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UNITED STATES OF AMERICA
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 28, 2002
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 0-19725
PERRIGO COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MICHIGAN 38-2799573
- ------------------------------- -------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
515 EASTERN AVENUE
ALLEGAN, MICHIGAN 49010
--------------------- ----------
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICES)
(269) 673-8451
----------------------------------------------------
(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, and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
OUTSTANDING AT
CLASS OF COMMON STOCK OCTOBER 21, 2002
--------------------- -------------------
WITHOUT PAR 69,363,134 SHARES
PERRIGO COMPANY AND SUBSIDIARIES
FORM 10-Q
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated statements of income -- For the quarters ended
September 28, 2002 and September 29, 2001 1
Condensed consolidated balance sheets -- September 28, 2002, June 29, 2002
and September 29, 2001 2
Condensed consolidated statements of cash flows -- For the quarters ended
September 28, 2002 and September 29, 2001 3
Notes to condensed consolidated financial statements -- September 28, 2002 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risks 11
Item 4. Controls and Procedures 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
CERTIFICATIONS 14
PERRIGO COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
First Quarter
----------------------------
2003 2002
--------- ---------
Net sales $ 213,215 $ 217,116
Cost of sales 151,536 164,777
--------- ---------
Gross profit 61,679 52,339
--------- ---------
Operating expenses
Distribution 4,027 4,017
Research and development 5,448 5,296
Selling and administration 24,270 22,576
--------- ---------
Subtotal 33,745 31,889
Unusual litigation (3,128) --
--------- ---------
Total 30,617 31,889
--------- ---------
Operating income 31,062 20,450
Interest and other, net (208) (163)
--------- ---------
Income before income taxes 31,270 20,613
Income tax expense 11,259 7,523
--------- ---------
Net income $ 20,011 $ 13,090
========= =========
Earnings per share
Basic $ 0.28 $ 0.18
Diluted $ 0.28 $ 0.17
Weighted average shares outstanding:
Basic 70,719 74,314
Diluted 72,136 76,925
See accompanying notes to condensed consolidated financial statements.
-1-
PERRIGO COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 28, June 29, September 29,
2002 2002 2001
--------- --------- ---------
Assets: (unaudited) (unaudited)
Current assets
Cash and cash equivalents $ 49,214 $ 76,824 $ 297
Accounts receivable, net of allowances 105,777 82,560 120,525
Inventories, net of allowances 163,704 155,611 171,119
Prepaid expenses and other current assets 8,635 6,896 11,536
Current deferred income taxes 19,863 19,860 19,203
Assets held for sale -- -- 16,207
--------- --------- ---------
Total current assets 347,193 341,751 338,887
Property and equipment 405,258 399,461 382,055
Less accumulated depreciation 195,486 188,417 171,990
--------- --------- ---------
209,772 211,044 210,065
Goodwill, net 35,919 35,919 47,045
Other 4,295 5,073 3,820
--------- --------- ---------
$ 597,179 $ 593,787 $ 599,817
========= ========= =========
Liabilities and Shareholders' Equity:
Current liabilities
Accounts payable $ 78,431 $ 74,449 $ 84,862
Notes payable 8,729 8,338 8,979
Payrolls and related taxes 23,232 31,338 18,934
Accrued expenses 39,740 32,721 31,141
Income taxes 17,864 8,088 19,097
--------- --------- ---------
Total current liabilities 167,996 154,934 163,013
Deferred income taxes 21,143 20,313 17,784
Long-term debt -- -- 21,380
Other long-term liabilities 3,079 2,396 2,353
Shareholders' equity
Preferred stock, without par value, 10,000 shares authorized -- -- --
Common stock, without par value, 200,000 shares authorized 57,340 89,222 105,497
Unearned compensation (499) (608) (1,017)
Accumulated other comprehensive income 952 373 757
Retained earnings 347,168 327,157 290,050
--------- --------- ---------
Total shareholders' equity 404,961 416,144 395,287
--------- --------- ---------
$ 597,179 $ 593,787 $ 599,817
========= ========= =========
Supplemental Disclosures of Balance Sheet Information:
Allowance for doubtful accounts $ 8,050 $ 7,569 $ 6,902
Allowance for inventory $ 20,714 $ 21,360 $ 30,722
Working capital $ 179,197 $ 186,817 $ 175,874
Preferred stock, shares issued -- -- --
Common stock, shares issued 69,424 72,550 73,996
See accompanying notes to condensed consolidated financial statements.
