Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the
“Company”) today provided unaudited financial results for the
quarter and six months ended September 30, 2022.
Quarter ended September 30, 2022* Highlights ─ compared to
September 30, 2021
- Net sales of $130.5 million decreased, principally due to the
continued price decline particularly in the U.S. generic business,
as well as a one-time gross-to-net (“GTN”) adjustment.
- Gross profit of $47.0 million (36.0% of net sales) compared to
$62.0 million (47.0% of net sales).
- Research and development (R&D) expenses of $11.5 million
decreased slightly.
- Selling, marketing, general and administrative expenses
(SG&A) of $42.3 million increased $18.6 million.
- Operating loss of $(6.8) million compared to operating income
of $24.4 million. The current year quarter operating loss is
primarily attributable to the aforementioned price erosion and GTN
adjustment, as well as the on-going impact associated with the
integration of our recent acquisition.
- Interest and other financial income of $4.3 million increased
$1.9 million.
- Tax benefit of $2.1 million compared to tax expense of $6.1
million in the prior year quarter.
- Net loss attributable to Taro was $(2.8) million compared to
net income of $23.3 million, resulting in (loss) per share of
$(0.07) compared to earnings per share of $0.62. Excluding the
impact from the settlement and loss contingencies charges in the
prior year quarter, net income was $24.7 million, resulting in
earnings per share of $0.66.
Six Months ended September 30, 2022* Highlights ─ compared to
September 30, 2021
- Net sales of $287.2 million increased $8.1 million.
- Gross profit of $128.6 million (44.8% of net sales compared to
50.1%) decreased $11.2 million.
- R&D expenses of $23.0 million decreased $2.4 million.
- SG&A of $98.4 million increased $50.7 million.
- Operating income of $7.2 million compared to $5.2 million,
Excluding the impact from the settlement and loss contingencies
charges in the prior year, operating income was $66.6 million. The
current year operating income primarily reflects the six-month
impact of the factors mentioned above.
- Interest and other financial income of $6.2 million increased
from $5.4 million.
- Net income attributable to Taro was $11.3 million compared to
$4.6 million, resulting in earnings per share of $0.30 compared to
earnings per share of $0.12. Excluding the impact from the
settlement and loss contingencies charges in the prior year, net
income was $66.0 million, resulting in diluted earnings per share
of $1.75.
Cash Flow and Balance Sheet Highlights
- Cash flow used in operations for the six months ended September
30, 2022 was $37.7 million compared to $8.0 million for the six
months ended September 30, 2021. Excluding the impact from the
settlement and loss contingencies charges in both periods, cash
flow provided by operations was $30.0 million compared to $94.9
million for the six months ended September 30, 2021.
- As of September 30, 2022, cash and cash equivalents, short-term
bank deposits and marketable securities (both short- and long-term)
decreased $58.9 million to $1.2 billion from March 31, 2022;
principally the result of a $67.6 million settlement payment to the
Direct Purchaser Plaintiff (“DPP”) class in the In re: Generic
Pharmaceuticals Pricing Antitrust Litigation, MDL No. 2724.
* The September 30, 2022 results include six months’ results
from the February 28th acquisition of Alchemee.
FDA Approvals and
Filings
The Company currently has a total of nineteen ANDAs awaiting FDA
approval, including three tentative approvals.
The Company cautions that the foregoing 2022 financial
information (including Alchemee) 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 2023. 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 Six Months Ended September 30,
September 30,
2022
2021
2022
2021
Sales, net
$
130,498
$
131,986
$
287,163
$
279,099
Cost of sales
83,536
69,941
158,595
139,356
Gross profit
46,962
62,045
128,568
139,743
Operating Expenses: Research and development
11,522
12,495
23,030
25,448
Selling, marketing, general and administrative
42,255
23,684
98,377
47,660
Settlements and loss contingencies
—
1,420
—
61,420
Operating (loss) income *
(6,815
)
24,446
7,161
5,215
Financial (income) expense, net: Interest and
other financial income
(4,296
)
(2,371
)
(6,222
)
(5,413
)
Foreign exchange (income) expense
2,788
(264
)
3,082
11
Other gain, net
395
2,340
839
2,724
Income (loss) before income taxes
(4,913
)
29,421
11,140
13,341
Tax (benefit) expense
(2,100
)
6,104
(126
)
8,792
Net (loss) income attributable to Taro *
$
(2,813
)
$
23,317
$
11,266
$
4,549
Net (loss) income per ordinary share attributable
to Taro: Basic and Diluted *
$
(0.07
)
$
0.62
$
0.30
$
0.12
Weighted-average number of shares used to compute
net (loss) income per share: Basic and Diluted
37,584,891
37,600,580
37,584,891
37,696,975
May not foot due to rounding.
