FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the years ended: December 31, 2003 and 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to ________
Commission file number 0-19725
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A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
L. Perrigo Company Profit-Sharing and Investment Plan
B. Name of the issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Perrigo Company
515 Eastern Avenue
Allegan, MI 49010
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
L. Perrigo Company Profit-Sharing and
Investment Plan
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(Name of Plan)
Date: June 25, 2004 /s/ Douglas R. Schrank
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Douglas R. Schrank
Executive Vice President and Chief
Financial Officer Principal Accounting
and Financial Officer
L. PERRIGO COMPANY
PROFIT-SHARING AND
INVESTMENT PLAN
===================================================
FINANCIAL STATEMENTS AND SCHEDULE
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
CONTENTS
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INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits -
December 31, 2003 and 2002 4
Statements of Changes in Net Assets Available for Benefits -
Years Ended December 31, 2003 and 2002 5
Notes to Financial Statements 6-10
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 11
December 31, 2003
2
INDEPENDENT AUDITORS' REPORT
Board of Directors
Perrigo Company
Allegan, Michigan
We have audited the accompanying statements of net assets available for benefits
of L. Perrigo Company Profit-Sharing and Investment Plan as of December 31, 2003
and 2002, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the plan administrator. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards
as established by the Auditing Standards Board (United States) and in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of L. Perrigo
Company Profit-Sharing and Investment Plan as of December 31, 2003 and 2002, and
the changes in net assets available for benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedule of assets (held at end of
year) as of December 31, 2003 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements, but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
plan administrator. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements, and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
By: /s/ BDO Seidman, LLP
---------------------------
BDO Seidman, LLP
Grand Rapids, Michigan
May 20, 2004
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L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
================================================================================
December 31, 2003 2002
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Investments, at fair value (Note 2):
Cash $ - $ 1,637
Putnam Money Market Fund 10,300,761* 9,430,976*
Mutual funds:
Van Kampen Growth and Income Fund 18,680,152* 14,458,936*
Putnam Vista Fund 14,991,112* 10,889,988*
Dodge & Cox Balanced Fund 14,056,722* 10,542,736*
MSDW Institutional Small Company Growth Class B 11,651,685* 7,246,620*
Pimco Total Return Institutional 7,923,630* 7,292,612*
ABN AMRO/Chicago Growth Fund 5,754,103 169,197
Neuberger Berman Genesis Trust 5,647,039 3,211,023
Putnam International Equity Fund 5,579,970 3,749,280
Harbor Capital Appreciation Fund 5,267,759 -
Calamos Growth Fund 246,008 -
Harbor International Fund 151,332 -
Putnam Growth Opportunities Fund - 8,021,994*
Common collective trust:
Putnam S & P 500 Fund 8,959,049* 7,358,180*
Perrigo Company common stock 10,719,158* 8,100,293*
Participant loans 2,870,036 2,794,427
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Total investments 122,798,516 93,267,899
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Receivables:
Participant contributions 41,733 111,128
Employer contributions 148,171 169,284
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Total receivables 189,904 280,412
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NET ASSETS AVAILABLE FOR BENEFITS $ 122,988,420 $ 93,548,311
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See accompanying notes to financial statements.
* Represents 5% or more of net assets available for benefits.
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L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
================================================================================
Year ended December 31, 2003 2002
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ADDITIONS
Contributions:
Participant $ 6,904,658 $ 6,511,520
Employer 6,944,982 6,815,653
Investment income:
Interest income from cash equivalents and
participant loans 224,447 281,041
Net gain (loss) from mutual funds 18,802,588 (14,106,925)
Net gain (loss) from common collective trust 2,086,314 (2,056,006)
Net gain from Perrigo Company common stock:
Appreciation 2,339,678 382,836
Dividends 72,724 -
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Total additions (decreases) 37,375,391 (2,171,881)
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DEDUCTIONS
Distribution of benefits to participants 7,921,970 6,617,327
Administrative fees 13,312 13,598
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Total deductions 7,935,282 6,630,925
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Net increase (decrease) 29,440,109 (8,802,806)
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 93,548,311 102,351,117
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NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 122,988,420 $ 93,548,311
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See accompanying notes to financial statements.
