[August 07, 2014] |
|
Taro Provides Results for Quarter Ended June 2014
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 June 30, 2014.
Quarter ended June 30, 2014 Highlights - compared to June 30, 2013
-
Net sales of $130 million, decreased $23 million, on a slight increase
in volumes.
-
The net sales decline is due to the impact of net charges taken to
meet contractual obligations associated with price adjustments.
The charges in the quarter ended June 30, 2014, are more
significant than the charges in the quarter ended June 30, 2013;
the incremental net impact of such adjustments in the quarter
ended June 30, 2014 as compared to the quarter ended June 30, 2013
was approximately $55 million ($79 million in the current quarter
vs. $24 million in the same period last year). Excluding the
impact of these price adjustments in both periods, net sales
growth would have been approximately 18%.
-
The benefits from these price adjustments are expected to commence
in the second fiscal quarter.
-
Gross profit of $85 million compared to $107 million in the same
period last year. The incremental net impact of the aforementioned
adjustments taken in the quarter ended June 30, 2014 as compared
to the quarter ended June 30, 2013 was approximately $55 million.
Excluding the impact of these price adjustments in both periods,
the gross profit increase would have been approximately 25% over
the same period last year.
-
Research and development (R&D) expenses increased 23% to $15 million
from $12 million. We anticipate the increase in R&D spend to continue
throughout the year.
-
Selling, marketing, general and administrative expenses increased $1
million to $22 million,
-
Settlements and loss contingencies was a $7 million credit, the result
of a settlement and the reversal of a portion of the associated
reserve, related to a certain price reporting litigation,
-
Operating income of $55 million compared to $74 million, a $19 million
decrease, principally due to the net charges taken against sales.
Excluding the incremental charges taken over the same period last
year, operating income, on a comparable basis, would have increased
approximately 30%,
-
Net income attributable to Taro was $46 million compared to $59
million, a $13 million decrease, resulting in diluted earnings per
share of $1.08 compared to $1.32, due to the impact of the above
referenced net charges taken.
Cash Flow and Balance Sheet Highlights
-
Cash flow provided by operations was $36 million compared to $64
million for the three months ended June 30, 2013,
-
Cash, including marketable securities, increased $25 million to $657
million from March 31, 2014.
Mr. Kal Sundaram, Taro's CEO stated, "Our underlying business is stable,
with volumes relatively flat from the comparative 2013 quarter. We
continue to increase our investment in our research and development,
having filed five ANDAs this quarter, with thirty-one total ANDAs
awaiting approval with the FDA. Excluding the impact on net sales from
the net charges associated with price adjustments, net sales would have
increased 18% versus the comparable prior year quarter."
FDA Approvals and Filings
The Company recently received approval from the U.S. Food and Drug
Administration ("FDA") for an Abbreviated New Drug Application ("ANDA")
for Fluocinonide Cream USP, 0.1%. During the quarter, the Company filed
five ANDAs with the FDA. With this, ANDAs representing thirty-one
products await FDA approval.
Form 20-F Filings with the SEC (News - Alert)
On July 3, 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, 2014.
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 2015. 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,
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Sales, net
|
|
|
$
|
130,230
|
|
|
$
|
153,195
|
|
Cost of sales
|
|
|
|
44,863
|
|
|
|
46,480
|
|
Gross profit
|
|
|
|
85,367
|
|
|
|
106,715
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
Research and development
|
|
|
|
14,988
|
|
|
|
12,212
|
|
Selling, marketing, general and administrative
|
|
|
|
22,386
|
|
|
|
20,953
|
|
Settlement and loss contingencies
|
|
|
|
(6,500
|
)
|
|
|
-
|
|
Operating income
|
|
|
|
54,493
|
|
|
|
73,550
|
|
|
|
|
|
|
|
Financial Expenses, net:
|
|
|
|
|
|
Interest and other financial (income) expense
|
|
|
|
(1,568
|
)
|
|
|
(1,165
|
)
|
Foreign exchange expense (income)
|
|
|
|
5,242
|
|
|
|
(993
|
)
|
|
|
|
|
|
|
Other income, net
|
|
|
|
406
|
|
|
|
396
|
|
Income before income taxes
|
|
|
|
51,225
|
|
|
|
76,104
|
|
Tax expense
|
|
|
|
4,903
|
|
|
|
17,035
|
|
Income from continuing operations
|
|
|
|
46,322
|
|
|
|
59,069
|
|
Net loss from discontinued operations
|
|
|
|
(124
|
)
|
|
|
(123
|
)
|
Net income
|
|
|
|
46,198
|
|
|
|
58,946
|
|
Net income attributable to non-controlling interest
|
|
|
|
100
|
|
|
|
150
|
|
Net income attributable to Taro
|
|
|
$
|
46,098
|
|
|
$
|
58,796
|
|
|
|
|
|
|
|
Net income per ordinary share
|
|
|
|
|
|
from continuing operations attributable to Taro:
|
|
|
|
|
|
Basic
|
|
|
$
|
1.08
|
|
|
$
|
1.32
|
|
Diluted
|
|
|
$
|
1.08
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
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
|
|
|
$
|
1.08
|
|
|
$
|
1.32
|
|
Diluted
|
|
|
$
|
1.08
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
Weighted-average number of ordinary shares used
|
|
|
|
to compute net income per ordinary share:
|
|
|
|
Basic
|
|
|
|
42,832,648
|
|
|
|
44,770,433
|
|
Diluted
|
|
|
|
42,833,325
|
|
|
|
44,774,048
|
|
|
|
|
|
|
|
* Amount is less than $0.01.
