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The reported results above include a write-off of in-process research anddevelopment of $4.8 million after-tax and a charge to cost of sales associatedwith a step-up of inventory of $2.7 million after-tax related to the March 26,2007, acquisition of nine generic prescription products and four pipelineproducts from Glades Pharmaceuticals, Inc. (Refer to Table II at the end ofthis press release for additional non-GAAP disclosure information.)
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Perrigo President and CEO Joseph C. Papa stated, "In fiscal 2007 weachieved record sales in every segment, had record earnings for our fourthquarter and announced two strategic acquisitions designed to increase ourreturn on invested capital. This performance allowed us to significantlyincrease our research and development investment by funding an incremental $14million versus last year. It was another strong new product year with $77million in new product sales, led by smoking cessation. On top of that, wealso introduced $59 million of newly reformulated products to the market, allthe while improving our customer service levels and investing in our qualitysystems. The Rx and API segments outperformed our expectations in highlycompetitive markets.
We exit fiscal 2007 with a stronger balance sheet, lower net debt andoperating cash flow of $128.9 million. I am proud of the progress our teamhas made in the course of this fiscal year."
Fiscal Year 2007
Sales for the 12 months ended June 30, 2007 were $1,447.4 million,compared with $1,366.8 million last year, an increase of $80.6 million, or sixpercent. Reported net income for the 12 months was $73.8 million, or $0.79 pershare. In fiscal 2007 and fiscal 2006, the Company recorded several charges,associated primarily with acquisitions. These net of tax charges aresummarized as follows:
Excluding the impact of the charges noted above, adjusted net income forfiscal 2007 was $83.1 million, or $0.89 per share. For fiscal year 2006,adjusted net income was $77.8 million, or $0.83 per share.
(Refer to Table II at the end of this press release for additional non-GAAP disclosure information.)
Fiscal Fourth Quarter
In the fiscal year 2007 fourth quarter, sales were $374.3 million, anincrease of $19.2 million, or five percent, compared with $355.1 million lastyear. Reported net income was $18.8 million, or $0.20 per share, compared withnet income of $12.3 million, or $0.13 per share a year ago. In the fourthquarter of fiscal 2007 and fiscal 2006, the Company recorded several net oftax charges summarized as follows:
Adjusted net income, excluding the items above, was $22.7 million, or$0.24 per share, compared with adjusted net income of $17.8 million, or $0.19per share a year ago.
(Refer to Table II at the end of this press release for additional non-GAAP disclosure information.)
Consumer Healthcare
Consumer Healthcare segment sales for fiscal year 2007 were $1,037.3million, an increase of $43.1 million, or four percent, compared with $994.2million last year. The sales increase was driven by new product sales of $69million, largely nicotine gum and nicotine lozenge smoking cessation products.Reported operating income, which included a pre-tax charge of $6.5 million fora product recall, was $69.6 million compared with $78.8 million last year.Adjusted operating income was $72.5 million compared with $88.0 million lastyear.
Consumer Healthcare sales in the fourth quarter were $257.3 million, adecrease of $1.0 million, or less than one percent, compared with $258.3million last year. Reported operating income was $13.5 million, compared with$13.6 million a year ago. Adjusted operating income was $15.4 million,compared with $22.5
