Perrigo Co. Message Board

run a company not computers. Just unloaded the
last of this dog. Owned 35,000 shares at one time and
was always told prosperity was just around the
corner. Watched as they shot themselves in the foot six
times. Now I find out they are reloading their gun. I'm
sorry but the moral at this place stinks find someone
who works there and get an earful. Whoops , I here
them pulling the hammer back.

Just some thoughts on insider10101's comments on
Perrigo's computer upgrades.

The system that Perrigo
implemented in 90 was an MRP II system. The old system just
could not support the growth that Perrigo was seeing at
the time. They also switched platforms to an AS/400
system. SAP is an ERP system whose development company
invests hundreds of millions of dollars per year in new
development. Yes the implementation hurt, but there are a lot
of companies that have messed it up worse. It is a
VERY complex system, and many of the issues were with
user training, not the software itself. This software
should provide Perrigo with great functionality for many
years to come. The question mark is whether Perrigo
will be able to effectively use this functionality to
improve their productivity and profitability. Time will
tell.

While you are basically correct I think you give
the national brands way too much credit. They are
losing their franchises every day as people continue to
refuse to pay up for national brands. Store brands are
the fastest growing category, and national brands are
forced to pay not only slotting allowances but
promitonal advertising. Remember that drug stores/wall mart
are nothing like a supermarket. There is no end of
isle space that has coke, pepse, nabisco or any other
features. The national brands sit on the shelf squeezed in
between the store brand. There is no premium spot.
However, if they don't pay then are going to be right next
to that big sign that tells yo uthat if you buy cvs
acitominophen instead of a national brand you will save 50% or
more. That is big bucks to the consumer. And, if the
economy slows then more people will be switching to the
store brands. Good for PRGO. It just sure seems to take
these PRGO guys a long time to get their act together.

I have always said altough remote. I felt PG
might be interested in PRGO. PRGO is out of lower
margined personal care. PG only likes brands that are one
or two in their market. PG commands a lot of shelf
space, so does PRGO. PRGO is #1 in generic OTC's.
Dosen't it make sense for PG to buy PRGO, and expand the
margins of their branded products, and PRGO's generics (
less competition from generics)since you own the
largest. Anybody on this hypothetical?

No I don't own this stock anymore. I owned it
since the ipo. It took off at first and all was well.
The last 5 years it gave back all the gains and went
nowhere. I finally bit the bullet and sold for 1999 tax
loss of about 25,000 dollars ouch.

i have bought, sold and followed perrigo stock
for about ten years now - through the pre-occupation
with the shareholders law suit, the many bad quarters
due to "mild flu seasons" the staff rationalizations
and ensuing poor morale, the write down of russian
investments (russia fooled many more companies than just
perrigo),the under performing person-care products business
sale and most recently the implementation problems
with their new sap enterprize software and the lost
market share that resulted. With all of this bad stuff
over and done with and with many positive developments
occuring, i have never had as good of a feeling about this
company as i do now. The company seems to be very
prepared to compete in the new internet b2b environment
now that its enterprize software is up and working, i
see perrigo's nico-derm patches prominantly displayed
in about every store imaginable (have you noticed
that the patches are know far cheaper than a carton of
cigarettes? - this might mean something) , maybe the "mild
flu season" excuse was bogus, but if not, this year
ought to be stellar flu season! Finally, if you look at
the way folks have been loading up on consumer debt,
you gotta beleive that american households will start
to look for ways to save their pennies pretty soon.
Perrigo is the leader in its industry, and they say that
their mexican subsidiary is doing really well. Mexico's
economy is booming by the way. I have loaded up with a
ton of perrigo stock in the belief that the downside
risk in minimal while the upside potential is very
great. Perrigo has had one solid quarter so far, however
the results have been somewhat obfuscated by the sale
of the consumer products division and resulting
lower total revenues. If the next quarter or two
continues this upward momentum, then this stock should do
extremely well - even if the stock market as a whole
corrects-, if not, the worst case scenario looks to me to be
sideways and not down.

A little insight into private label products. At
the buyer level, margin and inventory turn are the
key factors in determining what goes on the shelf.
This gauge is called the GMROI. (Gross Margin Return
on Investment). The formula is =margin*inventory
turns. Margin is calculated as =((retail price -
cost)/retail price). Inventory turns are calculated as total
yearly sales at cost/ average monthly inventory at cost.
98% of all the private label products I have bought
for the last 21 years have a higher margin than the
branded products. Private label fuels profits. I just
bought last week at 8 1/8 because of my experience in
the significance of private label development for
profits in the coming years.

