HAWTHORNE, N.Y.
Taro Pharmaceutical Industries Ltd. (NYSE:TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter and year ended March 31, 2015.
Quarter ended March 31, 2015 Highlights – compared to March 31, 2014
- Net sales of $244.2 million, increased $57.0 million, or 30.5%, on flat volumes
- Gross profit, as a percentage of net sales, was 81.8%, compared to 75.5% — an increase of $58.3 million or 41.2%
- Research and development expenses increased $10.7 million to $23.9 million
- Selling, marketing, general and administrative expenses of $22.2 million, a decrease of $4.4 million
- Operating income increased $52.0 million to $153.5 million, or 62.9% of net sales, compared to $101.5 million, or 54.3% of net sales — representing 51.2% growth
- Net income was positively impacted by foreign exchange (FX) income of $32.5 million, compared to $3.9 million, the result of favorable currency fluctuations
- As a result of increased sales, increased gross margins and cost containment, net income attributable to Taro was $152.3 million compared to $89.6 million, resulting in diluted earnings per share of $3.56 compared to $2.10, a 70.0% increase
Year ended March 31, 2015 Highlights – compared to March 31, 2014
- Net sales of $862.9 million, increased $103.7 million, or 13.7%, with a slight decrease in volumes
- Gross profit, as a percentage of net sales was 78.4%, compared to 76.4% — an increase of $96.6 million or 16.7%
- Research and development expenses increased $10.1 million to $65.5 million
- Selling, marketing, general and administrative expenses decreased $4.1 million to $87.6 million
- Settlements and loss contingencies was a $4.2 million credit, the net result of settlements which resulted in the reversal of a portion of the associated reserve, compared to a $2.6 million expense in 2014
- Operating income increased $97.4 million to $527.6 million, or 61.1% of net sales, from $430.3 million, or 56.7% of net sales – representing 22.6% growth
- Net income was favorably impacted by foreign exchange (FX) income of $41.6 million, compared to $7.1 million
- Net income attributable to Taro was $484.3 million compared to $360.4 million, a $123.9 million increase, resulting in diluted earnings per share of $11.31 compared to $8.14, a 38.9% increase
Cash Flow and Balance Sheet Highlights
- Cash provided by operations was $406.8 million, as compared to $357.6 million in the previous year
- Cash at March 31, 2015 (including marketable securities), increased $287.8 million to $920.2 million from March 31, 2014
- Total debt decreased $12.0 million, the result of the Company paying-off its debentures with institutional holders
Mr. Kal Sundaram, Taro’s CEO stated, “Overall, we are pleased with the quarter and full-year results, reflecting good performance despite the headwinds we face in the current environment. Our sales and earnings growth is mainly attributable to the prudent life cycle management of our existing product portfolio. We realized a modest benefit in cost of goods due to the strengthening of the U.S. dollar. Volumes of our U.S. generics business have experienced a slight decline during the year. We have also encountered increased competition and increased pricing pressure from customer consolidations.” Mr. Sundaram continued, “Our year-over-year increase in R&D demonstrates our commitment to growing our pipeline of quality products; further evidenced by twelve (12) total filings with the FDA this year.”
FDA Approvals and Filings
During the quarter, the Company filed five Abbreviated New Drug Applications (“ANDAs”) and a New Drug Application (NDA) with the U.S. Food and Drug Administration (“FDA”) – this brings the total number of filings for the fiscal year ended March 31 to twelve (12). With this, ANDAs representing thirty-five products and one NDA await FDA approval.
Earnings Call (8:00 am ET, May 28, 2015)
As previously announced, the Company will host an earnings call at 8:00 am ET on Thursday, May 28, 2015, where senior management will discuss the Company’s performance and answer questions from participants. This call will be accessible through an audio dial-in and a web-cast. Audio conference participants can dial-in on the numbers below:
- Participant Toll-Free Dial-In Number: +1 (844) 421-0601 ID: 49865423
- Participant International Dial-In Number: +1 (716) 247-5800 ID: 49865423
- Web-cast: More details are provided on our website, www.taro.com
To participate in the audio call, please dial the numbers provided above five to ten minutes ahead of the scheduled start time. The operator will provide instructions on asking questions before the call.
The transcript of the event will be available on the Company’s website at www.taro.com. An audio playback will be available for fifteen (15) days following the call.
