Perrigo Company plc: Quarterly report which provides a continuing view of a company’s financial position

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FORM 10-Q

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PERRIGO Co plc - PRGO

Filed: November 08, 2018 (period: September 29, 2018)

Quarterly report with a continuing view of a company's financial position

The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 _______________________________________________

FORM 10-Q

_______________________________________________

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 29, 2018

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-36353 _______________________________________________

Perrigo Company plc

(Exact name of registrant as specified in its charter) _______________________________________________

Ireland

Not Applicable

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

Treasury Building, Lower Grand Canal Street, Dublin 2, Ireland

-

(Address of principal executive offices)

(Zip Code)

+353 1 7094000

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in

Rule 12b-2 of the Exchange Act.

Large accelerated filer

[X]

Accelerated filer

[ ]

Smaller reporting company

[ ]

Emerging growth company

[ ]

Non-accelerated filer

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

[ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] YES [X] NO

As of November 2, 2018, there were 135,856,544 ordinary shares outstanding.

PERRIGO COMPANY PLC

FORM 10-Q

INDEX

PAGE

NUMBER

Cautionary Note Regarding Forward-Looking Statements 1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 29, 2018 and September

30, 2017 2

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 29,

2018 and September 30, 2017 3

Condensed Consolidated Balance Sheets as of September 29, 2018 and December 31, 2017 4

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 29, 2018 and September 30, 2017 5

Notes to the Condensed Consolidated Financial Statements

1 Summary of Significant Accounting Policies 6

2 Revenue Recognition 8

3 Acquisitions and Divestitures 12

4 Goodwill and Other Intangible Assets 13

5 Inventories 15

6 Fair Value Measurements 15

7 Investments 18

8 Derivative Instruments and Hedging Activities 19

9 Indebtedness 21

10 Earnings per Share and Shareholders' Equity 22

11 Accumulated Other Comprehensive Income (Loss) 23

12 Income Taxes 23

13 Contingencies 26

14 Restructuring Charges 32

15 Segment Information 33

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 34

Item 3. Quantitative and Qualitative Disclosures About Market Risk 49

Item 4. Controls and Procedures 49

PART II. OTHER INFORMATION

Item 1. Legal Proceedings 50

Item 1A. Risk Factors 51

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 52

Item 6. Exhibits 53

SIGNATURES 54

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report 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. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this report, including certain statements contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "forecast," "predict," "potential" or the negative of those terms or other comparable terminology.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control, including: the timing, amount and cost of any share repurchases; future impairment charges; the success of management transition; customer acceptance of new products; competition from other industry participants, some of whom have greater marketing resources or larger market share in certain product categories than we do; pricing pressure from customers and consumers; potential third-party claims and litigation, including litigation relating to our restatement of previously-filed financial information; potential impacts of ongoing or future government investigations and regulatory initiatives; resolution of uncertain tax positions; the impact of tax reform legislation and healthcare policy; general economic conditions; fluctuations in currency exchange rates and interest rates; the consummation of announced acquisitions or dispositions and the success of such transactions, and our ability to realize the desired benefits thereof; and our ability to execute and achieve the desired benefits of announced cost-reduction efforts and strategic and other initiatives. Statements regarding the separation of our Prescription Pharmaceuticals business, including the expected benefits, anticipated timing, form of any such separation and whether the separation ultimately occurs, are all subject to various risks and uncertainties, including future financial and operating results, our ability to separate the business, the effect of existing interdependencies with our manufacturing and shared service operations, and the tax consequences of the planned separation to us or our shareholders. In addition, we may identify new, or be unable to remediate previously identified, material weaknesses in our internal control over financial reporting. Furthermore, we may incur additional tax liabilities in respect of 2016 and prior years or be found to have breached certain provisions of Irish company law in connection with our restatement of our previously-filed financial statements, which may result in additional expenses and penalties. These and other important factors, including those discussed in our Form 10-K for the year ended December 31, 2017, in this report under "Risk Factors" and in any subsequent filings with the United States Securities and Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this report are made only as of the date hereof, and unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

This report contains trademarks, trade names and service marks that are the property of Perrigo Company plc, as well as, for informational purposes, trademarks, trade names, and service marks that are the property of other organizations. Solely for convenience, certain trademarks, trade names, and service marks referred to in this report appear without the ®, ™ and SM symbols, but those references are not intended to indicate that we or the applicable owners, as the case may be, will not assert, to the fullest extent under applicable law, our or their rights to such trademarks, trade names, and service marks.

1

Perrigo Company plc - Item 1

PART I.

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(unaudited)

Three Months Ended

PERRIGO COMPANY PLC

September 29,

September 30,

September 29,

September 30,

2018

2017

2018

2017

$

1,133.1$

1,231.3$

3,536.5$

3,663.1

Cost of sales

708.3

733.5

2,148.0

2,196.4

Gross profit

424.8

497.8

1,388.5

1,466.7

Operating expenses

Distribution

22.5

21.5

71.0

64.2

Research and development

43.7

38.4

174.0

120.8

Selling

134.7

143.5

451.2

454.1

Administration

105.6

123.3

310.0

326.9

Impairment charges

221.8

7.8

223.5

47.4

Restructuring

18.0

3.8

23.2

54.7

Other operating expense (income)

0.5

(2.9)

6.6

(41.0)

Total operating expenses

546.8

335.4

1,259.5

1,027.1

Operating income (loss)

(122.0)

162.4

129.0

439.6

Change in financial assets

(74.9)

2.6

(65.9)

24.2

Interest expense, net

31.7

34.7

95.2

133.1

Other (income) expense, net

0.2

(3.6)

12.3

(1.1)

Loss on extinguishment of debt

-

-

0.5

135.2

Income (loss) before income taxes

(79.0)

128.7

86.9

148.2

Income tax expense (benefit)

(11.5)

84.2

37.3

101.8

Net income (loss)

$

(67.5)$

44.5$

49.6$

46.4

Earnings (loss) per share

Basic

$

0.33

Diluted

$

0.32

Weighted-average shares outstanding

Basic

142.5

Diluted

142.8

Dividends declared per share

$

0.48

Net sales

(0.49)

$

0.31

(0.49)$

0.31$

$

137.4 137.4

141.3 138.5

141.7139.0

0.19$

0.16$

See accompanying Notes to the Condensed Consolidated Financial Statements

2

Nine Months Ended

0.36

$

0.36$

0.57$

Disclaimer

Perrigo Company plc published this content on 08 November 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 08 November 2018 15:29:00 UTC