Taro Provides Results for Quarter Ended June 2017
Quarter ended
- Net sales of
$161.3 million , decreased$72.5 million , or 31.0%, the result of continuing increased competition and the challenging pricing environment; despite an overall increase in volumes. - Gross profit of
$116.5 million , decreased$66.2 million and as a percentage of net sales, was 72.2% compared to 78.2%. - Research and development (R&D) expenses of
$14.7 million decreased$3.3 million ; as our R&D spending is not evenly distributed across quarters. R&D as a percentage of net sales increased to 9.1% from 7.7% in the previous year quarter. - Selling, marketing, general and administrative expenses of
$24.2 million increased$2.0 million . - Operating income of
$77.6 million decreased$65.0 million and as a percentage of net sales was 48.1% as compared to 61.0%. - Foreign exchange expense of
$19.6 million increased$13.7 million from$5.9 million , principally due to the weakening of the U.S. dollar vs. Canadian dollar at a higher degree than the prior year quarter. - Tax expense of
$10.0 million decreased$20.4 million with the effective tax rate improving to 15.5% from 21.7%. - Net income attributable to Taro was
$54.5 million compared to$109.9 million , a$55.4 million decrease, resulting in diluted earnings per share of$1.35 compared to$2.59 .
Cash Flow and Balance Sheet Highlights
- Cash flow provided by operations was
$72.7 million compared to$56.0 million for the three months endedJune 30, 2016 . - Cash, including short-term bank deposits and marketable securities, increased
$58.2 million to $1.4 billion .
Mr.
FDA Approvals and Filings
The Company recently received approvals from the
Share Repurchase Program - Returning Capital to Shareholders
On
Form 20-F Filings with the
On
The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.
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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 2018. 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**
TARO PHARMACEUTICAL INDUSTRIES LTD. | |||||||||
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(Unaudited) | |||||||||
(U.S. dollars in thousands, except share data) | |||||||||
Three Months Ended June 30, | |||||||||
2017 | 2016 | ||||||||
Sales, net | $ | 161,321 | $ | 233,784 | |||||
Cost of sales | 44,778 | 50,885 | |||||||
Impairment | — | 108 | |||||||
Gross profit | 116,543 | 182,791 | |||||||
Operating Expenses: | |||||||||
Research and development | 14,658 | 17,920 | |||||||
Selling, marketing, general and administrative | 24,249 | 22,252 | |||||||
Operating income | 77,636 | 142,619 | |||||||
Financial (income) expense, net: | |||||||||
Interest and other financial income | (4,476 | ) | (3,306 | ) | |||||
Foreign exchange expense | 19,642 | 5,909 | |||||||
Other gain, net | 2,119 | 403 | |||||||
Income before income taxes | 64,589 | 140,419 | |||||||
Tax expense | 9,987 | 30,425 | |||||||
Income from continuing operations | 54,602 | 109,994 | |||||||
Net loss from discontinued operations attributable to Taro | (47 | ) | (101 | ) | |||||
Net income | 54,555 | 109,893 | |||||||
Net income (loss) attributable to non-controlling interest | 58 | (4 | ) | ||||||
Net income attributable to Taro | $ | 54,497 | $ | 109,897 | |||||
Net income per ordinary share from continuing operations attributable to Taro: | |||||||||
Basic | $ | 1.35 | $ | 2.59 | |||||
Diluted | $ | 1.35 | $ | 2.59 | |||||
Net loss per ordinary share from discontinued operations attributable to Taro: | |||||||||
Basic | $ | (0.00 | ) | * | $ | (0.00 | ) | * | |
Diluted | $ | (0.00 | ) | * | $ | (0.00 | ) | * | |
Net income per ordinary share attributable to Taro: | |||||||||
Basic | $ | 1.35 | $ | 2.59 | |||||
Diluted | $ | 1.35 | $ | 2.59 | |||||
Weighted-average number of shares used to compute net income per share: | |||||||||
Basic | 40,489,470 | 42,370,644 | |||||||
Diluted | 40,489,470 | 42,370,644 | |||||||
* 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) | ||||||
June 30, | March 31, | |||||
2017 | 2017 | |||||
