Taro Provides Results for Year Ended March 31, 2023

HAWTHORNE, N.Y.--(BUSINESS WIRE)-- Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter and year ended March 31, 2023.

Quarter ended March 31, 2023* Highlights ─ compared to March 31, 2022

  • Net sales of $146.6 million increased $3.3 million, or 2.3%.
  • Gross profit of $75.7 million (51.6% of net sales) compared to $77.3 million (54.0% of net sales).
  • Research and development (R&D) expenses of $16.3 million increased $1.4 million.
  • Selling, marketing, general and administrative expenses (SG&A) of $50.1 million increased $9.0 million.
  • Operating income of $9.3 million compared to operating income of $21.3 million.
  • Interest and other financial income of $8.0 million increased $7.4 million.
  • Foreign Exchange (FX) expense of $0.5 million compared to FX income of $2.5 million ─ an unfavorable impact of $3.0 million.
  • Tax expense of $11.0 million compared to a tax benefit of $2.4 million ─ an unfavorable impact of $13.4 million.
  • Net income attributable to Taro was $6.9 million compared to net income of $27.4 million, resulting in earnings per share of $0.18 compared to earnings per share of $0.73.

Year ended March 31, 2023* Highlights ─ compared to March 31, 2022

  • Net sales of $573.0 million increased $11.6 million.
  • Gross profit of $268.3 million (46.8% of net sales compared to 52.2%) decreased $24.8 million.
  • R&D expenses of $52.2 million decreased $2.3 million.
  • SG&A of $198.4 million increased $84.7 million.
  • In the prior year, settlements and loss contingencies of $61.4 million consisted of a $60.0 million legal contingency related to ongoing multi-jurisdiction civil antitrust matters and $1.4 million related to the global resolution with the Department of Justice (“DOJ”) in connection with its investigations into the U.S. generic pharmaceutical industry.
  • Operating income of $17.7 million compared to $63.5 million. Excluding the $61.4 million impact from the settlement and loss contingencies charges in the prior year, operating income was $124.9 million.
  • Interest and other financial income of $20.9 million increased $12.7 million.
  • FX expense of $2.8 million compared to FX income of $2.0 million ─ an unfavorable impact of $4.8 million.
  • Tax expense of $12.8 million compared to tax expense of $19.6 million, a decrease of $6.8 million.
  • Net income attributable to Taro was $25.4 million compared to $58.3 million, resulting in earnings per share of $0.68 compared to earnings per share of $1.55. Excluding the impact from the settlement and loss contingencies charges in the prior year, net income was $126.4 million, resulting in diluted earnings per share of $3.36.

Cash Flow and Balance Sheet Highlights

  • Cash flow provided by operations for the year ended March 31, 2023 was $31.8 million compared to cash used in operations of $158.7 million for the year ended March 31, 2022. Excluding the impact from the settlement payments and settlement and loss contingencies charges impacting both periods, cash flow provided by operations was $99.0 million compared to $165.6 million for the year ended March 31, 2022.
  • As of March 31, 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, 2022; principally the result of settlement payments.

* The March 31, 2023 results include full-year results from the February 28, 2022 acquisition of Alchemee.

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
(U.S. dollars in thousands, except share data)
               
  Quarter Ended   Twelve Months Ended
  March 31st   March 31st
   

2023

     

2022

     

2023

     

2022

 
Sales, net

$

146,587

   

$

143,264

   

$

572,952

   

$

561,347

 
Cost of sales  

70,879

     

65,919

     

304,629

     

268,212

 
Impairment  

     

     

     

13

 
Gross profit  

75,708

     

77,345

     

268,323

     

293,122

 
               
Operating Expenses:              
Research and development  

16,306

     

14,892

     

52,243

     

54,540

 
Selling, marketing, general and administrative  

50,128

     

41,175

     

198,366

     

113,677

 
Settlements and loss contingencies  

     

     

     

61,446

 
Operating income *  

9,274

     

21,278

     

17,714

     

63,459

 
               
Financial (income) expense, net:              
Interest and other financial income  

(8,036

)

   

(685

)

   

(20,850

)

   

(8,187

)

Foreign exchange (income) expense  

469

     

(2,541

)

   

2,813

     

(1,986

)

Other gain, net  

1,059

     

512

     

2,462

     

4,226

 
Income before income taxes  

17,900

     

25,016

     

38,213

     

77,858

 
Tax expense  

10,987

     

(2,388

)

   

12,768

     

19,592

 
Net income attributable to Taro *

$

6,913

   

$

27,404

   

$

25,445

   

$

58,266

 
               
Net income per ordinary share attributable to Taro:              
Basic and Diluted *

$

0.18

   

$

0.73

   

$

0.68

   

$

1.55

 
Diluted

$

0.18

   

$

0.73

   

$

0.68

   

$

1.55

 
               
Weighted-average number of shares used to compute net income per share:              
Basic and Diluted  

37,584,891

     

37,584,891

     

37,584,891

     

37,641,087

 
               
May not foot due to rounding.              

