PERRIGO Co plc 8-K, filed Mar 1, 2021

PERRIGO Co plc (PRGO)

8-K 2021-03-01 For: 2021-03-01

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Added on April 09, 2026

About this 8-K

PERRIGO Co plc filed this 8-K on March 1, 2021.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Ireland						Not Applicable
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares	PRGO	New York Stock Exchange


Exhibit Number						Description

99.1						Press Release issued by Perrigo Company plc on March 1 , 2021 , furnished solely pursuant to Item 2.02 of Form 8-K.

104						Cover Page Interactive Data file (embedded within the Inline XBRL document).


	Year Ended
	December 31, 2020		December 31, 2019		December 31, 2018
Net sales	$	5,063.3	$	4,837.4	$	4,731.7
Cost of sales	3,248.1		3,064.1		2,900.2
Gross profit	1,815.2		1,773.3		1,831.5

Operating expenses
Distribution	100.4		96.1		94.2
Research and development	177.7		187.4		218.6
Selling	579.1		567.0		595.7
Administration	496.0		503.0		435.9
Impairment charges	346.8		184.5		224.4
Restructuring	3.5		26.3		21.0
Other operating expense (income)	(3.7)		4.2		5.2
Total operating expenses	1,699.8		1,568.5		1,595.0

Operating income	115.4		204.8		236.5

Change in financial assets	96.4		(22.1)		(188.7)
Interest expense, net	131.2		121.7		128.0
Other (income) expense, net	17.2		(66.0)		6.1
Loss on extinguishment of debt	20.0		0.2		0.5
Income (loss) before income taxes	(149.4)		171.0		290.6
Income tax expense	13.2		24.9		159.6


Net income (loss)	$	(162.6)	$	146.1	$	131.0

Earnings (loss) per share



Basic	$	(1.19)	$	1.07	$	0.95



Diluted	$	(1.19)	$	1.07	$	0.95

Weighted-average shares outstanding
Basic	136.1		136.0		137.8
Diluted	136.1		136.5		138.3


	December 31, 2020		December 31, 2019
Assets

Cash and cash equivalents	$	641.5	$	354.3
Accounts receivable, net of allowance for credit losses of $7.6 and $6.7, respectively	1,054.2		1,243.2
Inventories	1,200.2		967.3

Prepaid expenses and other current assets	237.6		165.8

Total current assets	3,133.5		2,730.6

Property, plant and equipment, net	996.0		902.8
Operating lease assets	186.0		129.9
Goodwill and indefinite-lived intangible assets	3,783.9		4,185.5
Definite-lived intangible assets, net	2,974.3		2,921.2
Deferred income taxes	44.2		5.4
Other non-current assets	370.5		426.0
Total non-current assets	8,354.9		8,570.8
Total assets	$	11,488.4	$	11,301.4
Liabilities and Shareholders’ Equity

Accounts payable	$	543.8	$	520.2
Payroll and related taxes	175.2		156.4
Accrued customer programs	365.9		394.4
Other accrued liabilities	250.3		229.2
Accrued income taxes	9.0		32.2

Current indebtedness	37.8		3.4
Total current liabilities	1,382.0		1,335.8

Long-term debt, less current portion	3,528.3		3,365.8
Deferred income taxes	279.3		280.6
Other non-current liabilities	643.7		515.1
Total non-current liabilities	4,451.3		4,161.5
Total liabilities	5,833.3		5,497.3
Commitments and contingencies - Refer to Note 17
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	7,118.2		7,359.9
Accumulated other comprehensive income	395.0		139.4
Retained earnings (accumulated deficit)	(1,858.1)		(1,695.5)
Total controlling interests	5,655.1		5,803.8
Noncontrolling interest	—		0.3
Total shareholders’ equity	5,655.1		5,804.1
Total liabilities and shareholders' equity	$	11,488.4	$	11,301.4

Supplemental Disclosures of Balance Sheet Information
Preferred shares, issued and outstanding	—		—
Ordinary shares, issued and outstanding	133.1		136.1


