##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended:March 29, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 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. Employerincorporation or organization)
    
    Identification No.)515 Eastern AvenueAllegan, 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)
 YES þ NO o
  Large accelerated filer
þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
    
    Smaller reporting
company o(Do not check if a smaller reporting company)
 o YES þ NO




---



##### 



PERRIGO COMPANY
 FORM 10-Q
 INDEX
   PAGENUMBERCautionary Note Regarding Forward-Looking Statements
    
    
    1PART I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed consolidated statements of income  For the quarters and year-to-date ended March 29, 2008 and March 31, 2007
    
    
    2Condensed consolidated balance sheets  March 29, 2008, June 30, 2007 and March 31, 2007
    
    
    3Condensed consolidated statements of cash flows  For the year-to-date ended March 29, 2008 and March 31, 2007
    
    
    4Notes to condensed consolidated financial statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    32PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    33Item 1A. Risk Factors
    
    
    33Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 5. Other Information
    
    
    34Item 6. Exhibits
    
    
    36SIGNATURES
    
    
    37




---



##### 



Cautionary Note Regarding Forward-Looking Statements
  - 1 -




---



##### 



PERRIGO COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Third Quarter
    
    Year-to-Date2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    503,707
    
    
    $
    362,288
    
    
    $
    1,321,930
    
    
    $
    1,073,132Cost of sales
    
    
    345,761
    
    
    
    262,751
    
    
    
    915,903
    
    
    
    784,273Gross profit
    
    
    157,946
    
    
    
    99,537
    
    
    
    406,027
    
    
    
    288,859Operating expensesDistribution
    
    
    7,987
    
    
    
    7,020
    
    
    
    22,805
    
    
    
    21,559Research and development
    
    
    19,160
    
    
    
    16,390
    
    
    
    51,623
    
    
    
    44,339Selling and administration
    
    
    67,978
    
    
    
    42,863
    
    
    
    172,822
    
    
    
    136,857Subtotal
    
    
    95,125
    
    
    
    66,273
    
    
    
    247,250
    
    
    
    202,755Write-off of in-process
research and development
    
    
    2,786
    
    
    
    8,252
    
    
    
    2,786
    
    
    
    8,252Restructuring
    
    
    348
    
    
    
    306
    
    
    
    348
    
    
    
    948Total
    
    
    98,259
    
    
    
    74,831
    
    
    
    250,384
    
    
    
    211,955Operating income
    
    
    59,687
    
    
    
    24,706
    
    
    
    155,643
    
    
    
    76,904Interest, net
    
    
    3,688
    
    
    
    3,650
    
    
    
    12,017
    
    
    
    11,536Other (income) expense, net
    
    
    448
    
    
    
    (699
    )
    
    
    (637
    )
    
    
    (2,919
    )Income before income taxes
    
    
    55,551
    
    
    
    21,755
    
    
    
    144,263
    
    
    
    68,287Income tax expense
    
    
    15,584
    
    
    
    4,699
    
    
    
    35,988
    
    
    
    13,261Net income
    
    $
    39,967
    
    
    $
    17,056
    
    
    $
    108,275
    
    
    $
    55,026Earnings per shareBasic
    
    $
    0.43
    
    
    $
    0.19
    
    
    $
    1.16
    
    
    $
    0.60Diluted
    
    $
    0.42
    
    
    $
    0.18
    
    
    $
    1.14
    
    
    $
    0.59Weighted average shares outstandingBasic
    
    
    92,854
    
    
    
    91,643
    
    
    
    93,127
    
    
    
    92,161Diluted
    
    
    94,955
    
    
    
    93,298
    
    
    
    95,115
    
    
    
    93,604Dividends declared per share
    
    $
    0.050
    
    
    $
    0.045
    
    
    $
    0.145
    
    
    $
    0.133
  - 2 -




---



##### 



PERRIGO COMPANY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  March 29,
    
    
    June 30,
    
    
    March 31,2008
    
    
    2007
    
    
    2007(unaudited)
    
    
    
    
    
    
    (unaudited)AssetsCurrent assetsCash and cash equivalents
    
    $
    64,402
    
    
    $
    30,305
    
    
    $
    34,873Investment securities
    
    
    725
    
    
    
    49,110
    
    
    
    58,220Accounts receivable
    
    
    372,526
    
    
    
    282,045
    
    
    
    246,582Inventories
    
    
    356,906
    
    
    
