Taro Provides Results for Quarter Ended June 30, 2020
Quarter reflects One-Time Charge for Global Resolution with DOJ
Quarter ended
- Net sales of
$117.6 million , decreased$43.7 million . - Gross profit of
$64.9 million decreased$36.8 million , and as a percentage of net sales was 55.2% compared to 63.1%. - Research and development expenses of
$12.9 million decreased slightly from the prior year. - Selling, marketing, general and administrative expenses of
$22.2 million , which includes the impact of COVID-19 related expenses and higher legal expenses, increased$2.5 million . - Settlements and loss contingencies of
$478.9 million reflect the one-time settlement charge of$418.9 million related to the global resolution of theDepartment of Justice investigations into theU.S. generic pharmaceutical industry. An additional provision of$60.0 million has been taken for the related ongoing multi-jurisdiction civil antitrust matters; however, there can be no assurance as to the ultimate outcome. - Operating (loss) income was
$(449.2) million . Excluding the settlement and loss contingencies charges, operating income was$29.8 million , a decrease of$38.8 million , and as a percentage of net sales was 25.3% as compared to 42.5%. - Interest and other financial income decreased
$2.3 million to$7.3 million , reflecting the lower global interest rate environment. - Foreign Exchange income of
$0.2 million compared to$7.9 million in the comparable quarter ─ an unfavorable impact of$7.7 million . - Tax expense of
$8.9 million compared to a tax expense of$20.4 million ─ a favorable impact of$11.5 million . Excluding the impact from the settlement and loss contingencies charges, the effective tax rate for the quarter was 23.4% as compared to 23.6%. - Net (loss) income attributable to Taro was
$(434.9) million . Excluding the settlement and loss contingencies charges, net income was$29.0 million compared to$66.2 million . Diluted (loss) per share for the quarter was$(11.37) . Excluding the settlement and loss contingencies charges, diluted earnings per share was$0.76 compared to$1.72 .
Cash Flow and Balance Sheet Highlights
- Cash flow provided by operations was
$64.1 million compared to$82.6 million for the three months endedJune 30, 2019 . - As of
June 30, 2020 , cash, including short-term and long-term marketable securities, increased$64.4 million to$1.63 billion fromMarch 31, 2020 .
Mr.
FDA Approvals and Filings
Taro recently received approvals from the
Taro Achieves Global Resolution of DOJ Antitrust Investigations
On
Form 20-F Filings with the
On
Taro cautions that the foregoing financial information is presented on an unaudited basis and is 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 2021. 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
|
||||||||
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(Unaudited) |
||||||||
( |
||||||||
Quarter Ended |
||||||||
|
2020 |
|
|
2019 |
|
|||
Sales, net |
$ |
117,634 |
|
$ |
161,296 |
|
||
Cost of sales |
|
52,688 |
|
|
59,572 |
|
||
Gross profit |
|
64,946 |
|
|
101,724 |
|
||
Operating Expenses: | ||||||||
Research and development |
|
12,932 |
|
|
13,443 |
|
||
Selling, marketing, general and administrative |
|
22,248 |
|
|
19,718 |
|
||
Settlements and loss contingencies |
|
478,924 |
|
|
— |
|
||
Operating (loss) income * |
|
(449,158 |
) |
|
68,563 |
|
||
Financial income, net: | ||||||||
Interest and other financial income |
|
(7,310 |
) |
|
(9,624 |
) |
||
Foreign exchange income |
|
(197 |
) |
|
(7,905 |
) |
||
Other gain, net |
|
549 |
|
|
594 |
|
||
(Loss) income before income taxes |
|
(441,102 |
) |
|
86,686 |
|
||
Tax expense |
|
8,854 |
|
|
20,445 |
|
||
Net (loss) income |
|
(449,956 |
) |
|
66,241 |
|
||
Net (loss) income attributable to non-controlling interest |
|
(15,038 |
) |
|
58 |
|
||
Net (loss) income attributable to Taro * |
$ |
(434,918 |
) |
$ |
66,183 |
|
||
Net (loss) income per ordinary share attributable to Taro: | ||||||||
Basic and Diluted * |
$ |
(11.37 |
) |
$ |
1.72 |
|
||
