Taro Provides Results for December 31, 2016
Quarter ended
- Net sales of
$220.4 million , decreased$37.9 million , or 14.7%, the result of continuing increased competition and the challenging pricing environment. Overall volumes increased 1%. - Gross profit of
$167.3 million decreased$46.8 million , and as a percentage of net sales, was 75.9% compared to 82.9%. - Research and development expenses remained in line with the comparable quarter at
$18.0 million . - Selling, marketing, general and administrative expenses (SG&A) decreased
$2.6 million to $20.3 million , principally the result of reduced marketing spend related to Keveyis. - Operating income of
$129.0 million decreased$44.4 million and as a percentage of net sales was 58.5% as compared to 67.1% in the prior year quarter. - FX income decreased
$5.4 million to $18.5 million , principally the result of the strengthening of the U.S. vs. Canadian dollar at a lower rate than in prior period. - Other income of
$9.0 million increased$8.3 million vs. the prior period, due to the sale of Keveyis inDecember 2016 . - Tax expense increased
$8.7 million to $20.5 million resulting in an effective tax rate of 12.8% compared to 5.9%. This increase is principally the result of certain tax benefits reflected in the prior year, not realized in the current year quarter, as well as the geographic mix of products manufactured in 2016. - Net income attributable to Taro was
$139.8 million compared to$189.0 million , resulting in diluted earnings per share of$3.42 compared to$4.41 for the same period last year.
Nine Months ended
- Net sales of
$683.0 million , slightly decreased$2.7 million , or 0.4%. Overall volumes increased 2%. - Gross profit decreased
$27.3 million to $527.4 million and as a percentage of net sales, was 77.2% compared to 80.9%. - Research and development expenses of
$50.8 million remained relatively in line with prior year expenses. - SG&A expenses decreased
$6.4 million to $63.5 million , principally as a result of reduced Keveyis spend and we continue to actively manage and gain efficiencies, as well as remaining disciplined with our overall spend. - Operating income of
$413.2 million decreased$19.5 million , and as a percentage of net sales was 60.5% as compared to 63.1%. - FX income decreased
$28.5 million to $26.0 million , principally driven by the strengthening of the U.S. vs. Canadian dollar at a lower rate compared to the prior year. The FX is mainly balance sheet driven. - Other income of
$10.5 million increased$8.6 million , primarily driven by the sale of Keveyis. - Tax expense increased
$14.1 million , principally the result of certain tax benefits reflected in the prior year, not realized in the current year, resulting in the effective tax rate increasing to 18.8% from 14.5%. - Net income attributable to Taro was
$373.4 million compared to$426.0 million , resulting in diluted earnings per share of$8.99 compared to$9.95 for the nine months endedDecember 31, 2015 .
Mr.
Cash Flow and Balance Sheet Highlights
- Cash flow provided by operations for the nine months ended
December 31, 2016 , was$320.5 million compared to$239.7 million for the nine months endedDecember 31, 2015 . - As of
December 31, 2016 , cash, including short-term bank deposits and marketable securities, decreased$120.4 million to $1.1 billion fromMarch 31, 2016 , mainly due to the$269.7 million impact from the Company’s share repurchases, and a$143.5 million increase in long-term bank deposits.
FDA Approvals and Filings
The Company recently received an approval from the
Officer and Director Appointments
On
In addition to Mr. Baldota’s nomination, Mr.
Due to Taro’s regular rotation principle for external directors, Mr.