Thank you for the excellent posts. The last
several posts have been GREAT. For a long time this
message board was dead.

I'm another holder of this
stock that is dumb founded by it's lack luster
performance over the years. I'm still trying to be optimistic
for the future of this stock.
1) The personal care
business and it's low margins has been sold.
2) Mr. J
is not happy with past performance which is the
first step towards improvement.
3) RX drugs prices
have experienced annual double digit price increases
for the past two years. This should increase future
use of non-rx drugs and generic equivalents.
4)
Buy-out opportunity. PRGO could be a candidate for a
takeover by a major drug company or a major retailer such
as Walmart.


Right or Wrong, I blame Mr.
J. for past performance failures (lack of Leadership
and Vision). He's the largest shareholder and has
significant influence over PRGO Board.

You have broadened, and extended my knowledge.
Thanks, and good investing to you. As for you,Insider
10101. I think you have to be looking from the outside,
to see what I like about PRGO now. As I've said
before. Time has a way of catching up with boards, who
keep making mistakes. I don't know this board well
enough to judge them yet. You said your looking to bail.
Wondering what can get this company to move? The answer
could (50/50) be right around the corner. PG talking
merger with American Home and (or) Warner Lambert. This
could create a branded name powerhouse. This could
possibly be the thing that gets PRGO's margins to expand?
I could be wrong, but have put money on it.

IS PRGO A GOOD BUY?

As someonE associated
with Perrigo, I'm not sure how to answer that
question. But, you're questions are refreshing and
intelligent.

Mike J. has made some obvious mistakes
(Hammond --hindsight---(he had hell of a resume though- I
would have hired him)with personell: --- So what!?
Eisner hasn't had a good track record lately either.
After MANY years in this business, Jandernoa IS THE
most respected Exec. in the P/L business ---PERIOD!
FLAT OUT --- NO ONE IS CLOSE!

Was SAP a
disaster ---YES! I often think that the greatest salesman
in the world has to work for SAP. EVERYONE ---from
G.E. -J & J, Gillette, has gone through this -- How
many Hershey candy bars did you see in retailers this
last Halloween ___ If you guessed 0, nada, you were
right.Mike did it for a good reason! ---- and to all of
those investors that can't stand the heat, or
understand the reasons why the decison was made -----
SELL!--go buy Qualcom.


As far as some of your
other questions/points:

1) Slotting allowances
ARE important to SOME retailers, These are buyers
whose compensation is based upon "how many excess
dollars can I bring to the bottom line this quarter."
Thankfully, these short term thinking companies are becoming
fewer and fewer. Big W is NOT one when it comes to
Store Brands."

2) Brands Slotting Allowances

Buyers are not stupid! If a P and G comes in and offers
a $100,000 per sku slotting allowance for a new
product --- anyone and EVERYONE will jump on it----but
with no guarentee as to how long it will stay on the
shelf. Sounds crazy --- but's that's the big MFG.guys
profit margin philosophy prevailing --- Win One, lose
two ---O.K. Still a bottom line winner -- to
them.

3) The "Store brand consumer" today has much less to
do with income --- than "EDUCATION." That may fly in
the face of what you may percieve as the typical
WalMart consumer --- but it's a FACT!

Trader
Joe's" based in So. Ca. examines a market STRICTLY on an
educational basis. A school teacher making $35,000 a year is
a much better shopper and customer than "Jethro,
from the Beverly Hillbillies"

In England, 70%
of HBC products are private label!! That doesn't
make sense to all of us that have had billions of
dollars of advertising "shoved down our throat for brands
for twenty -forty + years" -- but that is where the
U.S. IS going to end up in ten years. P.S. Don't tell
those MGTG MGRS. that are spending all of the money on
the Super Bowl. Marketing (brand) had miscalculated
the intelligence of the public for many years --- or
they have to justify their jobs! --- payback is
hell!

Today, Prgo is the leading purchasurer of such raw
ingredients as acetimetaphen, Ibupro. etc.--That's going to
happen in all categories soon.In MANY categories, P/L
outsells the brand --- retailers make virtually no money
or little, on the brands and 50% to 80%+ on P/L. If
you were a retailer, where would you put your
efforts? --even in light of the slotting allowances I'm
going to fleece the National Brands for.

The
brands are in long-term trouble and Perrigo is the ONLY
company in a position to take advantage of this rise in
buying patterns.

QUALITY, Good LONG TERM- ETHICAL
thinking mgt.

A BuY? Yes --- if we can get the
street to watch it.

Sorry for the disertation
--- but you asked.

best regards