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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
REPURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the year ended: December 31, 2005
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
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:
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.
Perrigo Company Profit-Sharing and Investment Plan
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(Name of Plan)
Date: June 28, 2006 /s/ Douglas R. Schrank
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Douglas R. Schrank
Executive Vice President and Chief Financial Officer
Principal Accounting and Financial Officer
Perrigo Company
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PERRIGO COMPANY
PROFIT-SHARING AND
INVESTMENT PLAN
FINANCIAL STATEMENTS AND SCHEDULE
For The Years Ended December 31, 2005 and 2004
PERRIGO COMPANY
PROFIT-SHARING AND
INVESTMENT PLAN
===================================================
FINANCIAL STATEMENTS AND SCHEDULE
For The Years Ended December 31, 2005 and 2004
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
CONTENTS
================================================================================
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits -
December 31, 2005 and 2004 4
Statements of Changes in Net Assets Available for Benefits -
Years Ended December 31, 2005 and 2004 5
Notes to Financial Statements 6-10
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) -
December 31, 2005 11
2
[BDO LOGO] BDO SEIDMAN, LLP 99 Monroe Avenue N.W., Suite 800
Accountants and Consultants Grand Rapids, Michigan 49503-2654
Telephone: (616) 774-7000
Fax: (616) 776-3680
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Perrigo Company
Allegan, Michigan
We have audited the accompanying statements of net assets available for benefits
of Perrigo Company Profit-Sharing and Investment Plan as of December 31, 2005
and 2004, 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 audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide 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 Perrigo Company
Profit-Sharing and Investment Plan as of December 31, 2005 and 2004, 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, 2005 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.
/s/ BDO SEIDMAN, LLP
Grant Rapids, Michigan
June 6, 2006
3
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
================================================================================
December 31, 2005 2004
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Investments, at fair value (Note 2)
Putnam Money Market Fund $ 11,969,499* $ 10,821,661*
Mutual funds:
Van Kampen Growth and Income Fund 23,920,852* 21,871,835*
Putnam Vista Fund 18,422,563* 17,091,341*
Dodge & Cox Balanced Fund 18,022,892* 16,886,582*
MSDW Institutional Small Company Growth Class B 15,665,008* 14,129,279*
Pimco Total Return Institutional 9,696,924* 9,361,170*
Neuberger Berman Genesis Trust 9,693,501* 7,675,363*
Putnam International Equity Fund 8,856,111* 7,067,512
Harbor Capital Appreciation Fund 7,702,509 6,388,000
ABN AMRO Growth Fund Class N 6,793,016 6,558,605
Calamos Growth Fund 3,417,586 2,007,929
Harbor International Fund 3,503,240 1,491,507
Common/collective trust:
Putnam S & P 500 Fund 10,953,004* 10,338,285*
Perrigo Company common stock 10,607,899* 11,977,865*
Participant loans 4,143,438 3,248,544
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Total investments 163,368,042 146,915,478
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Receivables
Employer contributions 75,244 -
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NET ASSETS AVAILABLE FOR BENEFITS $ 163,443,286 $ 146,915,478
===================================================================================================
See accompanying notes to financial statements.
* Represents 5% or more of net assets available for benefits.
4
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
================================================================================
Year ended December 31, 2005 2004
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ADDITIONS
Contributions:
Participant $ 7,775,215 $ 7,686,361
Employer 7,177,387 8,391,486
Investment income:
Interest income from cash equivalents and
participant loans 243,864 196,639
Net gain from mutual funds 11,818,949 13,748,463
Net gain from common/collective trust 487,837 994,932
Net gain (loss) from Perrigo Company common stock:
Net appreciation (depreciation) (1,661,883) 1,061,142
Dividends 113,639 97,066
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Total additions 25,955,008 32,176,089
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DEDUCTIONS
Distribution of benefits to participants 9,413,597 8,236,968
Administrative fees 13,603 12,063
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Total deductions 9,427,200 8,249,031
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Net increase 16,527,808 23,927,058
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 146,915,478 122,988,420
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NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 163,443,286 $ 146,915,478
====================================================================================================
See accompanying notes to financial statements.