Weighted-average number of shares used to compute net (loss) income per share: | ||||||||
Basic and Diluted |
|
38,258,337 |
|
|
38,539,056 |
|
||
May not foot due to rounding. | ||||||||
* Excluding the settlement and loss contingencies charges of
SUMMARY CONSOLIDATED BALANCE SHEETS | ||||||
( |
||||||
|
|
|||||
|
2020 |
|
|
2020 |
||
ASSETS |
(unaudited) |
(audited) |
||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents |
$ |
532,044 |
|
$ |
513,354 |
|
Marketable securities |
|
590,286 |
|
|
595,383 |
|
Accounts receivable and other: | ||||||
Trade, net |
|
189,301 |
|
|
235,221 |
|
Other receivables and prepaid expenses |
|
45,082 |
|
|
35,567 |
|
Inventories |
|
166,223 |
|
|
153,073 |
|
TOTAL CURRENT ASSETS |
|
1,522,936 |
|
|
1,532,598 |
|
Marketable securities |
|
510,397 |
|
|
459,639 |
|
Property, plant and equipment, net |
|
209,228 |
|
|
209,961 |
|
Deferred income taxes |
|
105,389 |
|
|
106,693 |
|
Other assets |
|
31,743 |
|
|
32,361 |
|
TOTAL ASSETS |
$ |
2,379,693 |
|
$ |
2,341,252 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Trade payables |
$ |
36,302 |
|
$ |
28,858 |
|
Other current liabilities |
|
560,185 |
|
|
193,873 |
|
TOTAL CURRENT LIABILITIES |
|
596,487 |
|
|
222,731 |
|
Deferred taxes and other long-term liabilities |
|
109,068 |
|
|
8,762 |
|
TOTAL LIABILITIES |
|
705,555 |
|
|
231,493 |
|
Taro shareholders' equity |
|
1,683,279 |
|
|
2,103,864 |
|
Non-controlling interest |
|
(9,141 |
) |
|
5,895 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
2,379,693 |
|
$ |
2,341,252 |
|
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited) | |||||||
( |
|||||||
Three Months Ended |
|||||||
|
2020 |
|
|
2019 |
|
||
Cash flows from operating activities: | |||||||
Net (loss) income |
$ |
(449,956 |
) |
$ |
66,241 |
|
|
Adjustments required to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization |
|
5,571 |
|
|
5,071 |
|
|
Change in derivative instruments, net |
|
(923 |
) |
|
(2,421 |
) |
|
Effect of change in exchange rate on inter-company balances, marketable securities and bank deposits |
|
(1,728 |
) |
|
(5,624 |
) |
|
Deferred income taxes, net |
|
(2,367 |
) |
|
2,930 |
|
|
Decrease in trade receivables, net |
|
45,921 |
|
|
24,431 |
|
|
Increase in inventories, net |
|
(13,150 |
) |
|
(205 |
) |
|
(Increase) decrease in other receivables, income tax receivable, prepaid expenses and other |
|
(3,462 |
) |
|
15,671 |
|
|
Increase (decrease) in trade, income tax, accrued expenses, and other payables |
|
483,957 |
|
|
(22,965 |
) |
|
Loss (income) from marketable securities, net |
|
247 |
|
|
(525 |
) |
|
Net cash provided by operating activities |
|
64,110 |
|
|
82,604 |
|
|
Cash flows from investing activities: | |||||||
Purchase of plant, property & equipment, net |
|
(5,133 |
) |
|
(7,969 |
) |
|
Investment in other intangible assets |
|
(63 |
) |
|
(30 |
) |
|
Investment in marketable securities, net |
|
(40,825 |
) |
|
(9,070 |
) |
|
Net cash used in investing activities |
|
(46,021 |
) |
|
(17,069 |
) |
|
Cash flows from financing activities: | |||||||
Net cash used in financing activities |
|
— |
|
|
— |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
601 |
|
|
— |
|
|
Increase in cash and cash equivalents |
|
18,690 |
|
|
65,535 |
|
|
Cash and cash equivalents at beginning of period |
|
513,354 |
|
|
567,451 |
|
|
Cash and cash equivalents at end of period |
$ |
532,044 |
|
$ |
632,986 |
|
|
Cash Paid during the year for: | |||||||
Income taxes |
$ |
7,119 |
|
$ |
10,432 |
|
|
Cash Received during the year for: | |||||||
Income taxes |
$ |
— |
|
$ |
7,128 |
|
|
Non-cash investing transactions: | |||||||
Purchase of property, plant and equipment included in accounts payable |
$ |
1,304 |
|
$ |
2,317 |
|
|
Non-cash financing transactions: | |||||||
(Sale) purchase of marketable securities |
$ |
(745 |
) |
$ |
2,436 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200729005920/en/
VP, CFO
(914) 345-9001
Daphne.Huang@taro.com
AVP, Business Finance, Treasurer and Investor Relations
(914) 345-9001
William.Coote@taro.com
Source: