Taro Provides Results for Quarter Ended June 30, 2019

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, 2019.

Quarter ended June 30, 2019 Highlights - compared to June 30, 2018

• Net sales of $161.3 million, increased $6.7 million, or 4.3%, despite a single digit decrease in volumes primarily due to category mix.
• Gross profit of $101.7 million increased $1.6 million, and as a percentage of net sales was 63.1% compared to 64.7%.
• Research and development expenses of $13.4 million remained in line with prior year.
• Selling, marketing, general and administrative expenses of $19.7 million decreased $3.9 million.
• Operating income of $68.6 million increased $5.4 million and as a percentage of net sales was 42.5% as compared to 40.8%.
• Interest and other financial income increased $1.8 million to $9.6 million.
• Foreign Exchange (FX) income of $7.9 million decreased $2.1 million the result of the strengthening of the Canadian dollar vs. the U.S. dollar.
• Tax expense of $20.4 million increased $6.3 million with the effective tax rate increasing to 23.6% from 17.3%.
• Net income attributable to Taro was $66.2 million compared to $67.3 million, resulting in diluted earnings per share of $1.72 compared to $1.71.

Cash Flow and Balance Sheet Highlights

• Cash flow provided by operations was $82.6 million compared to $82.4 million for the three months ended June 30, 2018.
• As of June 30, 2019, cash, including short-term and long-term marketable securities and bank deposits, increased $77.6 million to $1.431 billion from March 31, 2019.

Mr. Uday Baldota, Taro’s CEO stated, “Operating results of this quarter reflect the impact of many underlying challenges of our industry. Despite the headwinds, we remain steadfast in our commitment to customers and patients. We are executing on our strategy and continue to add to our portfolio of high quality products across business and markets.”

FDA Approvals and Filings

The Company recently received two approvals from the U.S. Food and Drug Administration (“FDA”) for Abbreviated New Drug Applications (“ANDAs”); Dapsone Gel, 7.5% and Iloperidone Tablets, 1 mg, 2 mg, 4 mg, 6 mg, 8 mg, 10 mg, and 12 mg. The Company currently has a total of twenty-six ANDAs awaiting FDA approval, including seven tentative approvals.

Form 20-F Filings with the SEC

On June 20, 2019, the Company filed its Annual Report on Form 20-F with the U.S. Securities and Exchange Commission (“SEC”) for the fiscal year ended March 31, 2019.

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The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.

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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 2020. 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**

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