-2-
PERRIGO COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
First Quarter
------------------------
2003 2002
-------- --------
Cash Flows From (For) Operating Activities:
Net income $ 20,011 $ 13,090
Depreciation and amortization 6,812 6,808
-------- --------
26,823 19,898
Accounts receivable (23,219) (24,697)
Inventories (8,111) (10,007)
Current and deferred income taxes 10,587 (1,115)
Accounts payable 3,998 477
Payrolls and related taxes (8,106) (7,187)
Other 6,798 2,522
-------- --------
Net cash from (for) operating activities 8,770 (20,109)
-------- --------
Cash Flows For Investing Activities:
Additions to property and equipment (4,950) (4,786)
-------- --------
Net cash for investing activities (4,950) (4,786)
-------- --------
Cash Flows From (For) Financing Activities:
Borrowings of long-term debt -- 21,380
Borrowings/(repayments) of short-term debt 393 (3,780)
Issuance of common stock 143 9,785
Repurchase of common stock (32,025) (13,240)
Other 59 31
-------- --------
Net cash (for) from financing activities (31,430) 14,176
-------- --------
Net Decrease in Cash and Cash Equivalents (27,610) (10,719)
Cash and Cash Equivalents, at Beginning of Period 76,824 11,016
-------- --------
Cash and Cash Equivalents, at End of Period $ 49,214 $ 297
======== ========
Supplemental Disclosures of Cash Flow Information:
Interest paid $ 257 $ 604
Income taxes paid $ 657 $ 8,344
See accompanying notes to condensed consolidated financial statements.
-3-
PERRIGO COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 28, 2002
(in thousands)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals and other adjustments) considered necessary for a fair presentation
have been included. The Company has reclassified certain amounts to conform to
the current year presentation.
Operating results for the quarter ended September 28, 2002 are not necessarily
indicative of the results that may be expected for the year ending June 28,
2003. The unaudited condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and footnotes included
in the Company's annual report on Form 10-K for the year ended June 29, 2002.
In June 2002, the Financial Accounting Standards Board (FASB) issued SFAS 146,
"Accounting for Costs Associated with Exit or Disposal Activities". SFAS 146
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan. This statement supercedes the guidance provided by
Emerging Issues Task Force 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)". SFAS 146 is required to be adopted for exit
or disposal activities initiated after December 31, 2002. Because SFAS 146 only
affects the timing of the recognition of the liabilities to be incurred if an
entity makes a decision to exit or dispose of a particular activity, the Company
does not expect the adoption of SFAS 146 to have a material impact on the
Company's financial statements. Accordingly, the application of SFAS 146 to the
restructuring recorded in fiscal 2002 would have resulted in no material
difference in the Company's financial statements.
NOTE B - INVENTORIES
September 28, June 29, September 29,
2002 2002 2001
-------- -------- --------
Finished goods $ 66,765 $ 62,360 $ 76,240
Work in process 59,629 57,870 57,009
Raw materials 37,310 35,381 37,870
-------- -------- --------
$163,704 $155,611 $171,119
======= ======= ========
-4-
NOTE C - SHAREHOLDERS' EQUITY
During the first quarter of fiscal 2003, the Company purchased 3,142 shares of
common stock for $32,025 under its common stock repurchase program. As of
October 29, 2002, the Company has purchased 61 shares for $642 in the second
quarter of fiscal 2003 and may purchase shares with a value of up to $14,321.
All repurchased common stock has been retired.
NOTE D - COMPREHENSIVE INCOME
Comprehensive income is comprised of all changes in shareholders' equity during
the period other than from transactions with shareholders. Comprehensive income
consists of the following:
First Quarter
---------------------
2003 2002
------ ------
Net income $20,011 $13,090
Other comprehensive income:
Foreign currency translation adjustments 579 329
------ ------
Comprehensive income $20,590 $13,419
====== ======
NOTE E - EARNINGS PER SHARE
A reconciliation of the numerators and denominators used in the basic and
diluted Earnings per Share (EPS) calculation follows:
First Quarter
--------------------
2003 2002
------- -------
Numerator:
Net income used for both basic and diluted EPS $20,011 $13,090
======= =======
Denominator:
Weighted average shares outstanding for basic EPS 70,719 74,314
Dilutive effect of stock options 1,417 2,611
------- -------
Weighted average shares outstanding for diluted EPS 72,136 76,925
======= =======
Options outstanding where the exercise price was higher than the market price
were 1,402 and 446 for the first quarter of fiscal 2003 and 2002, respectively.
These options are excluded from the diluted EPS calculation.
