HAWTHORNE, N.Y.--(BUSINESS WIRE)--Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro,” or the “Company”) today provided unaudited financial results for the three month period ended March 31, 2012.
Quarter Three Months ended March 31, 2012 Highlights - compared to the same period in 2011
- Net sales of $145.1 million, increased $37.4 million, or 34.7%
- Gross profit, as a percentage of net sales was 68.3%, compared to 58.6%
- Selling, marketing, general and administrative expenses increased $0.6 million, however, as a percentage of net sales decreased to 15.9%, compared to 20.8%
- Operating income increased 98.3% to $66.2 million, or 45.6% of net sales, compared to $33.4 million, or 31.0% of net sales
- Net income attributable to Taro was $47.3 million compared to $25.7 million, a $21.6 million increase, resulting in diluted earnings per share of $1.06 compared to $0.58.
Cash Flow and Balance Sheet Highlights
- Cash flow from operations was $78.1 million for the quarter ended March 31, 2012, compared to $24.4 million in the same period in 2011
- Cash, including marketable securities, increased $75.5 million to $334.3 million from December 31, 2011.
Mr. Kal Sundaram, Taro’s recently appointed Chairman commented, “We are pleased with the quarter’s results and the consistent progress that we continue to make. As we have stated in the past, a portion of our revenue and profit growth is the result of pricing opportunities, the sustainability of which is uncertain. We intend to ramp up our R&D expenditures in order to improve and grow our pipe-line of quality products in order to remain competitive in a highly-competitive market.”
Mr. Sundaram added, “I look forward to working with the entire Taro management team as we continue to move the Company forward, and build upon the progress and success that Taro has achieved, particularly in the past eighteen months.”
FDA Approvals and Filings
During the quarter, Taro received one Supplemental New Drug Application approval from the U.S. Food and Drug Administration (“FDA”) for Daranide® (Dichlorphenamide) Tablets 50mg. Taro also received one Abbreviated New Drug Application (“ANDA”) approval in May 2012 (Escitalopram Oxalate Oral Solution, 5mg (base)/5mL). The total number of products awaiting approval at the FDA is sixteen ANDAs and one New Drug Application.
Taro Changing its Fiscal Year End to March 31
Taro’s Board of Directors approved a change in the Company’s fiscal year end from December 31 to March 31. The new fiscal year end was effectuated to align Taro's fiscal reporting period and its annual budget planning with that of its major shareholder, Sun Pharmaceutical Industries Ltd. (“Sun Pharma,” Reuters: SUN.BO, Bloomberg: SUNP IN, NSE: SUNPHARMA, BSE: 524715). A report on Form 20-F with unaudited results will be filed with the U.S. Securities and Exchange Commission (“SEC”) by the Company to cover the transition period from January 1, 2012 to March 31, 2012 (“Transition Report”).
The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change. In addition to filing a Transition Report, final audited results for the transition period will be included in the Company’s Annual Report on Form 20-F for the fiscal period from April 1, 2012 to March 31, 2013.
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 and statements 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 financial information for 2012. 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 the evaluation of the Sun Pharma tender offer by Taro’s Board of Directors, acceptance of the offer by Taro shareholders, approval, if any required, by regulatory authorities, actions of the Company's lenders and creditors, 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 actions 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.
|
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (U.S. dollars in thousands, except share data) |
||||||||
|
|
Three Months Ended |
|||||||
|
|
March 31, |
|||||||
|
|
2012 |
|
2011 |
|||||
| Sales, net |
|
$ 145,141 |
|
$ 107,727 |
||||
| Cost of sales | 45,971 | 44,617 | ||||||
| Gross Profit | 99,170 | 63,110 | ||||||
|
Operating Expenses: |
||||||||
|
Research and development, net |
9,847 |
7,258 |
||||||
|
Selling, marketing, general and administrative |
23,101 |
22,460 |
||||||
|
Operating Income |
66,222 |
33,392 |
||||||
|
Financial Expenses, net: |
||||||||
|
Interest and other financial (income) expense |
(107 |
) |
778 |
|||||
|
Foreign exchange expense |
1,107 |
409 |
||||||
|
Other (expense) income, net |
(94 |
) |
251 |
|||||
|
Income before income taxes |
65,128 |
32,456 |
||||||
|
Tax expense |
17,791 |
6,368 |
||||||
|
Income from continuing operations |
47,337 |
26,088 |
||||||
|
Net income (loss) from discontinued operations(1) |
66 |
(135 |
) |
|||||
|
Net income |
47,403 |
25,953 |
||||||
|
Net income attributable to non-controlling interest(2) |
151 |
295 |
||||||
|
Net income attributable to Taro |
|
$ 47,252 |
|
$ 25,658 |
||||
|
Net income per ordinary share |
||||||||
|
from continuing operations attributable to Taro: |
||||||||
|
Basic |
