Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the
“Company”) today provided unaudited financial results for the
quarter and nine months ended December 31, 2022.
Quarter ended December 31, 2022* Highlights ─ compared to
December 31, 2021
- Net sales of $139.2 million was line with the prior year
quarter. We continue to experience price pressures particularly in
the U.S. generic business.
- Gross profit of $64.0 million (46.0% of net sales) compared to
$76.0 million (54.7% of net sales).
- Research and development (R&D) expenses of $12.9 million
decreased $1.3 million.
- Selling, marketing, general and administrative expenses
(SG&A) of $49.9 million increased $25.0 million.
- Operating income of $1.3 million compared to operating income
of $37.0 million. The current year quarter operating result is
primarily attributable to the aforementioned price erosion, as well
as the on-going impact associated with our recent acquisition.
- Interest and other financial income of $6.6 million increased
$4.5 million.
- Tax expense of $1.9 million compared to $13.2 million in the
prior year quarter.
- Net income attributable to Taro was $7.3 million compared to
net income of $26.3 million, resulting in earnings per share of
$0.19 compared to earnings per share of $0.70.
Nine Months ended December 31, 2022* Highlights ─ compared to
December 31, 2021
- Net sales of $426.4 million increased $8.3 million.
- Gross profit of $192.6 million (45.2% of net sales compared to
51.6%) decreased $23.2 million.
- R&D expenses of $35.9 million decreased $3.7 million.
- SG&A of $148.2 million increased $75.7 million.
- Operating income of $8.4 million compared to $42.2 million.
Excluding the $61.4 million impact from the settlement and loss
contingencies charges in the prior year, operating income was
$103.6 million. The current year operating income primarily
reflects the six-month impact of the factors mentioned above.
- Interest and other financial income of $12.8 million increased
from $7.5 million.
- Net income attributable to Taro was $18.5 million compared to
$30.9 million, resulting in earnings per share of $0.49 compared to
earnings per share of $0.82. Excluding the impact from the
settlement and loss contingencies charges in the prior year, net
income was $99.2 million, resulting in diluted earnings per share
of $2.64.
Cash Flow and Balance Sheet Highlights
- Cash flow used in operations for the nine months ended December
31, 2022 was $24.9 million compared to $200.0 million for the nine
months ended December 31, 2021. Excluding the impact from the
settlement payments and settlement and loss contingencies charges
impacting both periods, cash flow provided by operations was $50.4
million compared to $124.6 million for the nine months ended
December 31, 2021.
- As of December 31, 2022, cash and cash equivalents, short-term
bank deposits and marketable securities (both short- and long-term)
decreased $54.6 million to $1.2 billion from March 31, 2022;
principally the result of settlement payments.
* The December 31, 2022 results include nine months’ results
from the February 28, 2022 acquisition of Alchemee.
The Company cautions that the foregoing 2022 financial
information (including Alchemee) is unaudited 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 2023. 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 31st
December 31st
2022
2021
2022
2021
Sales, net
$
139,202
$
138,984
$
426,365
$
418,083
Cost of sales
75,155
62,937
233,750
202,293
Impairment
—
13
—
13
Gross profit
64,047
76,034
192,615
215,777
Operating Expenses: Research and development
12,907
14,201
35,937
39,648
Selling, marketing, general and administrative
49,861
24,841
148,238
72,501
Settlements and loss contingencies
—
26
—
61,446
Operating income *
1,279
36,966
8,440
42,182
Financial (income) expense, net: Interest and other
financial income
(6,592
)
(2,090
)
(12,814
)
(7,503
)
Foreign exchange (income) expense
(738
)
544
2,344
555
Other gain, net
563
990
1,403
3,714
Income before income taxes
9,172
39,501
20,313
52,842
Tax expense
1,907
13,188
1,781
21,980
Net income attributable to Taro *
$
7,265
$
26,313
$
18,532
$
30,862
Net income per ordinary share attributable to Taro:
Basic and Diluted *
$
0.19
$
0.70
$
0.49
$
0.82
Weighted-average number of shares used to compute net
income per share: Basic and Diluted
37,584,891
37,584,891
37,584,891
37,584,891
May not foot due to rounding.