NOTE F - COMMITMENTS AND CONTINGENCIES
The Company is currently defending numerous individual lawsuits pending in
various state and federal courts involving PPA, an ingredient formerly used in
the manufacture of certain OTC cough/cold and diet products. The Company
discontinued using PPA in November 2000 at the request of the FDA. These cases
allege that the plaintiff suffered injury, generally some type of stroke, from
ingesting PPA-containing products. Most of these suits also name
-5-
other manufacturers or retailers of PPA-containing products. These personal
injury suits seek an unspecified amount of compensatory, exemplary and statutory
damages. The Company maintains product liability insurance coverage for the
claims asserted in these lawsuits.
The Company believes that it has meritorious defenses to these lawsuits and
intends to vigorously defend them. At this time, the Company cannot determine
whether it will be named in additional PPA-related suits, the outcome of
existing suits or the effect that PPA-related suits may have on its financial
condition or operating results.
In August 1999, the Company filed a civil antitrust lawsuit in the U.S. District
Court for the Western District of Michigan against a group of vitamin raw
material suppliers alleging the defendants conspired to fix the prices of
vitamin raw materials sold to the Company. The relief sought includes money
damages and a permanent injunction enjoining defendants from future violations
of antitrust laws. The Company has entered into settlement agreements with the
remaining defendants. The Company received settlement payments of $3,128 in
fiscal 2003, net of attorney fees and expenses that were withheld prior to the
disbursement of the funds to the Company.
NOTE G - SEGMENT INFORMATION
The Company has one reportable segment, store brand health care, that
encompasses two operating segments, OTC pharmaceuticals and nutritional
products. All other consists of the operating segments, Quimica y Farmacia S.A.
de C.V. (Quifa), the Company's Mexican operating subsidiary; and Wrafton
Laboratories Limited (Wrafton), the Company's United Kingdom operating
subsidiary, neither of which meet the quantitative thresholds for separate
disclosure. The accounting policies of all of the operating segments are the
same as those described in the summary of significant accounting policies in
Note A.
Store Brand All
Health Care Other Total
----------- ----- -----
First Quarter 2003
Net sales $195,069 $ 18,146 $213,215
Operating income $ 30,482 $ 580 $ 31,062
Operating income % 15.6% 3.2% 14.6%
First Quarter 2002
Net sales $202,888 $ 14,228 $217,116
Operating income $ 19,887 $ 563 $ 20,450
Operating income % 9.8% 4.0% 9.4%
NOTE H - RESTRUCTURING
In the fourth quarter of fiscal 2002, the Company approved a restructuring plan
related to Quifa. The implementation of the plan began in June 2002 and is
expected to be completed in its entirety by June 2003. No additional charges
related to this restructuring plan were recorded or are expected to be recorded
in fiscal 2003. In the first quarter of fiscal 2003, $328 was paid primarily
related to severance costs and professional fees. Twenty-one administrative
employees have been terminated in fiscal 2003.
-6-
The activity of the restructuring reserve is detailed in the following table:
2002 Restructuring
Severance and Other Costs
Balance at June 29, 2002 $2,500
Reductions (328)
------
Balance at September 28, 2002 $2,172
======
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
FIRST QUARTER OF FISCAL YEARS 2003 AND 2002
(in thousands)
RESULTS OF OPERATIONS
FIRST QUARTER OF FISCAL YEARS 2003 AND 2002
Results of Operations
STORE BRAND HEALTH CARE
First Quarter
-----------------------
2003 2002
-----------------------
Net sales $195,069 $202,888
Gross profit $ 57,017 $ 48,355
Gross profit % 29.2% 23.8%
Operating expenses $ 26,535 $ 28,468
Operating expenses % 13.6% 14.0%
Operating income $ 30,482 $ 19,887
Operating income % 15.6% 9.8%
Net Sales
Fiscal 2003 net sales decreased 4% or $7,819 to $195,069 from $202,888 during
fiscal 2002. Net sales decreased approximately $12,000 primarily due to lower
unit sales of analgesic and antacid products. The net sales decrease was
partially offset by a favorable mix of products sold and improved net realized
pricing. The analgesic sales decline was related to existing products. Sales of
antacid products were enhanced in fiscal 2002 by famotidine 10 mg tablets, then
recently introduced.
Gross Profit
Gross profit increased $8,662 or 18% during fiscal 2003 compared to fiscal 2002.
The gross profit percent to net sales was 29.2% in fiscal 2003 compared to 23.8%
in fiscal 2002. Approximately half of the increase in gross profit was due to
lower obsolescence expenses resulting from lower finished goods inventory when
compared to the first quarter of fiscal 2002 and improved aging of that
inventory. The remaining increase resulted from a favorable mix of products sold
and improved net realized pricing.
