[May 26, 2016] |
|
Taro Provides Results for Year Ended March 31, 2016
Taro Pharmaceutical Industries Ltd. (NYSE:TARO) ("Taro" or the
"Company") today provided unaudited financial results for the quarter
and year ended March 31, 2016.
Quarter ended March 31, 2016 Highlights - compared to March 31, 2015
-
Net sales of $265.1 million, increased $20.9 million, or 8.6%, on
relatively flat volumes
-
Gross profit of $224.2 million increased $24.6 million, as Cost of
Goods decreased $3.8 million; and as a percentage of net sales
increased to 84.6% as compared to 81.8%
-
Research and development expenses decreased 16.4% to $19.9 million
-
Selling, marketing, general and administrative expenses remained
relatively flat
-
Operating income increased $28.2 million to $181.7 million
-
Net Income was unfavorably impacted by an $80.0 million fluctuation in
foreign exchange (FX) from income of $32.5 million in 2015 to an
expense of $47.5 million in 2016, principally the result of the
strength of the Canadian dollar vs. U.S. dollar
-
Tax expense decreased $13.9 million to $23.0 million resulting in an
effective tax rate of 16.6% compared to 19.5%
-
Net income attributable to Taro was $115.0 million compared to $152.3
million, resulting in diluted earnings per share of $2.68 compared to
$3.56
Year ended March 31, 2016 Highlights - compared to March 31, 2015
-
Net sales of $950.8 million, increased $87.8 million, or 10.2%,
despite a 5% volume decline
-
Gross profit increased $102.4 million to $779.0 million and as a
percentage of net sales, was 81.9% compared to 78.4%
-
Research and development expenses increased 8.6% to $71.2 million
-
Selling, marketing, general and administrative expenses increased $4.7
million to $92.4 million
-
Settlements and loss contingencies was a $1.0 million expense compared
to a $4.2 million creditin 2015
-
Operating income increased $86.8 million to $614.5 million
-
FX income decreased $34.6 million to $7.1 million, principally the
result of the strength of the Canadian dollar vs. U.S. dollar in the
fourth quarter of 2016
-
Tax expense remained relatively flat, however the effective tax rate
improved to 15.0% from 16.5%
-
Net income attributable to Taro was $540.9 million compared to $484.3
million, a $56.7 million increase, resulting in diluted earnings per
share of $12.62 compared to $11.31
Cash Flow and Balance Sheet Highlights - compared to March 31, 2015
-
Cash, including marketable securities increased to $1.2 billion from
$920.2 million
-
Cash provided by operations for the period ended March 31, 2016 was
$395.1 million, as compared to $406.8 million
-
Debt of $5.9 million was paid-off during the year
Mr. Kal Sundaram, Taro's CEO stated, "Overall, we are pleased with our
strong operating performance. Additionally, our 9% year-over-year
increase in R&D demonstrates our commitment to growing our pipeline of
quality products; further evidenced by ten (10) FDA filings this year.
However, we continue to face broader industry challenges in the generic
landscape, driven by ever-increasing competition and customer
consolidation. Nevertheless, we remain cautiously optimistic about our
medium and long-term growth and remain focused on strengthening our R&D
pipeline and other initiatives that continue to keep us well positioned
in the market."
FDA Approvals and Filings
The Company recently received approvals from the U.S. Food and Drug
Administration ("FDA") for four Abbreviated New Drug Application
("ANDA") Naftifine Hydrochloride Cream USP, 2%, Oxiconazole Nitrate
Cream, 1%, Diclofenac Sodium Gel, 2% and Fluocinolone Acetonide Topical
Oil, 0.01% (Body Oil and Scalp Oil). For the year ended March 31, 2016,
the total number of FDA filings was ten (10). The Company currently has
a total of thirty-six ANDAs awaiting FDA approval.
