Taro Provides Results for Year Ended March 31, 2024

2024-05-20

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HAWTHORNE, N.Y.--(BUSINESS WIRE)-- 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 . 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: Contacts William J. Coote VP, CFO (914) 345-9001 William.Coote@taro.com Source: Taro Pharmaceutical Industries Ltd. View this news release online at: