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home / news releases / TARO - Taro Provides Results for September 30 2023


TARO - Taro Provides Results for September 30 2023

Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter and six months ended September 30, 2023.

Quarter ended September 30, 2023 Highlights ? compared to September 30, 2022

  • Net sales of $148.2 million increased, in part, due to a one-time gross-to-net (“GTN”) adjustment. Excluding the impact of the one-time GTN adjustments in both quarters, the sales growth was mid-single-digits.
  • Gross profit of $73.6 million (49.7% of net sales) compared to $47.0 million (36.0% of net sales).
  • Research and development (R&D) expenses of $14.3 million increased $2.8 million, principally the result of increased clinical studies.
  • Selling, marketing, general and administrative expenses (SMG&A) of $54.5 million included certain one-time charges of $6.1 million principally related to work performed by the Special Committee that was established by the Taro Board to consider the proposal submitted by Sun Pharmaceutical Industries Ltd. on May 26, 2023. Excluding these charges, SMG&A was $48.4 million compared to $42.3 million.
  • Operating income was $4.7 million; excluding the impact from the certain one-time charges, operating income was $10.9 million compared to operating loss of $(6.8) million in the previous year quarter.
  • Interest and other financial income of $14.0 million increased $9.7 million.
  • Tax expense of $9.1 million compared to a tax benefit of $2.1 million in the prior year quarter.
  • Net income was $8.5 million compared to net loss of $(2.8) million, resulting in earnings per share of $0.23 compared to loss per share of $(0.07). Excluding the impact of the aforementioned certain one-time charges, net income was $14.3 million, resulting in earnings per share of $0.38.

Six Months ended September 30, 2023 Highlights ? compared to September 30, 2022

  • Net sales of $307.1 million increased $19.9 million, or 6.9%.
  • Gross profit of $137.7 million (44.8% of net sales in each period) increased $9.1 million.
  • R&D expenses of $30.5 million increased $7.4 million, principally the result of increased clinical studies.
  • SMG&A of $110.4 million included certain one-time charges of $12.3 million (of which $6.2 million from the first quarter of the current year) related to the aforementioned certain one-time charges. Excluding these charges, SMG&A was $98.1 million, in line with the prior year quarter.
  • Operating loss was $(3.2) million; excluding the impact from the certain one-time charges, operating income was $9.1 million compared to $7.2 million.
  • Interest and other financial income of $24.9 million increased from $6.2 million.
  • Net income was $18.6 million compared to $11.3 million, resulting in earnings per share of $0.49 compared to earnings per share of $0.30. Excluding the impact of the aforementioned certain one-time charges, net income was $29.2 million, resulting in earnings per share of $0.78.

Cash Flow and Balance Sheet Highlights

  • Net cash provided by operations for the six months ended September 30, 2023 was $55.3 million compared to net cash used in operations of $37.7 million for the six months ended September 30, 2022.
  • As of September 30, 2023, cash and cash equivalents, short-term bank deposits and marketable securities (both short- and long-term) increased $40.2 million to $1.3 billion from 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
Six Months Ended
September 30,
September 30,

2023

2022

2023

2022

Sales, net

$

148,202

$

130,498

$

307,096

$

287,163

Cost of sales

74,600

83,536

169,410

158,595

Gross profit

73,602

46,962

137,686

128,568

Operating Expenses:
Research and development

14,325

11,522

30,470

23,030

Selling, marketing, general and administrative

54,537

42,255

110,398

98,377

Operating income/(loss) *

4,740

(6,815

)

(3,182

)

7,161

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

(13,972

)

(4,296

)

(24,862

)

(6,222

)

Foreign exchange (income)/expense

1,623

2,788

(460

)

3,082

Other gain, net

566

395

956

839

Income/(loss) before income taxes

17,655

(4,913

)

23,096

11,140

Tax expense/(benefit)

9,108

(2,100

)

4,515

(126

)

Net income/(loss) *

$

8,547

$

(2,813

)

$

18,581

$

11,266

Net income/(loss) per ordinary share:
Basic and Diluted *

$

0.23

$

(0.07

)

$

0.49

$

0.30

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

37,584,891

37,584,891

37,584,891

37,584,891

May not foot due to rounding.

* For the quarter ended September 30, 2023, excluding the impact from the certain one-time charges of $6.1 million (see page one of release for a description), operating income was $10.9 million compared to operating loss of $(6.8) million. Excluding the impact of the certain one-time charges, net income was $14.3 million, resulting in earnings per share of $0.38.

* For the six months ended September 30, 2023, excluding the impact from the certain one-time charges of $12.3 million (see page one of release for a description), operating income was $9.1 million compared to $7.2 million. Excluding the impact of the certain one-time charges, net income was $29.2 million, resulting in earnings per share of $0.78.

TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
September 30,
March 31,

2023

2023

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

$

269,011

$

154,495

Short-term bank deposits

119,980

119,980

Marketable securities

518,058

575,814

Accounts receivable and other:
Trade, net

181,064

202,260

Other receivables and prepaid expenses

46,254

57,210

Inventories

208,188

226,669

TOTAL CURRENT ASSETS

1,342,555

1,336,428

Marketable securities

388,370

404,896

Property, plant and equipment, net

189,893

190,139

Deferred income taxes

100,807

103,672

Goodwill

17,231

17,231

Other assets

80,617

83,147

TOTAL ASSETS

$

2,119,473

$

2,135,513

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables

$

43,059

$

68,485

Other current liabilities

318,429

317,064

TOTAL CURRENT LIABILITIES

361,488

385,549

Deferred taxes and other long-term liabilities

10,429

19,106

TOTAL LIABILITIES

371,917

404,655

Taro shareholders' equity

1,747,556

1,730,858

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

2,119,473

$

2,135,513

TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(U.S. dollars in thousands)
Six Months Ended September 30,

2023

2022

Cash flows from operating activities:
Net income

$

18,581

$

11,266

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

15,498

13,994

Change in derivative instruments, net

(24

)

Decrease in goodwill and intangible assets

250

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

202

1,358

Deferred income taxes, net

2,539

2,245

Decrease (increase) in trade receivables, net

20,927

(2,071

)

Decrease (increase) in inventories, net

18,356

(5,316

)

Decrease in other receivables, income tax receivables, prepaid expenses and other

10,862

5,739

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

(28,837

)

(71,798

)

(Income)/expense from amortization of marketable securities bonds, net

(3,085

)

6,940

Net cash provided by (used in) operating activities

55,293

(37,667

)

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

(13,800

)

(3,443

)

Investment in other intangible assets

(50

)

(68

)

Investment in short-term bank deposits, net

(48,044

)

Proceeds from marketable securities, net

73,716

15,516

Net cash used in (provided by) investing activities

59,866

(36,039

)

Cash flows from financing activities:
Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

(643

)

(2,237

)

Increase (decrease) in cash and cash equivalents

114,516

(75,943

)

Cash and cash equivalents at beginning of period

154,495

251,134

Cash and cash equivalents at end of period

$

269,011

$

175,191

Cash Paid during the year for:
Income taxes

$

6,232

$

3,091

Cash Received during the year for:
Income taxes

$

12,930

$

14,156

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

$

1,097

$

3,206

Non-cash financing transactions:
Purchase of marketable securities, net

$

157

$

6,199

Sale of marketable securities

$

157

$

View source version on businesswire.com: https://www.businesswire.com/news/home/20231026372692/en/

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

Stock Information

Company Name: Taro Pharmaceutical Industries Ltd.
Stock Symbol: TARO
Market: NYSE
Website: taro.com

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