TARO Taro Pharmaceutical Industries Ltd

Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter and year ended March 31, 2024.

Quarter ended March 31, 2024 Highlights ─ compared to March 31, 2023

• Net sales of $164.9 million increased $18.4 million, or 12.5%, principally due to new launches and gross-to-net (“GTN”) adjustments. Excluding the impact of GTN adjustments, sales growth was high single digits.
• Gross profit of $87.4 million (53.0% of net sales) compared to $75.7 million (51.6% of net sales).
• Research and development (R&D) expenses of $20.5 million increased $4.2 million.
• Selling, marketing, general and administrative expenses (SG&A) of $58.1 million included certain one-time charges of $1 million related to the Special Committee that was established by the Board to consider the proposal submitted by Sun Pharmaceutical Industries Ltd. on May 26, 2023. Excluding these charges, SG&A increased $7.0 million.
• Operating income was $ 8.8 million; excluding the impact from the GTN adjustments and the certain one-time charges for the quarter, the decline in the operating income was even higher.
• Interest and other financial income of $15.8 million increased $7.8 million.
• Tax expense of $11.2 million compared to a tax expense of $11.0 million.
• Net income attributable to Taro was $15.1 million compared to net income of $6.9 million, resulting in earnings per share of $0.40 compared to earnings per share of $0.18. Excluding the impact from the certain one-time charges, net income was $16.1 million, resulting in diluted earnings per share of $0.43.

Year ended March 31, 2024 Highlights ─ compared to March 31, 2023

• Net sales of $629.2 million increased $56.2 million or 9.8%, principally due to new launches and one-time GTN adjustments. Excluding these adjustments, the sales growth was mid-single-digits.
• Gross profit of $305.0 million (48.5% of net sales compared to 46.8%) increased $36.6 million.
• R&D expenses of $64.5 million increased $12.3 million.
• SG&A of $219.0 million included certain one-time charges of $14.2 million related to the aforementioned certain one-time charges and transitional expenses for the relocation of our Alchemee operations from California to New York. Excluding these charges, SG&A was $204.7 million, increased 3.2% above the prior year.
• Operating income was $21.5 million; excluding the impact from the GTN adjustments and the certain one-time charges during the current year, the resulting operating income was lower than the previous year.
• Interest and other financial income of $56.2 million increased $35.3 million from $20.9 million.
• Tax expense of $28.8 million compared to tax expense of $12.8 million, an increase of $16.0 million.
• Net income attributable to Taro was $53.9 million compared to $25.4 million, resulting in earnings per share of $1.43 compared to earnings per share of $0.68. Excluding the impact from the certain one-time charges, net income was $66.3 million, resulting in diluted earnings per share of $1.77.

Cash Flow and Balance Sheet Highlights

• Cash flow provided by operations for the year ended March 31, 2024 was $124.6 million compared to $31.8 million for the year ended March 31, 2023. Excluding the impact from certain one-time charges impacting both years, cash flow provided by operations was $137.0 million compared to $99.0 million for the year ended March 31, 2023.
• As of March 31, 2024, cash and cash equivalents, short-term bank deposits and marketable securities (both short- and long-term) was $1.3 billion, or $82.2 million more than March 31, 2023.

The Company cautions that the foregoing 2024 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 2025. 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 (U.S. dollars in thousands, except share data)   Quarter Ended Twelve Months Ended March 31, March 31,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Sales, net

$

164,941

 

$

146,587

 

$

629,182

 

$

572,952

 

Cost of sales

 

77,552

 

 

70,879

 

 

324,203

 

 

304,629

 

Impairment

 

—

 

 

—

 

 

23

 

 

—

 

Gross profit

 

87,389

 

 

75,708

 

 

304,956

 

 

268,323

 

  Operating Expenses: Research and development

 

20,478

 

 

16,306

 

 

64,536

 

 

52,243

 

Selling, marketing, general and administrative

 

58,127

 

 

50,128

 

 

218,935

 

 

198,366

 

Operating income *

 

8,784

 

 

9,274

 

 

21,485

 

 

17,714

 

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

 

(15,834

)

 

(8,036

)

 

(56,192

)

 

(20,850

)

Foreign exchange expense/(income)

 

588

 

 

469

 

 

(9

)

 

2,813

 

Other gain, net

 

2,198

 

 

1,059

 

 

4,981

 

 

2,462

 