Operating Expenses
Operating expenses decreased $1,933 during fiscal 2003 compared to fiscal 2002.
Operating expenses were favorably impacted by unusual litigation income of
$3,128. Selling and administration increased $1,202 primarily due to rising
insurance costs. The Company expects insurance costs to continue to be higher in
fiscal 2003 than fiscal 2002.
-8-
ALL OTHER
First Quarter
----------------------
2003 2002
----------------------
Net sales $18,146 $14,228
Gross profit $ 4,662 $ 3,984
Gross profit % 25.7% 28.0%
Operating expenses $ 4,082 $ 3,421
Operating expenses % 22.5% 24.0%
Operating income $ 580 $ 563
Operating income % 3.2% 4.0%
The increases in net sales, gross profit and operating expenses were primarily
due to Wrafton. Because fiscal 2002 was a transitional year for Wrafton, the
first quarter of fiscal 2002 included two months of results compared to the
first quarter of fiscal 2003, which included three months of results.
INTEREST AND OTHER
Interest and other, net decreased $45 during fiscal 2003. Interest expense was
$46 for fiscal 2003 compared to $380 for fiscal 2002. The difference in interest
expense was primarily due to invested cash in fiscal 2003 versus borrowings in
fiscal 2002.
INCOME TAXES
The effective tax rate was 36.0% for fiscal 2003 and 36.5% for fiscal 2002.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
For fiscal 2003, working capital, including cash, decreased $7,620 to $179,197
from $186,817. Cash and cash equivalents decreased from $76,824 to $49,214.
Cash flow from operating activities was $8,770 for fiscal 2003. Cash flow was
positively impacted by net income of $20,011 that included $2,000 of after-tax
income related to vitamin litigation settlements and depreciation of $6,812.
Income taxes increased $10,587 primarily due to the timing of certain payments
and accounts payable increased $3,998. Cash flow was negatively impacted by an
increase in accounts receivable of $23,219 primarily due to seasonal sales
increases and a decrease in payrolls and related taxes of $8,106 primarily due
to the timing of certain payments. Additionally, inventory increased $8,111. The
impact on both accounts payable and inventory was primarily due to seasonal
production levels.
Capital expenditures for facilities and equipment of $4,950 during fiscal 2003
were primarily for normal equipment replacement, productivity enhancements and
capacity additions.
During fiscal 2003, the Company continued to repurchase shares of its common
stock. The Company purchased 3,142 shares for $32,025 in the first quarter of
fiscal 2003. As of
-9-
October 29, 2002, the Company has purchased 61 shares for $642 in the second
quarter of fiscal 2003 and may purchase additional shares with a value of up to
$14,321.
The Company had no long-term debt at September 28, 2002 and had $175,000
available on its unsecured credit facility. Cash flows from operations and
borrowings from its credit facility are expected to be sufficient to finance the
known and/or foreseeable liquidity and capital needs of the Company.
CRITICAL ACCOUNTING POLICIES
Determination of certain amounts in the Company's financial statements requires
the use of estimates. These estimates are based upon the Company's historical
experiences combined with management's understanding of current facts and
circumstances. Although the estimates are considered reasonable, actual results
could differ from the estimates. Discussed below are the accounting policies
considered by management to require the most judgement and to be critical in the
preparation of the financial statements. Other accounting policies are included
in Note A of the condensed consolidated financial statements.
Allowance for Doubtful Accounts - The Company maintains an allowance for
customer accounts that reduces receivables to amounts that are expected to be
collected. In estimating the allowance, management considers factors such as
current overall economic conditions, industry-specific economic conditions,
historical and anticipated customer performance, historical experience with
write-offs and the level of past-due amounts. Changes in these conditions may
result in additional allowances. The allowance for doubtful accounts was $8,050,
$7,569 and $6,902 at September 28, 2002, June 29, 2002 and September 29, 2001,
respectively.
Inventory - The Company maintains an allowance for estimated obsolete or
unmarketable inventory based on the difference between the cost of the inventory
and its estimated market value. In estimating the allowance, management
considers factors such as excess or slow moving inventories, product expiration
dating, current and future customer demand, and market conditions. Changes in
these conditions may result in additional allowances. The allowance for
inventory was $20,714, $21,360 and $30,722 at September 28, 2002, June 29, 2002
and September 29, 2001, respectively.
Goodwill - Goodwill is tested for impairment annually or more frequently if
changes in circumstances or the occurrence of events suggest impairment exists.
