Taro Pharmaceutical Industries Ltd. (NYSE:TARO) (“Taro” or the
“Company”) today provided unaudited financial results for the
quarter and year ended March 31, 2018.
Quarter ended March 31, 2018 Highlights ─ compared to
March 31, 2017
- Net sales of $175.2 million decreased
$21.2 million, the result of continuing increased competition and
the challenging pricing environment, particularly in the U.S.;
despite an increase in overall volumes.
- Gross profit of $118.9 million
decreased $24.9 million, and as a percentage of net sales was 67.9%
compared to 73.2%.
- Research and development (R&D)
expenses of $20.3 million increased slightly from the comparable
quarter.
- Selling, marketing, general and
administrative expenses (SG&A) increased $1.6 million to $23.8
million.
- Operating income of $74.8 million
decreased $26.9 million and as a percentage of net sales was 42.7%
as compared to 51.8%.
- Interest and other financial income
increased $2.2 million to $5.9 million.
- Foreign Exchange (FX) income of $16.0
million compared to FX expense of $5.8 million ─ a favorable impact
of $21.9 million, principally the result of the weakening of the
Canadian dollar vs. the U.S. dollar.
- Tax expense decreased $6.6 million to
$10.7 million resulting in an effective tax rate of 11.0% compared
to 17.3%.
- Net income attributable to Taro was
$86.3 million compared to $83.0 million, resulting in diluted
earnings per share of $2.17 compared to $2.05 for the same period
last year.
Year ended March 31, 2018 Highlights ─ compared to
March 31, 2017
- Net sales of $661.9 million decreased
$217.5 million, the result of continuing increased competition and
the challenging pricing environment; despite an increase in overall
volumes.
- Gross profit of $463.5 million
decreased $207.7 million and as a percentage of net sales was 70.0%
compared to 76.3%.
- R&D expenses of $70.4 million were
relatively in line with the prior year.
- SG&A expenses of $88.2 million
increased $2.5 million.
- Operating income of $303.0 million
decreased $211.9 million, and as a percentage of net sales was
45.8% as compared to 58.6%.
- Interest and other financial income
increased $5.5 million to $19.9 million.
- FX expense of $32.5 million compared to
FX income of $20.2 million in 2017 ─ an unfavorable impact of $52.6
million, principally the result of the strength of the Canadian
dollar vs. U.S. dollar.
- Other income of $1.9 million decreased
$9.3 million, principally due to the sale of Keveyis in December
2016.
- Tax expense decreased $21.8 million to
$82.0 million, however, the effective tax rate increased to 28.0%
from 18.5%. During the third quarter, the Company recorded a $38.0
million expense for the impact of the re-measurement of the
Company's estimated net deferred tax asset, as a result of the Tax
Cuts and Jobs Act. Excluding the impact from the one-time
re-measurement, tax expense would have been $44.0 million with an
effective tax rate of 15.0%.
- Net income attributable to Taro was
$211.2 million compared to $456.4 million, resulting in diluted
earnings per share of $5.26 compared to $11.05. Excluding the
impact of the one-time tax re-measurement, net income attributable
to Taro would have been $248.0 million, or diluted earnings per
share of $6.18.
Mr. Uday Baldota, Taro’s CEO stated, “Our results reflect the
challenges that the entire U.S. generic industry has faced, and
continues to encounter. While we continue to invest prudently in
developing products, we have a reasonably good pipeline; some of
which will come to market over the next 24 months. We also continue
to look at initiatives and opportunities in areas of our core
strengths and potentially some adjacent areas as well.”
Cash Flow and Balance Sheet
Highlights
- Cash flow provided by operations for
the year ended March 31, 2018, was $323.7 million compared to
$437.5 million for the year ended March 31, 2017.
- As of March 31, 2018, cash, including
short-term and long-term bank deposits and marketable securities,
increased $190.8 million to $1.6 billion from March 31, 2017. Cash
reflects the $107.0 million impact from the Company’s share
repurchases during the current fiscal year.
FDA Approvals and
Filings
The Company recently received approval from the U.S. Food and
Drug Administration (“FDA”) for an Abbreviated New Drug
Applications (“ANDA”): Clobetasol Propionate Spray, 0.05%. The
Company currently has a total of thirty-two ANDAs awaiting FDA
approval, including four tentative approvals. Taro's onychomycosis
drug, Novexatin, did not meet the main goal of the Phase IIb study.
The study data is being analyzed and we are evaluating the next
course of action in the program.
Share Repurchase Program - Returning
Capital to Shareholders
On November 23, 2016, the Company announced that its Board of
Directors approved a $250 million share repurchase of ordinary
shares. Under this authorization, 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. 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. On November 7,
2017, the Board extended the share repurchase program for one
year.
During the year, the Company repurchased 1,085,694 shares at an
average price of $102.52. Through May 1, 2018, in total under the
authorization, the Company has repurchased 1,774,064 shares at
an average price of $102.83; with $67.6 million remaining.
Earnings Call (8:00 am EDT,
May 18, 2018)
As previously announced, the Company will host an earnings call
at 8:00 am EDT on Friday, May 18, 2018, 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: 3249428
- Participant International Dial-In
Number: +1 (716) 247-5800 ID: 3249428
- 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 thirteen (13) 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.
