Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter ended June 30, 2019.
Quarter ended June 30, 2019 Highlights - compared to June 30, 2018
Cash Flow and Balance Sheet Highlights
Mr. Uday Baldota, Taro’s CEO stated, “Operating results of this quarter reflect the impact of many underlying challenges of our industry. Despite the headwinds, we remain steadfast in our commitment to customers and patients. We are executing on our strategy and continue to add to our portfolio of high quality products across business and markets.”
FDA Approvals and Filings
The Company recently received two approvals from the U.S. Food and Drug Administration (“FDA”) for Abbreviated New Drug Applications (“ANDAs”); Dapsone Gel, 7.5% and Iloperidone Tablets, 1 mg, 2 mg, 4 mg, 6 mg, 8 mg, 10 mg, and 12 mg. The Company currently has a total of twenty-six ANDAs awaiting FDA approval, including seven tentative approvals.
Form 20-F Filings with the SEC
On June 20, 2019, 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, 2019.
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The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.
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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 2020. 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 Israel, the 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 SEC reports, 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.
**Financial Tables Follow**
| TARO PHARMACEUTICAL INDUSTRIES LTD. | ||||||||
| SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| (U.S. dollars in thousands, except share data) | ||||||||
| Three Months Ended June 30, | ||||||||
|
2019 |
|
|
2018 |
|
|||
| Sales, net | $ |
161,296 |
|
$ |
154,618 |
|
||
| Cost of sales |
|
59,572 |
|
|
54,536 |
|
||
| Gross profit |
|
101,724 |
|
|
100,082 |
|
||
| Operating Expenses: | ||||||||
| Research and development |
|
13,443 |
|
|
13,345 |
|
||
| Selling, marketing, general and administrative |
|
19,718 |
|
|
23,582 |
|
||
| Operating income |
|
68,563 |
|
|
63,155 |
|
||
| Financial income, net: | ||||||||
| Interest and other financial income |
|
(9,624 |
) |
|
(7,804 |
) |
||
| Foreign exchange income |
|
(7,905 |
) |
|
(9,962 |
) |
||
| Other gain, net |
|
594 |
|
|
603 |
|
||
| Income before income taxes |
|
86,686 |
|
|
81,524 |
|
||
| Tax expense |
|
20,445 |
|
|
14,096 |
|
||
| Net income |
|
66,241 |
|
|
67,428 |
|
||
| Net income attributable to non-controlling interest |
|
58 |
|
|
151 |
|
||
| Net income attributable to Taro | $ |
66,183 |
|
$ |
67,277 |
|
||
| Net income per ordinary share attributable to Taro: | ||||||||
| Basic and Diluted | $ |
1.72 |
|
$ |
1.71 |
|
||
| Weighted-average number of shares used to compute net income per share: | ||||||||
| Basic and Diluted |
|
38,539,056 |
|
|
39,260,218 |
|
||
| May not foot due to rounding. | ||||||||
| TARO PHARMACEUTICAL INDUSTRIES LTD. | ||||||||
| SUMMARY CONSOLIDATED BALANCE SHEETS | ||||||||
| (U.S. dollars in thousands) | ||||||||
| June 30, | March 31, | |||||||
2019 |
2019 |
|||||||
| ASSETS | (unaudited) | (audited) | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ |
632,986 |
$ |
567,451 |
||||
| Marketable securities |
|
506,751 |
|
481,883 |
||||
| Accounts receivable and other: | ||||||||
| Trade, net |
|
213,514 |
|
237,945 |
||||
| Corporate tax receivable |
|
9,476 |
|
25,969 |
||||
| Other receivables and prepaid expenses |
|
22,645 |
|
21,393 |
||||
| Inventories |
|
148,283 |
|
148,079 |
||||
| TOTAL CURRENT ASSETS |
|
1,533,655 |
|
1,482,720 |
||||
| Long-term deposits and marketable securities |
|
291,544 |
|
304,322 |
||||
| Property, plant and equipment, net |
|
205,654 |