Share Repurchase Program
On March 15, 2016, the Company announced that its Board of Directors
approved a $250 million share repurchase of ordinary shares. Repurchases
may be made from time to time at the Company's discretion, based on
ongoing assessments of the capital needs of the business, the market
price of its stock, and general market conditions. No time period has
been set for the repurchase program, and any such program may be
suspended or discontinued at any time. The repurchase authorization
enables the Company to purchase its ordinary shares from time to time
through open market purchases, negotiated transactions or other means,
including 10b5-1 trading plans in accordance with applicable securities
laws or other restrictions. The table below presents the purchase of
ordinary shares as of May 24, 2016, which were acquired in accordance
with a 10b5-1 program:
Period
|
|
Total Number of Shares Purchased as
Part of the Current Program
|
|
Average Price Paid (News - Alert) per Share
|
|
Dollar Value of Shares that May Yet Be
Purchased Under the Program
|
March 17, 2016 - March 31, 2016
|
|
67,339
|
|
|
$140.30
|
|
|
|
April 1, 2016 - May 24, 2016
|
|
599,504
|
|
|
$135.76
|
|
|
|
TOTAL
|
|
666,843
|
|
|
$136.22
|
|
|
$159,165,488
|
|
|
Keveyis
On May 2, 2016, Taro announced it will now make Keveyis™
(dichlorphenamide) available to distributors at no cost for the
treatment of primary periodic paralysis. As a result, Taro will cease
commercial sales and related promotional activities for Keveyis and bear
all costs associated with its manufacture. In the near term, patients
will continue to receive the medicine through its specialty pharmacy
partner, Diplomat as the Company evaluates the best option for keeping
pharmacy dispensing fees to patients as low as possible.
Earnings Call (8:30 am EST, May 27,
2016)
As previously announced, the Company will host an earnings call at 8:30
am EST on Friday, May 27, 2016, where senior management will discuss the
Company's performance and answer questions from participants. This call
will be accessible through an audio dial-in and a web-cast. Audio
conference participants can dial-in on the numbers below:
-
Participant Toll-Free Dial-In Number: +1 (844) 421-0601 ID: 18504447
-
Participant International Dial-In Number: +1 (716) 247-5800 ID:
18504447
-
Web-cast: More details are provided on our website, www.taro.com
To participate in the audio call, please dial the numbers provided above
five to ten minutes ahead of the scheduled start time. The operator will
provide instructions on asking questions before the call. The transcript
of the event will be available on the Company's website at www.taro.com.
An audio playback will be available for fifteen (15) days following the
call.
About Taro
Taro Pharmaceutical Industries Ltd. is a multinational, science-based
pharmaceutical company, dedicated to meeting the needs of its customers
through the discovery, development, manufacturing and marketing of the
highest quality healthcare products. For further information on Taro
Pharmaceutical Industries Ltd., please visit the Company's website at www.taro.com.
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
SEC (News - Alert).
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 Israel, the United
States, or any country in which Taro operates, regulatory and
legislative actions in the countries in which Taro operates, and other
risks detailed from time to time in the Company's SEC reports, including
its Annual Reports on Form 20-F. Forward-looking statements are
applicable only as of the date on which they are made. The
Company undertakes no obligations to update, change or revise any
forward-looking statement, whether as a result of new information,
additional or subsequent developments or otherwise.
TARO PHARMACEUTICAL INDUSTRIES LTD.
|
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in thousands, except share data)
|
|
|
|
Quarter Ended
|
|
Year Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(audited)
|
Sales, net
|
|
$
|
265,073
|
|
|
$
|
244,180
|
|
|
$
|
950,751
|
|
|
$
|
862,944
|
|
Cost of sales
|
|
|
40,749
|
|
|
|
44,545
|
|
|
|
169,743
|
|
|
|
186,359
|
|
Impairment
|
|
|
95
|
|
|
|
-
|
|
|
|
2,042
|
|
|
|
-
|
|
Gross profit
|
|
|
224,229
|
|
|
|
199,635
|
|
|
|
