, our brand healthcare products represent
our strategy of delivering quality,
core strengths and unprecedented a significant portion of a retailer’s
affordable healthcare products that
performance from new products pharmacy category profitability. That
save consumers money while generating
produced outstanding results. We combination of value and profitability
greater profits for our retail customers.
had record sales and earnings and is what sets us apart from other
We estimate that our products save
record new product launches, all healthcare product manufacturers.
PERRIGO vs. INDICES FY 2005-2009
Perrigo vs. Indices Price 250%
Performance
FY 2005-2009
200%
150%
PERRIGO
100%
S & P
DJIA
50%
NASDAQ
0%
-50%
| | | | |
June 05 June 06 June 07 June 08 June 09
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This Year’s Challenges Also Created Opportunities.
Opportunities: generated a record $258 million in cash succeed given our relentless focus on
flow from operations in fiscal 2009, cost management and our increased
Like many companies, we faced a
allowing us to end the fiscal year with a market share in this category.
number of challenges during fiscal 2009;
balance sheet even stronger than at the
however, we were able to convert In addition, we believe our emphasis
beginning of the year.
some of them into opportunities. on quality and our pharmaceutical
Our strong financial position also manufacturing expertise will provide
For example, although the weaker
allowed us to move forward with us with a competitive advantage
economy created profit pressure
a $10.5 million expansion of our as the nutrition business faces
among our retail customers, the result
manufacturing facilities in Michigan increased regulatory requirements,
was a greater emphasis on promotion
to help us meet the growing demand and we look forward to future growth
of their store brand products. This
for our products. and profitability in this category of
increased exposure created higher
our business.
consumer awareness of store brand Challenges:
healthcare product value, and that There’s Never Been a Better
Perrigo’s nutrition business did
positively impacted our market share. Time for Perrigo Value.
not perform at an acceptable level
While the tightening liquidity and credit during fiscal 2009, due in part to The long-term trends that impact
markets could have posed a potential significant cost challenges. These our business – the emphasis on
barrier to our growth, we had proactively challenges resulted from our inability reducing healthcare costs, an aging
raised an additional $200 million to cost-effectively respond to an population, continued economic
through a private placement offering in unprecedented increase in demand uncertainty, the growing consumer
fiscal 2008 to avoid the credit problems caused by a competitor’s supply issues reliance on self-treatment – all play to
in fiscal 2009. This tremendous financial and consumers’ increased focus on our strengths: delivering savings and
flexibility enabled us to pursue four prevention and wellness. We have value to consumers, and increased
strategic acquisitions during this fiscal been, and we will continue to be, profits to retailers. All this means
year, a feat many companies would aggressively focused on returning that there has never been a better
not have even considered in today’s this business to an acceptable level time for Perrigo’s quality, affordable
economic climate. On top of this, we of profitability. We believe we will healthcare products.
The Perrigo Advantage.
Leader in bringing to market Quality focus/culture Focus on difficult-to-develop
products that have switched from generic Rx “topicals”
Critical mass – 35+ billion tablets/
prescription to over-the-counter
caplets per year, among the top Low-cost manufacturing
(Rx-to-OTC switches)
three manufacturers worldwide
Innovative new products
- We have received a total of
Mass customization – Nearly
139 Abbreviated New Drug
12,000 stock keeping units (SKUs)
P Applications (ANDAs) for OTC
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Perrigo’s Five
Strategic Pillars
Throughout fiscal 2009 we continued our focus on the
five pillars that are at the foundation of our strategic plan.
High Quality – We invested more than Leading Innovation – In fiscal 2009, significant progress in overall cost
$60 million in quality-related processes we reinforced our leadership position management, particularly in our
and activities in fiscal 2009. In fact, through the introduction of several new Rx operations.
15 percent of our workforce is healthcare products that contributed
Winning People – By developing new
dedicated to quality initiatives. approximately $214 million to our sales
programs and training facilities, we
for the year.
Superior Customer Service – While the continue to seek, motivate and reward
complexity of our enormous volume Effective Cost Management – Economies the highly talented and skilled people
and number of SKUs sets us apart of scale and efficiency are critical to our we need to meet the growing demand
from our competitors, it also makes it a ability to consistently deliver affordable for Perrigo healthcare products.
challenge for us to meet our customers’ healthcare products. Despite ever-
service expectations. In spite of this, we present cost pressures, our highly
improved our overall customer service skilled and sophisticated manufacturing
levels, even while achieving record sales and global procurement teams made
volumes in fiscal 2009.