    295,114
    
    
    
    310,272Current deferred income taxes
    
    
    37,716
    
    
    
    41,400
    
    
    
    39,122Income taxes refundable
    
    
    4,684
    
    
    
    
    
    
    
    Assets held for sale
    
    
    2,746
    
    
    
    2,746
    
    
    
    Prepaid expenses and other current assets
    
    
    16,146
    
    
    
    18,340
    
    
    
    23,833Total current assets
    
    
    855,851
    
    
    
    719,060
    
    
    
    712,902Property and equipment
    
    
    708,297
    
    
    
    664,096
    
    
    
    641,343Less accumulated depreciation
    
    
    372,618
    
    
    
    333,024
    
    
    
    320,672335,679
    
    
    
    331,072
    
    
    
    320,671Restricted cash
    
    
    400,000
    
    
    
    422,000
    
    
    
    422,000Goodwill
    
    
    264,913
    
    
    
    196,218
    
    
    
    189,450Other intangible assets
    
    
    231,033
    
    
    
    159,977
    
    
    
    159,427Non-current deferred income taxes
    
    
    51,033
    
    
    
    54,908
    
    
    
    42,624Other non-current assets
    
    
    58,876
    
    
    
    41,919
    
    
    
    43,487$
    2,197,385
    
    
    $
    1,925,154
    
    
    $
    1,890,561Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    229,744
    
    
    $
    164,318
    
    
    $
    158,499Notes payable
    
    
    10,169
    
    
    
    11,776
    
    
    
    3,763Payroll and related taxes
    
    
    54,849
    
    
    
    46,226
    
    
    
    43,590Accrued customer programs
    
    
    45,773
    
    
    
    48,218
    
    
    
    40,494Accrued liabilities
    
    
    39,039
    
    
    
    47,333
    
    
    
    48,135Accrued income taxes
    
    
    
    
    
    
    29,460
    
    
    
    16,210Current deferred income taxes
    
    
    18,864
    
    
    
    17,125
    
    
    
    13,886Current portion of long-term debt
    
    
    17,598
    
    
    
    15,381
    
    
    
    14,910Total current liabilities
    
    
    416,036
    
    
    
    379,837
    
    
    
    339,487Non-current liabilitiesLong-term debt
    
    
    697,598
    
    
    
    650,762
    
    
    
    709,342Non-current deferred income taxes
    
    
    112,675
    
    
    
    103,775
    
    
    
    102,129Other non-current liabilities
    
    
    110,512
    
    
    
    36,311
    
    
    
    34,346Total non-current liabilities
    
    
    920,785
    
    
    
    790,848
    
    
    
    845,817Shareholders equityPreferred stock, without par value, 10,000 shares authorized
    
    
    
    
    
    
    
    
    
    
    Common stock, without par value, 200,000 shares authorized
    
    
    498,002
    
    
    
    519,419
    
    
    
    507,025Accumulated other comprehensive income
    
    
    95,398
    
    
    
    56,676
    
    
    
    34,434Retained earnings
    
    
    267,164
    
    
    
    178,374
    
    
    
    163,798Total shareholders equity
    
    
    860,564
    
    
    
    754,469
    
    
    
    705,257$
    2,197,385
    
    
    $
    1,925,154
    
    
    $
    1,890,561Supplemental Disclosures of Balance Sheet InformationAllowance for doubtful accounts
    
    $
    9,511
    
    
    $
    9,421
    
    
    $
    9,933Allowance for inventory
    
    $
    36,962
    
    
    $
    36,210
    
    
    $
    37,390Working capital
    
    $
    439,815
    
    
    $
    339,223
    
    
    $
    373,415Preferred stock, shares issued
    
    
    
    
    
    
    
    
    
    
    Common stock, shares issued
    
    
    93,380
    
    
    
    93,395
    
    
    
    92,510
  - 3 -




---



##### 



PERRIGO COMPANY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 Year-to-Date2008
    
    
    2007Cash Flows (For) From Operating ActivitiesNet income
    
    $
    108,275
    
    
    $
    55,026Adjustments to derive cash flowsWrite-off of in-process research and development
    
    
    2,786
    
    
    
    8,252Depreciation and amortization
    
    
    50,822
    
    
    
    41,997Share-based compensation
    
    
    6,457
    
    
    
    6,530Deferred income taxes
    
    
    8,336
    
    
    
    12,749Sub-total
    
    
    176,676
    
    
    
