HAWTHORNE, N.Y.--(BUSINESS WIRE)--Taro Pharmaceutical Industries Ltd. (NYSE:TARO) (“Taro” or the “Company”) today provided unaudited financial results for the three and nine months ended December 31, 2015.
Quarter ended December 31, 2015 Highlights - compared to December 31, 2014
- Net sales of $258.3 million, increased $20.6 million, or 8.7%, on marginally increased volumes
- Gross profit of $214.2 million increased $20.7 million as Cost of Goods remained flat; and as a percentage of net sales, was 82.9% compared to 81.4%
- Research and development expenses increased 39.9% to $17.9 million
- Selling, marketing, general and administrative expenses increased $1.5 million to $22.9 million
- Operating income increased $14.1 million to $173.4 million
- Net Income was favorably impacted by a $15.6 million increase in foreign exchange (FX) income to $23.9 million, principally the result of the strength of the U.S. dollar vs. Canadian dollar
- Tax expense decreased $16.3 million to $11.8 million resulting in an effective tax rate of 5.9% compared to 16.5%; we expect the tax benefits realized this quarter to continue for the remainder of the 2015/16 fiscal year
- Net income attributable to Taro was $189.0 million compared to $142.5 million, resulting in diluted earnings per share of $4.41 compared to $3.33
Nine Months ended December 31, 2015 Highlights - compared to December 31, 2014
- Net sales of $685.7 million, increased $66.9 million, or 10.8%, despite a 5% volume decline and a change in product mix
- Gross profit increased $77.8 million to $554.7 million and as a percentage of net sales, was 80.9% compared to 77.1%
- Research and development expenses increased 23.0% to $51.2 million
- Selling, marketing, general and administrative expenses increased $4.4 million to $69.8 million
- Operating income increased $58.7 million to $432.7 million
- FX income increased $45.4 million to $54.5 million
- Tax expense increased $13.2 million due to the $106.6 million increase in pre-tax income, however the effective tax rate decreased from 15.1% to 14.5%
- Net income attributable to Taro was $426.0 million compared to $332.0 million, a $94.0 million increase, resulting in diluted earnings per share of $9.95 compared to $7.75
Mr. Kal Sundaram, Taro’s CEO stated, “We are satisfied with our overall performance, which is in-line with our expectations, given a competitive landscape that continues to intensify.” Mr. Sundaram continued, “Regarding Keveyis, the first medicine approved by the FDA for the treatment of primary periodic paralysis, the patient feedback we have received is extremely positive, however its use is less than anticipated. We will continue to invest in medical and marketing initiatives to build the brand and monitor the sales performance of Keveyis in the coming quarters.”
Cash Flow and Balance Sheet Highlights
- Cash provided by operations for the period ended December 31, 2015 was $239.7 million, as compared to $192.8 million at December 31, 2014
- Cash, including marketable securities of $1.2 billion, increased $262.5 million from March 31, 2015
- During the quarter, the Company paid-off its remaining debt of $5.9 million
FDA Approvals and Filings
The Company recently received an approval from the U.S. Food and Drug Administration (“FDA”) for an Abbreviated New Drug Application (“ANDA”) Naftifine Hydrochloride Cream USP, 2%. The Company currently has a total of thirty-five ANDAs awaiting 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 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 2016. 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.