Note: Quarter and nine months ended December, 2022 includes
results from Alchemee (acquired February 28, 2022).
* Excluding the settlement and loss contingencies charges of
$61.4 million for the nine months ended December 31, 2021,
Operating income was $103.6 million, Net income attributable to
Taro was $99.2 million, and basic and diluted earnings per share
was $2.64.
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED
BALANCE SHEETS (U.S. dollars in thousands)
December 31,
March 31,
2022
2022
ASSETS (unaudited) (audited) CURRENT ASSETS: Cash and cash
equivalents
$
91,973
$
251,134
Short-term bank deposits
169,568
47,586
Marketable securities
602,357
522,028
Accounts receivable and other: Trade, net
251,807
246,972
Other receivables and prepaid expenses
51,730
59,727
Inventories
222,675
210,439
TOTAL CURRENT ASSETS
1,390,110
1,337,886
Marketable securities
337,431
435,189
Property, plant and equipment, net
190,507
199,692
Deferred income taxes
121,100
124,882
Goodwill
12,718
11,820
Other assets
65,658
66,893
TOTAL ASSETS
$
2,117,524
$
2,176,362
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Trade payables
$
69,549
$
68,232
Other current liabilities
304,526
363,886
TOTAL CURRENT LIABILITIES
374,075
432,118
Deferred taxes and other long-term liabilities
23,514
32,799
TOTAL LIABILITIES
397,589
464,917
Taro shareholders' equity
1,719,935
1,711,445
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
2,117,524
$
2,176,362
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED
STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Nine Months Ended December
31,
2022
2021
Cash flows from operating activities: Net income
$
18,533
$
30,862
Adjustments required to reconcile net income (loss) to net cash
used in operating activities: Depreciation and amortization
21,320
19,248
Realized loss on sale of long-lived assets
2
551
Change in derivative instruments, net
(24
)
(536
)
Effect of change in exchange rate on marketable securities and bank
deposits
1,590
(39
)
Deferred income taxes, net
4,612
15,003
Increase in trade receivables, net
(5,168
)
(11,129
)
Increase in inventories, net
(12,361
)
(2,154
)
Decrease in other receivables, income tax receivables, prepaid
expenses and other
7,287
10,973
Decrease in trade, income tax, accrued expenses and other payables
(67,938
)
(270,482
)
Expense from amortization of marketable securities bonds, net
7,247
7,734
Net cash used in operating activities
(24,900
)
(199,969
)
Cash flows from investing activities: Purchase of
plant, property & equipment, net
(11,186
)
(9,121
)
Investment in other intangible assets
(122
)
(120
)
Investment in short-term bank deposits, net
(121,982
)
(35,573
)
Proceeds from (investment in) marketable securities, net
3,060
(17,161
)
Other investments
(2,000
)
—
Net cash used in investing activities
(132,230
)
(61,975
)
Cash flows from financing activities: Purchase of
treasury stock
—
(24,934
)
Net cash used in financing activities
—
(24,934
)
Effect of exchange rate changes on cash and cash
equivalents
(2,031
)
(209
)
Decrease in cash and cash equivalents
(159,161
)
(287,087
)
Cash and cash equivalents at beginning of period
251,134
605,177
Cash and cash equivalents at end of period
$
91,973
$
318,090
Cash Paid during the year for: Income taxes
$
3,415
$
5,667
Cash Received during the year for: Income taxes
$
14,156
$
2,351
Non-cash investing transactions: Purchase of property, plant
and equipment included in accounts payable
$
1,260
$
763
Non-cash financing transactions: Purchase of marketable
securities, net
$
2,710
$
—
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230124006013/en/
William J. Coote VP, CFO (914) 345-9001
William.Coote@taro.com
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