Taro Provides Results for the Quarter Ended June 30, 2023

Taro Pharmaceutical Industries Ltd. provided unaudited financial results for the quarter ended June 30, 2023.

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

   

$

   

View source version on businesswire.com: https://www.businesswire.com/news/home/20230726580223/en/

Contacts

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

Source: Taro Pharmaceutical Industries Ltd.

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