Income before income taxes

 

26,228

 

 

17,900

 

 

82,668

 

 

38,213

 

Tax expense

 

11,150

 

 

10,987

 

 

28,801

 

 

12,768

 

Net income *

$

15,078

 

$

6,913

 

$

53,867

 

$

25,445

 

  Net income/ per ordinary share: Basic and Diluted *

$

0.40

 

$

0.18

 

$

1.43

 

$

0.68

 

  Weighted-average number of shares used to compute net income 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 March 31, 2024, excluding the impact from the certain one-time charges of $1.0 million (see page one of release for a description), operating income was $9.8 million. compared to operating income of $8.8 million. Excluding the impact of the certain one-time charges, net income was $16.1 million, resulting in earnings per share of $0.43.

* For the full year ended March 31, 2024, excluding the impact from the certain one-time charges of $14.2 million (see page one of release for a description), operating income was $35.7 million compared to $21.5 million. Excluding the impact of the certain one-time charges, net income was $66.3 million, resulting in earnings per share of $1.77.

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

2024

2023

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

$

362,909

$

154,495

Short-term bank deposits

 

58,947

 

119,980

Marketable securities

 

457,495

 

575,814

Accounts receivable and other: Trade, net

 

177,463

 

202,260

Other receivables and prepaid expenses

 

41,772

 

57,210

Inventories

 

204,817

 

226,669

TOTAL CURRENT ASSETS

 

1,303,403

 

1,336,428

Marketable securities

 

457,991

 

404,896

Property, plant and equipment, net

 

217,592

 

190,139

Deferred income taxes

 

83,397

 

103,672

Goodwill

 

17,231

 

17,231

Other assets

 

82,455

 

83,147

TOTAL ASSETS

$

2,162,069

$

2,135,513

  LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables

$

44,664

$

68,484

Other current liabilities

 

316,443

 

317,064

TOTAL CURRENT LIABILITIES

 

361,107

 

385,548

Deferred taxes and other long-term liabilities

 

7,956

 

19,106

TOTAL LIABILITIES

 

369,063

 

404,654

  Taro shareholders' equity

 

1,793,006

 

1,730,859

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

2,162,069

$

2,135,513

  TARO PHARMACEUTICAL INDUSTRIES LTD. SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands)   Twelve Months Ended March 31,

 

2024

 

 

2023

 

Cash flows from operating activities: Net income

$

53,867

 

$

25,445

 

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

 

31,094

 

 

32,127

 

Impairment of long-lived assets

 

23

 

 

—

 

Realized loss on sale of long-lived assets

 

—

 

 

136

 

Change in derivative instruments, net

 

—

 

 

(24

)

Adjustments to opening balance sheet (PPA)

 

—

 

 

(15,292

)

Decrease in goodwill and intangible assets

 

242

 

 

—

 

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

 

(86

)

 

2,291

 

Deferred income taxes, net

 

19,148

 

 

16,802

 

Decrease in trade receivables, net

 

24,481

 

 

37,482

 

Decrease (increase) in inventories, net

 

21,728

 

 

(16,922

)

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

 

15,730

 

 

2,240

 

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

 

(33,839

)

 

(60,707

)

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

 

(7,833

)

 

8,172

 

Net cash provided by operating activities

 

124,555

 

 

31,750

 

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

 

(53,971

)

 

(17,553

)

Investment in other intangible assets

 

(247

)

 

(294

)

Proceeds from (Investment in) short-term bank deposits, net

 

58,338

 

 

(72,394

)

Proceeds from (Investment in) marketable securities, net

 

81,723

 

 

(33,315

)

Investment in other investments

 

(1,500

)

 

(2,000

)

Net cash provided by (used in) investing activities

 

84,343

 

 

(125,556

)

    Effect of exchange rate changes on cash and cash equivalents

 

(483

)

 

(2,833

)

Increase (decrease) in cash and cash equivalents

 

208,415

 

 

(96,639

)

Cash and cash equivalents at beginning of period

 

154,495

 

 

251,134

 

Cash and cash equivalents at end of period

$

362,910

 

$

154,495

 

  Cash Paid during the year for: Income taxes

$

18,309

 

$

4,175

 

Cash Received during the year for: Income taxes

$

12,931

 

$

14,156

 

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

$

2,041

 

$

1,242

 

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

$

4,602

 

$

3,038

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520647281/en/

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