    124,554Changes in operating assets and liabilities, net of
business and asset acquisitions and restructuringAccounts receivable
    
    
    (71,497
    )
    
    
    (8,616
    )Inventories
    
    
    (37,314
    )
    
    
    (4,224
    )Income taxes refundable
    
    
    (4,684
    )
    
    
    Accounts payable
    
    
    52,513
    
    
    
    (19,254
    )Payroll and related taxes
    
    
    6,958
    
    
    
    (10,151
    )Accrued customer programs
    
    
    (2,445
    )
    
    
    (9,040
    )Accrued liabilities
    
    
    (14,771
    )
    
    
    2,968Accrued income taxes
    
    
    12,089
    
    
    
    3,008Other
    
    
    17,969
    
    
    
    (5,084
    )Sub-total
    
    
    (41,182
    )
    
    
    (50,393
    )Net cash from operating activities
    
    
    135,494
    
    
    
    74,161Cash Flows (For) From Investing ActivitiesPurchases of securities
    
    
    (170,552
    )
    
    
    (228,341
    )Proceeds from sales of securities
    
    
    201,436
    
    
    
    198,530Additions to property and equipment
    
    
    (26,022
    )
    
    
    (30,133
    )Proceeds from sale of property and equipment
    
    
    
    
    
    
    2,613Acquisition of business
    
    
    (87,130
    )
    
    
    Acquisition of assets
    
    
    (12,401
    )
    
    
    (59,538
    )Net cash for investing activities
    
    
    (94,669
    )
    
    
    (116,869
    )Cash (For) From Financing ActivitiesRepayments of short-term debt, net
    
    
    (1,607
    )
    
    
    (16,293
    )Borrowings of long-term debt
    
    
    140,000
    
    
    
    130,000Repayments of long-term debt
    
    
    (95,801
    )
    
    
    (30,000
    )Tax effect of stock transactions
    
    
    5,008
    
    
    
    (30
    )Issuance of common stock
    
    
    26,097
    
    
    
    5,347Repurchases of common stock
    
    
    (58,979
    )
    
    
    (20,919
    )Cash dividends
    
    
    (13,551
    )
    
    
    (12,281
    )Net cash from financing activities
    
    
    1,167
    
    
    
    55,824Net increase in cash and cash equivalents
    
    
    41,992
    
    
    
    13,116Cash and cash equivalents, beginning of period
    
    
    30,305
    
    
    
    19,018Effect of exchange rate changes on cash
    
    
    (7,895
    )
    
    
    2,739Cash and cash equivalents, end of period
    
    $
    64,402
    
    
    $
    34,873Supplemental Disclosures of Cash Flow InformationCash paid/received during the period for:Interest paid
    
    $
    29,102
    
    
    $
    27,973Interest received
    
    $
    15,590
    
    
    $
    15,119Income taxes paid
    
    $
    25,715
    
    
    $
    8,500Income taxes refunded
    
    $
    6,560
    
    
    $
    8,443
  - 4 -




---



##### 



PERRIGO COMPANY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  March 29, 2008
  NOTE A  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
   New Accounting Pronouncements
   - 5 -




---



##### 



,
  - 6 -




---



##### 



Investment Securities
    NOTE B  BUSINESS ACQUISITION
 Galpharm Healthcare, Ltd.
 - 7 -




---



##### 



Inventory
    
    $
    16,179Accounts receivable
    
    
    10,101Other current assets
    
    
    485Property and equipment
    
    
    1,189Intangible assets
    
    
    44,105Goodwill
    
    
    42,314Total assets acquired
    
    
    114,373
 Accounts payable
    
    
    6,257Other current liabilities
    
    
    7,632Deferred tax liability
    
    
    13,354Total liabilities assumed
    
    
    27,243Total purchase price
    
    $
    87,130
    Trade names and trademarks
    
    $
    4,695Developed product technology and product rights
    
    
    15,456License and distribution agreements
    
    
    1,604Customer relationships
    
    
    19,564In-process research and development
    
    
    2,786Total intangible assets acquired
    
    $
    44,105
  - 8 -




---



##### 



Glades Pharmaceuticals, LLC
  Intangible assets  developed product technology
    
    $
    45,617Intangible assets  in-process research and development
    
    
    8,252Inventory
    
    
    5,669Total assets acquired
    
    $
    59,538
 - 9 -




---



##### 



NOTE C  EARNINGS PER SHARE
  Third Quarter
    
    
    Year-to-Date2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net income used for both basic and diluted EPS
    
