Taro Provides Results for Quarter Ended June 2015

HAWTHORNE, N.Y.--(BUSINESS WIRE)--Aug. 6, 2015-- Taro Pharmaceutical Industries Ltd.(NYSE:TARO) ("Taro" or the "Company") today provided unaudited financial results for the quarter ended June 30, 2015.

Quarter ended June 30, 2015 Highlights - compared to June 30, 2014

  • Net sales of $215 million, reflects an increase of $85 million. Last year's quarter net sales were negatively impacted by a $79 million provision for price protection (current quarter's price protection provision was $14 million). On a pro-forma basis, adjusted for the price protection provisions, the net sales increase would have been 10%. Sales volumes declined 10% as the result of an increase in competitor activity in the U.S. market.
  • Gross profit was $172 million as compared to $85 million. Excluding the impact of the aforementioned price adjustments in both periods, the gross profit increase would have been 13% over the same period last year.
  • Research and development (R&D) and Selling, marketing, general and administrative expenses remained relatively flat.
  • Operating income increased $80 million to $134 million, primarily due to the benefits realized from the price adjustments in the prior year. Excluding the non-recurring items, operating income on a comparable basis, would have increased approximately 17%.
  • Net income attributable to Taro was $104 million compared to $46 million, a $58 million increase, resulting in diluted earnings per share of $2.42 compared to $1.08.

Cash Flow and Balance Sheet Highlights

  • Cash flow provided by operations was $68 million compared to $36 million for the three months ended June 30, 2014.
  • Cash, including short-term bank deposits and marketable securities, increased $77 million to $998 million from March 31, 2015.

Mr. Kal Sundaram, Taro's CEO stated, "As we have stated in the past, we remain cautious of the ever-increasing pressure on our business from strong competition and the continuing industry and customer consolidations. We continue our commitment to building a strong, quality pipeline of products through our investment in our R&D efforts which, along with our business development efforts, will help to fuel our medium and long-term growth".

FDA Approvals and Filings

The Company recently received approvals from the U.S. Food and Drug Administration("FDA") for the Abbreviated New Drug Applications ("ANDAs") Desloratadine Oral Solution, 0.5 mg/mL and Loratadine Oral Solution USP, 1 mg/mL (Sugar Free, Bubble Gum Flavor, OTC). The Company has a total of thirty-two ANDAs and one NDA for Orphan indication, awaiting FDA approval.

Form 20-F Filings with the SEC

On July 1, the Company filed its Annual Report on Form 20-F with the U.S. Securities and Exchange Commission ("SEC") for the fiscal year ended March 31, 2015.

The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.

About Taro

Taro Pharmaceutical Industries Ltd. is a multinational, science-based pharmaceutical company, dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products. For further information on Taro Pharmaceutical Industries Ltd., please visit the Company's website at www.taro.com.

SAFE HARBOR STATEMENT

The unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments necessary to present fairly the financial condition and results of operations of the Company. The unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 20-F, as filed with the SEC.

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements that do not describe historical facts or that refer or relate to events or circumstances the Company "estimates," "believes," or "expects" to happen or similar language, and statements with respect to the Company's financial performance, availability of financial information, and estimates of financial results and information for fiscal year 2016.Although the Company believes the expectations reflected in such forward-looking statements to be based on reasonable assumptions, it can give no assurances that its expectations will be attained. Factors that could cause actual results to differ include general domestic and international economic conditions, industry and market conditions, changes in the Company's financial position, litigation brought by any party in any court in Israelthe United States, or any country in which Taro operates, regulatory and legislative actions in the countries in which Taro operates, and other risks detailed from time to time in the Company's SECreports, including its Annual Reports on Form 20-F. Forward-looking statements are applicable only as of the date on which they are made. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(U.S. dollars in thousands, except share data)

           
          Three Months Ended June 30,
          2015   2014
               
Sales, net       $ 215,278     $ 130,230  
Cost of sales         43,474       44,863  
Gross profit         171,804       85,367  
               
Operating Expenses:            
  Research and development         14,540       14,988  
  Selling, marketing, general and administrative         22,892       22,386  
  Settlements and loss contingencies         -       (6,500 )
Operating income         134,372       54,493  
               
Financial Expenses, net:            
  Interest and other financial income         (3,269 )     (1,568 )
  Foreign exchange expense         4,200       5,242  
               