778,966
|
|
|
|
676,585
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
19,948
|
|
|
|
23,865
|
|
|
|
71,160
|
|
|
|
65,510
|
|
Selling, marketing, general and administrative
|
|
|
22,561
|
|
|
|
22,229
|
|
|
|
92,365
|
|
|
|
87,644
|
|
Settlements and loss contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
973
|
|
|
|
(4,200
|
)
|
Operating income
|
|
|
181,720
|
|
|
|
153,541
|
|
|
|
614,468
|
|
|
|
527,631
|
|
|
|
|
|
|
|
|
|
|
Financial (income) expense, net:
|
|
|
|
|
|
|
|
|
Interest and other financial income
|
|
|
(2,896
|
)
|
|
|
(3,087
|
)
|
|
|
(12,604
|
)
|
|
|
(9,677
|
)
|
Foreign exchange expense (income)
|
|
|
47,478
|
|
|
|
(32,481
|
)
|
|
|
(7,068
|
)
|
|
|
(41,634
|
)
|
Other gain, net
|
|
|
860
|
|
|
|
395
|
|
|
|
2,680
|
|
|
|
2,738
|
|
Income before income taxes
|
|
|
137,999
|
|
|
|
189,504
|
|
|
|
636,820
|
|
|
|
581,680
|
|
Tax expense
|
|
|
22,950
|
|
|
|
36,872
|
|
|
|
95,313
|
|
|
|
96,059
|
|
Income from continuing operations
|
|
|
115,049
|
|
|
|
152,632
|
|
|
|
541,507
|
|
|
|
485,621
|
|
Net loss from discontinued operations attributable to Taro
|
|
|
(34
|
)
|
|
|
(314
|
)
|
|
|
(236
|
)
|
|
|
(787
|
)
|
Net income
|
|
|
115,015
|
|
|
|
152,318
|
|
|
|
541,271
|
|
|
|
484,834
|
|
Net income attributable to non-controlling interest
|
|
|
65
|
|
|
|
26
|
|
|
|
339
|
|
|
|
577
|
|
Net income attributable to Taro
|
|
$
|
114,950
|
|
|
$
|
152,292
|
|
|
$
|
540,932
|
|
|
$
|
484,257
|
|
|
|
|
|
|
|
|
|
|
Net income per ordinary share from continuing operations
attributable to Taro:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.68
|
|
|
$
|
3.56
|
|
|
$
|
12.63
|
|
|
$
|
11.32
|
|
Diluted
|
|
$
|
2.68
|
|
|
$
|
3.56
|
|
|
$
|
12.63
|
|
|
$
|
11.32
|
|
|
|
|
|
|
|
|
|
|
Net loss per ordinary share from discontinued operations
attributable to Taro:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.00
|
)
|
*
|
$
|
(0.00
|
)
|
*
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
Diluted
|
|
$
|
(0.00
|
)
|
*
|
$
|
(0.00
|
)
|
*
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
Net income per ordinary share attributable to Taro:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.68
|
|
|
$
|
3.56
|
|
|
$
|
12.62
|
|
|
$
|
11.31
|
|
Diluted
|
|
$
|
2.68
|
|
|
$
|
3.56
|
|
|
$
|
12.62
|
|
|
$
|
11.31
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares used to compute net income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
42,828,338
|
|
|
|
42,833,533
|
|
|
|
42,832,241
|
|
|
|
42,833,533
|
|
Diluted
|
|
|
42,828,338
|
|
|
|
42,833,533
|
|
|
|
42,832,241
|
|
|
|
42,833,750
|
|
|
* 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)
|
|
|
|
March 31,
|
|
March 31,
|
|
|
2016
|
|
2015
|
ASSETS
|
|
(unaudited)
|
|
(audited)
|
CURRENT ASSETS:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
576,757
|
|
|
$
|
481,641
|
|
Short-term and current maturities of long-term bank deposits
|
|
|
648,297
|
|
|
|
434,899
|
|
Restricted short-term bank deposits
|
|
|
-
|
|
|
|
199
|
|
Marketable securities
|
|
|
3,572
|
|
|
|
3,458
|
|
Accounts receivable and other:
|
|
|
|
|
Trade, net
|
|
|
238,611
|
|
|
|
222,427
|
|
Other receivables and prepaid expenses
|
|
|
270,724
|
|
|
|
250,911
|
|
Inventories
|
|
|
138,553
|
|
|
|
120,272
|
|
Long-term assets held for sale, net
|
|
|
1,081
|
|
|
|
-
|
|
TOTAL CURRENT ASSETS
|
|
|
1,877,595
|
|
|
|
1,513,807
|
|
Long-term bank deposits
|
|
|
115,173
|
|
|
|
30,175
|
|
Property, plant and equipment, net
|
|
|
159,459
|
|
|
|
153,045
|
|
Other assets
|
|
|
35,806
|
|
|
|
40,718
|
|
TOTAL ASSETS
|
|
$
|
2,188,033
|
|
|
$
|
1,737,745
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
Current maturities of long-term debt
|
|
$
|
-
|
|
|
$
|
912
|
|
Trade payables and other current liabilities
|
|
|
245,462
|
|
|
|
309,093
|
|
TOTAL CURRENT LIABILITIES
|
|
|
245,462
|
|
|
|
310,005
|
|
Long-term debt, net of current maturities
|
|
|
-
|
|
|
|
4,976
|
|
Deferred taxes and other long-term liabilities
|
|
|
5,427
|
|
|
|
5,381
|
|
TOTAL LIABILITIES
|
|
|
250,889
|
|
|
|
320,362
|
|
|
|
|
|
|
Taro shareholders' equity
|
|
|
1,931,142
|
|
|
|
1,411,720
|
|
Non-controlling interest
|
|
|
6,002
|
|
|
|
5,663
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
$
|
2,188,033
|
|
|
$
|
1,737,745
|
|
|
TARO PHARMACEUTICAL INDUSTRIES LTD.