5
L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. PLAN DESCRIPTION The following description of the L. Perrigo Company
Profit-Sharing and Investment Plan (formerly the L.
Perrigo Investment Plan and Trust) (Plan) provides only
general information. Participants should refer to the
plan agreement or plan summary for a more complete
description of the Plan's provisions.
ECONOMIC GROWTH AND TAX RELIEF ACT
The Plan document was amended as of January 1, 2002, to
demonstrate good faith compliance with the Economic
Growth and Tax Relief Act of 2001 (EGTRAA).
GENERAL
The Plan is a defined contribution plan in which
substantially all employees of L. Perrigo Company,
Perrigo Company of South Carolina, Perrigo Sales
Company and Perrigo International, Inc. (Company) are
eligible to participate. The minimum term of service
for employees to participate in the Plan is four
consecutive months of service in which an employee
works at least 83 hours in each month. Plan entry dates
are at the beginning of each payroll period after the
minimum term requirements are satisfied. For employees
hired after December 31, 2002, the Plan has automatic
enrollment. Under this enrollment, 2% of participant's
compensation will automatically be deferred into the
Plan. The participant has the option to withdraw from
the Plan within 45 days after participant eligibility
is met, or choose to increase the deferral percentage.
The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The
Plan is administered by an administrative committee
(Committee).
CONTRIBUTIONS
A participant may contribute to the Plan annually an
amount not less than 1% and not more than 50% of his or
her compensation, up to the dollar limit set by the
federal government (for 2003, limit is $12,000).
Participants who are at least 50 years of age by the
end of a Plan year, may elect to make an additional
"catch up" contribution salary deferral for that Plan
year (for 2003, "catch up" limit is
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L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
$2,000). The Company has agreed to match employee
contributions per plan year at the rate of 100% of the
first 2% of employee contributions and 50% of the next
2% of employee contributions. The minimum term of
service for employees to be eligible for employer
matching contributions in the Plan is one year. Amounts
credited to a participant's investment account relating
to participant contributions and employer matching
contributions are 100% vested at all times. The Company
has the right under the Plan to discontinue such
contributions at any time.
The Company has agreed to voluntarily contribute such
amounts as determined by the board of directors of the
Company. The Employer's voluntary contribution is
allocated based on the ratio of the participant's
eligible compensation to aggregate participants'
eligible compensation for the year. Vesting of the
Employer's voluntary contribution begins at 33% when
two years of service are met and then increases at a
rate of 33% for each additional year of service until
100% is reached after four years.
Discretionary contributions in the amounts of
$4,019,395 and $3,884,036 were made by the Company in
2003 and 2002, respectively.
Participants direct the investment of their
contributions, the employer matching contribution and
the Employer's voluntary contribution into various
investment options offered by the Plan. Currently, the
Plan offers mutual funds, a common collective trust and
the Company's common stock as investment options for
plan participants.
PARTICIPANT ACCOUNTS
Investment income is allocated to the accounts of
participants in proportion to their account balance in
each fund as of the beginning of the year, reduced by
withdrawals or distributions during the year, bears to
the aggregate account balances of all participants.
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L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
PARTICIPANT LOANS
Participants may, with the consent of the Committee,
borrow an amount not to exceed the lesser of 50% of
their account balance or $50,000. The amount must be at
least $1,000. The loans are secured by an equivalent
amount in the remaining portion of the participant's
salary deferral contribution and rollover accounts. All
loans must be repaid within five years, except for
loans used to acquire or rehabilitate a principal
residence, which must be repaid within ten years.
Interest rates ranged from 6.0% to 11.5% at December
31, 2003. The loans are repaid ratably through payroll
deductions. The interest earned on participant loans is
allocated to the respective funds, in accordance with
participant elections.
WITHDRAWALS
A participant may elect to withdraw up to an amount
equal to the balance in the participant's elective
contribution account on the allocation date coinciding
with or immediately preceding the date of withdrawal,
provided the Committee determines that: (1) the purpose
of the withdrawal is to meet an immediate and heavy
financial need of the participant, (2) the amount of
the withdrawal does not exceed such financial need, (3)
the amount of the withdrawal is not reasonably
available from other resources of the participant, and
(4) all available plan loans have been taken. A
participant may also elect to make a similar
withdrawal, provided that participant has reached
fifty-nine and one half years of age, even if the
participant is still employed.