ASSETS | (unaudited) | (audited) | ||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | 430,713 | $ | 600,399 | ||
Short-term and current maturities of long-term bank deposits | 806,558 | 782,813 | ||||
Marketable securities | 207,712 | 3,548 | ||||
Accounts receivable and other: | ||||||
Trade, net | 185,881 | 203,924 | ||||
Other receivables and prepaid expenses | 157,755 | 266,280 | ||||
Inventories | 144,354 | 141,045 | ||||
Long-term assets held for sale, net | 1,083 | 1,015 | ||||
TOTAL CURRENT ASSETS | 1,934,056 | 1,999,024 | ||||
Long-term deposits and marketable securities | 71,376 | 70,685 | ||||
Property, plant and equipment, net | 183,415 | 180,085 | ||||
Deferred income taxes | 137,706 | 10,324 | ||||
Other assets | 31,094 | 29,635 | ||||
TOTAL ASSETS | $ | 2,357,647 | $ | 2,289,753 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Trade payables and other current liabilities | $ | 205,767 | $ | 209,837 | ||
TOTAL CURRENT LIABILITIES | 205,767 | 209,837 | ||||
Deferred taxes and other long-term liabilities | 5,995 | 6,110 | ||||
TOTAL LIABILITIES | 211,762 | 215,947 | ||||
Taro shareholders' equity | 2,139,515 | 2,067,494 | ||||
Non-controlling interest | 6,370 | 6,312 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,357,647 | $ | 2,289,753 | ||
TARO PHARMACEUTICAL INDUSTRIES LTD. | ||||||||
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
(U.S. dollars in thousands) | ||||||||
Three Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 54,555 | $ | 109,893 | ||||
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 3,775 | 3,692 | ||||||
Impairment for long-lived assets | — | 108 | ||||||
Realized gain on sale of marketable securities and long-lived assets | (247 | ) | — | |||||
Change in derivative instruments, net | (3,093 | ) | 2,671 | |||||
Effect of change in exchange rate on inter-company balances and bank deposits | 22,078 | 4,101 | ||||||
Deferred income taxes, net | 4,825 | (20,282 | ) | |||||
Decrease (increase) in trade receivables, net | 18,270 | (51,220 | ) | |||||
Increase in inventories, net | (2,114 | ) | (9,190 | ) | ||||
(Increase) decrease in other receivables, income tax receivable, prepaid expenses and other | (21,483 | ) | 19,612 | |||||
Decrease in trade, income tax, accrued expenses, and other payables | (3,377 | ) | (3,420 | ) | ||||
Income from marketable securities | (521 | ) | — | |||||
Net cash provided by operating activities | 72,668 | 55,965 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of plant, property & equipment, net | (4,557 | ) | (9,184 | ) | ||||
Investment in other intangible assets | (2,056 | ) | (11 | ) | ||||
Proceeds from short-term bank deposits | 46,940 | 90,754 | ||||||
Investment in long-term deposits and other assets | — | (143,503 | ) | |||||
(Investment in) proceeds from marketable securities, net | (275,128 | ) | 80 | |||||
Net cash used in investing activities | (234,801 | ) | (61,864 | ) | ||||
Cash flows from financing activities: | ||||||||
Purchase of treasury stock | (8,489 | ) | (132,489 | ) | ||||
Net cash used in financing activities | (8,489 | ) | (132,489 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 936 | 363 | ||||||
Decrease in cash and cash equivalents | (169,686 | ) | (138,025 | ) | ||||
Cash and cash equivalents at beginning of period | 600,399 | 576,757 | ||||||
Cash and cash equivalents at end of period | $ | 430,713 | $ | 438,732 | ||||
Cash paid during the quarter for: | ||||||||
Income taxes | $ | 29,595 | $ | 37,721 | ||||
Non-cash investing transactions: | ||||||||
Purchase of property, plant and equipment included in accounts payable |
$ |
1,180 | $ | 617 | ||||
Non-cash financing transactions: | ||||||||
Purchase of treasury stock |
$ |
— | $ | 8,341 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170808006568/en/
Source:
Taro Pharmaceutical Industries Ltd.
Mariano A. Balaguer, 914-345-9001
VP, CFO
Mariano.Balaguer@taro.com
or
William J. Coote, 914-345-9001
AVP, Business Finance, Treasurer and Investor Relations
William.Coote@taro.com