Correspondence 0001193125-23-235297 from PERRIGO Co plc (PRGO) (CIK 0001585364) (PRGO)
PERRIGO Co plc (PRGO) (CIK 0001585364)
Date: Sept. 14, 2023 · CIK: 0001585364 · Accession: 0001193125-23-235297
AI Filing Summary & Sentiment
File numbers found in text: 001-36353
Referenced dates: August 17, 2023, August 25, 2023
Letter
United States Securities and Exchange Commission Division of Corporation Finance Filed February 28, 2023 Form 8-K Filed August 8, 2023 File No. 001-36353
Re: PERRIGO Co plc
Dear Ms. Mast and Mr. Gordon,
We refer to the letter dated August 17, 2023, relating to the review by the Staff of the Securities and Exchange Commission (the “Staff”) of financial statements and related disclosures of Perrigo Company plc (the “Company”) in the above-referenced filings and to our response letter dated August 25, 2023. We also refer to the conference call between Ms. Mast and representatives of the Company on August 30, 2023, relating to the presentation of the Company’s reconciliation of Non-GAAP measures in the Form 8-K dated August 8, 2023 (the “Form 8-K”). During the conference call, Ms. Mast advised that the Staff continues to believe that such presentation is inconsistent with the guidance in C&DI 102.10(a) and 102.10(c), and requested that the Company revise such presentation.
The Company respectfully acknowledges the Staff’s comment and informs the Staff that it will revise the referenced disclosures in its future filings so that the reconciliation tables do not resemble a “non-GAAP income statement” as described in C&DI 102.10(c). The following reflects the revised presentation as applied to the earnings release for the second quarter ended July 1, 2023 furnished under Item 2.02 of the Form 8-K.
Table I
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)
Three Months Ended July 1, 2023
Consolidated Continuing Operations
Gross Profit
Operating Income
Income from Continuing Operations(1)
Diluted Earnings per Share(1)
Reported
$ 428.0
$ 56.8
$ 8.9
$ 0.06
As a % of reported net sales(2)
35.9 %
4.8 %
0.7 %
Pre-tax adjustments:
Amortization expense related primarily to acquired intangible assets
33.7
69.7
70.1
0.51
Restructuring charges and other termination benefits
0.1
5.8
5.8
0.04
Acquisition and integration-related charges and contingent consideration adjustments
—
2.9
2.9
0.02
Unusual litigation
—
2.1
2.1
0.02
(Gain) loss on investment securities
—
—
0.1
—
Milestone payments received related to royalty rights
—
—
(10.0 )
(0.07 )
Non-GAAP tax adjustments(3)
—
—
6.8
0.05
Adjusted
461.8
137.3
86.7
0.63
As a % of reported net sales(2)
38.7 %
11.5 %
7.3 %
Diluted weighted average shares outstanding (in millions)
Reported
136.6
Note: amounts may not add due to rounding. Percentages are based on actuals.
(1) 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.
(2) Reported net sales for the three months ended July 1, 2023 was $1,193.1.
(3) The non-GAAP tax adjustments are primarily due to (1) $14.3 million of tax expense related to pre-tax non-GAAP adjustments and the interim tax accounting requirements in ASC740 - Income Taxes, offset by the removal of (2) $20.6 million of tax expense related to audit settlements during the second quarter 2023.
Table II
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)
Three Months Ended July 1, 2023
Consolidated Continuing Operations
R&D Expense
DSG&A Expense
Restructuring and Other
Reported
$ 32.2
$ 332.3
$ 6.7
As a % of reported net sales(1)
2.7 %
27.9 %
0.6 %
Pre-tax adjustments:
Amortization expense related primarily to acquired intangible assets
(0.2 )
(35.7 )
—
Restructuring charges and other termination benefits
—
—
(5.7 )
Acquisition and integration-related charges and contingent consideration adjustments
—
(2.9 )
—
Unusual litigation
—
(2.1 )
—
Adjusted
32.0
291.6
1.0
As a % of reported net sales(1)
2.7 %
24.4 %
0.1 %
Note: amounts may not add due to rounding. Percentages are based on actuals.
(1) Reported net sales for the three months ended July 1, 2023 was $1,193.1.
Table III
PERRIGO COMPANY PLC
RECONCILIATION OF NON-GAAP MEASURES
SELECTED CONSOLIDATED INFORMATION
(in millions, except per share amounts)
(unaudited)
Three Months Ended July 1, 2023
Consolidated Continuing Operations
Interest and Other
Income Tax Expense
Reported
$ 34.3
$ 13.6
As a % of reported net sales(1)
2.9 %
1.1 %
Effective tax rate
60.5 %
Pre-tax adjustments:
Amortization expense related primarily to acquired intangible assets
(0.5 )
—
(Gain) loss on investment securities
(0.1 )
—
Milestone payments received related to royalty rights
10.0
—
Non-GAAP tax adjustments(2)
—
(6.8 )
Adjusted
43.8
6.8
As a % of reported net sales(1)
3.7 %
0.5 %
Adjusted effective tax rate
7.3 %
Note: amounts may not add due to rounding. Percentages are based on actuals.
(1) Reported net sales for the three months ended July 1, 2023 was $1,193.1.
(2) The non-GAAP tax adjustments are primarily due to (1) $14.3 million of tax expense related to pre-tax non-GAAP adjustments and the interim tax accounting requirements in ASC740 - Income Taxes, offset by the removal of (2) $20.6 million of tax expense related to audit settlements during the second quarter 2023.
