Taro Provides Third Quarter and Fiscal Year to Date Results

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Taro Provides Third Quarter and Fiscal Year to Date Results

Favorable Performance Over 2011 Periods Continues

HAWTHORNE, N.Y.--(BUSINESS WIRE)-- Taro Pharmaceutical Industries Ltd. (NYS: TARO) ("Taro" or the "Company") today provided unaudited financial results for the three and nine month periods ended December 31, 2012.


Quarter ended December 31, 2012 Highlights - compared to December 31, 2011

  • Net sales of $185.7 million, increased $37.6 million, or 25.4%, however, sales volumes have slightly declined
  • Gross profit, as a percentage of net sales was 75.4%, compared to 71.6%
  • Research and development expenses increased 33.5% to $11.8 million
  • Selling, marketing, general and administrative expenses, which included a $3.3 million litigation provision in 2012, increased $2.1 million
  • Operating income increased to $104.0 million, or 56.0% of net sales, compared to $74.5 million, or 50.3% of net sales
  • Net income attributable to Taro was $88.8 million compared to $62.4 million, resulting in diluted earnings per share of $1.98 compared to $1.40.

Nine months ended December 31, 2012 Highlights - compared to December 31, 2011

  • Net sales of $505.8 million, increased $107.9 million, or 27.1%,however, sales volumes have marginally declined
  • Gross profit, as a percentage of net sales was 74.2%, compared to 66.9%
  • Research and development expenses increased 45.3% to $34.3 million
  • Selling, marketing, general and administrative expenses, which included $11.3 million litigation provisions in 2012, increased $4.2 million
  • Operating income increased to $265.4 million, or 52.5% of net sales, compared to $170.6 million, or 42.9% of net sales
  • Income tax expense increased $33.5 million from $18.2 million to $51.7 million
  • Net income attributable to Taro was $217.0 million compared to $157.0 million, a $60.0 million increase, resulting in diluted earnings per share of $4.86 compared to $3.52.

Cash Flow and Balance Sheet Highlights

  • Cash flow provided by operations for the nine months ended December 31, 2012, as compared to December 31, 2011,was $173.1 million compared to $157.0 million, primarily due to the payment of income taxes as reflected in the significant decrease in trade and other payables
  • Cash, including marketable securities, increased $152.2 million to $486.6 million from March 31, 2012.

FDA Approvals and Filings

During the quarter, the Company filed one ANDA with the FDA. With this, ANDAs representing seventeen products as well as two NDAs await FDA approval.

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 fiscal year 2013.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 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 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 INCOME

(Unaudited)


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

 
   

Quarter Ended

December 31,

  

Year to Date

December 31,

2012

 20112012 2011
Sales, net$185,695$148,105$505,821$397,941
Cost of sales 45,769  42,056  130,470  131,526 
Gross Profit139,926106,049375,351266,415
 

Operating Expenses:

Research and development, net11,8388,86734,30623,609
Selling, marketing, general and administrative24,05321,93075,61271,458
Impairment -  784  -  784 
Operating income104,03574,468265,433170,564
 

Financial Expenses, net:

Interest and other financial (income) expenses, net(581)315(440)2,445
Foreign exchange (income) expense(1,992)6,312(1,736)(7,329)
Other income (loss), net 1,359  (565) 1,952  358 
Income before income taxes107,96767,276269,561175,806
Tax expense 18,779  4,584  51,713  18,183 
Income from continuing operations89,18862,692217,848157,623
 
Net loss from discontinued operations (37) (344) (44) (298)
Net income89,15162,348217,804157,325
Net income (loss) attributable to non-controlling interest 374  (52) 765  303 
 
Net income attributable to Taro$88,777 $62,400 $217,039 $157,022 
 

Net income per ordinary share from continuing

operations attributable to Taro:

Basic$1.98$1.41$4.86$3.53
Diluted$1.98$1.41$4.86$3.53
 

Net loss per ordinary share from discontinued

operations attributable to Taro:

Basic($0.00)*($0.01)($0.00)*

($0.01)

Diluted($0.00)*($0.01)($0.00)*

($0.01)

 
Net income per ordinary share attributable to Taro:
Basic$1.98$1.40$4.86$3.53
Diluted$1.98$1.40$4.86$3.52
 

Weighted-average number of shares used to compute

net income per share:

Basic44,725,89844,474,72744,651,53444,527,689
Diluted44,740,42744,550,02244,699,71544,587,620
 

* Amount is less than $0.01.
May not foot due to rounding.

  
 

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED BALANCE SHEETS

(Unaudited)


(U.S. dollars in thousands)

       

December 31,

March 31,

2012

2012
 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$276,995$ 238,266
Short-term bank deposits198,97372,440
Restricted short-term bank deposits7,43015,780
Marketable securities3,1727,835

Accounts receivable and other:

Trade, net

134,590

111,130

Other receivables and prepaid expenses109,71198,501
Inventories110,732109,638
Long-term assets held for sale, net 69  71
TOTAL CURRENT ASSETS841,672653,661
 
Long-term receivables and other assets27,92919,972
Property, plant and equipment, net145,762150,750
Other assets 29,945  32,041
TOTAL ASSETS$1,045,308$ 856,424
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Current maturities of long-term debt$11,086$10,957
Trade payables and other current liabilities 162,756  187,942
TOTAL CURRENT LIABILITIES173,842198,899
 
Long-term debt, net of current maturities17,24427,949
Deferred taxes and other long-term liabilities 6,116  6,618
TOTAL LIABILITIES197,202233,466
 
Taro shareholders' equity843,391619,008
Non-controlling interest 4,715  3,950

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$1,045,308$ 856,424
 
 

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(U.S. dollars in thousands)

       

Nine Months Ended December 31,

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