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, 2020
Consolidated	Net Sales		Gross Profit			R&D Expense			DSG&A Expense			Restructuring, Impairment Charges, and Other Operating Income			Operating Income (Loss)			Interest, Other, and Change in Financial Assets			Income Tax Expense (Benefit)			Net Income (Loss)*			Diluted Earnings (Loss) per Share*
Reported	$	1,289.5	$	469.2		$	46.1		$	330.0		$	145.4		$	(52.3)		$	156.0		$	(33.3)		$	(175.0)		$	(1.29)
As a % of reported net sales			36.4		%	3.6		%	25.6		%	11.3		%	(4.1)		%	12.1		%	(2.6)		%	(13.6)		%
Effective tax rate																					16.0		%
Pre-tax adjustments:
Amortization expense related primarily to acquired intangible assets	$	—	$	44.2		$	(0.4)		$	(31.9)		$	—		$	76.5		$	—		$	—		$	76.5		$	0.56
Acquisition and integration-related charges and contingent consideration adjustments	—		0.8			—			(3.4)			(0.4)			4.6			—			—			4.6			0.03
Impairment charges	—		—			—			—			(144.4)			144.4			—			—			144.4			1.06

(Gain) loss on divestitures	—		—			—			(0.5)			0.5			—			(2.3)			—			2.3			0.02
Unusual litigation	—		—			—			(11.7)			0.5			11.2			—			—			11.2			0.08
Restructuring charges and other termination benefits	—		—			—			(0.1)			(1.6)			1.7			—			—			1.7			0.01


Change in financial assets	—		—			—			—			—			—			(121.2)			—			121.2			0.89



(Gain) Loss on investment securities	—		—			—			—			—			—			(0.7)			—			0.7			0.01

Separation and reorganization expense	—		—			—			(0.2)			—			0.2			—			—			0.2			—
Non-GAAP tax adjustments**	—		—			—			—			—			—			—			61.3			(61.3)			(0.44)

Adjusted	1,289.5		$	514.2		$	45.7		$	282.2		$	—		$	186.3		$	31.8		$	28.0		$	126.5		$	0.93
As a % of reported net sales			39.9		%	3.5		%	21.9		%				14.4		%	2.5		%	2.2		%	9.8		%
Adjusted effective tax rate																					18.1		%

						Diluted weighted average shares outstanding
						Reported																		135.4
						Effect of dilution as reported amount was a loss, while adjusted amount was income***																		1.2
						Adjusted																		136.6

*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.


**The non-GAAP tax adjustments of $61.3 million are primarily due to: (1) $9.0 million of additional tax expense related to pre-tax non-GAAP adjustments calculated based upon the applicable jurisdictions of the pre-tax items and (2) removal of $51.5 million tax benefit related to valuation allowance releases in the U.S.

***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)
	Three Months Ended December 31, 2019
Consolidated	Net Sales		Gross Profit			R&D Expense			DSG&A Expense			Restructuring, Impairment Charges, and Other Operating Income			Operating Income (Loss)			Interest, Other, and Change in Financial Assets			Income Tax Expense (Benefit)			Net Income (Loss)**			Diluted Earnings (Loss) per Share**
Reported	$	1,322.8	$	480.9		$	59.4		$	288.6		$	139.7		$	(6.8)		$	27.4		$	(15.2)		$	(19.0)		$	(0.14)
As a % of reported net sales			36.4		%	4.5		%	21.8		%	10.6		%	(0.5)		%	2.1		%	(1.2)		%	(1.4)		%
Effective tax rate																					44.5		%
Pre-tax adjustments:
Amortization expense primarily related to acquired intangible assets	$	—	$	48.8		$	(0.1)		$	(30.9)		$	—		$	79.8		$	—		$	—		$	79.8		$	0.59
Restructuring charges and other termination benefits	—		—			—			—			0.4			(0.4)			—			—			(0.4)			—
Separation and reorganization expense	—		—			—			(2.2)			—			2.2			—			—			2.2			0.02
Impairment charges	—		—			—			—			(141.6)			141.6			—			—			141.6			1.03
Acquisition and integration-related charges and contingent consideration adjustments	—		0.1			—			(1.0)			0.5			0.6			—			—			0.6			—