|
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(U.S. dollars in thousands)
|
|
|
|
Year Ended March 31,
|
|
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
(audited)
|
Cash flows from operating activities:
|
|
|
|
|
Net income
|
|
$
|
541,271
|
|
|
$
|
484,834
|
|
Adjustments required to reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
14,848
|
|
|
|
15,798
|
|
Impairment for long-lived assets
|
|
|
2,042
|
|
|
|
90
|
|
Realized loss (gain) on sale of marketable securities and long-lived
assets
|
|
|
74
|
|
|
|
(209
|
)
|
Change in derivative instruments, net
|
|
|
(6,137
|
)
|
|
|
5,483
|
|
Effect of change in exchange rate on inter-company balances
|
|
|
(2,268
|
)
|
|
|
(18,167
|
)
|
Foreign exchange effect of bank deposits
|
|
|
(5,510
|
)
|
|
|
-
|
|
Decrease in long-term debt due to currency fluctuations
|
|
|
-
|
|
|
|
(1,030
|
)
|
Deferred income taxes, net
|
|
|
(11,976
|
)
|
|
|
(70,387
|
)
|
Increase in trade receivables, net
|
|
|
(16,386
|
)
|
|
|
(85,277
|
)
|
Increase in inventories, net
|
|
|
(19,013
|
)
|
|
|
(7,027
|
)
|
(Decrease) increase in other receivables, income tax receivable,
prepaid expenses and other
|
|
|
(42,858
|
)
|
|
|
14,359
|
|
(Decrease) increase in trade, income tax and other payables and
accrued expenses
|
|
|
(58,959
|
)
|
|
|
68,321
|
|
Net cash provided by operating activities
|
|
|
395,128
|
|
|
|
406,788
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchase of plant, property & equipment
|
|
|
(18,972
|
)
|
|
|
(19,997
|
)
|
(Investment in) proceeds from other intangible assets and long-lived
assets
|
|
|
(134
|
)
|
|
|
59
|
|
Proceeds from (investment in) other assets
|
|
|
35,000
|
|
|
|
(31,050
|
)
|
Investment in short-term bank deposits
|
|
|
(220,102
|
)
|
|
|
(43,344
|
)
|
Proceeds from restricted bank deposits
|
|
|
199
|
|
|
|
28
|
|
(Investment in) proceeds from long-term deposits and other assets
|
|
|
(80,587
|
)
|
|
|
2,112
|
|
(Investment in) proceeds from marketable securities, net
|
|
|
(135
|
)
|
|
|
111
|
|
Net cash used in investing activities
|
|
|
(284,731
|
)
|
|
|
(92,081
|
)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Proceeds from issuance of shares, net
|
|
|
-
|
|
|
|
26
|
|
Purchase of treasury stock
|
|
|
(9,450
|
)
|
|
|
-
|
|
Repayment of long-term debt
|
|
|
(5,888
|
)
|
|
|
(10,944
|
)
|
Net cash used in financing activities
|
|
|
(15,338
|
)
|
|
|
(10,918
|
)
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
57
|
|
|
|
(32,115
|
)
|
Increase in cash and cash equivalents
|
|
|
95,116
|
|
|
|
271,674
|
|
Cash and cash equivalents at beginning of period
|
|
|
481,641
|
|
|
|
209,967
|
|
Cash and cash equivalents at end of period
|
|
$
|
576,757
|
|
|
$
|
481,641
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160526006537/en/
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|