Note: Quarter and six months ended September 30, 2022 includes
results from Alchemee (acquired February 28, 2022).
* Excluding the settlement and loss contingencies charges of
$1.4 million for the quarter ended September 30, 2021, Operating
income was $25.9 million, Net income attributable to Taro was $24.7
million, and basic and diluted earnings per share was $0.66.
Excluding the settlement and loss contingencies charges of $61.4
million for the six months ended September 30, 2021, Operating
income was $66.6 million, Net income attributable to Taro was $66.0
million, and basic and diluted earnings per share was $1.75.
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED
BALANCE SHEETS (U.S. dollars in thousands)
September 30,
March 31,
2022
2022
ASSETS (unaudited) (audited) CURRENT ASSETS: Cash and cash
equivalents
$
175,191
$
251,134
Short-term bank deposits
95,630
47,586
Marketable securities
568,671
522,028
Accounts receivable and other: Trade, net
248,495
246,972
Other receivables and prepaid expenses
53,097
59,727
Inventories
215,524
210,439
TOTAL CURRENT ASSETS
1,356,608
1,337,886
Marketable securities
357,586
435,189
Property, plant and equipment, net
191,489
199,692
Deferred income taxes
124,167
124,882
Goodwill
12,718
11,820
Other assets
64,711
66,893
TOTAL ASSETS
$
2,107,279
$
2,176,362
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Trade payables
$
61,356
$
68,232
Other current liabilities
313,495
363,886
TOTAL CURRENT LIABILITIES
374,851
432,118
Deferred taxes and other long-term liabilities
26,148
32,799
TOTAL LIABILITIES
400,999
464,917
Taro shareholders' equity
1,706,280
1,711,445
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
2,107,279
$
2,176,362
Note: September 30, 2022, includes the Balance Sheet of Alchemee
(acquired February 28, 2022).
TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED
STATEMENTS OF CASH FLOWS (U.S. dollars in thousands)
Six Months Ended September 30,
2022
2021
(unaudited)
(unaudited)
Cash flows from operating activities: Net income
(loss)
$
11,266
$
4,549
Adjustments required to reconcile net income (loss) to net cash
used in operating activities: Depreciation and amortization
13,994
12,795
Realized loss on sale of long-lived assets
—
551
Change in derivative instruments, net
(24
)
(314
)
Effect of change in exchange rate on marketable securities and bank
deposits
1,358
404
Deferred income taxes, net
2,245
16,927
Increase (decrease) in trade receivables, net
(2,071
)
16,868
Increase in inventories, net
(5,316
)
(2,636
)
Decrease (increase) in other receivables, income tax receivables,
prepaid expenses and other
5,739
(2,472
)
Decrease in trade, income tax, accrued expenses and other payables
(71,798
)
(59,982
)
Expense from amortization of marketable securities bonds, net
6,940
5,287
Net cash used in operating activities
(37,667
)
(8,023
)
Cash flows from investing activities: Purchase of
plant, property & equipment, net
(3,443
)
(5,831
)
Investment in other intangible assets
(68
)
(107
)
Investment in short-term bank deposits, net
(48,044
)
(35,573
)
Proceeds from (investment in) marketable securities, net
15,516
(6,442
)
Net cash used in investing activities
(36,039
)
(47,953
)
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
(2,237
)
(599
)
Decrease in cash and cash equivalents
(75,943
)
(81,509
)
Cash and cash equivalents at beginning of period
251,134
605,177
Cash and cash equivalents at end of period
$
175,191
$
523,668
Cash Paid during the year for: Income taxes
$
3,091
$
4,532
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
$
3,206
$
702
Non-cash financing transactions: Purchase of marketable
securities, net
$
6,199
$
630
Note: September 30, 2022, includes the Balance Sheet of Alchemee
(acquired February 28, 2022).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221027006161/en/
William J. Coote VP, CFO (914) 345-9001
William.Coote@taro.com
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