|
$1.06 |
|
$0.58 |
||||
|
Diluted |
|
$1.06 |
|
$0.58 |
||||
|
Net income (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 |
$1.06 |
$0.58 |
||||||
|
Diluted |
$1.06 |
$0.58 |
||||||
|
Weighted-average number of ordinary shares used |
||||||||
|
to compute net income per ordinary share: |
||||||||
|
Basic |
44,476,429 |
44,284,556 |
||||||
|
Diluted |
44,589,007 |
44,447,293 |
||||||
|
(1) |
In 2010, the Company closed its Ireland manufacturing facility and decided to sell the facility and has therefore classified the losses attributable to its Irish subsidiary as losses from discontinued operations. |
|
|
(2) |
The impact of the Company adopting FASB ASC Section 810-10-65, which requires the Company to allocate income or loss attributable to a non-controlling interest based on the respective ownership percentages. |
|
|
* |
Amount is less than $0.01. |
|
|
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) |
||||||||
|
March 31, |
December 31, |
|||||||
| 2012 | 2011 | |||||||
| ASSETS | (unaudited) | (audited) | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 238,266 | $ | 150,001 | ||||
| Short-term bank deposits | 72,440 | 89,814 | ||||||
| Restricted short-term bank deposits | 15,780 | 16,080 | ||||||
| Marketable securities | 7,835 | 2,901 | ||||||
|
Accounts receivable and other: |
||||||||
|
Trade, net |
111,130 |
120,832 |
||||||
| Other receivables and prepaid expenses | 98,501 | 94,344 | ||||||
| Inventories | 109,638 | 107,378 | ||||||
| Assets held for sale, net(1) | 71 | 81 | ||||||
| TOTAL CURRENT ASSETS | 653,661 | 581,431 | ||||||
| Long-term receivables and other assets | 19,972 | 23,131 | ||||||
| Property, plant and equipment, net | 150,750 | 152,532 | ||||||
| Other assets | 32,041 | 38,751 | ||||||
| TOTAL ASSETS | $ | 856,424 | $ | 795,845 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current maturities of long-term debt | $ | 10,957 | $ | 17,073 | ||||
| Trade payables and other current liabilities | 187,942 | 173,310 | ||||||
| TOTAL CURRENT LIABILITIES | 198,899 | 190,383 | ||||||
| Long-term debt, net of current maturities | 27,949 | 27,614 | ||||||
| Deferred taxes and other long-term liabilities | 6,618 | 6,785 | ||||||
| TOTAL LIABILITIES | 233,466 | 224,782 | ||||||
| Taro shareholders’ equity | 619,008 | 567,264 | ||||||
| Non-controlling interest(2) | 3,950 | 3,799 | ||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
856,424 |
$ |
795,845 |
||||
|
(1) |
In 2010, the Company closed its Ireland manufacturing facility and decided to sell the facility and therefore has classified the related assets as held for sale. | |
|
(2) |
The impact of the Company adopting FASB ASC Section 810-10-65, which requires the Company to allocate income or loss attributable to a non-controlling interest based on the respective ownership percentages. | |
|
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (U.S. dollars in thousands) |
||||||||||
|
Three Months Ended March 31, |
||||||||||
|
2012 |
2011 |
|||||||||
|
Operating Activities |
||||||||||
| Net income | $ | 47,403 | $ | 25,953 | ||||||
| Adjustments required to reconcile net income to net cash | ||||||||||
| provided by operating activities: | ||||||||||
| Depreciation and amortization | 4,598 | 4,709 | ||||||||
| Stock-based compensation | - | 20 | ||||||||
| Loss on sale of long-lived assets | 22 | - | ||||||||
| Increase in long-term debt due to currency fluctuations | 814 | 1,136 | ||||||||
| Decrease (increase) in trade receivables | 9,879 | (8,270 | ) | |||||||
| Change in derivative instruments, net | (3,392 | ) | (831 | ) | ||||||
| Decrease in other receivables, prepaid expenses and other assets | 3,268 | 2,531 | ||||||||
| Increase in inventories | (1,583 | ) | (1,592 | ) | ||||||
| Foreign exchange effect on intercompany balances | 2,104 | (368 | ) | |||||||
| Increase in trade and other payables and accruals | 14,981 | 1,070 | ||||||||
| Net cash provided by operating activities | 78,094 | 24,358 | ||||||||
|
|
||||||||||
| Investing Activities: | ||||||||||
| Purchase of property plant & equipment, net of related grants | (1,610 | ) | (887 | ) | ||||||
| Proceeds from long-term deposits and other assets | 18 | - | ||||||||
| Proceeds from (investment in) short-term and restricted bank deposits | 22,059 | (10,105 | ) | |||||||
| Investment in marketable securities | (4,909 | ) | - | |||||||
| Proceeds from sale of property, plant and equipment | 28 | - | ||||||||
| Net cash provided by (used in) investing activities | 15,586 | (10,992 | ) | |||||||
|
Financing Activities: |
||||||||||
|
Proceeds from the issuance of shares, net |
7 |
8,554 |
||||||||
|
(Repayments) proceeds of long-term debt |
(6,595 |
) |
9 |
|||||||
|
Proceeds of short-term bank debt, net |
- |
2,428 |
||||||||
|
Net cash (used in) provided by financing activities |
(6,588 |
) |
10,991 |
|||||||
|
Effect of exchange rate changes |
1,173 |
371 |
||||||||
|
Net increase in cash |
88,265 |
24,728 |
||||||||
|
Cash at beginning of period |
150,001 |
54,144 |
||||||||
|
Cash at end of period |
$ |
238,266 |
$ |
78,872 |
||||||