Taro Provides Results for Quarter Ended June 2018
Aug. 09, 2018
HAWTHORNE, N.Y.--(BUSINESS WIRE)--Aug 9, 2018--Taro Pharmaceutical Industries Ltd. (NYSE:TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter ended June 30, 2018.
Quarter ended June 30, 2018 Highlights - compared to June 30, 2017Net sales of $154.6 million, decreased $6.7 million, or 4.2%, the result of continuing increased competition and the challenging pricing environment; despite an overall increase in volumes of 11.1%. Gross profit of $100.1 million, decreased $16.5 million and as a percentage of net sales, was 64.7% compared to 72.2%. Research and development expenses of $13.3 million decreased $1.3 million. Selling, marketing, general and administrative expenses of $23.6 million decreased $0.7 million. Operating income of $63.2 million decreased $14.5 million and as a percentage of net sales was 40.8% as compared to 48.1%. Interest and other financial income increased $3.3 million to $7.8 million. Foreign Exchange (FX) income of $10.0 million compared to FX expense of $19.6 million ─ a favorable impact of $29.6 million, principally the result of the weakening of the Canadian dollar vs. the U.S. dollar. Tax expense of $14.1 million increased $4.1 million with the effective tax rate increasing to 17.3% from 15.5%. Net income attributable to Taro was $67.3 million compared to $54.5 million, resulting in diluted earnings per share of $1.71 compared to $1.35.
Cash Flow and Balance Sheet Highlights
Mr. Uday Baldota, Taro’s CEO stated, “We continue to face an overall market trend, particularly in the U.S., that is not dramatically changing, and depending on the product(s), price deflation continues to be a challenge. We continue to maintain a development pipeline investing only in those products which are viable. From a business development perspective, we will continue to evaluate opportunities that make strategic sense and remain disciplined in our approach.”
FDA Approvals and Filings
The Company recently received two approvals from the U.S. Food and Drug Administration (“FDA”) for Abbreviated New Drug Applications (“ANDAs”); Benzoyl Peroxide; Clindamycin Phosphate Topical Gel 5%; 1% and Clindamycin Phosphate and Benzoyl Peroxide Gel, 1.2%/3.75%. The Company currently has a total of thirty-two ANDAs awaiting FDA approval, including five tentative approvals.
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 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 quarter, the Company repurchased 202,325 shares at an average price of $100.34. Through June 30, 2018, in total under the authorization, the Company has repurchased 1,806,984 shares at an average price of $102.86; with $64.1 million remaining.
Form 20-F Filings with the SEC
On June 21, 2018, the Company filed its Annual Report on Form 20-F with the U.S. Securities and Exchange Commission (“SEC”) for the fiscal year ended March 31, 2018.
The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.
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**
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CONTACT: Taro Pharmaceutical Industries Ltd.
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