|
|
|||||||||||||||||||||
|
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) |
|||||||||||||||||||||
|
|
|||||||||||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
||||||||||||||||||
| Sales, net | $ | 258,342 | $ | 237,700 | $ | 685,678 | $ | 618,764 | |||||||||||||
| Cost of sales | 44,166 | 44,206 | 128,994 | 141,814 | |||||||||||||||||
| Impairment | - | - | 1,947 | - | |||||||||||||||||
| Gross profit | 214,176 | 193,494 | 554,737 | 476,950 | |||||||||||||||||
| Operating Expenses: | |||||||||||||||||||||
| Research and development | 17,944 | 12,829 | 51,212 | 41,645 | |||||||||||||||||
| Selling, marketing, general and administrative | 22,866 | 21,345 | 69,804 | 65,415 | |||||||||||||||||
| Settlements and loss contingencies | (27 | ) | - | 973 | (4,200 | ) | |||||||||||||||
| Operating income | 173,393 | 159,320 | 432,748 | 374,090 | |||||||||||||||||
| Financial Income, net: | |||||||||||||||||||||
| Interest and other financial income | (3,038 | ) | (2,968 | ) | (9,708 | ) | (6,590 | ) | |||||||||||||
| Foreign exchange income | (23,887 | ) | (8,264 | ) | (54,545 | ) | (9,153 | ) | |||||||||||||
| Other gain, net | 710 | 362 | 1,820 | 2,343 | |||||||||||||||||
| Income before income taxes | 201,028 | 170,914 | 498,821 | 392,176 | |||||||||||||||||
| Tax expense | 11,831 | 28,174 | 72,363 | 59,187 | |||||||||||||||||
| Income from continuing operations | 189,197 | 142,740 | 426,458 | 332,989 | |||||||||||||||||
| Net loss from discontinued operations | (101 | ) | (126 | ) | (202 | ) | (473 | ) | |||||||||||||
| Net income | 189,096 | 142,614 | 426,256 | 332,516 | |||||||||||||||||
| Net income attributable to non-controlling interest | 98 | 132 | 274 | 551 | |||||||||||||||||
| Net income attributable to Taro | $ | 188,998 | $ | 142,482 | $ | 425,982 | $ | 331,965 | |||||||||||||
|
Net income per ordinary share from continuing operations |
|||||||||||||||||||||
| Basic | $ | 4.41 | $ | 3.33 | $ | 9.95 | $ | 7.76 | |||||||||||||
| Diluted | $ | 4.41 | $ | 3.33 | $ | 9.95 | $ | 7.76 | |||||||||||||
|
Net loss per ordinary share from discontinued operations |
|||||||||||||||||||||
| Basic | $ | (0.00 | ) | * | $ | (0.00 | ) | * | $ | (0.00 | ) | * | $ | (0.01 | ) | ||||||
| Diluted | $ | (0.00 | ) | * | $ | (0.00 | ) | * | $ | (0.00 | ) | * | $ | (0.01 | ) | ||||||
| Net income per ordinary share attributable to Taro: | |||||||||||||||||||||
| Basic | $ | 4.41 | $ | 3.33 | $ | 9.95 | $ | 7.75 | |||||||||||||
| Diluted | $ | 4.41 | $ | 3.33 | $ | 9.95 | $ | 7.75 | |||||||||||||
|
Weighted-average number of shares used to compute net |
|||||||||||||||||||||
| Basic | 42,833,533 | 42,833,533 | 42,833,533 | 42,833,162 | |||||||||||||||||
| Diluted | 42,833,533 | 42,833,533 | 42,833,533 | 42,833,452 | |||||||||||||||||
| * 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) |
||||||||||
|
|
||||||||||
|
December 31, |
March 31, |
|||||||||
|
2015 |
2015 |
|||||||||
| ASSETS | (unaudited) | (audited) | ||||||||
| CURRENT ASSETS: | ||||||||||
| Cash and cash equivalents | $ | 523,214 | $ | 481,641 | ||||||
| Short-term bank deposits | 655,982 | 434,899 | ||||||||
| Restricted short-term bank deposits | - | 199 | ||||||||
| Marketable securities | 3,502 | 3,458 | ||||||||
| Accounts receivable and other: | ||||||||||
| Trade, net | 279,538 | 222,427 | ||||||||
| Other receivables and prepaid expenses | 275,025 | 250,911 | ||||||||
| Inventories | 126,875 | 120,272 | ||||||||
| Long-term assets held for sale, net | 1,034 | - | ||||||||