Other income, net         352       406  
Income before income taxes         133,793       51,225  
Tax expense         30,089       4,903  
Income from continuing operations         103,704       46,322  
Net loss from discontinued operations         (31 )     (124 )
Net income         103,673       46,198  
Net income attributable to non-controlling interest         37       100  
Net income attributable to Taro       $ 103,636     $ 46,098  
               
Net income per ordinary share from continuing operations attributable to Taro:            
Basic       $ 2.42     $ 1.08  
Diluted       $ 2.42     $ 1.08  
               
Net loss per ordinary share from discontinued operations attributable to Taro:            
Basic       $ (0.00)*   $ (0.00)*
Diluted       $ (0.00)*   $ (0.00)*
               
Net income per ordinary share attributable to Taro:            
Basic       $ 2.42     $ 1.08  
Diluted       $ 2.42     $ 1.08  
               
Weighted-average number of ordinary shares used to compute net income per ordinary share:            
Basic         42,833,533       42,832,648  
Diluted         42,833,533       42,833,325  
               
*Amount is less than $0.01
 
 

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

               
          June 30,

2015

  March 31,

2015

          (unaudited)   (audited)
ASSETS            
               
CURRENT ASSETS:            
Cash and cash equivalents       $ 438,998   $ 481,641
Short-term bank deposits         555,122     434,899
Restricted short-term bank deposits         -     199
Marketable securities         3,425     3,458
Accounts Receivable and other:            
  Trade, net         196,795     222,427
  Other receivables and prepaid expenses         257,228     250,911
Inventories         119,382     120,272
TOTAL CURRENT ASSETS         1,570,950     1,513,807
               
Long-term receivables         41,419     46,330
Property, plant and equipment, net         152,902     153,045
Other assets         23,746     24,563
TOTAL ASSETS       $ 1,789,017   $ 1,737,745
               
               
               
LIABILITIES AND SHAREHOLDERS' EQUITY            
               
CURRENT LIABILITIES:            
Current maturities of long-term debt       $ 925   $ 912
Trade payable and other current liabilities         248,079     309,093
TOTAL CURRENT LIABILITIES         249,004     310,005
               
Long -term debt, net of current maturities         4,740     4,976
Deferred income taxes and other long-term liabilities         5,260     5,381
TOTAL LIABILITIES         259,004     320,362
               
Taro shareholders' equity         1,524,312     1,411,720
Non-controlling interest         5,701     5,663
               
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $ 1,789,017   $ 1,737,745
                 
                 

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(U.S. dollars in thousands)

           
          Three Months Ended June 30,
          2015   2014

Operating Activities

           
Net Income       $ 103,673     $ 46,198  
Adjustments required to reconcile net income to net cash provided by operating activities:            
               
  Depreciation and amortization         3,913       3,964  
  Gain (loss) on sale of marketable securities and long-lived assets         48       (39 )
  Increase in long-term debt due to currency fluctuations         -       206  
  Decrease in trade receivables         25,809       35,636  
  Change in derivative instruments, net         (5,198 )     (3,989 )
  Increase in other receivables, prepaid expenses and other assets         (5,785 )     (42,651 )
  Decrease (increase) in inventories         1,317       (8,656 )
  Foreign exchange effect on intercompany balances         1,716       5,209  
  Decrease in trade and other payables and accruals         (57,226 )     (144 )
Net cash provided by operating activities         68,267       35,734  
               
Investing Activities:            
 

Purchase of property plant & equipment

        (2,393 )     (6,058 )
 

(Investment in) proceeds from sale of property plant & equipment and other intangible assets

        (15 )     78  
  Investment in long-term deposits and other assets         (20,000 )     (14,708 )
  (Investment in) proceeds from short-term and bank deposits         (92,124 )     90,078  
  Investment in marketable securities, net         (16 )     -  
Net cash (used in) provided by investing activities         (114,548 )     69,390  
               
Financing Activities:            
  Proceeds from the issuance of shares, net         -       13  
  Repayments of long-term debt         (223 )     (209 )
Net cash used in financing activities         (223 )     (196 )
               
Effect of exchange rate changes         3,861       2,978  
Net (decrease) increase in cash         (42,643 )     107,906  
Cash at beginning of period         481,641       209,967  
               
Cash at end of period       $ 438,998     $ 317,873  

 

Source: Taro Pharmaceutical Industries Ltd.

Taro Pharmaceutical Industries Ltd.
Michael Kalb, GVP, CFO, 914-345-9001
[email protected]
or
William J. Coote, 914-345-9001
[email protected]

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