    $
    39,967
    
    
    $
    17,056
    
    
    $
    108,275
    
    
    $
    55,026Denominator:Weighted
average shares outstanding for basic EPS
    
    
    92,854
    
    
    
    91,643
    
    
    
    93,127
    
    
    
    92,161Dilutive effect of share-based awards
    
    
    2,101
    
    
    
    1,655
    
    
    
    1,988
    
    
    
    1,443Weighted average shares outstanding for
diluted EPS
    
    
    94,955
    
    
    
    93,298
    
    
    
    95,115
    
    
    
    93,604
  - 10 -




---



##### 



NOTE D  INVENTORIES
  March 29,
    
    
    June 30,
    
    
    March 31,2008
    
    
    2007
    
    
    2007Finished goods
    
    $
    169,616
    
    
    $
    135,974
    
    
    $
    150,187Work in process
    
    
    94,222
    
    
    
    77,241
    
    
    
    75,499Raw materials
    
    
    93,068
    
    
    
    81,899
    
    
    
    84,586$
    356,906
    
    
    $
    295,114
    
    
    $
    310,272
  NOTE E  GOODWILL
   Consumer
    
    
    Rx Pharma-Healthcare
    
    
    ceuticals
    
    
    API
    
    
    TotalBalance as of June 30, 2007
    
    $
    47,048
    
    
    $
    72,426
    
    
    $
    76,744
    
    
    $
    196,218Addition  Galpharm acquisition
    
    
    42,314
    
    
    
    
    
    
    
    
    
    
    
    42,314Goodwill adjustment
    
    
    
    
    
    
    5,039
    
    
    
    3,677
    
    
    
    8,716Currency translation adjustment
    
    
    733
    
    
    
    8,107
    
    
    
    8,825
    
    
    
    17,665Balance as of March 29, 2008
    
    $
    90,095
    
    
    $
    85,572
    
    
    $
    89,246
    
    
    $
    264,913
  - 11 -




---



##### 



NOTE F  INTANGIBLE ASSETS
  March 29, 2008
    
    
    June 30, 2007Accumulated
    
    
    
    
    
    
    AccumulatedGross
    
    
    Amortization
    
    
    Gross
    
    
    AmortizationDeveloped product technology /
formulation and product rights
    
    $
    219,405
    
    
    $
    35,098
    
    
    $
    154,923
    
    
    $
    21,490Distribution and license agreements
    
    
    22,441
    
    
    
    9,026
    
    
    
    24,790
    
    
    
    7,593Customer relationships
    
    
    24,765
    
    
    
    4,540
    
    
    
    4,900
    
    
    
    4,018Trade names and trademarks
    
    
    15,581
    
    
    
    2,495
    
    
    
    10,235
    
    
    
    1,770Total
    
    $
    282,192
    
    
    $
    51,159
    
    
    $
    194,848
    
    
    $
    34,871
    Fiscal Year
    
    Amount2008 (1)
    
    $
    5,4002009
    
    
    21,4002010
    
    
    19,9002011
    
    
    18,5002012
    
    
    18,500
 
 (1)
    
    Reflects remaining three months of fiscal 2008. - 12 -




---



##### 



NOTE G  OUTSTANDING DEBT
  March 29,
    
    
    June 30,
    
    
    March 31,2008
    
    
    2007
    
    
    2007Short-term debt:Swingline loan
    
    $
    10,169
    
    
    $
    11,776
    
    
    $
    3,763Current portion of long-term debt
    
    
    17,598
    
    
    
    15,381
    
    
    
    14,910Total
    
    
    27,767
    
    
    
    27,157
    
    
    
    18,673Long-term debt:Revolving line of credit
    
    
    180,000
    
    
    
    120,000
    
    
    
    180,000Term loan
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000Letter of undertaking  Israel subsidiary
    
    
    400,000
    
    
    
    400,000
    
    
    
    400,000Debenture  Israel subsidiary
    
    
    17,598
    
    
    
    30,762
    
    
    
    29,342Total
    
    
    697,598
    
    
    
    650,762
    
    
    
    709,342Total debt
    
    $
    725,365
    
    
    $
    677,919
    
    
    $
    728,015
   NOTE H  SHAREHOLDERS EQUITY
  - 13 -




---



##### 



NOTE I  COMPREHENSIVE INCOME
  Third Quarter
    
    
    Year-to-Date2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    39,967
    
    
    $
    17,056
    
    
    $
    108,275
    
    
    $
    55,026Other comprehensive income (loss):Change in fair value of derivative
instruments, net of tax
    
