Taro Pharmaceutical Industries Ltd.
c/o Taro Pharmaceuticals U.S.A., Inc.
Three Skyline Drive
Hawthorne, New York 10532
(NYSE: TARO)
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CONTACTS:
Michael Kalb
GVP, CFO
(914) 345-9001
Michael.Kalb@taro.com
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William J. Coote
VP, Treasurer
(914) 345-9001
William.Coote@taro.com
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Net sales of $145.1 million, increased $37.4 million, or 34.7%
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Gross profit, as a percentage of net sales was 68.3%, compared to 58.6%
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Selling, marketing, general and administrative expenses increased $0.6 million, however, as a percentage of net sales decreased to 15.9%, compared to 20.8%
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Operating income increased 98.3% to $66.2 million, or 45.6% of net sales, compared to $33.4 million, or 31.0% of net sales
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Net income attributable to Taro was $47.3 million compared to $25.7 million, a $21.6 million increase, resulting in diluted earnings per share of $1.06 compared to $0.58.
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Cash flow from operations was $78.1 million for the quarter ended March 31, 2012, compared to $24.4 million in the same period in 2011
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Cash, including marketable securities, increased $75.5 million to $334.3 million from December 31, 2011.
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Three Months Ended
March 31,
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||||||||
2012
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2011
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Sales, net
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$ | 145,141 | $ | 107,727 | ||||
Cost of sales
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45,971 | 44,617 | ||||||
Gross Profit
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99,170 | 63,110 |
Research and development, net
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9,847 | 7,258 | ||||||
Selling, marketing, general and administrative
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23,101 | 22,460 | ||||||
Operating Income
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66,222 | 33,392 |
Interest and other financial (income) expense
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(107 | ) | 778 | |||||
Foreign exchange expense
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1,107 | 409 |
Other (expense) income, net
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(94 | ) | 251 | |||||
Income before income taxes
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65,128 | 32,456 | ||||||
Tax expense
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17,791 | 6,368 | ||||||
Income from continuing operations
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47,337 | 26,088 | ||||||
Net income (loss) from discontinued operations(1)
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66 | (135 | ) | |||||
Net income
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47,403 | 25,953 | ||||||
Net income attributable to non-controlling interest(2)
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151 | 295 | ||||||
Net income attributable to Taro
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$ | 47,252 | $ | 25,658 |
Net income per ordinary share
from continuing operations attributable to Taro:
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Basic
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$ | 1.06 | $ | 0.58 | ||||
Diluted
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$ | 1.06 | $ | 0.58 | ||||
Net income (loss) per ordinary share
from discontinued operations attributable to Taro:
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Basic
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$ | 0.00 | * | $ | (0.00 | )* | ||
Diluted
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$ | 0.00 | * | $ | (0.00 | )* | ||
Net income per ordinary share
attributable to Taro:
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Basic
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$ | 1.06 | $ | 0.58 | ||||
Diluted
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$ | 1.06 | $ | 0.58 |
Weighted-average number of ordinary shares used
to compute net income per ordinary share:
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Basic
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44,476,429 | 44,284,556 | ||||||
Diluted
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44,589,007 | 44,447,293 |
(1)
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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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(2)
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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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March 31, | December 31, | |||||||
2012
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2011
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ASSETS
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(unaudited)
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(audited)
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CURRENT ASSETS:
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Cash and cash equivalents
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$ | 238,266 | $ | 150,001 | ||||
Short-term bank deposits
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72,440 | 89,814 | ||||||
Restricted short-term bank deposits
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15,780 | 16,080 | ||||||
Marketable securities
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7,835 | 2,901 | ||||||
Accounts receivable and other:
Trade, net
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111,130 | 120,832 | ||||||
Other receivables and prepaid expenses
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98,501 | 94,344 | ||||||
Inventories
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109,638 | 107,378 | ||||||
Assets held for sale, net(1)
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71 | 81 | ||||||
TOTAL CURRENT ASSETS
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653,661 | 581,431 | ||||||
Long-term receivables and other assets
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19,972 | 23,131 | ||||||
Property, plant and equipment, net
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150,750 | 152,532 | ||||||
Other assets
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32,041 | 38,751 | ||||||
TOTAL ASSETS
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$ | 856,424 | $ | 795,845 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Current maturities of long-term debt
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$ | 10,957 | $ | 17,073 | ||||
Trade payables and other current liabilities
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187,942 | 173,310 | ||||||
TOTAL CURRENT LIABILITIES
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198,899 | 190,383 | ||||||
Long-term debt, net of current maturities
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27,949 | 27,614 | ||||||
Deferred taxes and other long-term liabilities
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6,618 | 6,785 | ||||||
TOTAL LIABILITIES
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233,466 | 224,782 | ||||||
Taro shareholders’ equity
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619,008 | 567,264 | ||||||
Non-controlling interest(2)
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3,950 | 3,799 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 856,424 | $ | 795,845 | ||||
(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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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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Three Months Ended March 31, | ||||||||
2012 | 2011 | |||||||
Operating Activities | ||||||||
Net income
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$ | 47,403 | $ | 25,953 | ||||
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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4,598 | 4,709 | ||||||
Stock-based compensation
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- | 20 | ||||||
Loss on sale of long-lived assets
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22 | - | ||||||
Increase in long-term debt due to currency fluctuations
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814 | 1,136 | ||||||
Decrease (increase) in trade receivables
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9,879 | (8,270 | ) | |||||
Change in derivative instruments, net
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(3,392 | ) | (831 | ) | ||||
Decrease in other receivables, prepaid expenses and other assets
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3,268 | 2,531 | ||||||
Increase in inventories
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(1,583 | ) | (1,592 | ) | ||||
Foreign exchange effect on intercompany balances
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2,104 | (368 | ) | |||||
Increase in trade and other payables and accruals
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14,981 | 1,070 | ||||||
Net cash provided by operating activities
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78,094 | 24,358 | ||||||
Investing Activities:
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Purchase of property plant & equipment, net of related grants
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(1,610 | ) | (887 | ) | ||||
Proceeds from long-term deposits and other assets
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18 | - | ||||||
Proceeds from (investment in) short-term and restricted bank deposits
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22,059 | (10,105 | ) | |||||
Investment in marketable securities
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(4,909 | ) | - | |||||
Proceeds from sale of property, plant and equipment
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28 | - | ||||||
Net cash provided by (used in) investing activities
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15,586 | (10,992 | ) |
Financing Activities:
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Proceeds from the issuance of shares, net
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7 | 8,554 | ||||||
(Repayments) proceeds of long-term debt
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(6,595 | ) | 9 | |||||
Proceeds of short-term bank debt, net
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- | 2,428 | ||||||
Net cash (used in) provided by financing activities
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(6,588 | ) | 10,991 |
Effect of exchange rate changes
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1,173 | 371 | ||||||
Net increase in cash
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88,265 | 24,728 | ||||||
Cash at beginning of period
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150,001
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54,144 |
Cash at end of period
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$ | 238,266 | $ | 78,872 |
By: | /s/ James Kedrowski | ||
Name: | James Kedrowski | ||
Title: | Interim Chief Executive Officer and Director |