| TOTAL CURRENT ASSETS | 1,865,170 | 1,513,807 | ||||||||
| Long-term receivables and other assets | 31,356 | 46,330 | ||||||||
| Property, plant and equipment, net | 153,343 | 153,045 | ||||||||
| Other assets | 20,604 | 24,563 | ||||||||
| TOTAL ASSETS | $ | 2,070,473 | $ | 1,737,745 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Current maturities of long-term debt | $ | - | $ | 912 | ||||||
| Trade payables and other current liabilities | 290,418 | 309,093 | ||||||||
| TOTAL CURRENT LIABILITIES | 290,418 | 310,005 | ||||||||
| Long-term debt, net of current maturities | - | 4,976 | ||||||||
| Deferred taxes and other long-term liabilities | 4,595 | 5,381 | ||||||||
| TOTAL LIABILITIES | 295,013 | 320,362 | ||||||||
| Taro shareholders' equity | 1,769,522 | 1,411,720 | ||||||||
| Non-controlling interest | 5,938 | 5,663 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,070,473 | $ | 1,737,745 | ||||||
|
|
||||||||||||
|
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) |
||||||||||||
|
|
||||||||||||
| Nine Months Ended December 31, | ||||||||||||
| 2015 | 2014 | |||||||||||
| (unaudited) | (unaudited) | |||||||||||
| Operating Activities: | ||||||||||||
| Net income | $ | 426,256 | $ | 332,516 | ||||||||
|
Adjustments required to reconcile net income to net cash
provided by |
||||||||||||
| Depreciation and amortization | 11,304 | 11,933 | ||||||||||
| Loss (gain) on sale of long-lived assets and marketable securities, net | 91 | (199 | ) | |||||||||
| Impairment for long-lived assets | 1,947 | - | ||||||||||
| Decrease in long-term debt due to currency fluctuations | - | (1,030 | ) | |||||||||
| Increase in trade receivables, net | (58,129 | ) | (87,406 | ) | ||||||||
| Change in derivative instruments, net | (6,242 | ) | 4,965 | |||||||||
| Increase in other receivables, prepaid expenses and other assets | (60,545 | ) | (68,213 | ) | ||||||||
| Increase in inventories, net | (9,878 | ) | (9,063 | ) | ||||||||
| Effect of change in exchange rate on bank and inter-company balances | (52,860 | ) | (11,436 | ) | ||||||||
| (Decrease) increase in trade and other payables and liabilities | (12,233 | ) | 20,775 | |||||||||
| Net cash provided by operating activities | 239,711 | 192,842 | ||||||||||
| Investing Activities: | ||||||||||||
| Purchase of plant, property & equipment | (13,111 | ) | (14,019 | ) | ||||||||
| (Investment in) proceeds from other intangible assets | (134 | ) | 60 | |||||||||
| Proceeds from (investment in) other assets | 35,000 | (31,050 | ) | |||||||||
| Investment in long-term security deposits and other assets | (8,808 | ) | (17,810 | ) | ||||||||
| Investment in short-term bank deposits | (200,676 | ) | (42,321 | ) | ||||||||
| Proceeds from restricted bank deposits | 199 | 23 | ||||||||||
| (Investment in) proceeds from the sale of marketable securities | (105 | ) | 81 | |||||||||
| Net cash used in investing activities | (187,635 | ) | (105,036 | ) | ||||||||
| Financing Activities: | ||||||||||||
| Proceeds from issuance of shares, net | - | 26 | ||||||||||
| Repayment of long-term debt | (5,888 | ) | (10,725 | ) | ||||||||
| Net cash used in financing activities | (5,888 | ) | (10,699 | ) | ||||||||
| Effect of exchange rate changes | (4,615 | ) | (3,855 | ) | ||||||||
| Net increase in cash | 41,573 | 73,252 | ||||||||||
| Cash at beginning of period | 481,641 | 209,967 | ||||||||||
| Cash at end of period | $ | 523,214 | $ | 283,219 | ||||||||