Share Repurchase Program
On
Under the
Period |
Total Number of |
Average Price Paid per Share |
Dollar Value of |
|||
November 25, 2016 - November 30, 2016 | 68,641 | $105.21 | ||||
December 1, 2016 - December 31, 2016 | 242,821 | $104.87 | ||||
January 1, 2017 - January 31, 2017 | 156,353 | $103.33 | ||||
TOTAL | 467,815 | $104.40 | $201,157,915 | |||
Sale of Keveyis
On
About Taro
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
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 2017. 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
TARO PHARMACEUTICAL INDUSTRIES LTD. | ||||||||||||||||
SUMMARY CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(U.S. dollars in thousands, except share data) | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||||||
Sales, net | $ | 220,395 | $ | 258,342 | $ | 682,973 | $ | 685,678 | ||||||||
Cost of sales | 53,053 | 44,166 | 155,366 | 128,994 | ||||||||||||
Impairment | - | - | 184 | 1,947 | ||||||||||||
Gross profit | 167,342 | 214,176 | 527,423 | 554,737 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Research and development | 18,001 | 17,944 | 50,766 | 51,212 | ||||||||||||
Selling, marketing, general and administrative | 20,312 | 22,866 | 63,450 | 69,804 | ||||||||||||
Settlements and loss contingencies | - | (27 | ) | - | 973 | |||||||||||
Operating income | 129,029 | 173,393 | 413,207 | 432,748 | ||||||||||||
Financial (income) expense, net: | ||||||||||||||||
Interest and other financial income | (3,961 | ) | (3,038 | ) | (10,814 | ) | (9,708 | ) | ||||||||
Foreign exchange income | (18,533 | ) | (23,887 | ) | (25,998 | ) | (54,545 | ) | ||||||||
Other gain, net | 9,009 | 710 | 10,466 | 1,820 | ||||||||||||
Income before income taxes | 160,532 | 201,028 | 460,485 | 498,821 | ||||||||||||
Tax expense | 20,483 | 11,831 | 86,467 | 72,363 | ||||||||||||
Income from continuing operations | 140,049 | 189,197 | 374,018 | 426,458 | ||||||||||||
Net loss from discontinued operations attributable to Taro | (137 | ) | (101 | ) | (314 | ) | (202 | ) | ||||||||
Net income | 139,912 | 189,096 | 373,704 | 426,256 | ||||||||||||
Net income attributable to non-controlling interest | 94 | 98 | 334 | 274 | ||||||||||||
Net income attributable to Taro | $ | 139,818 | $ | 188,998 | $ | 373,370 | $ | 425,982 | ||||||||
Net income per ordinary share from continuing operations attributable to Taro: | ||||||||||||||||
Basic | $ | 3.42 | $ | 4.41 | $ | 9.00 | $ | 9.95 | ||||||||
Diluted | $ | 3.42 | $ | 4.41 | $ | 9.00 | $ | 9.95 | ||||||||
Net loss per ordinary share from discontinued operations attributable to Taro: | ||||||||||||||||
Basic | $ | (0.00 | ) |
* |
$ | (0.00 | ) | * | $ | (0.01 | ) | $ | (0.00 | ) |
* |
|
Diluted | $ | (0.00 | ) | * | $ | (0.00 | ) | * | $ | (0.01 | ) | $ | (0.00 | ) |
* |
|
Net income per ordinary share attributable to Taro: | ||||||||||||||||
Basic | $ | 3.42 | $ | 4.41 | $ | 8.99 | $ | 9.95 | ||||||||
Diluted | $ | 3.42 | $ | 4.41 | $ | 8.99 | $ | 9.95 | ||||||||
Weighted-average number of shares used to compute net income per share: | ||||||||||||||||
Basic | 40,961,015 | 42,833,533 | 41,541,010 | 42,833,533 | ||||||||||||
Diluted | 40,961,015 | 42,833,533 | 41,541,010 | 42,833,533 | ||||||||||||
* 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, |
|||||||
2016 | 2016 | |||||||
ASSETS | (unaudited) | (audited) | ||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 549,646 | $ | 576,757 | ||||
Short-term and current maturities of long-term bank deposits | 555,127 | 648,297 | ||||||
Marketable securities | 3,422 | 3,572 | ||||||
Accounts receivable and other: | ||||||||
Trade, net | 251,623 | 238,611 | ||||||
Other receivables and prepaid expenses | 275,103 | 270,724 | ||||||
Inventories | 145,955 | 138,553 | ||||||
Long-term assets held for sale, net | 999 | 1,081 | ||||||
TOTAL CURRENT ASSETS | 1,781,875 | 1,877,595 | ||||||
Long-term bank deposits | 258,685 | 115,173 | ||||||
Property, plant and equipment, net | 173,446 | 159,459 | ||||||
Other assets | 33,173 | 35,806 | ||||||
TOTAL ASSETS | $ | 2,247,179 | $ | 2,188,033 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables and other current liabilities | $ | 239,463 | $ | 245,462 | ||||
TOTAL CURRENT LIABILITIES | 239,463 | 245,462 | ||||||
Deferred taxes and other long-term liabilities | 5,457 | 5,427 | ||||||
TOTAL LIABILITIES | 244,920 | 250,889 | ||||||
Taro shareholders' equity | 1,995,923 | 1,931,142 | ||||||
Non-controlling interest | 6,336 | 6,002 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,247,179 | $ | 2,188,033 | ||||
TARO PHARMACEUTICAL INDUSTRIES LTD. | |||||||
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited) | |||||||
(U.S. dollars in thousands) | |||||||
Nine Months Ended December 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 373,704 | $ | 426,256 | |||
Adjustments required to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 11,067 | 11,304 | |||||
Impairment for long-lived assets | 184 | 1,947 | |||||
Realized (gain) loss on sale of marketable securities and long-lived assets | (8,517 | ) | 91 | ||||
Change in derivative instruments, net | 4,501 | (6,242 | ) | ||||
Effect of change in exchange rate on inter-company balances and bank deposits | (30,017 | ) | (52,860 | ) | |||
Deferred income taxes, net | (13,138 | ) | (43,768 | ) | |||
Increase in trade receivables, net | (13,411 | ) | (58,129 | ) | |||
Increase in inventories, net | (9,120 | ) | (9,878 | ) | |||
Decrease (increase) in other receivables, income tax receivable, prepaid expenses and other | 16,744 | (16,888 | ) | ||||
Decrease in trade, income tax and other payables and accrued expenses | (11,542 | ) | (12,122 | ) | |||
Net cash provided by operating activities | 320,455 | 239,711 | |||||
Cash flows from investing activities: | |||||||
Purchase of plant, property & equipment, net | (26,377 | ) | (13,111 | ) | |||
Proceeds from (investment in) other intangible assets | 955 | (134 | ) | ||||
Proceeds from other assets | - | 35,000 | |||||
Proceeds from (investment in) short-term bank deposits | 250,854 | (8,808 | ) | ||||
Investment in long-term deposits and other assets | (301,616 | ) | (200,676 | ) | |||
Proceeds from restricted bank deposits | - | 199 | |||||
Proceeds from (investment in) marketable securities, net | 95 | (105 | ) | ||||
Net cash used in investing activities | (76,089 | ) | (187,635 | ) | |||
Cash flows from financing activities: | |||||||
Purchase of treasury stock | (269,712 | ) | - | ||||
Repayment of long-term debt | - | (5,888 | ) | ||||
Net cash used in financing activities | (269,712 | ) | (5,888 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,765 | ) | (4,615 | ) | |||
(Decrease) increase in cash and cash equivalents | (27,111 | ) | 41,573 | ||||
Cash and cash equivalents at beginning of period | 576,757 | 481,641 | |||||
Cash and cash equivalents at end of period | $ | 549,646 | $ | 523,214 | |||
Non-cash operating transactions: | |||||||
Sale of Intangible Asset | $ | 7,500 | $ | - | |||
Non-cash investing transactions: | |||||||
Purchase of property, plant and equipment included in accounts payable | $ | 354 | $ | 949 | |||
Non-cash financing transactions: | |||||||
Purchase of treasury stock | $ | 3,602 | $ | - |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170209006342/en/
Source:
Taro Pharmaceutical Industries Ltd.
Mariano Balaguer, 914-345-9001
VP, CFO
Mariano.Balaguer@Taro.com
or
William J. Coote, 914-345-9001
William.Coote@Taro.com