HAWTHORNE, N.Y.–(BUSINESS WIRE)–Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter ended June 30, 2023.
Quarter ended June 30, 2023 Highlights ─ compared to June 30, 2022
- Net sales increased $2.2 million, or 1.4%, to $158.9 million.
- Gross profit of $64.1 million (40.3% of net sales) compared to $81.6 million (52.1% of net sales).
- Research and development (R&D) expenses of $16.1 million increased $4.6 million.
- Selling, marketing, general and administrative expenses (“SMGA”) of $55.9 million includes certain one-time items of $6.2 million related to transitional expenses for the planned relocation of our Alchemee operations from California to New York. Excluding this charge, SMGA was $49.7 million, or $6.4 million below the prior year quarter.
- Operating income/(loss) of $(7.9) million compared to an operating income of $14.0 million. Excluding the impact from the aforementioned certain one-time items, operating income/(loss) was $(1.7) million in the current year quarter.
- Interest and other financial income of $10.9 million increased $9.0 million.
- Foreign Exchange (FX) income of $2.1 compared to FX expense of $0.3 million in the prior year quarter; a favorable impact of $2.4 million.
- Tax/(benefit) of $(4.6) million compared to tax expense of $2.0 million in the prior year quarter.
- Net income was $10.0 million compared to net income of $14.1 million, resulting in earnings per share of $0.27 compared to net earnings per share of $0.37. Excluding the impact from the certain one-time items in the current year quarter, net income was $14.9 million resulting in earnings per share of $0.40.
Cash Flow and Balance Sheet Highlights
- Cash flow provided by operations for the quarter ended June 30, 2023, was $7.8 million; compared to cash flow used in operations for the quarter ended June 30, 2022, of $58.0 million (excluding the impact from the settlement and loss contingencies charges in the prior year quarter, cash flow provided by operations was $9.6 million).
- As of June 30, 2023, cash and cash equivalents, short-term bank deposits and marketable securities (both short- and long-term) was $1.3 billion in line with March 31, 2023.
Form 20-F Filings with the SEC
On June 29, 2023, Taro filed its Annual Report on Form 20-F with the U.S. Securities and Exchange Commission (“SEC”) for the fiscal year ended March 31, 2023.
The Company cautions that the foregoing 2023 financial information is unaudited and is subject to change.
************************
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.
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 2024. 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.
**Financial Tables Follow**
| TARO PHARMACEUTICAL INDUSTRIES LTD. | ||||||||
| SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| (U.S. dollars in thousands, except share data) | ||||||||
| Quarter Ended June 30, | ||||||||
|
2023 |
2022 |
|||||||
| (unaudited) | (unaudited) | |||||||
| Sales, net |
$ |
158,894 |
|
$ |
156,665 |
|
||
| Cost of sales |
|
94,810 |
|
|
75,059 |
|
||
| Gross profit |
|
64,084 |
|
|
81,606 |
|
||
| Operating Expenses: | ||||||||
| Research and development |
|
16,145 |
|
|
11,508 |
|
||
| Selling, marketing, general and administrative |
|
55,861 |
|
|
56,122 |
|
||
| Operating income/(loss) * |
|
(7,922 |
) |
|
13,976 |
|
||
| Financial (income) expense, net: | ||||||||
|
Interest and other financial income |
|
(10,890 |
) |
|
(1,926 |
) |
||
| Foreign exchange (income)/expense |
|
(2,083 |
) |
|
294 |
|
||
| Other gain, net |
|
390 |
|
|
445 |
|
||
| Income/(loss) before income taxes |
|
5,440 |
|
|
16,053 |
|
||
| Tax expense/(benefit) |
|
(4,593 |
) |
|
1,974 |
|
||
| Net income/(loss) * |
$ |
10,033 |
|
$ |
14,079 |
|
||
| Net income/(loss) per ordinary share: | ||||||||
| Basic and Diluted * |
$ |
0.27 |
|
$ |
0.37 |
|
||
| Weighted-average number of shares used to compute net income/(loss) per share: | ||||||||
| Basic and Diluted |
|
37,584,891 |
|
|
37,584,891 |
|
||
| May not foot due to rounding. | ||||||||
| TARO PHARMACEUTICAL INDUSTRIES LTD. | |||||||
| SUMMARY CONSOLIDATED BALANCE SHEETS | |||||||
| (U.S. dollars in thousands) | |||||||
| June 30, | March 31, | ||||||