* * *
We appreciate the opportunity to address the Staff’s comments. If you have any further questions regarding this matter, please contact Eduardo Bezerra, Chief Financial Officer, at eduardo.bezerra@perrigo.com.
Very truly yours,
/s/ Eduardo Bezerra
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CORRESP 1 filename1.htm CORRESP United States Securities and Exchange Commission Division of Corporation Finance 100 F Street, NE Washington, D.C. 20549 Attn: Mary Mast Dan Gordon September 14, 2023 Re: PERRIGO Co plc Form 10-K for the Year Ended December 31, 2022 Filed February 28, 2023 Form 8-K Filed August 8, 2023 File No. 001-36353 Dear Ms. Mast and Mr. Gordon, We refer to the letter dated August 17, 2023, relating to the review by the Staff of the Securities and Exchange Commission (the “Staff”) of financial statements and related disclosures of Perrigo Company plc (the “Company”) in the above-referenced filings and to our response letter dated August 25, 2023. We also refer to the conference call between Ms. Mast and representatives of the Company on August 30, 2023, relating to the presentation of the Company’s reconciliation of Non-GAAP measures in the Form 8-K dated August 8, 2023 (the “Form 8-K”). During the conference call, Ms. Mast advised that the Staff continues to believe that such presentation is inconsistent with the guidance in C&DI 102.10(a) and 102.10(c), and requested that the Company revise such presentation. The Company respectfully acknowledges the Staff’s comment and informs the Staff that it will revise the referenced disclosures in its future filings so that the reconciliation tables do not resemble a “non-GAAP income statement” as described in C&DI 102.10(c). The following reflects the revised presentation as applied to the earnings release for the second quarter ended July 1, 2023 furnished under Item 2.02 of the Form 8-K. 1 Table I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended July 1, 2023 Consolidated Continuing Operations Gross Profit Operating Income Income from Continuing Operations(1) Diluted Earnings per Share(1) Reported $ 428.0 $ 56.8 $ 8.9 $ 0.06 As a % of reported net sales(2) 35.9 % 4.8 % 0.7 % Pre-tax adjustments: Amortization expense related primarily to acquired intangible assets 33.7 69.7 70.1 0.51 Restructuring charges and other termination benefits 0.1 5.8 5.8 0.04 Acquisition and integration-related charges and contingent consideration adjustments — 2.9 2.9 0.02 Unusual litigation — 2.1 2.1 0.02 (Gain) loss on investment securities — — 0.1 — Milestone payments received related to royalty rights — — (10.0 ) (0.07 ) Non-GAAP tax adjustments(3) — — 6.8 0.05 Adjusted 461.8 137.3 86.7 0.63 As a % of reported net sales(2) 38.7 % 11.5 % 7.3 % Diluted weighted average shares outstanding (in millions) Reported 136.6 Note: amounts may not add due to rounding. Percentages are based on actuals. (1) 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. (2) Reported net sales for the three months ended July 1, 2023 was $1,193.1. (3) The non-GAAP tax adjustments are primarily due to (1) $14.3 million of tax expense related to pre-tax non-GAAP adjustments and the interim tax accounting requirements in ASC740 - Income Taxes, offset by the removal of (2) $20.6 million of tax expense related to audit settlements during the second quarter 2023. Table II PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended July 1, 2023 Consolidated Continuing Operations R&D Expense DSG&A Expense Restructuring and Other Reported $ 32.2 $ 332.3 $ 6.7 As a % of reported net sales(1) 2.7 % 27.9 % 0.6 % Pre-tax adjustments: Amortization expense related primarily to acquired intangible assets (0.2 ) (35.7 ) — Restructuring charges and other termination benefits — — (5.7 ) Acquisition and integration-related charges and contingent consideration adjustments — (2.9 ) — Unusual litigation — (2.1 ) — Adjusted 32.0 291.6 1.0 As a % of reported net sales(1) 2.7 % 24.4 % 0.1 % Note: amounts may not add due to rounding. Percentages are based on actuals. (1) Reported net sales for the three months ended July 1, 2023 was $1,193.1. 2 Table III PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended July 1, 2023 Consolidated Continuing Operations Interest and Other Income Tax Expense Reported $ 34.3 $ 13.6 As a % of reported net sales(1) 2.9 % 1.1 % Effective tax rate 60.5 % Pre-tax adjustments: Amortization expense related primarily to acquired intangible assets (0.5 ) — (Gain) loss on investment securities (0.1 ) — Milestone payments received related to royalty rights 10.0 — Non-GAAP tax adjustments(2) — (6.8 ) Adjusted 43.8 6.8 As a % of reported net sales(1) 3.7 % 0.5 % Adjusted effective tax rate 7.3 % Note: amounts may not add due to rounding. Percentages are based on actuals. (1) Reported net sales for the three months ended July 1, 2023 was $1,193.1. (2) The non-GAAP tax adjustments are primarily due to (1) $14.3 million of tax expense related to pre-tax non-GAAP adjustments and the interim tax accounting requirements in ASC740 - Income Taxes, offset by the removal of (2) $20.6 million of tax expense related to audit settlements during the second quarter 2023. * * * We appreciate the opportunity to address the Staff’s comments. If you have any further questions regarding this matter, please contact Eduardo Bezerra, Chief Financial Officer, at eduardo.bezerra@perrigo.com. Very truly yours, /s/ Eduardo Bezerra Eduardo Bezerra Chief Financial Officer 3