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     131  0 Kommentare Taro Provides Results for December 31, 2019

    Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the three and nine months ended December 31, 2019.

    Quarter ended December 31, 2019 Highlights ─ compared to December 31, 2018

    • Net sales of $147.7 million decreased $28.7 million, primarily the result of competition.
    • Gross profit of $94.1 million (63.7% of net sales compared to 66.6%) decreased $23.4 million.
    • Research and development (R&D) expenses of $15.0 million remained constant.
    • Selling, marketing, general and administrative expenses (SG&A) of $20.9 million decreased $3.0 million.
    • Operating income of $58.2 million (39.4% of net sales compared to 44.8%) decreased $20.7 million.
    • Interest and other financial income of $8.5 million increased slightly.
    • Foreign Exchange (FX) income of $3.3 million decreased $27.4 million principally the result of the commencement of hedging accounting in accordance with ASU No. 2017-12 and the change in our Canadian subsidiary’s functional currency to U.S. dollar.
    • Tax expense of $2.9 million decreased $22.9 million; reflecting the impact from a non-recurring item.
    • Net income attributable to Taro was $67.7 million compared to $93.5 million, a $25.8 million decrease ─ as the decrease in operating income and FX income was partially offset by the decrease in tax expense ─resulting in diluted earnings per share of $1.76 compared to $2.40.

    Nine Months ended December 31, 2019 Highlights ─ compared to December 31, 2018

    • Net sales of $469.8 million decreased $20.1 million.
    • Gross profit of $297.5 million (63.3% of net sales compared to 66.6%) decreased $28.7 million.
    • R&D expenses of $44.0 million increased $1.3 million.
    • SG&A of $64.3 million decreased $2.3 million.
    • Settlements and loss contingencies was a $0.2 million credit, as compared to a $4.0 million credit (the result of a settlement of a patent infringement) in the prior year.
    • Operating income of $189.3 million (40.3% of net sales compared to 45.1%) decreased $31.5 million.
    • Interest and other financial income increased $1.7 million to $27.0 million.
    • FX income of $11.1 million compared to $34.7 million in 2018 ─ an unfavorable impact of $23.6 million – principally the result of the aforementioned commencement of hedging accounting and the change in our Canadian subsidiary’s functional currency to U.S. dollar effective April 1, 2019.
    • Tax expense of $39.6 million decreased $19.5 million; the result of the aforementioned non-recurring item in the quarter.
    • Net income attributable to Taro was $190.0 million compared to $223.3 million, a $33.3 million decrease, resulting in diluted earnings per share of $4.93 compared to $5.71.

    Cash Flow and Balance Sheet Highlights

    • Cash flow provided by operations for the nine months ended December 31, 2019, was $222.0 million compared to $265.1 million for the nine months ended December 31, 2018.
    • As of December 31, 2019, cash and cash equivalents and marketable securities (both short and long-term) increased $176.8 million to $1.5 billion from March 31, 2019. Cash and cash equivalents reflects the impact from the $26.8 million Tender Offer paid in December 2019.

    Mr. Uday Baldota, Taro’s CEO, stated, “Despite approximately 75% of our products ranking in the top two (2) ─ when measured on market share ─ this quarters’ financial performance reflects, in big measure, the continued challenging market dynamics particularly in the U.S. generic market. Responding to the faith our customers and patients repose in us, we continue to invest in R&D for augmenting our product offering. This, coupled with investments in inorganic strategic opportunities, is aimed toward creating longer term shareholder value.”

    FDA Approvals and Filings

    The Company recently received an approval from the U.S. Food and Drug Administration (“FDA”) for one Abbreviated New Drug Application (“ANDA”); Azithromycin for Oral Suspension USP, 200 mg per 5mL. The Company currently has a total of twenty-three ANDAs awaiting FDA approval, including seven tentative approvals.

    Results of the Tender Offer

    On December 19, 2019, Taro announced the final results of its modified “Dutch auction” tender offer whereby the Company accepted for payment 280,719 ordinary shares including all “odd lots” properly tendered, at the final purchase price of $91.00 per share, for an aggregate purchase price of approximately $25.5 million (excluding fees and expenses relating to the tender offer).

    The Company cautions that the foregoing financial information is unaudited and could be 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 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)

    Quarter Ended Nine Months Ended
    December 31, December 31,

    2019

     

    2018

     

    2019

     

    2018

    Sales, net

    $ 147,683

    $ 176,381

    $ 469,829

    $ 489,972

    Cost of sales

    53,557

    58,838

    172,375

    163,785

    Gross profit

    94,126

    117,543

    297,454

    326,187

     
    Operating Expenses:

    Research and development

    14,996

    14,726

    43,978

    42,726

    Selling, marketing, general and administrative

    20,932

    23,883

    64,302

    66,650

    Settlements and loss contingencies

    (150)

    (4,000)

    Operating income

    58,198

    78,934

    189,324

    220,811

     
    Financial income, net:

    Interest and other financial income

    (8,531)

    (8,388)

    (27,012)

    (25,302)

    Foreign exchange income

    (3,287)

    (30,702)

    (11,147)

    (34,706)

    Other gain, net

    534

    1,398

    2,211

    1,910

    Income before income taxes

    70,550

    119,422

    229,694

    282,729

    Tax expense

    2,874

    25,752

    39,565

    59,083

    Net income

    67,676

    93,670

    190,129

    223,646

    Net (loss) income attributable to non-controlling interest

    (6)

    164

    84

    303

    Net income attributable to Taro

    $ 67,682

    $ 93,506

    $ 190,045

    $ 223,343

     
    Net income per ordinary share attributable to Taro:
    Basic and Diluted

    $ 1.76

    $ 2.40

    $ 4.93

    $ 5.71

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

    38,502,440

    38,938,963

    38,526,806

    39,134,563

     
    May not foot due to rounding.

