Taro Provides Results Year Ended March 31, 2013

Taro Provides Results Year Ended March 31, 2013

HAWTHORNE, N.Y.--(BUSINESS WIRE)-- Taro Pharmaceutical Industries Ltd. (NYS: TARO) ("Taro" or the "Company") today provided unaudited financial results for the three months and year ended March 31, 2013.

Quarter ended March 31, 2013 Highlights - compared to March 31, 2012

  • Net sales of $165.1 million, increased $20.0 million, or 13.8%, however, volumes have slightly declined

  • Gross profit, as a percentage of net sales was 72.4%, compared to 68.3%

  • Research and development expenses increased 23.9% to $12.2 million

  • Selling, marketing, general and administrative expenses decreased $1.0 million

  • Settlements and loss contingencies of $22.0 million, in March 2013, related to certain price reporting litigations

  • Operating income decreased to $63.1 million, or 38.2% of net sales, compared to $66.2 million, or 45.6% of net sales; however, excluding settlements and loss contingencies, operating income would have been $85.1 million, or 51.6% of net sales

  • Net income attributable to Taro was $49.2 million compared to $47.3 million, resulting in diluted earnings per share of $1.10 compared to $1.06


Year ended March 31, 2013 Highlights - compared to March 31, 2012

  • Net sales of $671.0 million, increased $127.9 million, or 23.5%,however, volumes have slightly declined

  • Gross profit, as a percentage of net sales was 73.7%, compared to 67.3%

  • Research and development expenses increased 39.0% to $46.5 million

  • Selling, marketing, general and administrative expenses decreased $8.1 million and as a percentage of net sales decreased from 17.4% to 12.9%

  • Settlements and loss contingencies, of $33.3 million, primarily related to certain price reporting litigations

  • Operating income increased to $328.6 million, or 49.0% of net sales, compared to $237.6 million, or 43.7% of net sales; however, excluding settlements and loss contingencies, operating income would have been $361.9 million, or 53.9% of net sales

  • Income tax expense increased $31.8 million from $36.0 million to $67.8 million

  • Net income attributable to Taro was $266.2 million compared to $204.3 million, a $61.9 million increase, resulting in diluted earnings per share of $5.95 compared to $4.59

Cash Flow and Balance Sheet Highlights

  • Cash flow provided by operations for the year ended March 31, 2013, as compared to March 31, 2012,was $248.7 million compared to $235.1 million

  • Cash, including marketable securities, increased $226.2 million to $560.5 million from March 31, 2012

FDA Approvals and Filings

During the quarter, the Company filed Abbreviated New Drug Applications ("ANDAs") for five (5) products with the U.S. Food and Drug Administration ("FDA"). With this, ANDAs representing twenty-one (21) products as well as two (2) New Drug Applications ("NDAs") await FDA approval.

Taro Receives FDA Approval for Topicort® (desoximetasone) Topical Spray, 0.25%

As announced on April 12, 2013, Taro received approval from the FDA for its NDA, Topicort® (desoximetasone) Topical Spray, 0.25%.

The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change. Final audited results will be included in the Company's Form 20-F to be filed with the U.S. Securities and Exchange Commission ("SEC") on or before the due date of July 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 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.

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


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

Quarter Ended

Year Ended

March 31,

March 31,

2013

2012

2013

2012

Sales, net

$

165,133

$

145,141

$

670,954

$

543,082

Cost of sales

45,658

45,971

176,128

177,497

Gross Profit

119,475

99,170

494,826

365,585

Operating Expenses:

Research and development, net

12,202

9,847

46,508

33,456

Selling, marketing, general and administrative

22,126

23,101

86,438

94,559

Settlements and loss contingencies

22,000

-

33,300

-

Operating income

63,147

66,222

328,580

237,570

Financial Expenses, net:

Interest and other financial (income) expenses, net

(1,074

)

(107

)

(1,514

)

2,338

Foreign exchange (income) expense

(681

)

1,107

(2,417

)

(6,222

)

Other income (loss), net

1,400

(94

)

3,352

264

Income before income taxes

66,302

65,128

335,863

241,718

Tax expense

16,086

17,791

67,799

35,974

Income from continuing operations

50,216

47,337

268,064

205,744

Net (loss) income from discontinued operations

(1,150

)

66

(1,194

)

(1,016

)

Net income

49,066

47,403

266,870

204,728

Net (loss) income attributable to non-controlling interest

(101

)

151

664

454

Net income attributable to Taro

$

49,167

$

47,252

$

266,206

$

204,274

Net income per ordinary share from continuing operations attributable to Taro:

Basic

$

1.13

$

1.06

$

5.99

$

4.61

Diluted

$

1.13

$

1.06

$

5.98

$

4.61

Net loss per ordinary share from discontinued operations attributable to Taro:

Basic

($ 0.03

)

$ 0.00*

($ 0.03

)

($ 0.02

)

Diluted

($ 0.03

)

$ 0.00*

($ 0.03

)

($ 0.02

)

Net income per ordinary share attributable to Taro:

Basic

$

1.10

$

1.06

$

5.96

$

4.59

Diluted

$

1.10

$

1.06

$

5.95

$

4.59

Weighted-average number of shares used to compute net income per share:

Basic

44,757,257

44,476,429

44,677,603

44,468,209

Diluted

44,762,748

44,589,007

44,715,111

44,541,302

* 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)

March 31,

March 31,

2013

2012

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

237,284

$

238,266

Short-term bank deposits

312,603

72,440

Restricted short-term bank deposits

7,430

15,780

Marketable securities

3,183

7,835

Accounts receivable and other:

Trade, net

119,810

111,130

Other receivables and prepaid expenses

119,768

98,501

Inventories

109,626

109,638

Long-term assets held for sale, net

67

71

TOTAL CURRENT ASSETS

909,771

653,661

Long-term receivables and other assets

23,227

19,972

Property, plant and equipment, net

145,265

150,750

Other assets

28,373

32,041

TOTAL ASSETS

$

1,106,636

$

856,424

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Current maturities of long-term debt

$

11,330

$

10,957

Trade payables and other current liabilities

181,201

187,942

TOTAL CURRENT LIABILITIES

192,531

198,899

Long-term debt, net of current maturities

17,269

27,949

Deferred taxes and other long-term liabilities

5,875

6,618

TOTAL LIABILITIES

215,675

233,466

Taro shareholders' equity

886,347

619,008

Non-controlling interest

4,614

3,950

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,106,636

$

856,424

TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(U.S. dollars in thousands)

Year Ended March 31,

2013

2012

Operating Activities:

Net income

$

266,870

$

204,728

Adjustments required to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization

17,765

18,619

Impairment of long-lived assets

-

784

Share-based compensation expense

8

39

Loss on sale of long-lived assets and marketable securities, net

925

593

Increase (decrease) in long-term debt due to currency fluctuations

440

(2,157

)

Increase in trade receivables, net

(8,912

)

(29,492

)

Change in derivative instruments, net

1,550

2,678

Increase in other receivables, prepaid expenses and other assets

(19,560

)

(20,175

)

Increase in inventories, net

(630

)

(24,455

)

Effect of exchange differences on inter-company balances

(1,510

)

(776

)

(Decrease) increase in trade and other payables and liabilities

(8,296

)

84,757

Net cash provided by operating activities

248,650

235,143

Investing Act