Net sales of $130.5 million decreased, principally due to the continued price decline particularly in the U.S. generic business, as well as a one-time gross-to-net (“GTN”) adjustment.

Gross profit of $47.0 million (36.0% of net sales) compared to $62.0 million (47.0% of net sales).

Research and development (R&D) expenses of $11.5 million decreased slightly.

Selling, marketing, general and administrative expenses (SG&A) of $42.3 million increased $18.6 million.

Operating loss of $(6.8) million compared to operating income of $24.4 million. The current year quarter operating loss is primarily attributable to the aforementioned price erosion and GTN adjustment, as well as the on-going impact associated with the integration of our recent acquisition.

Interest and other financial income of $4.3 million increased $1.9 million.

Tax benefit of $2.1 million compared to tax expense of $6.1 million in the prior year quarter.

Net loss attributable to Taro was $(2.8) million compared to net income of $23.3 million, resulting in (loss) per share of $(0.07) compared to earnings per share of $0.62. Excluding the impact from the settlement and loss contingencies charges in the prior year quarter, net income was $24.7 million, resulting in earnings per share of $0.66.

Net sales of $287.2 million increased $8.1 million.

Gross profit of $128.6 million (44.8% of net sales compared to 50.1%) decreased $11.2 million.

R&D expenses of $23.0 million decreased $2.4 million.

SG&A of $98.4 million increased $50.7 million.

Operating income of $7.2 million compared to $5.2 million, Excluding the impact from the settlement and loss contingencies charges in the prior year, operating income was $66.6 million. The current year operating income primarily reflects the six-month impact of the factors mentioned above.

Interest and other financial income of $6.2 million increased from $5.4 million.

Net income attributable to Taro was $11.3 million compared to $4.6 million, resulting in earnings per share of $0.30 compared to earnings per share of $0.12. Excluding the impact from the settlement and loss contingencies charges in the prior year, net income was $66.0 million, resulting in diluted earnings per share of $1.75.

Cash flow used in operations for the six months ended September 30, 2022 was $37.7 million compared to $8.0 million for the six months ended September 30, 2021. Excluding the impact from the settlement and loss contingencies charges in both periods, cash flow provided by operations was $30.0 million compared to $94.9 million for the six months ended September 30, 2021.

As of September 30, 2022, cash and cash equivalents, short-term bank deposits and marketable securities (both short- and long-term) decreased $58.9 million to $1.2 billion from March 31, 2022; principally the result of a $67.6 million settlement payment to the Direct Purchaser Plaintiff (“DPP”) class in the In re: Generic Pharmaceuticals Pricing Antitrust Litigation, MDL No. 2724.

The September 30, 2022 results include six months’ results from the February 28^th acquisition of Alchemee.

Sales, net

Cost of sales

Gross profit

Operating Expenses:

Research and development

Selling, marketing, general and administrative

Settlements and loss contingencies

Operating (loss) income *

Financial (income) expense, net:

Interest and other financial income

Foreign exchange (income) expense

Other gain, net

Income (loss) before income taxes

Tax (benefit) expense

Net (loss) income attributable to Taro *

Net (loss) income per ordinary share attributable to Taro:

Basic and Diluted *

Weighted-average number of shares used to compute net (loss) income per share:

Basic and Diluted

Excluding the settlement and loss contingencies charges of $1.4 million for the quarter ended September 30, 2021, Operating income was $25.9 million, Net income attributable to Taro was $24.7 million, and basic and diluted earnings per share was $0.66.

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

Short-term bank deposits

Marketable securities

Accounts receivable and other:

Trade, net

Other receivables and prepaid expenses

Inventories

TOTAL CURRENT ASSETS

Marketable securities

Property, plant and equipment, net

Deferred income taxes

Goodwill

Other assets

TOTAL ASSETS

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Trade payables

Other current liabilities

TOTAL CURRENT LIABILITIES

Deferred taxes and other long-term liabilities

TOTAL LIABILITIES

Taro shareholders’ equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

Cash flows from operating activities:

Net income (loss)

Adjustments required to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

Realized losss on sale of long-lived assets

Change in derivative instruments, net

Effect of change in exchange rate on marketable securities and bank deposits

Deferred income taxes, net

Increase (decrease) in trade receivables, net

Increase in inventories, net

Decrease (increase) in other receivables, income tax receivables, prepaid expenses and other

Decrease in trade, income tax, accrued expenses and other payables

Expense from amortization of marketable securities bonds, net

Net cash used in operating activities

Cash flows from investing activities:

Purchase of plant, property & equipment, net

Investment in other intangible assets

Investment in short-term bank deposits, net

Proceeds from (investment in) marketable securities, net

Net cash used in investing activities

Cash flows from financing activities:

Purchase of treasury stock

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Cash Paid during the year for:

Income taxes

Cash Received during the year for:

Income taxes

Non-cash investing transactions:

Purchase of property, plant and equipment included in accounts payable

Non-cash financing transactions:

Purchase of marketable securities, net