Taro Provides Results for December 31, 2019
Quarter ended
- 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
- 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 effectiveApril 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 endedDecember 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 fromMarch 31, 2019 . Cash and cash equivalents reflects the impact from the$26.8 million Tender Offer paid inDecember 2019 .
Mr.
FDA Approvals and Filings
The Company recently received an approval from the
Results of the Tender Offer
On
The Company cautions that the foregoing financial information is unaudited and could be subject to change.
************************
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 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
**Financial Tables Follow**
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. | |||||||
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 |
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) |
$ — | |
#####
View source version on businesswire.com: https://www.businesswire.com/news/home/20200203005800/en/
Source:
William J. Coote
AVP, Treasurer and Investor Relations ─ Interim CFO
(914) 345-9001
William.Coote@Taro.com