Taro Pharmaceutical Industries Ltd.
c/o Taro Pharmaceuticals U.S.A., Inc.
Three Skyline Drive |
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Hawthorne, New York 10532
(Pink Sheets: TAROF)
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CONTACTS:
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Michael Kalb
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William J. Coote
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GVP, CFO
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VP, Treasurer
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(914) 345-9001
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(914) 345-9001
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Michael.Kalb@taro.com
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William.Coote@taro.com
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Net sales of $111.6 million, increased $13.8 million or 14.2%,
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Gross profit, as a percentage of net sales was 60.1%, compared to 58.4%,
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Selling, general and administrative expenses decreased $2.1 million, and as a percentage of net sales decreased to 22.5%, compared to 27.8%,
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Operating income increased 75.8% to $34.2 million, or 30.6% of net sales, compared to $19.4 million, or 19.9% of net sales,
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Net income attributable to Taro was $35.7 million, compared to $16.4 million, an increase of $19.3 million, resulting in diluted earnings per share of $0.80 compared to $0.40.
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Net sales of $219.3 million, increased $32.5 million or 17.4%,
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Gross profit, as a percentage of net sales was 59.4%, compared to 59.0%,
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Selling, general and administrative expenses decreased $4.5 million, and as a percentage of net sales decreased to 21.7% as compared to 27.9%,
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Operating income increased 79.9% to $67.6 million, or 30.8% of net sales, compared to $37.5 million, or 20.1% of net sales,
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Net income attributable to Taro was $61.3 million compared to $25.0 million, a $36.3 million increase, resulting in diluted earnings per share of $1.38 compared to $0.61.
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Cash flows from operations were $57.7 million compared to $24.1 million in the same period a year ago,
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Cash, including marketable securities, increased $63.3 million to $152.1 million from December 31, 2010.
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Quarter Ended | Year to Date | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010(1) | 2011 | 2010(1) |
Sales, net
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$ | 111,584 | $ | 97,751 | $ | 219,312 | $ | 186,794 | ||||||||
Cost of sales
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44,524 | 40,705 | 89,142 | 76,596 | ||||||||||||
Gross Profit
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67,060 | 57,046 | 130,170 | 110,198 |
Operating Expenses: | ||||||||||||||||
Research and development, net
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7,807 | 9,103 | 15,066 | 17,941 | ||||||||||||
Selling, marketing, general and administrative
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25,092 | 27,199 | 47,552 | 52,097 | ||||||||||||
Impairment
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- | 1,307 | - | 2,617 | ||||||||||||
Operating income
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34,161 | 19,437 | 67,552 | 37,543 |
Financial Expenses, net: | ||||||||||||||||
Interest and other financial expenses
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624 | 1,635 | 1,401 | 2,123 | ||||||||||||
Foreign exchange expense
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2,431 | (4,333 | ) | 2,840 | (527 | ) |
Other income (expense), net
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752 | 22 | 1,004 | (127 | ) | |||||||||||
Income before income taxes
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31,858 | 22,157 | 64,315 | 35,820 | ||||||||||||
Tax (benefit) expense(3)
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(4,719 | ) | 3,951 | 1,650 | 5,815 | |||||||||||
Income from continuing operations
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36,577 | 18,206 | 62,665 | 30,500 | ||||||||||||
Net loss from discontinued operations (2)
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(249 | ) | (1,666 | ) | (384 | ) | (4,888 | ) | ||||||||
Net income
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36,328 | 16,540 | 62,281 | 25,117 | ||||||||||||
Net income attributable to non-controlling interest(3)
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639 | 91 | 935 | 121 | ||||||||||||
Net income attributable to Taro
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$ | 35,689 | $ | 16,449 | $ | 61,346 | $ | 24,996 | ||||||||
Net income per ordinary share from continuing operations attributable to Taro:
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Basic
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$ | 0.81 | $ | 0.46 | $ | 1.39 | $ | 0.76 | ||||||||
Diluted
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$ | 0.81 | $ | 0.44 | $ | 1.39 | $ | 0.73 |
Net loss per ordinary share from discontinued operations attributable to Taro:
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Basic
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$ | (0.01 | ) | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.12 | ) | ||||
Diluted
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$ | (0.01 | ) | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.12 | ) |
Net income per ordinary share attributable to Taro:
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Basic
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$ | 0.80 | $ | 0.42 | $ | 1.38 | $ | 0.64 | ||||||||
Diluted
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$ | 0.80 | $ | 0.40 | $ | 1.38 | $ | 0.61 |
Weighted-average number of shares used to compute net income per share:
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Basic
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44,511,229 | 39,249,342 | 44,398,519 | 39,249,342 | ||||||||||||
Diluted
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44,568,588 | 41,434,830 | 44,505,099 | 41,203,849 |
(1)
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The 2010 information presented above is updated from the August 23, 2010 quarterly press release to reflect footnotes 2 and 3 below.