Note: Quarter and year ended March 2023 includes results from Alchemee (acquired February 28, 2022).

* Excluding the settlement and loss contingencies charges of $61.4 million for the year ended March 31, 2022, Operating income was $124.9 million, Net income attributable to Taro was $126.4 million, and basic and diluted earnings per share was $3.36.

 
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
         
    March 31,   March 31,
   

2023

 

2022

ASSETS   (unaudited)   (audited)
CURRENT ASSETS:        
Cash and cash equivalents  

$

154,495

 

$

251,134

Short-term bank deposits    

119,980

   

47,586

Marketable securities    

575,814

   

522,028

Accounts receivable and other:        
Trade, net    

202,260

   

246,973

Other receivables and prepaid expenses    

57,210

   

59,726

Inventories    

226,669

   

210,439

TOTAL CURRENT ASSETS    

1,336,428

   

1,337,886

Marketable securities    

404,896

   

435,189

Property, plant and equipment, net    

190,139

   

199,692

Deferred income taxes    

103,672

   

124,882

Goodwill    

17,231

   

11,820

Other assets    

83,147

   

66,892

TOTAL ASSETS  

$

2,135,513

 

$

2,176,361

         
LIABILITIES AND SHAREHOLDERS' EQUITY        
CURRENT LIABILITIES:        
Trade payables  

$

68,485

 

$

68,232

Other current liabilities    

317,064

   

363,887

TOTAL CURRENT LIABILITIES    

385,549

   

432,119

Deferred taxes and other long-term liabilities    

19,106

   

32,799

TOTAL LIABILITIES    

404,655

   

464,918

         
Taro shareholders' equity    

1,730,858

   

1,711,443

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  

$

2,135,513

 

$

2,176,361

 
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
         
    Twelve Months Ended March 31,
     

2023

     

2022

 
    (unaudited)   (audited)
Cash flows from operating activities:        
Net income  

$

25,445

   

$

58,266

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

32,127

     

25,915

 
Impairment of long-lived assets    

     

13

 
Realized loss on sale of long-lived assets    

136

     

689

 
Change in derivative instruments, net    

(24

)

   

(631

)

Adjustments to Opening Balance-Sheet (PPA)    

(15,292

)

   

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

2,291

     

(449

)

Deferred income taxes, net    

16,802

     

23,200

 
Increase (decrease) in trade receivables, net    

37,482

     

(6,229

)

Increase in inventories, net    

(16,922

)

   

(2,082

)

Increase (decrease) in other receivables, income tax receivables, prepaid expenses and other    

2,240

     

(5,451

)

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

(60,707

)

   

(265,278

)

Expense from amortization of marketable securities bonds, net    

8,172

     

13,339

 
Net cash provided by (used in) operating activities    

31,750

     

(158,698

)

         
Cash flows from investing activities:        
Purchase of plant, property & equipment, net    

(17,553

)

   

(11,796

)

Acquisition, net of cash acquired    

     

(91,872

)

Investment in other intangible assets    

(294

)

   

(243

)

Investment in short-term bank deposits, net    

(72,394

)

   

(47,586

)

Proceeds from (investment in) marketable securities, net    

(33,315

)

   

(19,084

)

Investment in other investments    

(2,000

)

   

 
Net cash used in investing activities    

(125,556

)

   

(170,581

)

         
Cash flows from financing activities:        
Purchase of treasury stock    

     

(24,934

)

Net cash used in financing activities    

     

(24,934

)

         
Effect of exchange rate changes on cash and cash equivalents    

(2,833

)

   

170

 
Decrease in cash and cash equivalents    

(96,639

)

   

(354,043

)

Cash and cash equivalents at beginning of period    

251,134

     

605,177

 
Cash and cash equivalents at end of period  

$

154,495

   

$

251,134

 
         
Cash Paid during the year for:        
Income taxes  

$

4,175

   

$

7,753

 
Cash Received during the year for:        
Income taxes  

$

14,156

   

$

2,351

 
Non-cash investing transactions:        
Purchase of property, plant and equipment included in accounts payable  

$

1,242

   

$

1,468

 
Non-cash financing transactions:        
Purchase of intangible assets  

$

   

$

 
Purchase of treasury stock  

$

   

$

 
Purchase of marketable securities, net  

$

3,038

   

$

3,890

 
Sale of marketable securities  

$

(314

)

 

$

21

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230523006054/en/

Contacts

William J. Coote
VP, CFO
(914) 345-9001
William.Coote@taro.com

Source: Taro Pharmaceutical Industries Ltd.

Back to news