Unusual litigation	—		—			—			(1.8)			—			1.8			—			—			1.8			0.01
(Gain) Loss on investment securities	—		—			—			—			—			—			4.0			—			(4.0)			(0.03)



(Gain) loss on divestitures	—		—			—			3.6			1.0			(4.6)			(0.7)			—			(3.9)			(0.03)
Change in financial assets	—		—			—			—			—			—			3.6			—			(3.6)			(0.03)




Non-GAAP tax adjustments*	—		—			—			—			—			—			—			50.3			(50.3)			(0.36)
Adjusted	$	1,322.8	$	529.8		$	59.3		$	256.3		$	—		$	214.2		$	34.3		$	35.1		$	144.8		$	1.06
As a % of reported net sales			40.1		%	4.5		%	19.4		%				16.2		%	2.6		%	2.7		%	10.9		%
Adjusted effective tax rate																					19.5		%

															Diluted weighted average shares outstanding
															Reported												137.0


















*The non-GAAP tax adjustments are primarily due to: (1) $4.9 million of tax effects of pretax non-GAAP adjustments that are calculated based upon the specific rate of the applicable jurisdiction of the pretax items and (2) $43.8 million of valuation allowance releases in the U.S. and Australia.

**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.


TABLE II
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED SEGMENT INFORMATION
(in millions)
(unaudited)
	Three Months Ended														Three Months Ended
	December 31, 2020														December 31, 2019
Worldwide Consumer*	Net Sales		Gross Profit			R&D Expense			DSG&A Expense			Operating Income			Net Sales		Gross Profit			R&D Expense			DSG&A Expense			Operating Income
Reported	$	1,053.2	$	384.4		$	32.6		$	306.5		$	44.1		$	1,066.9	$	392.5		$	34.1		$	264.0		$	85.6
As a % of reported net sales			36.5		%	3.1		%	29.1		%	4.2		%			36.8		%	3.2		%	24.7		%	8.0		%
Pre-tax adjustments:
Amortization expense related primarily to acquired intangible assets	$	—	$	22.9		$	(0.4)		$	(31.8)		$	55.1		$	—	$	26.7		$	(0.1)		$	(30.8)		$	57.5
Unusual litigation	—		—			—			(11.7)			11.2			—		—			—			(1.8)			1.8
Impairment charges	—		—			—			—			—			—		—			—			—			9.6

Separation and reorganization expense	—		—			—			(0.2)			0.2			—		—			—			(2.2)			2.2

Restructuring charges and other termination benefits	—		—			—			—			1.6			—		—			—			—			(0.5)
(Gain) loss on divestitures	—		—			—			(0.5)			0.5			—		—			—			4.5			(4.6)

Acquisition and integration-related charges and contingent consideration adjustments	—		0.8			—			(3.4)			4.2			—		0.1			—			(1.0)			1.1
Adjusted	$	1,053.2	$	408.1		$	32.2		$	258.9		$	116.9		$	1,066.9	$	419.3		$	34.0		$	232.7		$	152.7
As a % of reported net sales			38.7		%	3.1		%	24.6		%	11.1		%			39.3		%	3.2		%	21.8		%	14.3%


*Worldwide Consumer includes the CSCA and CSCI segments in addition to Corporate.


TABLE II (CONTINUED)
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED SEGMENT INFORMATION
(in millions)
(unaudited)
	Three Months Ended														Three Months Ended
	December 31, 2020														December 31, 2019
Consumer Self-Care Americas	Net Sales		Gross Profit			R&D Expense			DSG&A Expense			Operating Income			Net Sales		Gross Profit			R&D Expense			DSG&A Expense			Operating Income
Reported	$	700.8	$	226.3		$	20.8		$	88.0		$	117.5		$	710.5	$	233.0		$	22.9		$	78.5		$	130.7
As a % of reported net sales			32.3		%	3.0		%	12.6		%	16.8		%			32.8		%	3.2		%	11.1		%	18.4		%
Pre-tax adjustments:
Amortization expense related primarily to acquired intangible assets	$	—	$	5.3		$	—		$	(7.3)		$	12.7		$	—	$	6.7		$	—		$	(6.5)		$	13.2
Unusual litigation	—		—			—			—			(0.5)			—		—			—			—			—