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 INCOME (U.S. dollars in thousands, except share data) |
||||||||||||||||||||
|
Quarter Ended |
Year Ended |
|||||||||||||||||||
|
March 31, |
March 31, |
|||||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
|||||||||||||||||
| (unaudited) |
(unaudited) |
(unaudited) |
(audited) | |||||||||||||||||
|
Sales, net |
$ |
244,180 |
$ |
187,176 |
$ |
862,944 |
$ |
759,285 |
||||||||||||
| Cost of sales | 44,545 |
45,818 |
186,359 |
179,279 | ||||||||||||||||
|
Gross Profit |
199,635 |
141,358 |
676,585 |
580,006 |
||||||||||||||||
|
Operating Expenses (Income): |
||||||||||||||||||||
| Research and development | 23,865 | 13,167 | 65,510 | 55,430 | ||||||||||||||||
|
Selling, marketing, general and administrative |
22,229 |
26,647 | 87,644 | 91,733 | ||||||||||||||||
| Settlements and loss contingencies | – | – | (4,200) | 2,590 | ||||||||||||||||
|
Operating income |
153,541 |
101,544 |
527,631 |
430,253 |
||||||||||||||||
|
Financial Income, net: |
||||||||||||||||||||
| Interest and other financial income, net | (3,087) |
(1,241) |
(9,677) |
(5,167) | ||||||||||||||||
| Foreign exchange income | (32,481) | (3,897) |
(41,634) |
(7,118) |
||||||||||||||||
| Other income, net | 395 | 407 | 2,738 | 1,369 | ||||||||||||||||
| Income before income taxes | 189,504 | 107,089 | 581,680 | 443,907 | ||||||||||||||||
| Tax expense | 36,872 | 17,433 | 96,059 | 82,729 | ||||||||||||||||
|
Income from continuing operations |
152,632 |
89,656 |
485,621 |
361,178 |
||||||||||||||||
| Net loss from discontinued operations | (314) | (97) | (787) | (319) | ||||||||||||||||
| Net income | 152,318 | 89,559 | 484,834 | 360,859 | ||||||||||||||||
|
|
||||||||||||||||||||
|
Net income (loss) attributable to non-controlling interest |
26 | (81) | 577 | 472 | ||||||||||||||||
|
Net income attributable to Taro |
$ |
152,292 |
$ |
89,640 |
$ |
484,257 |
$ |
360,387 |
||||||||||||
|
Net income per ordinary share from continuing |
|
|
||||||||||||||||||
| Basic | $ | 3.56 | $ | 2.10 | $ | 11.32 | $ | 8.15 | ||||||||||||
| Diluted | $ | 3.56 | $ | 2.10 | $ | 11.32 | $ | 8.15 | ||||||||||||
|
Net loss per ordinary share from discontinued |
||||||||||||||||||||
| Basic |
($ 0.00) |
* |
($ 0.00) |
* |
($ 0.01) | ($ 0.01) | ||||||||||||||
| Diluted |
($ 0.00) |
* |
($ 0.00) |
* |
($ 0.01) |
($ 0.01) | ||||||||||||||
|
Net income per ordinary share attributable to Taro: |
|
|||||||||||||||||||
| Basic | $ | 3.56 | $ | 2.10 | $ | 11.31 | $ | 8.14 | ||||||||||||
| Diluted | $ | 3.56 | $ | 2.10 | $ | 11.31 | $ | 8.14 | ||||||||||||
|
Weighted-average number of shares used to compute |
|
|
||||||||||||||||||
| Basic | 42,833,533 | 42,830,989 | 42,833,533 | 44,276,003 | ||||||||||||||||
| Diluted | 42,833,533 | 42,832,772 | 42,833,750 | 44,279,124 | ||||||||||||||||
| * | Amount is less than $0.01. | |
| May not foot due to rounding. | ||
|
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) |
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|
March 31, |
March 31, |
|||||||||
| 2015 | 2014 | |||||||||
| (unaudited) | (audited) | |||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS: | ||||||||||
| Cash and cash equivalents | $ | 481,641 | $ | 209,967 | ||||||
| Short-term bank deposits | 434,899 | 418,946 | ||||||||
| Restricted short-term bank deposits | 199 | 227 | ||||||||
| Marketable securities | 3,458 | 3,255 | ||||||||
| Accounts receivable and other: | ||||||||||
| Trade, net | 222,427 | 138,772 | ||||||||
| Other receivables and prepaid expenses | 250,911 | 162,392 | ||||||||
| Inventories | 120,272 | 117,639 | ||||||||
| Long-term assets held for sale, net | – | 73 | ||||||||
| TOTAL CURRENT ASSETS | 1,513,807 | |||||||||