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 2019. 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 Year Ended March 31,
March 31, 2018
2017 2018
2017 (unaudited)
(unaudited) (unaudited) (audited)
Sales, net $
175,216 $ 196,414 $ 661,913
$ 879,387 Cost of sales 56,287 52,494 198,405 207,860
Impairment — 92 —
276
Gross profit 118,929 143,828
463,508 671,251 Operating Expenses: Research
and development 20,308 19,878 70,418 70,644 Selling, marketing,
general and administrative 23,775 22,206 88,196 85,656 Settlements
and loss contingencies 24 —
1,884 —
Operating income 74,822
101,744 303,010 514,951 Financial
(income) expense, net: Interest and other financial income (5,894 )
(3,654 ) (19,934 ) (14,468 ) Foreign exchange (income) expense
(16,041 ) 5,830 32,465 (20,168 ) Other gain, net 458
745 1,889 11,211 Income
before income taxes 97,215 100,313 292,368 560,798 Tax expense
10,691 17,313 81,954
103,780
Income from continuing operations
86,524 83,000 210,414 457,018 Net loss
from discontinued operations attributable to Taro (96 )
(38 ) (335 ) (352 ) Net income 86,428 82,962
210,079 456,666 Net income (loss) attributable to non-controlling
interest 141 (23 ) (1,071 ) 310
Net income attributable to Taro $
86,287 $ 82,985 $
211,150 $ 456,356
Net income per ordinary share from
continuingoperations attributable to Taro:
Basic and Diluted $ 2.17 $ 2.05 $ 5.27 $ 11.06
Net loss per ordinary share from
discontinued operationsattributable to Taro:
Basic and Diluted $ (0.00 ) * $ (0.00 ) * $ (0.01 ) $ (0.01 )
Net income per ordinary share attributable to Taro:
Basic and Diluted $ 2.17 $ 2.05 $ 5.26 $ 11.05
Weighted-average number of shares used
to compute netincome per share:
Basic and Diluted 39,729,942 40,566,815
40,155,087 41,300,797 * 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, 2018
2017 ASSETS (unaudited) (audited) CURRENT ASSETS:
Cash and cash equivalents $ 576,611 $ 600,399 Short-term and
current maturities of long-term bank deposits 296,188 782,813
Marketable securities 549,821 3,548 Accounts receivable and other:
Trade, net 206,455 203,924 Other receivables and prepaid expenses
122,965 266,280 Inventories 144,595 141,045 Long-term assets held
for sale, net — 1,015
TOTAL CURRENT ASSETS
1,896,635 1,999,024 Long-term deposits and marketable
securities 225,639 70,685 Property, plant and equipment, net
193,727 180,085 Deferred income taxes 87,257 10,324 Other assets
29,952 29,635
TOTAL ASSETS $
2,433,210 $ 2,289,753 LIABILITIES
AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $
25,697 $ 16,394 Other current liabilities 190,059
193,443
TOTAL CURRENT LIABILITIES 215,756
209,837 Deferred taxes and other long-term liabilities
7,055 6,110
TOTAL LIABILITIES 222,811
215,947 Taro shareholders' equity 2,205,158 2,067,494
Non-controlling interest 5,241 6,312
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,433,210
$ 2,289,753
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED
STATEMENTS OF CASH FLOWS (U.S. dollars in thousands)
Year Ended March 31, 2018 2017
(unaudited) (audited)
Cash flows from operating
activities: Net income $ 210,079 $
456,666 Adjustments required to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 16,496 14,829 Impairment of long-lived assets — 276
Realized loss (gain) on sale of marketable securities and
long-lived assets 275 (8,389 ) Change in derivative instruments,
net (893 ) 1,434 Effect of change in exchange rate on inter-company
balances, marketable securities and bank deposits 34,970 (21,174 )
Deferred income taxes, net 56,007 73,706 (Increase) decrease in
trade receivables, net (2,297 ) 34,413 Increase in inventories, net
(1,978 ) (3,770 ) Decrease (increase) in other receivables, income
tax receivable, prepaid expenses and other 12,644 (75,219 )
Decrease in trade, income tax, accrued expenses, and other payables
(936 ) (35,237 ) Income from marketable securities, net (678
) —
Net cash provided by operating activities
323,689 437,535
Cash flows from investing activities: Purchase of plant,
property & equipment (26,886 ) (35,755 ) Investment in other
intangible assets (2,650 ) (68 ) Proceeds from short-term bank
deposits, net 161,032 196,170 Proceeds from (investment in)
long-term deposits and other assets 396,281 (286,607 ) Investment
in marketable securities, net (770,490 ) (26 ) Proceeds from the
sale of long-lived assets 1,075 8,508
Net cash used in investing activities (241,638
) (117,778 ) Cash flows from
financing activities: Purchase of treasury stock
(106,986 ) (294,897 )
Net cash used in financing
activities (106,986 )
(294,897 ) Effect of exchange rate changes
on cash and cash equivalents 1,147 (1,218
)
(Decrease) increase in cash and cash equivalents (23,788 )
23,642
Cash and cash equivalents at beginning of period
600,399 576,757
Cash and cash
equivalents at end of period $ 576,611
$ 600,399 Cash Paid during the year
for: Income taxes $ 55,051 $ 99,720
Cash
Received during the year for: Income taxes $ 36,668 $
1,938
Non-cash investing transactions: Purchase of
property, plant and equipment included in accounts payable $ 2,281
$ 692
Non-cash financing transactions:
Purchase of treasury stock $ 4,348 $ — Purchase of
marketable securities $ 3,491 $ —
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180517006437/en/
Taro Pharmaceutical Industries Ltd.Mariano Balaguer,
914-345-9001VP, Chief Financial
OfficerMariano.Balaguer@Taro.comorWilliam J. Coote,
914-345-9001AVP, Business Finance, Treasurer and Investor
RelationsWilliam.Coote@Taro.com
Taro Pharmaceutical Indu... (NYSE:TARO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Taro Pharmaceutical Indu... (NYSE:TARO)
Historical Stock Chart
From Apr 2023 to Apr 2024