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(2)
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In 2010, the Company closed its Ireland manufacturing facility and decided to sell the facility and has therefore classified the losses attributable to its Irish subsidiary as losses from discontinued operations.
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(3)
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Represents the impact of the Company adopting FASB ASC Section 810-10-65, which requires the Company to allocate income or loss attributable to a non-controlling interest based on the respective ownership percentages.
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June 30, | December 31, | |||||||
2011
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2010
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(unaudited)
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(audited)
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$ | 107,703 | $ | 54,144 | ||||
Short-term bank deposits
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41,642 | 31,000 | ||||||
Marketable securities
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2,786 | 3,693 | ||||||
Accounts receivable and other: | ||||||||
Trade, net
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83,135 | 73,406 | ||||||
Other receivables and prepaid expenses
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68,865 | 49,251 | ||||||
Inventories
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90,910 | 83,709 | ||||||
Long-term assets held for sale, net(1)
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470 | 434 | ||||||
TOTAL CURRENT ASSETS
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395,511 | 295,637 | ||||||
Long-term receivables and other assets
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31,696 | 30,663 | ||||||
Property, plant and equipment, net
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159,424 | 163,596 | ||||||
Other assets
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50,185 | 66,546 | ||||||
TOTAL ASSETS
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$ | 636,816 | $ | 556,442 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Short-term bank credit and short-term loans
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$ | 13,417 | $ | 14,885 | ||||
Current maturities of long-term debt
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13,947 | 13,310 | ||||||
Trade payables and other current liabilities
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104,998 | 101,591 | ||||||
TOTAL CURRENT LIABILITIES
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132,362 | 129,786 | ||||||
Long-term debt, net of current maturities
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33,068 | 31,225 | ||||||
Deferred taxes and other long-term liabilities
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11,839 | 10,918 | ||||||
TOTAL LIABILITIES
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177,269 | 171,929 | ||||||
Non-controlling interest(2)
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4,136 | 3,201 | ||||||
Taro shareholders' equity
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455,411 | 381,312 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 636,816 | $ | 556,442 | ||||
(1)
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In 2010, the Company closed its Ireland manufacturing facility and decided to sell the facility and therefore has classified the related assets as held for sale.
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(2)
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Represents the impact of the Company adopting FASB ASC Section 810-10-65, which requires the Company to allocate income or loss attributable to a non-controlling interest based on the respective ownership percentages.
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Six Months Ended June 30,
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2011 | 2010(1) | |||||||
Operating Activities | ||||||||
Net income
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$ | 62,281 | $ | 25,117 | ||||
Adjustments required to reconcile net income to net cash
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provided by operating activities:
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Depreciation and amortization
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9,463 | 9,298 | ||||||
Stock-based compensation
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58 | 177 | ||||||
Impairment of long-lived assets
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- | 2,617 | ||||||
Increase in long-term debt due to currency fluctuations
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2,461 | 245 | ||||||
Increase in trade receivables
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(9,469 | ) | (11,169 | ) | ||||
Change in derivative instruments, net
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(1,163 | ) | - | |||||
(Increase) decrease in other receivables, prepaid expenses and other assets
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(4,302 | ) | 100 | |||||
Increase in inventories
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(6,336 | ) | (7,890 | ) | ||||
Foreign exchange effect on intercompany balances
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1,394 | (906 | ) | |||||
Increase in trade and other payables and accruals
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3,320 | 6,474 | ||||||
Net cash provided by operating activities
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57,707 | 24,063 | ||||||
Investing Activities:
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Purchase of property plant & equipment, net of related grants
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(2,240 | ) | (816 | ) | ||||
Investment in other intangible assets
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- | (2,528 | ) | |||||
Investment in short-term bank deposits
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(10,641 | ) | (32,028 | ) | ||||
Proceeds from sale of short-term bank deposits
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- | 12,489 | ||||||
Proceeds from the sale of marketable securities
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923 | - | ||||||
Net cash used in investing activities
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(11,958 | ) | (22,883 | ) | ||||
Financing Activities:
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Proceeds from the issuance of shares, net
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8,781 | - | ||||||
Repayments of long-term debt
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(3 | ) | (14,861 | ) | ||||
(Proceeds) repayments of short-term bank debt, net
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(1,446 | ) | 1,775 | |||||
Net cash provided by (used in) financing activities
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7,332 | (13,086 | ) | |||||
Effect of exchange rate changes
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478 | (224 | ) | |||||
Net increase (decrease) in cash
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53,559 | (12,130 | ) | |||||
Cash at beginning of period
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54,144
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98,439 |
Cash at end of period
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$ | 107,703 | $ | 86,309 |
(1) |
The 2010 information presented above is updated from the August 23, 2010 press release to reflect the Company’s Irish subsidiary as discontinued operations and the impairment of its assets.
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By:
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/s/ James Kedrowski
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Name:
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James Kedrowski
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Title:
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Interim Chief Executive Officer and Director
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