    
    (2,257
    )
    
    
    (422
    )
    
    
    (5,500
    )
    
    
    (2,130
    )Foreign currency translation adjustments
    
    
    22,830
    
    
    
    3,022
    
    
    
    50,100
    
    
    
    33,470Change in fair value of investment
securities, net of tax
    
    
    (4,529
    )
    
    
    378
    
    
    
    (5,528
    )
    
    
    (499
    )Pension and post-retirement liability
adjustments, net of tax
    
    
    (116
    )
    
    
    
    
    
    
    (349
    )
    
    
    Comprehensive income
    
    $
    55,895
    
    
    $
    20,034
    
    
    $
    146,998
    
    
    $
    85,867
 NOTE J  INCOME TAXES
    - 14 -




---



##### 



NOTE K  COMMITMENTS AND CONTINGENCIES
   NOTE L  SEGMENT INFORMATION
  - 15 -




---



##### 



RxConsumer
    
    Pharma-
    
    
    
    
    
    
    
    
    
    UnallocatedHealthcare
    
    ceuticals
    
    API
    
    Other
    
    expenses
    
    TotalThird Quarter 2008Net sales
    
    $
    373,031
    
    
    $
    49,231
    
    
    $
    37,818
    
    
    $
    43,627
    
    
    
    
    
    
    $
    503,707Operating income
    
    $
    51,693
    
    
    $
    11,349
    
    
    $
    6,024
    
    
    $
    868
    
    
    $
    (10,247
    )
    
    $
    59,687Amortization of intangibles
    
    $
    1,261
    
    
    $
    6,575
    
    
    $
    509
    
    
    $
    265
    
    
    
    
    
    
    $
    8,610Third Quarter 2007Net sales
    
    $
    262,277
    
    
    $
    34,025
    
    
    $
    30,095
    
    
    $
    35,891
    
    
    
    
    
    
    $
    362,288Operating income
    
    $
    21,905
    
    
    $
    7,615
    
    
    $
    4,238
    
    
    $
    1,550
    
    
    $
    (10,602
    )
    
    $
    24,706Amortization of intangibles
    
    $
    828
    
    
    $
    1,775
    
    
    $
    443
    
    
    $
    313
    
    
    
    
    
    
    $
    3,359Year-to-Date 2008Net sales
    
    $
    961,495
    
    
    $
    122,846
    
    
    $
    111,240
    
    
    $
    126,349
    
    
    
    
    
    
    $
    1,321,930Operating income
    
    $
    120,549
    
    
    $
    27,160
    
    
    $
    16,723
    
    
    $
    6,922
    
    
    $
    (15,711
    )
    
    $
    155,643Amortization of intangibles
    
    $
    2,971
    
    
    $
    12,628
    
    
    $
    1,444
    
    
    $
    833
    
    
    
    
    
    
    $
    17,876Year-to-Date 2007Net sales
    
    $
    780,033
    
    
    $
    93,710
    
    
    $
    88,507
    
    
    $
    110,882
    
    
    
    
    
    
    $
    1,073,132Operating income
    
    $
    56,770
    
    
    $
    17,047
    
    
    $
    14,851
    
    
    $
    6,959
    
    
    $
    (18,723
    )
    
    $
    76,904Amortization of intangibles
    
    $
    2,395
    
    
    $
    5,288
    
    
    $
    1,306
    
    
    $
    794
    
    
    
    
    
    
    $
    9,783
 NOTE M  RESTRUCTURING
   - 16 -




---



##### 



MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIRD QUARTER FISCAL YEARS 2008 AND 2007
 OVERVIEW
 Segments 
 Seasonality 
 Current Year Results
  - 17 -




---



##### 



Acquisition 
 Other Factors Impacting Earnings
    - 18 -




---



##### 



Event Impacting Future Results
  RESULTS OF OPERATIONS
 Consumer Healthcare
 Third Quarter
    