PAYMENT OF BENEFITS
Upon termination of service, a participant may elect to
receive either a lump-sum amount equal to the value of
the participant's vested account or annual
installments. Participants may also elect to transfer
their account balance into another qualified retirement
plan.
8
L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
FORFEITURES
Forfeited unvested accounts totaled $29,503 and
$114,216 at December 31, 2003 and 2002, respectively.
Forfeitures are allocated to participant's employer
discretionary contribution accounts.
2. SIGNIFICANT BASIS OF ACCOUNTING
ACCOUNTING
POLICIES The accompanying financial statements have been
prepared under the accrual method of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities
and changes therein, and disclosure of contingent
assets and liabilities. Actual results could differ
from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in mutual funds, a common collective trust
and Perrigo Company common stock are stated at fair
value based on quoted market prices. Participant loans
are stated at cost, which approximates fair value.
Investment purchases and sales are recorded on a
trade-date basis. Interest is recorded on an accrual
basis.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
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L. PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
3. ASSETS IN TRUST Under the terms of the trust agreement with Putnam
FUND Fiduciary Trust Company (Putnam), the custodian manages
the trust fund on behalf of the Plan. Putnam has
discretionary investment authority over the investments
held in each investment option made available to
participants, except for the investments in Perrigo
Company common stock.
4. RELATED PARTY Certain Plan investments throughout the year
TRANSACTIONS represented shares of various types of investments that
were managed by Putnam. These transactions qualify as
party-in-interest. Administrative and investment
management fees paid by the Plan to Putnam amounted to
$13,312 and $13,598 in 2003 and 2002, respectively.
5. PLAN TERMINATION Although it has not expressed any intent to do so, the
Employer has the right to discontinue contributions at
any time and to terminate the Plan, subject to the
provisions of ERISA. In the event of termination, all
participants will become fully vested in their
accounts.
6. INCOME TAX The Plan obtained its latest determination letter on
STATUS October 3, 2002, in which the Internal Revenue Service
stated that the Plan was in compliance with the
applicable requirements of the Internal Revenue Code
(Code). The Plan has been amended since receiving the
determination letter. However, the plan administrator
and the Plan's tax counsel believe that the Plan is
currently designed and being operated in compliance
with the applicable requirements of the Code.
Therefore, no provision for income taxes has been
included in the Plan's financial statements.
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EIN: 38-0920980
Plan Number: 003
December 31, 2003
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(c)
Description of Investment,
including Shares, Maturity
(b) Date, Rate of Interest, (e)
Identity of Issuer, Borrower, Lessor Collateral, Par or Maturity (d) Current
(a) or Similar Party Value Cost Value
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* Putnam Money Market Fund 10,300,761 ** $ 10,300,761
Mutual funds:
Van Kampen Growth and Income Fund 1,035,485 ** 18,680,152
* Putnam Vista Fund 1,876,234 ** 14,991,112
Dodge & Cox Balanced Fund 192,452 ** 14,056,722
MSDW Institutional Small Company
Growth Class B 1,116,062 ** 11,651,685
Pimco Total Return Institutional 739,835 ** 7,923,630
ABN AMRO/Chicago Growth Fund 261,907 ** 5,754,103
Neuberger Berman Genesis Trust 152,499 ** 5,647,039
* Putnam International Equity Fund 270,086 ** 5,579,970
Harbor Capital Appreciation Fund 200,143 ** 5,267,759
Calamos Growth Fund 5,494 ** 246,008
Harbor International Fund 4,113 ** 151,332
Common collective trust:
* Putnam S & P 500 Fund 322,500 ** 8,959,049
* Perrigo Company common stock 681,880 10,719,158
* Participant loans (6.0% to 11.5%) ** 2,870,036
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* A party-in-interest as defined by ERISA.
** The cost of participant-directed investments is not required to be disclosed.
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