|
|
|
|
|
|
|
|
|
|
|
|
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
|
|
|
|
|
June 30,
|
|
March 31,
|
|
|
|
2014
|
|
2014
|
ASSETS
|
|
|
(unaudited)
|
|
(audited)
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
317,873
|
|
$
|
209,967
|
Short-term bank deposits
|
|
|
|
335,999
|
|
|
418,946
|
Restricted short-term bank deposits
|
|
|
|
231
|
|
|
227
|
Marketable securities
|
|
|
|
3,305
|
|
|
3,255
|
Accounts receivable and other:
|
|
|
|
|
|
Trade, net
|
|
|
|
103,526
|
|
|
138,772
|
Other receivables and prepaid expenses
|
|
|
|
206,265
|
|
|
162,392
|
Inventories
|
|
|
|
127,441
|
|
|
117,639
|
Long-term assets held for sale, net
|
|
|
|
72
|
|
|
73
|
TOTAL CURRENT ASSETS
|
|
|
|
1,094,712
|
|
|
1,051,271
|
|
|
|
|
|
|
Long-term receivables and other assets
|
|
|
|
69,207
|
|
|
52,894
|
Property, plant and equipment, net
|
|
|
|
154,939
|
|
|
151,416
|
Other assets
|
|
|
|
27,914
|
|
|
28,795
|
TOTAL ASSETS
|
|
|
$
|
1,346,772
|
|
$
|
1,284,376
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
Current maturities of long-term debt
|
|
|
$
|
12,193
|
|
$
|
11,974
|
Trade payables and other current liabilities
|
|
|
|
238,302
|
|
|
241,330
|
TOTAL CURRENT LIABILITIES
|
|
|
|
250,495
|
|
|
253,304
|
|
|
|
|
|
|
Long-term debt, net of current maturities
|
|
|
|
5,665
|
|
|
5,888
|
Deferred income taxes and other long-term liabilities
|
|
|
|
4,667
|
|
|
4,591
|
TOTAL LIABILITIES
|
|
|
|
260,827
|
|
|
263,783
|
|
|
|
|
|
|
Taro shareholders' equity
|
|
|
|
1,080,759
|
|
|
1,015,507
|
Non-controlling interest
|
|
|
|
5,186
|
|
|
5,086
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
$
|
1,346,772
|
|
$
|
1,284,376
|
|
|
|
|
|
|
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(U.S. dollars in thousands)
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
2014
|
|
2013
|
Operating Activities
|
|
|
|
|
|
Net income
|
|
|
$
|
46,198
|
|
|
$
|
58,946
|
|
Adjustments required to reconcile net income to net cash
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
3,964
|
|
|
|
4,234
|
|
Gain on sale of marketable securities and long-lived assets
|
|
|
|
(39
|
)
|
|
|
(112
|
)
|
Increase in long-term debt due to currency fluctuations
|
|
|
|
206
|
|
|
|
310
|
|
Decrease in trade receivables
|
|
|
|
35,636
|
|
|
|
2,881
|
|
Change in derivative instruments, net
|
|
|
|
(3,989
|
)
|
|
|
2,969
|
|
Increase in other receivables, prepaid expenses and other assets
|
|
|
|
(42,651
|
)
|
|
|
(14,415
|
)
|
Increase in inventories
|
|
|
|
(8,656
|
)
|
|
|
(4,058
|
)
|
Foreign exchange effect on intercompany balances
|
|
|
|
5,209
|
|
|
|
(3,856
|
)
|
(Decrease) increase in trade and other payables and accruals
|
|
|
|
(144
|
)
|
|
|
17,512
|
|
Net cash provided by operating activities
|
|
|
|
35,734
|
|
|
|
64,411
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
Purchase of property plant & equipment
|
|
|
|
(6,058
|
)
|
|
|
(3,898
|
)
|
Proceeds from sale of property plant & equipment and intangible
assets
|
|
|
|
78
|
|
|
|
-
|
|
Investment in long-term deposits and other assets
|
|
|
|
(14,708
|
)
|
|
|
-
|
|
Proceeds from (investment in) short-term and restricted bank deposits
|
|
|
|
90,078
|
|
|
|
(20,694
|
)
|
Proceeds from sale of marketable securities
|
|
|
|
-
|
|
|
|
365
|
|
Net cash provided by (used in) investing activities
|
|
|
|
69,390
|
|
|
|
(24,227
|
)
|
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
Excess tax benefits from share-based payment arrangements
|
|
|
|
-
|
|
|
|
21
|
|
Proceeds from the issuance of shares, net
|
|
|
|
13
|
|
|
|
298
|
|
Repayments of long-term debt
|
|
|
|
(209
|
)
|
|
|
(197
|
)
|
Net cash (used in) provided by financing activities
|
|
|
|
(196
|
)
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
|
|
|
|
2,978
|
|
|
|
(4,032
|
)
|
Net increase in cash
|
|
|
|
107,906
|
|
|
|
36,274
|
|
Cash at beginning of period
|
|
|
|
209,967
|
|
|
|
237,284
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
|
$
|
317,873
|
|
|
$
|
273,558
|
|
|
|
|
|
|
|
|
|
|
|
#####
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