1992 1991 Assets 538 50,460 106,504 6.092 163,504 04 31.281 58,604 3.95 087878 Current Cash Accounts receivables (not feventories Prepaid expenses and other current Total current sets Property and equipment (al cost Land Buildings Machinery and equipment Less acumulated plepreciation Net Fixed Acts Coat in excess of net assets of cured butrisses Other Total Assets Llabies & Shareholders' Equity Current about Accounts payable Payrolls and related to Accrued expenses Income taxes Current installients on long-tom debt Total currentes Deferred Incoche taxes Long debt is current installmenis) 7410 70 515 67.951 145,683 28.737 5117,148 83,177 UX3027 5316046 4,292 45,975 38,704 30.071 19.324 9847 18,412 2.785 $1182722 $ 41.898 8.411 16.929 4352 871 12:45 14.744 45.990 133,208 132.285 51453 25.380 5.929 9,928 1.718 11 557 55.121 12.000 82,100 144,837 10,000 22.902 32902 56272 Tey skin Common stock Retained earrings Total stiroholders equity $316940 Source: Pertiga Company, 1992 Annual Report E Finances 42 Perrigo was a high growth company. Between fiscal 1989 (the first full year after the final manage- ment-led buyout) and Racal 1992, the company's sales and met Income grew al compounded annual rules of approximately 24% and 197%, respectiyely. However, the two leveraged buyout resulted in a high long-term debt-to-equlty ratio of 13,3:in June 1990 (before the initial public issue of its stock). Primarily as a result of the initial stock offering, this ratio decreased to 0.25:1 by June 1992. Perrigo did not break down the sales and profits of its Cumberland Swant and South Carolina subsidi aries. Pertigo's sales and net incoms had historically peaked in the second and third quarters of the fiscal yeat while the first quarter had been its least profitable, Sales of cough and cold remedies tradicionally peaked during the second and third fiscal quarters at customers stocked inventories for the winter months. Sale oletan products peaked in the third and fourth que customis stocked up for the summer months to find a high growth, the company noted in its 1992 Annual Report that it does not currently bay cash dividends Exhibit 10 gives the company's financial data. 1990 100,928 $247,020 181,699 6227 Income Statements June 30, 1990, 1991, and 1082 (in thousands) 1992 1991 Not sales $409,785 $281.265 Cost of sales 204 814 Gross profit 70.631 Operating expenses Distribusion 11,869 5305 Research & development 3.373 1,565 Selling & administrative 50 585 38057 Operating Income Interest expenso 8.781 12.420 Income before Income 45,651 19,304 Income aces 18.500 ZA Net Income $ 29,551 12,204 02 4,375 1,518 31.846 27,76 15.350 12.432 4800 Source: Parige Company. 1802 Anual Report Industry 1991 1992 Average Interpretation Ratios: Liquidity: Current Quick 2.00x 1.00x Leverage: Debt-Assets Debt-Equity 1.00x Activity: 4.50x Asset Turnover Fixed Asset Ratio Inventory Ratio A/R Turnover Avg, Collection 6.2x Profitability: Return on Sales Return on Assets Return on Equity 4.40% * 10.20% * 23.50% Working Capital * Before Taxes