    Year-to-Date2008
    
    2007
    
    2008
    
    2007Net sales
    
    $
    373,031
    
    
    $
    262,277
    
    
    $
    961,495
    
    
    $
    780,033Gross profit
    
    $
    107,819
    
    
    $
    59,560
    
    
    $
    266,728
    
    
    $
    175,452Gross profit %
    
    
    28.9
    %
    
    
    22.7
    %
    
    
    27.7
    %
    
    
    22.5
    %Operating expenses
    
    $
    56,126
    
    
    $
    37,655
    
    
    $
    146,179
    
    
    $
    118,682Operating expenses %
    
    
    15.0
    %
    
    
    14.4
    %
    
    
    15.2
    %
    
    
    15.2
    %Operating income
    
    $
    51,693
    
    
    $
    21,905
    
    
    $
    120,549
    
    
    $
    56,770Operating income %
    
    
    13.9
    %
    
    
    8.4
    %
    
    
    12.5
    %
    
    
    7.3
    %
 Net Sales
   - 19 -




---



##### 



Gross Profit
  .
  Operating Expenses
   - 20 -




---



##### 



Rx Pharmaceuticals
 Third Quarter
    
    Year-to-Date2008
    
    2007
    
    2008
    
    2007Net sales
    
    $
    49,231
    
    
    $
    34,025
    
    
    $
    122,846
    
    
    $
    93,710Gross profit
    
    $
    21,790
    
    
    $
    16,298
    
    
    $
    54,653
    
    
    $
    41,431Gross profit %
    
    
    44.3
    %
    
    
    47.9
    %
    
    
    44.5
    %
    
    
    44.2
    %Operating expenses
    
    $
    10,441
    
    
    $
    8,683
    
    
    $
    27,493
    
    
    $
    24,384Operating expenses %
    
    
    21.2
    %
    
    
    25.5
    %
    
    
    22.4
    %
    
    
    26.0
    %Operating income
    
    $
    11,349
    
    
    $
    7,615
    
    
    $
    27,160
    
    
    $
    17,047Operating income %
    
    
    23.1
    %
    
    
    22.4
    %
    
    
    22.1
    %
    
    
    18.2
    %
 Net Sales
    - 21 -




---



##### 



Gross Profit
   Operating Expenses
  - 22 -




---



##### 



API
 Third Quarter
    
    Year-to-Date2008
    
    2007
    
    2008
    
    2007Net sales
    
    $
    37,818
    
    
    $
    30,095
    
    
    $
    111,240
    
    
    $
    88,507Gross profit
    
    $
    14,618
    
    
    $
    11,357
    
    
    $
    41,762
    
    
    $
    33,651Gross profit %
    
    
    38.7
    %
    
    
    37.7
    %
    
    
    37.5
    %
    
    
    38.0
    %Operating expenses
    
    $
    8,594
    
    
    $
    7,119
    
    
    $
    25,039
    
    
    $
    18,800Operating expenses %
    
    
    22.7
    %
    
    
    23.7
    %
    
    
    22.5
    %
    
    
    21.2
    %Operating income
    
    $
    6,024
    
    
    $
    4,238
    
    
    $
    16,723
    
    
    $
    14,851Operating income %
    
    
    15.9
    %
    
    
    14.1
    %
    
    
    15.0
    %
    
    
    16.8
    %
 Net Sales
   Gross Profit
   Operating Expenses
  - 23 -




---



##### 



Other
  Third Quarter
    
    Year-to-Date2008
    
    2007
    
    2008
    
    2007Net sales
    
    $
    43,627
    
    
    $
    35,891
    
    
    $
    126,349
    
    
    $
    110,882Gross profit
    
    $
    13,719
    
    
    $
    12,322
    
    
    $
    42,883
    
    
    $
    38,325Gross profit %
    
    
    31.4
    %
    
    
    34.3
    %
    
    
    33.9
    %
    
    
    34.6
    %Operating expenses
    
    $
    12,851
    
    
    $
    10,772
    
    
    $
    35,961
    
    
    $
    31,366Operating expenses %
    
    
    29.5
    %
    
    
    30.0
    %
    
    
    28.5
    %
    
    
    28.3
    %Operating income
    
    $
    868
    
    
    $
    1,550
    
    
    $
    6,922
    
    
    $
    6,959Operating income %
    
    
    2.0
    %
    
    
    4.3
    %
    
    
    5.5
    %
    
    
    6.3
    %
 Net Sales
   Gross Profit
  - 24 -




---



##### 



Operating Expenses
  Unallocated Expenses
 Third Quarter
    
    Year-to-Date2008
    
    2007
    
    2008
    
    2007Operating expenses
    
    $
    10,247
    
    
    $
    10,602
    
    
    $
    15,711
    
    
    $
    18,723
   Interest and Other (Consolidated)
   Income Taxes (Consolidated)
  - 25 -