    TARO PHARMACEUTICAL INDUSTRIES LTD.
    SUMMARY CONSOLIDATED BALANCE SHEETS
    (U.S. dollars in thousands)

    December 31,

     

    March 31,

    2019

     

    2019

    ASSETS (unaudited) (audited)
    CURRENT ASSETS:
    Cash and cash equivalents

    $ 509,361

    $ 567,451

    Marketable securities

    542,032

    481,883

    Accounts receivable and other:

    Trade, net

    227,327

    237,945

    Other receivables and prepaid expenses

    21,115

    47,362

    Inventories

    157,875

    148,079

    TOTAL CURRENT ASSETS

    1,457,710

    1,482,720

    Marketable securities

    479,050

    304,322

    Property, plant and equipment, net

    206,692

    206,242

    Deferred income taxes

    114,193

    110,974

    Other assets

    33,318

    31,068

    TOTAL ASSETS

    $ 2,290,963

    $ 2,135,326

     
    LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES:
    Trade payables

    $ 37,035

    $ 35,060

    Other current liabilities

    177,144

    181,761

    TOTAL CURRENT LIABILITIES

    214,179

    216,821

    Deferred taxes and other long-term liabilities

    8,180

    7,383

    TOTAL LIABILITIES

    222,359

    224,204

     
    Taro shareholders' equity

    2,062,934

    1,905,536

    Non-controlling interest

    5,670

    5,586

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

    $ 2,290,963

    $ 2,135,326

    TARO PHARMACEUTICAL INDUSTRIES LTD.
    SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
    (Unaudited)
    (U.S. dollars in thousands)

      Nine Months Ended December 31,
     

    2019

     

    2018

    Cash flows from operating activities:      
    Net income

     $            190,129

     

     $            223,646

    Adjustments required to reconcile net income to net cash provided by operating activities:    
         Depreciation and amortization

                      16,101

     

                      13,738

         Realized gain on sale of long-lived assets                         —  

                            18

         Change in derivative instruments, net

                      (3,395)

     

                        5,881

         Effect of change in exchange rate on inter-company balances, marketable securities and bank deposits

                     (11,061)

     

                     (49,688)

         Deferred income taxes, net

                      (2,076)

     

                          741

         Decrease (increase) in trade receivables, net

                      10,618

     

                     (18,439)

         Increase in inventories, net

                      (9,796)

     

                      (6,795)

         Decrease in other receivables, income tax receivable, prepaid expenses and other

                      27,407

     

                      86,425

         Increase in trade, income tax, accrued expenses, and other payables

                        5,263

     

                        8,810

         (Income) loss from marketable securities, net

                      (1,182)

     

                          792

    Net cash provided by operating activities

                   222,008

     

                   265,129

           
    Cash flows from investing activities:      
         Purchase of plant, property & equipment, net

                     (19,350)

     

                     (19,526)

         Investment in other intangible assets

                      (1,016)

     

                      (2,669)

         Proceeds from short-term bank deposits, net                         —  

                    225,503

         Proceeds from long-term deposits and other assets                         —  

                      70,685

        (Investment in) proceeds from marketable securities, net

                   (233,393)

     

                      24,742

    Net cash (used in) provided by investing activities

                 (253,759)

     

                   298,735

           
    Cash flows from financing activities:      
         Purchase of treasury stock

                     (26,827)

     

                     (72,191)

         Dividends paid                         —  

                   (500,000)

    Net cash used in financing activities

                   (26,827)

     

                 (572,191)

           
    Effect of exchange rate changes on cash and cash equivalents

                          488

     

                      (1,815)

    Decrease in cash and cash equivalents

                     (58,090)

     

                     (10,142)

    Cash and cash equivalents at beginning of period

                    567,451

     

                    576,611

    Cash and cash equivalents at end of period

     $            509,361

     

     $            566,469

           
    Cash Paid during the year for: 
    Income taxes

     $               38,773

     $               51,487

    Cash Received during the year for: 
    Income taxes

     $               24,819

     $               78,367

    Non-cash investing transactions:
    Purchase of property, plant and equipment included in accounts payable

     $                 1,479

     $                 1,544

    Non-cash financing transactions:
    Purchase of intangible assets

     $                    750

     $                     —
    Purchase of treasury stock  $                     —

     $                 4,493

    Purchase of marketable securities  $                     —  

     $                 1,799

    Sale of marketable securities

     $                  (145)

       $                     —

    #####




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    Taro Provides Results for December 31, 2019 Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the three and nine months ended December 31, 2019. Quarter ended December 31, 2019 Highlights ─ compared to December 31, 2018 …