(Gain) loss on divestitures	—		—			—			—			—			—		—			—			—			(0.1)
Separation and reorganization expense	—		—			—			—			—			—		—			—			0.3			(0.3)


Restructuring charges and other termination benefits	—		—			—			—			0.4			—		—			—			—			1.0
Acquisition and integration-related charges and contingent consideration adjustments	—		—			—			(2.0)			2.0			—		0.1			—			(0.1)			0.3
Adjusted	$	700.8	$	231.6		$	20.8		$	78.7		$	132.1		$	710.5	$	239.8		$	22.9		$	72.2		$	144.8
As a % of reported net sales			33.0		%	3.0		%	11.2		%	18.8		%			33.8		%	3.2		%	10.2		%	20.4%


TABLE III
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS
(in millions)
(unaudited)

	Three Months Ended
	December 31, 2020		December 31, 2019		Total Change	FX Change	Constant Currency Change
Reported Net sales
Consolidated	$	1,289.5	$	1,322.8	(2.5)%	(1.3)%	(3.8)%
CSCA	$	700.8	$	710.5	(1.4)%	0.3%	(1.1)%
CSCI	$	352.4	$	356.4	(1.1)%	(5.0)%	(6.1)%
RX	$	236.3	$	255.9	(7.7)%	(0.5)%	(8.2)%


Consolidated	$	1,289.5	$	1,322.8
Less: Rosemont Pharmaceuticals business	—		(14.8)
Less: Canoderm prescription product	—		(4.0)
Consolidated net sales as so adjusted excluding divested businesses	$	1,289.5	$	1,304.0	(1.1)%	(1.3)%	(2.4)%
Less: Dr. Fresh*	(27.8)		—
Less: Eastern European Brands Acquisition	(2.1)		—
Organic Consolidated net sales as so adjusted	$	1,259.6	$	1,304.0	(3.4)%	(1.3)%	(4.7)%

Worldwide Consumer
CSCA	$	700.8	$	710.5
CSCI	352.4		356.4
Total Worldwide Consumer	$	1,053.2	$	1,066.9	(1.3)%	(1.4)%	(2.7)%
Less: Canoderm prescription product	—		(4.0)
Less: Rosemont Pharmaceuticals business	—		(14.8)
Worldwide Consumer net sales as so adjusted excluding divested businesses	$	1,053.2	$	1,048.1	0.5%	(1.5)%	(1.0)%
Less: Dr. Fresh*	(27.8)		—
Less: Eastern European Brands Acquisition	(2.1)		—
Organic Worldwide Consumer net sales as so adjusted	$	1,023.3	$	1,048.1	(2.4)%	(1.4)%	(3.8)%

CSCA	$	700.8	$	710.5
Less: Dr. Fresh*	(26.2)		—
Organic CSCA net sales as so adjusted	$	674.6	$	710.5	(5.1)%	0.4%	(4.7)%

*Dr. Fresh acquisition comprises all oral self-care assets purchased from High Ridge Brands, including the brands Dr. Fresh®, REACH® and Firefly®.


TABLE III (CONTINUED)
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS
(in millions)
(unaudited)

	Three Months Ended
	December 31, 2020		December 31, 2019		Total Change	FX Change	Constant Currency Change
CSCI	$	352.4	$	356.4
Less: Canoderm prescription product	—		(4.0)
Less: Rosemont Pharmaceuticals business	—		(14.8)
CSCI net sales as so adjusted excluding divested businesses	$	352.4	$	337.6	4.4%	(5.2)%	(0.8)%
Less: Dr. Fresh*	(1.6)		—
Less: Eastern European Brands Acquisition	(2.1)		—
Organic CSCI net sales as so adjusted	$	348.7	$	337.6	3.3%	(5.2)%	(1.9)%


*Dr. Fresh acquisition comprises all oral self-care assets purchased from High Ridge Brands, including the brands Dr. Fresh®, REACH® and Firefly®.