---



##### 



Financial Condition, Liquidity and Capital Resources
        - 26 -




---



##### 



Credit Facilities
  Investment Securities
    - 27 -




---



##### 



Guaranties and Contractual Obligations
   Critical Accounting Policies
  Revenue Recognition and Customer Programs
    - 28 -




---



##### 



Year-to-
    
    
    Year-to-Date
    
    
    Date2008
    
    
    2007Customer Related AccrualsBalance, beginning of period
    
    $
    51,656
    
    
    $
    54,456Provision recorded
    
    
    184,712
    
    
    
    144,487Credits processed
    
    
    (187,656
    )
    
    
    (156,042
    )Balance, end of the period
    
    $
    48,712
    
    
    $
    42,901
 Allowance for Doubtful Accounts
 Allowance for Inventory
 Goodwill
 - 29 -




---



##### 



Other Intangible Assets
 Product Liability and Workers Compensation
 Income Taxes
   - 30 -




---



##### 



- 31 -




---



##### 



- 32 -




---



##### 



PART II. OTHER INFORMATION
 
   
   Impact of At Risk Launches
 ®
 Pseudoephedrine
  - 33 -




---



##### 



Total
    
    Average
    
    Total Number of
    
    Value ofNumber of
    
    Price
    
    Shares Purchased
    
    SharesShares
    
    Paid per
    
    as Part of Publicly
    
    Available forFiscal 2008
    
    Purchased (1)
    
    Share
    
    Announced Plans
    
    Purchase$
    22,060December 30 to February 2
    
    
    589
    
    
    $
    33.02
    
    
    
    588
    
    
    $
    152,640February 3 to March 1
    
    
    25
    
    
    $
    32.00
    
    
    
    22
    
    
    $
    151,941March 2 to March 29
    
    
    93
    
    
    $
    35.78
    
    
    
    92
    
    
    $
    148,663Total
    
    
    707
    
    
    
    
    
    
    
    702
 
 (1)
    
    Private party transactions accounted for the purchase of 1 share in the period from
December 30 to February 2, 3 shares in the period from February 3 to March 1 and 1 share in
the period from March 2 to March 29.  Amendment to Employment Agreement and
Nondisclosure and Noncompetition Agreement with Refael Lebel
    - 34 -




---



##### 



Consulting
Agreement with Moshe Arkin
   - 35 -




---



##### 








Exhibit Number
    
    Description10.1
    
    
    Third Amendment, dated as of July 31, 2007, to Credit Agreement, dated as of
March 16, 2005, among Perrigo Company, the Foreign Subsidiary Borrowers named therein,
the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent for the
Lenders, Bank Leumi USA, as Syndication Agent, and Bank of America, N.A., LaSalle Bank
Midwest National Association and National City Bank of the Midwest, as Documentation
Agents.10.2
    
    
    Fourth Amendment, dated as of January 8, 2008, to Credit Agreement, dated as of
March 16, 2005, among Perrigo Company, the Foreign Subsidiary Borrowers named therein,
the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent for the
Lenders, Bank Leumi USA, as Syndication Agent, and Bank of America, N.A., LaSalle Bank
Midwest National Association and National City Bank of the Midwest, as Documentation
Agents.10.3
    
    
    Amendment to Employment Agreement by and
between Perrigo Company, Perrigo Israel Pharmaceuticals,
Ltd., and Refael Lebel dated as of May 1, 2008.10.4
    
    
    Noncompetition and Nondisclosure Agreement
by and between Perrigo Company, Perrigo Israel Pharmaceuticals, Ltd.,
and Refael Lebel dated as of May 1, 2008.10.5
    
    
    Consulting Agreement by and between Perrigo Company, Moshe Arkin, and M. Arkin Ltd., dated as of May 1, 2008.31
    
    
    Rule 13a-14(a) Certifications.32
    
    
    Section 1350 Certifications.


- 36 -



---



##### 



SIGNATURES
  PERRIGO COMPANY(Registrant)Date:
    May 6, 2008
    
    By: /s/ Joseph C. PapaJoseph C. PapaPresident and Chief Executive OfficerDate:
    May 6, 2008
    
    By: /s/ Judy L. BrownJudy L. BrownExecutive Vice President and Chief Financial Officer(Principal Accounting and Financial Officer)
 - 37 -