|
2023 |
2023 |
||||||
| ASSETS | (unaudited) | (audited) | |||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents |
$ |
124,165 |
$ |
154,495 |
|||
| Short-term bank deposits |
|
119,980 |
|
119,980 |
|||
| Marketable securities |
|
562,008 |
|
575,814 |
|||
| Accounts receivable and other: | |||||||
| Trade, net |
|
226,873 |
|
202,260 |
|||
| Other receivables and prepaid expenses |
|
56,555 |
|
57,210 |
|||
| Inventories |
|
204,592 |
|
226,669 |
|||
| TOTAL CURRENT ASSETS |
|
1,294,173 |
|
1,336,428 |
|||
| Marketable securities |
|
451,174 |
|
404,896 |
|||
| Property, plant and equipment, net |
|
189,590 |
|
190,139 |
|||
| Deferred income taxes |
|
101,386 |
|
103,672 |
|||
| Goodwill |
|
17,231 |
|
17,231 |
|||
| Other assets |
|
81,495 |
|
83,147 |
|||
| TOTAL ASSETS |
$ |
2,135,049 |
$ |
2,135,513 |
|||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Trade payables |
$ |
59,368 |
$ |
68,485 |
|||
| Other current liabilities |
|
325,638 |
|
317,064 |
|||
| TOTAL CURRENT LIABILITIES |
|
385,006 |
|
385,549 |
|||
| Deferred taxes and other long-term liabilities |
|
11,511 |
|
19,106 |
|||
| TOTAL LIABILITIES |
|
396,517 |
|
404,655 |
|||
| Taro shareholders’ equity |
|
1,738,532 |
|
1,730,858 |
|||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
2,135,049 |
$ |
2,135,513 |
|||
| TARO PHARMACEUTICAL INDUSTRIES LTD. | |||||||||
| SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (U.S. dollars in thousands) | |||||||||
| Quarter Ended June 30, | |||||||||
|
2023 |
2022 |
||||||||
| (unaudited) | (unaudited) | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income |
$ |
10,033 |
|
$ |
14,079 |
|
|||
| Adjustments required to reconcile net income (loss) to net cash used in operating activities: | |||||||||
| Depreciation and amortization |
|
7,892 |
|
|
6,978 |
|
|||
| Change in derivative instruments, net |
|
— |
|
|
(24 |
) |
|||
| Effect of change in exchange rate on marketable securities and bank deposits |
|
(953 |
) |
|
747 |
|
|||
| Deferred income taxes, net |
|
2,379 |
|
|
2,415 |
|
|||
| Increase in trade receivables, net |
|
(24,814 |
) |
|
(19,321 |
) |
|||
| Decrease (increase) in inventories, net |
|
21,977 |
|
|
(6,566 |
) |
|||
| Decrease (increase) in other receivables, income tax receivables, prepaid expenses and other |
|
505 |
|
|
(467 |
) |
|||
| Decrease in trade, income tax, accrued expenses and other payables |
|
(6,513 |
) |
|
(59,819 |
) |
|||
| (Income)/expense from amortization of marketable securities bonds, net |
|
(2,729 |
) |
|
3,950 |
|
|||
| Net cash provided by (used in) operating activities |
|
7,777 |
|
|
(58,028 |
) |
|||
| Cash flows from investing activities: | |||||||||
| Purchase of plant, property & equipment, net |
|
(6,793 |
) |
|
(2,074 |
) |
|||
| Investment in other intangible assets |
|
(51 |
) |
|
(34 |
) |
|||
| Proceeds from short-term bank deposits, net |
|
— |
|
|
25,000 |
|
|||
| Investment in long-term deposits and other assets |
|
— |
|
|
(73 |
) |
|||
| (Investment in) proceeds from marketable securities, net |
|
(31,860 |
) |
|
11,936 |
|
|||
| Net cash used in investing activities |
|
(38,704 |
) |
|
34,755 |
|
|||
| Cash flows from financing activities: | |||||||||
| Net cash used in financing activities |
|
— |
|
|
— |
|
|||
| Effect of exchange rate changes on cash and cash equivalents |
|
597 |
|
|
(2,060 |
) |
|||
| Decrease in cash and cash equivalents |
|
(30,330 |
) |
|
(25,333 |
) |
|||
| Cash and cash equivalents at beginning of period |
|
154,495 |
|
|
251,134 |
|
|||
| Cash and cash equivalents at end of period |
$ |
124,165 |
|
$ |
225,801 |
|
|||
| Cash Paid during the year for: | |||||||||
| Income taxes |
$ |
261 |
|
$ |
2,410 |
|
|||
| Cash Received during the year for: | |||||||||
| Income taxes |
$ |
— |
|
$ |
12,511 |
|
|||
| Non-cash investing transactions: | |||||||||
| Purchase of property, plant and equipment included in accounts payable |
$ |
740 |
|
$ |
1,232 |
|
|||
| Non-cash financing transactions: | |||||||||
| Purchase of marketable securities, net |
$ |
3,023 |
|
$ |
2,050 |
|
|||
| Sale of marketable securities |
$ |
157 |
|
$ |
— |
|
|||
Contacts
William J. Coote
VP, CFO
(914) 345-9001
William.Coote@taro.com