TABLE IV
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED AND SEGMENT INFORMATION
(in millions)
(unaudited)
	Three Months Ended
	December 31, 2020			December 31, 2019			Total Change


Consolidated adjusted EPS	$	0.93		$	1.06		(12.3)%










Adjusted gross margin

Worldwide Consumer	38.7		%	39.3		%	(60) bps
CSCA	33.0		%	33.8		%	(80) bps
CSCI	50.0		%	50.4		%	(40) bps
RX	44.9		%	43.2		%	170 bps








Adjusted operating margin

Worldwide Consumer	11.1		%	14.3		%	(320) bps
CSCA	18.8		%	20.4		%	(160) bps
CSCI	9.6		%	13.9		%	(430) bps
RX	29.4		%	24.0		%	540 bps










	Twelve Months Ended
	December 31, 2020			December 31, 2019			Total Change










Adjusted gross margin

Worldwide Consumer	38.9		%	40.3		%	(140) bps
CSCA	32.7		%	33.6		%	(90) bps
CSCI	50.8		%	52.4		%	(160) bps
RX	41.0		%	43.6		%	(260) bps

Adjusted operating income

CSCA	$	527.2		$	487.5		8.1%



Adjusted operating margin
Worldwide Consumer	13.2		%	14.1		%	(90) bps
CSCA	19.6		%	19.7		%	(10) bps
CSCI	14.3		%	15.7		%	(140) bps
RX	26.2		%	27.3		%	(110) bps


	Twelve Months Ended
	December 31, 2020
Operating cash flow	$	636.2



Adjusted net income	$	552.2
Cash conversion ratio	115		%


	Year Ended
	December 31, 2020		December 31, 2019		December 31, 2018
Cash Flows From (For) Operating Activities
Net income (loss)	$	(162.6)	$	146.1	$	131.0
Adjustments to derive cash flows:
Depreciation and amortization	384.8		396.5		423.6
Loss (Gain) on sale of business	20.9		(71.7)		—
Share-based compensation	58.5		52.2		37.7
Impairment charges	346.8		184.5		224.4
Asset abandonments	—		11.0		—
Change in financial assets	96.4		(22.1)		(188.7)
Loss on extinguishment of debt	20.0		0.2		0.5
Restructuring charges	3.5		26.3		21.0
Deferred income taxes	(54.5)		(43.9)		(17.9)
Amortization of debt premium	(2.4)		(4.4)		(8.1)
Other non-cash adjustments, net	(6.0)		26.6		(11.1)
Subtotal	705.4		701.3		612.4
Increase (decrease) in cash due to:
Accounts receivable	168.9		(140.7)		21.0
Inventories	(170.6)		(67.0)		(98.6)
Accounts payable	(2.7)		17.0		28.8
Payroll and related taxes	10.8		(3.7)		(34.5)
Accrued customer programs	(43.3)		(48.6)		25.5
Accrued liabilities	(23.1)		(23.2)		(20.9)
Accrued income taxes	(7.0)		(74.5)		68.1
Other, net	(2.2)		27.2		(8.8)
Subtotal	(69.2)		(313.5)		(19.4)
Net cash from (for) operating activities	636.2		387.8		593.0
Cash Flows From (For) Investing Activities
Proceeds from royalty rights	4.1		2.9		13.7
Acquisitions of businesses, net of cash acquired	(168.5)		(747.7)		—
Asset acquisitions	(35.2)		(149.1)		(35.6)
Purchase of equity method investment	(15.0)		—		—
Purchase of investment securities	—		—		(7.5)
Proceeds from the Royalty Pharma contingent milestone	—		250.0		—
Additions to property, plant and equipment	(170.4)		(137.7)		(102.6)
Net proceeds from sale of business	187.8		182.5		5.2

Other investing, net	9.4		3.0		—