5
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. PLAN DESCRIPTION
The following description of the 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.
GENERAL
The Plan is a defined contribution plan in which substantially all
employees of Perrigo Company, Perrigo Company of South Carolina,
Perrigo Sales Company, Perrigo Research and Development, Perrigo
Pharmaceuticals and Perrigo International, Inc. (Company) are eligible
to participate. As of September 1, 2005, the minimum term of service
for employees to participate in the Plan is one month of service which
means a consecutive 30-day period of employment beginning with the
Employee's date of hire. Prior to September 1, 2005 the eligibility
requirement was a consecutive four-month period of employment. 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 2% automatic deferral amount is invested in
the Putnam Money Market Fund. 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. For employees hired
after September 1, 2005, the Plan increases the automatic enrollment
percentage by 1% in each of the following two years to bring the total
deferral amount to at least 4%. 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 2005, limit is
$14,000). 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 2005, "catch up" limit is
$4,000). 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
6
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
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 $4,063,551 and $5,404,979
were made by the Company in 2005 and 2004, respectively.
PARTICIPANT ACCOUNTS
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 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% on outstanding loans at December 31,
2005. 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
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PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
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. This
hardship withdrawal is subject to 10% federal income tax penalty and
the participant cannot make elective deferrals for 6 months following
the hardship withdrawal.
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.
FORFEITURES
Forfeited unvested accounts in the amount of $30,978 and $67,768 in
2005 and 2004, respectively, were reallocated to remaining plan
participants. Forfeitures are applied to participant accounts as an
additional employer discretionary contribution. No additional forfeited
amounts remained in the Plan at December 31, 2005.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
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 in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of net assets and changes therein. Actual results could differ
from those estimates. The Plan utilized various investment instruments,
which are exposed to various risks, such as interest rate, credit, and
overall
8
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
market volatility. Due to the level of risk associated with certain
investment securities, it is reasonably possible that changes in the
values of investment securities will occur in the near term and that
such changes could materially affect participant's account balances and
the amounts reported in the financial statements.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in mutual funds and Perrigo Company common stock are stated
at fair value based on quoted market prices. Common/collective trust is
stated at its fair value as determined by the trustee/custodian based
upon quoted market prices of the underlying securities. 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.
3. ASSETS IN TRUST FUND
Under the terms of the trust agreement with Putnam 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 TRANSACTIONS
Certain Plan investments throughout the year represented shares of
various types of investments that were managed by Mercer. These
transactions qualify as party-in-interest. Administrative fees paid by
the Plan to Mercer amounted to $13,603 and $12,063 in 2005 and 2004,
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.
11
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
================================================================================
6. INCOME TAX STATUS
The Plan obtained its latest determination letter on 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.
12
PERRIGO COMPANY
PROFIT-SHARING AND INVESTMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
================================================================================
EIN: 38-2799573
Plan Number: 003
December 31, 2005
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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 11,969,499 shares ** $ 11,969,499
Mutual funds:
Van Kampen Growth and Income Fund 1,164,511 shares ** 23,920,852
Putnam Vista Fund 1,728,195 shares ** 18,422,563
Dodge & Cox Balanced Fund 221,575 shares ** 18,022,892
MSDW Institutional Small Company
Growth Class B 1,272,543 shares ** 15,665,008
Pimco Total Return Institutional 923,517 shares ** 9,696,924
Neuberger Berman Genesis Trust 199,660 shares ** 9,693,501
Putnam International Equity Fund 338,925 shares ** 8,856,111
Harbor Capital Appreciation Fund 235,839 shares ** 7,702,509
ABN AMRO Growth Fund Class N 304,756 shares ** 6,793,016
Calamos Growth Fund 62,070 shares ** 3,417,586
Harbor International Fund 71,031 shares ** 3,503,240
Common/collective trust:
Putnam S & P 500 Fund 340,473 shares ** 10,953,004
* Perrigo Company common stock 711,462 shares 10,607,899
* Participant loans (6.0% to 11.5%) ** 4,143,438
===================================================================================================================
* A party-in-interest as defined by ERISA.
** The cost of participant-directed investments is not required to be disclosed.
11
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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23 Consent of Independent Registered Public Accounting Firm