Perrigo(PRGO) - 2022 Q4 - Annual Report

Financial Performance - Perrigo Company reported net sales of $4,451.6 million for the year ended December 31, 2022, an increase of 7.5% compared to $4,138.7 million in 2021[333]. - The cost of sales for 2022 was $2,996.2 million, resulting in a gross profit of $1,455.4 million, which is a slight increase from $1,416.2 million in 2021[333]. - Operating income decreased significantly to $78.9 million in 2022 from $410.4 million in 2021, reflecting a decline of 80.8%[333]. - The company incurred a net loss of $140.6 million in 2022, compared to a net loss of $68.9 million in 2021[333]. - Comprehensive loss for the year was $203.1 million, compared to a loss of $428.4 million in 2021, showing an improvement in overall financial performance[337]. - Net cash from operating activities was $307.3 million for 2022, compared to $156.3 million in 2021, indicating a significant increase of about 96.5%[340]. - The net loss for the year ended December 31, 2022, was $140.6 million, compared to a net loss of $68.9 million in 2021, indicating a deterioration in profitability[337]. Assets and Liabilities - Total assets increased to $11,017.3 million as of December 31, 2022, up from $10,425.7 million in 2021, reflecting a growth of approximately 5.7%[335]. - Long-term debt rose to $4,070.4 million, up from $2,916.7 million in 2021, marking an increase of approximately 39.5%[335]. - Total current liabilities decreased to $1,113.6 million from $1,587.9 million in 2021, a decline of approximately 30%[335]. - As of December 31, 2022, the total equity was $4,842.1 million, with accumulated earnings showing a deficit of $2,067.6 million[346]. - Cash and cash equivalents decreased significantly to $600.7 million from $1,864.9 million in the previous year, representing a decline of about 67.8%[340]. Acquisitions and Divestitures - The acquisition of HRA Pharma was completed for €1.8 billion (approximately $1.9 billion), generating net sales of $193.6 million and a net operating loss of $59.4 million from April 29, 2022, to December 31, 2022[410][411]. - The acquisition of Nestlé's Gateway infant formula plant and GoodStart brand for $110.0 million generated net sales of $42.7 million and operating income of $11.5 million from November 1, 2022, to December 31, 2022[419][420]. - The company has divested its Rx segment, which was reported as discontinued operations in 2021[352]. - The sale of the Latin American businesses to Advent International was completed for $23.9 million, resulting in a pre-tax loss of $1.4 million[433]. - The sale of the U.K.-based Rosemont Pharmaceuticals business generated cash consideration of approximately $195.0 million, resulting in a pre-tax loss of $21.1 million[437]. Goodwill and Intangible Assets - As of December 31, 2022, the goodwill related to the Company's Consumer Self-Care International segment was $1,446.0 million[304]. - Goodwill balance as of December 31, 2022, was $3,490.4 million, an increase from $2,999.4 million in 2021, primarily due to business acquisitions of $559.5 million[450]. - Total intangible assets as of December 31, 2022, amounted to $5,007.6 million, up from $3,683.8 million in 2021, with definite-lived intangibles increasing to $4,949.0 million[454]. - The total assets acquired from HRA Pharma were valued at $2,220.4 million, with goodwill of $559.5 million attributed to anticipated growth and synergies[415][418]. Research and Development - Research and development expenses were $123.1 million in 2022, slightly up from $122.0 million in 2021[333]. - The company incurs all research and development costs as expenses, including payments related to products under development and clinical trials[392]. Foreign Exchange and Interest Rate Risks - The Company is exposed to foreign exchange risk primarily due to operations in North America, Europe, China, and Australia[290]. - A 1% increase in interest rates would result in approximately $3.9 million of additional annual interest expense in 2023[295]. - The company entered into two non-designated currency option contracts with a total notional amount of $1.1 billion in September 2021, which was later increased to $2.0 billion in April 2022 due to market conditions[471]. - The company recorded a loss of $16.2 million and $20.9 million for the years ended December 31, 2022 and 2021, respectively, related to foreign currency options[471]. Internal Controls and Compliance - The company’s internal control over financial reporting was assessed as effective as of December 31, 2022, based on the COSO criteria[323]. - The company has not provided assurance that the FDA will approve the sale of daily oral contraceptives without a prescription in the United States[8]. Other Financial Metrics - The company reported interest expense of $156.0 million for 2022, an increase from $125.0 million in 2021[333]. - Cash dividends paid increased to $142.4 million in 2022 from $129.6 million in 2021, reflecting a rise of about 9.6%[343]. - The company reported a provision for credit losses of $3.2 million for the year ended December 31, 2022[357].