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Results Fiscal 2009 adjusted operating Performance Led
income from continuing operations by New Products
Despite the unprecedented global
was a record $267 million, up
challenges during our fiscal 2009, the Consumer Healthcare: In fiscal 2009,
24 percent from last year, while
Perrigo team achieved unprecedented Perrigo’s Consumer Healthcare net sales
our adjusted operating margin also
results: increased 23 percent or $303 million,
improved 80 basis points.
which included $192 million in sales
Fiscal 2009 net sales from continuing
Improved results and our continued of new products.
operations were a record $2.01
focus on working capital generated
billion compared to $1.73 billion The most significant contributor to
a record $258 million in cash flow
in fiscal 2008, an increase of $277 that growth was Omeprazole (Prilosec
from operations.
million or 16 percent. OTC®), which we launched near the
During fiscal 2009, we declared end of fiscal 2008. The Omeprazole
Adjusted income from continuing
dividends totaling $0.215 per share launch was the largest in our 122-year
operations for the year was $175
versus $0.195 per share in fiscal history, and its performance surpassed
million versus $154 million last
2008, an increase of 10 percent. our high expectations. To date, we
year. Adjusted diluted earnings per
believe our store brand Omeprazole
share from continuing operations
has saved consumers more than $300
were a record $1.87 this year versus
million over the national brand.
$1.62 a year ago, an increase of
15 percent.
Key Events Timeline
July 2008 August 2008 September 2008
Announced $10.5 million Shipment of Famotidine Acquisition of JB Laboratories, Inc., Holland, Michigan
investment to expand Complete chewable tablets for $44 million
Allegan, Michigan facilities (Famotidine 10 mg;
Anticipated annual sales: $70 million
Calcium Carbonate 800 mg;
Magnesium Hydroxide
Acquisition of exclusive U.S. sales and distribution
165 mg) (Pepcid® Complete)
rights for Levocetirizine tablets, (UCB’s Xyzal®
tablets, from Synthon Pharmaceuticals, Inc.)
Retail brand sales: $100 million
Retail brand sales: $192 million
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We produce
more than
35 billion
tablets each year.
Cetirizine (Zyrtec®), introduced mid- Medimetriks launched Centany® in
fiscal 2008, performed well by early 2009, where it competes in a
capturing market share from previously topical antibiotic market that exceeds
prescription-only products, which $150 million.
Xyzal® is indicated for treatment of
contributed to increasing the whole
indoor and outdoor allergies, has In March 2009, we announced that
OTC allergy category.
annual sales of approximately $192 our partner, Cobrek Pharmaceuticals,
Rx Pharmaceuticals: Our Rx business million and is growing at 15 percent Inc., filed an ANDA for Clindamycin
also performed well during fiscal per year. Phosphate Foam 1%, a generic version
2009, primarily on the strength of of Evoclin® Foam 1%. Cobrek was the
In October 2008, Perrigo entered into a
core products, modest new product first-to-file an ANDA with a Paragraph IV
licensing agreement with Medimetriks
introductions and effective cost certification against Evoclin®.
Pharmaceuticals, Inc. for the U.S.
management.
marketing rights to Centany® ointment Evoclin® (clindamycin phosphate)
In September 2008, we acquired and two prescription keratolytic Foam 1% is a topical antibiotic
the exclusive U.S. rights to sell and brands. Patented through 2018, prescribed for topical application in
distribute Levocetirizine tablets, the Centany® was previously marketed the treatment of acne, and had sales
generic version of UCB’s Xyzal® tablets, by Johnson & Johnson’s Ortho- of approximately $44 million for the
from Synthon Pharmaceuticals, Inc. Neutrogena professional division. 12 months ended January 2009.
October 2008 November 2008 February 2009 March 2009
Acquisition of Laboratorios Acquisition of Unico Holdings, Shipment of OTC Perrigo partner Cobrek
Diba, S.A., Guadalajara, Mexico Inc., Lake Worth, Florida for Ibuprofen 200 mg and Pharmaceuticals, Inc. is
for $25 million $52 million Diphenhydramine Citrate first-to-file an ANDA with
Tablets 38 mg Paragraph IV certification for
Anticipated annual sales: Anticipated annual sales:
(Advil® PM caplets) Clindamycin Phosphate
$10 million $50 million
Foam 1%, a generic version
Retail brand sales: $70 million
of Evoclin® Foam 1%
Licensing agreement with
Medimetriks Pharmaceuticals,
Retail brand sales: $44 million
Inc. for the U.S. marketing
rights to Centany® ointment
and two prescription
keratolytic brands
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Retail brand sales: $150 million 00
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We have received
a total of 139
ANDAs for OTC
and R medications.
Active Pharmaceutical Ingredients: x Also in the fourth quarter of fi scal
In the fi rst half of fi scal 2009, our 2009, management determined that
API business encountered a fi ercely in light of our strategic focus on
competitive global marketplace, specialty molecules and vertical
currency exchange rates. However,
sluggish demand for some of its key integration, we needed to improve the
we identifi ed these challenges early
products and unfavorable foreign cost competitiveness of our current
and focused heavily on aggressive
manufacturing footprint for our
cost management to help mitigate
future product portfolio. As a result,
their effects. Those efforts became
we began the process of exiting our
visible in the fourth quarter.
German API facility, and in August
2009, we acquired an 85 percent
stake in an API facility currently under
construction in India for $12 million.
Once operational, this state-of-the-
art, low-cost plant 30 miles outside
of Mumbai, will manufacture certain
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Description:provides important insight into Perrigo's ongoing core business operations on a
Fiscal 2009 was an extraordinary year for the Perrigo Company, particularly in
light of balance sheet even stronger than at the . Ibuprofen 200 mg and ..
Interactive Data File required to be submitted and posted pur