The test for impairment requires the Company to make several estimates about
fair value, most of which are based on projected future cash flows. The
estimates associated with the goodwill impairment tests are considered critical
due to the judgments required in determining fair value amounts, including
projected future cash flows. Changes in these estimates may result in the
recognition of an impairment loss.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements in Management's Discussion and Analysis of Results of
Operations and Financial Condition and other portions of this report are
forward-looking statements within the
-10-
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 pages 23-27 of the Company's Form 10-K
for the year ended June 29, 2002 for a discussion of certain important factors
that relate to forward-looking statements contained in this report. Although the
Company believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to be correct. Unless otherwise required by applicable securities laws,
the Company disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
The Company is exposed to market risks, which include changes in interest rates
and changes in the foreign currency exchange rate as measured against the U.S.
dollar.
The Company is exposed to interest rate changes primarily as a result of
interest income earned on its investment of cash on hand and interest expense
related to its variable rate line of credit used to finance working capital when
necessary and for general corporate purposes. The Company had invested cash and
cash equivalents of $49,214 and no outstanding borrowings on its credit facility
at September 28, 2002. Management believes that a fluctuation in interest rates
in the near future will not have a material impact on the Company's consolidated
financial statements.
The Company has international operations in Mexico and the United Kingdom. These
operations transact business in the local currency, thereby creating exposures
to changes in exchange rates. The Company does not currently have hedging or
similar foreign currency contracts. Significant currency fluctuations could
adversely impact foreign revenues; however, the Company does not expect any
significant changes in foreign currency exposure in the near future.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
The Company's Chief Executive Officer and its Chief Financial Officer, have
reviewed and evaluated the effectiveness of the Company's disclosure controls
and procedures (as defined in the Securities Exchange Act of 1934 Rules
13a-14(c) and 15d-14(c)) as of a date within 90 days of the filing date of this
quarterly report on Form 10-Q (the "Evaluation Date"). Based on their review and
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that, as of the Evaluation Date, the Company's disclosure controls and
procedures were adequate and effective to ensure that material information
relating to the Company and its consolidated subsidiaries would be made known to
them by others within those entities in a timely manner, particularly during the
period in which this quarterly report on Form 10-Q was being prepared, and that
no changes are required at this time.
(b) Changes in Internal Controls
-11-
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect the Company's internal controls
subsequent to the Evaluation Date, or any significant deficiencies or material
weaknesses in such internal controls requiring corrective actions. As a result,
no corrective actions were taken.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number Description
3(a) Amended and Restated Articles of Incorporation of Registrant,
incorporated by reference from Amendment No. 2 to Registration
Statement No. 33-43834 filed by the Registrant on September
23, 1993.
3(b) Restated Bylaws of Registrant, dated April 10, 1996, as
amended, incorporated by reference from the Registrant's Form
10-K filed on September 6, 2000.
4(a) Shareholders' Rights Plan, incorporated by reference from the
Registrant's Form 8-K filed on April 10, 1996.
10(a)* Registrant's Management Incentive Bonus Plan for Fiscal Year
2003.
10(b)* Registrant's Nonqualified Deferred Compensation Plan, as
amended.
10(c)* Consulting Agreement, dated July 31, 2002, between Registrant
and Michael J. Jandernoa, incorporated by reference from the
Registrant's Form 10-K filed on September 18, 2002.
99(a) Certification under Section 906 of the Sarbanes-Oxley Act of
2002.
* Denotes management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
The Company filed a report on August 20, 2002 that announced it entered into
settlement agreements with the remaining defendants related to a civil antitrust
lawsuit.
The Company filed a report on August 20, 2002 that announced the Board of
Directors had approved extending the Company's share repurchase program.
-12-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PERRIGO COMPANY
------------------------------------
(Registrant)
Date: October 30, 2002 By: /s/David T. Gibbons
------------------ ----------------------------------------------------
David T. Gibbons
President and Chief Executive Officer
Date: October 30, 2002 By: /s/Douglas R. Schrank
------------------ ----------------------------------------------------
Douglas R. Schrank
Executive Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)
-13-
CERTIFICATION
I, David T. Gibbons, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Perrigo Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: October 30, 2002
/s/ David T. Gibbons
--------------------------------------
David T. Gibbons
President and Chief Executive Officer
-14-
CERTIFICATION
I, Douglas R. Schrank, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Perrigo Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: October 30, 2002
/s/ Douglas R. Schrank
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Douglas R. Schrank
Executive Vice President and
Chief Financial Officer
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