|
206,242 |
||||
| Deferred income taxes |
|
108,852 |
|
110,974 |
||||
| Other assets |
|
32,495 |
|
31,068 |
||||
| TOTAL ASSETS | $ |
2,172,200 |
$ |
2,135,326 |
||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | $ |
37,210 |
$ |
35,060 |
||||
| Other current liabilities |
|
152,023 |
|
181,761 |
||||
| TOTAL CURRENT LIABILITIES |
|
189,233 |
|
216,821 |
||||
| Deferred taxes and other long-term liabilities |
|
8,122 |
|
7,383 |
||||
| TOTAL LIABILITIES |
|
197,355 |
|
224,204 |
||||
| Taro shareholders' equity |
|
1,969,201 |
|
1,905,536 |
||||
| Non-controlling interest |
|
5,644 |
|
5,586 |
||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ |
2,172,200 |
$ |
2,135,326 |
||||
| TARO PHARMACEUTICAL INDUSTRIES LTD. | |||||||
| SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Unaudited) | |||||||
| (U.S. dollars in thousands) | |||||||
Three Months Ended June 30, |
|||||||
|
2019 |
|
|
2018 |
|
||
| Cash flows from operating activities: | |||||||
| Net income | $ |
66,241 |
|
$ |
67,428 |
|
|
| Adjustments required to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization |
|
5,071 |
|
|
4,299 |
|
|
| Realized gain on sale of marketable securities | — |
|
(7 |
) |
|||
| Change in derivative instruments, net |
|
(2,421 |
) |
|
3,546 |
|
|
| Effect of change in exchange rate on inter-company balances, marketable securities and bank deposits |
|
(5,624 |
) |
|
(28,918 |
) |
|
| Deferred income taxes, net |
|
2,930 |
|
|
1,575 |
|
|
| Decrease (increase) in trade receivables, net |
|
24,431 |
|
|
(2,897 |
) |
|
| (Increase) decrease in inventories, net |
|
(205 |
) |
|
2,653 |
|
|
| Decrease in other receivables, income tax receivable, prepaid expenses and other |
|
15,671 |
|
|
52,479 |
|
|
| Decrease in trade, income tax, accrued expenses, and other payables |
|
(22,965 |
) |
|
(17,408 |
) |
|
| Income from marketable securities, net |
|
(525 |
) |
|
(310 |
) |
|
| Net cash provided by operating activities |
|
82,604 |
|
|
82,440 |
|
|
| Cash flows from investing activities: | |||||||
| Purchase of plant, property & equipment, net |
|
(7,969 |
) |
|
(6,078 |
) |
|
| Investment in other intangible assets |
|
(30 |
) |
|
(45 |
) |
|
| Proceeds from short-term bank deposits, net | — |
|
51,345 |
|
|||
| Proceeds from long-term deposits and other assets | — |
|
70,685 |
|
|||
| Investment in marketable securities, net |
|
(9,070 |
) |
|
(107,644 |
) |
|
| Net cash (used in) provided by investing activities |
|
(17,069 |
) |
|
8,263 |
|
|
| Cash flows from financing activities: | |||||||
| Purchase of treasury stock | — |
|
(24,655 |
) |
|||
| Net cash used in financing activities | — |
|
(24,655 |
) |
|||
| Effect of exchange rate changes on cash and cash equivalents | — |
|
(670 |
) |
|||
| Increase in cash and cash equivalents |
|
65,535 |
|
|
65,378 |
|
|
| Cash and cash equivalents at beginning of period |
|
567,451 |
|
|
576,611 |
|
|
| Cash and cash equivalents at end of period | $ |
632,986 |
|
$ |
641,989 |
|
|
| Cash Paid during the year for: | |||||||
| Income taxes | $ |
10,432 |
|
$ |
36,830 |
|
|
| Cash Received during the year for: | |||||||
| Income taxes | $ |
7,128 |
|
$ |
60,544 |
|
|
| Non-cash investing transactions: | |||||||
| Purchase of property, plant and equipment included in accounts payable | $ |
2,317 |
|
$ |
1,823 |
|
|
| Non-cash financing transactions: | |||||||
| Purchase of marketable securities | $ |
2,436 |
|
$ |
8,629 |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190808005909/en/
Mariano A. Balaguer
VP, CFO
(914) 345-9001
Mariano.Balaguer@taro.com
William J. Coote
AVP, Business Finance, Treasurer and Investor Relations
(914) 345-9001
William.Coote@taro.com