The largest US manufacturer of over-the-counter pharmaceutical and nutritional products, Perrigo, has reported a 4 per cent increase in net sales for the third quarter of 2002 to $198.5 million (€221.2m).
Profits for the period were $19.3 million, including a civil lawsuit settlement of $5.0 million after-tax. Excluding the lawsuit settlement, net income in the quarter was $14.3 million compared with $10.1 million a year earlier.
"We are pleased with the excellent results recorded in our fiscal third quarter," said David T. Gibbons, president and chief executive officer, adding that strong vitamin sales had helped drive revenues during the quarter.
For the nine months ended 30 March 2002, sales were $644.3 million, an increase of 13 per cent on the $572.6 million reported a year earlier. Net sales for the first nine months of 2001, excluding a charge relating to the discontinuation of various cough/cold and diet aid products, were $586.6 million.
Net income for the nine months was $48.9 million, including the $5.0 million after-tax lawsuit settlement. This compares with reported net income of $21.5 million a year ago. Excluding the product discontinuation charge, net income for the nine months of 2001 was $36.8 million.
"We have done a good job to date meeting our plans while managing through a seasonal cycle that proved difficult to forecast. Revenues, new product introductions, cost control initiatives and working capital measures have met our targets within this challenging environment. In line with our seasonal pattern, we expect lower fourth quarter sales and margins compared with the third quarter and expect earnings of $0.04 to $0.06 per share," Gibbons said.
"Looking forward, we see continuing progress as we execute against our core strategies - quality, customer service, low cost and innovation. However, we also anticipate challenges ahead, such as the speed with which we can implement new global sourcing initiatives meant to offset rising costs for health care coverage, liability insurance and quality programmes.
"While we will be challenged to continue increasing our margins and income next year, we are confident Perrigo is doing all the right things to achieve our long-term goals and to maintain our strong leadership position in the store brand market," he concluded.