a50638647.htm

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

For the month of May, 2013

Commission File Number 001-35463
 
Taro Pharmaceutical Industries Ltd.
 
(Translation of registrant’s name into English)

14 Hakitor Street, Haifa Bay 26110, Israel
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F   x     Form 40-F   ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  Yes   ¨     No   x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_____.
 
 
 

 
 
 
logo 
Taro Pharmaceutical Industries Ltd.
c/o Taro Pharmaceuticals U.S.A., Inc.
Three Skyline Drive
Hawthorne, New York 10532
(NYSE: TARO)
 
 
FOR IMMEDIATE RELEASE

CONTACTS:
 
Michael Kalb
William J. Coote
GVP, CFO
VP, Treasurer
(914) 345-9001
(914) 345-9001
Michael.Kalb@taro.com
William.Coote@taro.com


TARO PROVIDES RESULTS YEAR ENDED MARCH 31, 2013

Hawthorne, NY, May 23, 2013 - Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the three months and year ended March 31, 2013.

Quarter ended March 31, 2013 Highlights - compared to March 31, 2012
Net sales of $165.1 million, increased $20.0 million, or 13.8%, however, volumes have slightly declined
Gross profit, as a percentage of net sales was 72.4%, compared to 68.3%
Research and development expenses increased 23.9% to $12.2 million
Selling, marketing, general and administrative expenses decreased $1.0 million
Settlements and loss contingencies of $22.0 million, in March 2013, related to certain price reporting litigations
Operating income decreased to $63.1 million, or 38.2% of net sales, compared to $66.2 million, or 45.6% of net sales; however, excluding settlements and loss contingencies, operating income would have been $85.1 million, or 51.6% of net sales
Net income attributable to Taro was $49.2 million compared to $47.3 million, resulting in diluted earnings per share of $1.10 compared to $1.06
 
Year ended March 31, 2013 Highlights - compared to March 31, 2012
Net sales of $671.0 million, increased $127.9 million, or 23.5%, however, volumes have slightly declined
Gross profit, as a percentage of net sales was 73.7%, compared to 67.3%
Research and development expenses increased 39.0% to $46.5 million
Selling, marketing, general and administrative expenses decreased $8.1 million and as a percentage of net sales decreased from 17.4% to 12.9%
Settlements and loss contingencies, of $33.3 million, primarily related to certain price reporting litigations
Operating income increased to $328.6 million, or 49.0% of net sales, compared to $237.6 million, or 43.7% of net sales; however, excluding settlements and loss contingencies, operating income would have been $361.9 million, or 53.9% of net sales
Income tax expense increased $31.8 million from $36.0 million to $67.8 million
Net income attributable to Taro was $266.2 million compared to $204.3 million, a $61.9 million increase, resulting in diluted earnings per share of $5.95 compared to $4.59
 
Cash Flow and Balance Sheet Highlights
Cash flow provided by operations for the year ended March 31, 2013, as compared to March 31, 2012, was $248.7 million compared to $235.1 million
Cash, including marketable securities, increased $226.2 million to $560.5 million from March 31, 2012
 
 
- more -

 

Taro Pharmaceutical Industries Ltd.
Page 2 of 5



FDA Approvals and Filings

During the quarter, the Company filed Abbreviated New Drug Applications (“ANDAs”) for five (5) products with the U.S. Food and Drug Administration (“FDA”).  With this, ANDAs representing twenty-one (21) products as well as two (2) New Drug Applications (“NDAs”) await FDA approval.

Taro Receives FDA Approval for Topicort® (desoximetasone) Topical Spray, 0.25%

As announced on April 12, 2013, Taro received approval from the FDA for its NDA, Topicort® (desoximetasone) Topical Spray, 0.25%.

The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.  Final audited results will be included in the Company's Form 20-F to be filed with the U.S. Securities and Exchange Commission (“SEC”) on or before the due date of July 31, 2013.

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 and statements 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 financial information for fiscal year 2013.  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 actions of the Company's lenders and creditors, 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.
Page 3 of 5

TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(U.S. dollars in thousands, except share data)
                                                                                                                                   ­                                                                                                                               
    Quarter Ended     Year Ended  
    March 31,     March 31,  
    2013     2012     2013     2012  
Sales, net
  $ 165,133     $ 145,141     $ 670,954     $ 543,082  
Cost of sales
    45,658       45,971       176,128       177,497  
Gross Profit
    119,475       99,170       494,826       365,585  
 
Operating Expenses:                                
Research and development, net
    12,202       9,847       46,508       33,456  
Selling, marketing, general and administrative
    22,126       23,101       86,438       94,559  
Settlements and loss contingencies
     22,000       -        33,300        -  
Operating income
    63,147       66,222       328,580       237,570  
 
Financial Expenses, net:                                
Interest and other financial (income) expenses, net
     (1,074 )     (107 )     (1,514 )     2,338  
Foreign exchange (income) expense
    (681 )     1,107       (2,417 )      (6,222 )
Other income (loss), net
    1,400        (94 )      3,352       264  
Income before income taxes
    66,302       65,128       335,863       241,718  
Tax expense
    16,086        17,791        67,799        35,974  
Income from continuing operations
    50,216       47,337       268,064       205,744  

Net (loss) income from discontinued operations
    (1,150 )      66       (1,194 )     (1,016 )
Net income
    49,066       47,403       266,870       204,728  
Net (loss) income attributable to non-controlling interest
     (101 )     151        664       454  
                                 
Net income attributable to Taro
  $ 49,167     $ 47,252     $ 266,206     $ 204,274  

Net income per ordinary share from continuing operations attributable to Taro:
                       
Basic
  $ 1.13     $ 1.06     $ 5.99     $ 4.61  
Diluted
  $ 1.13     $ 1.06     $ 5.98     $ 4.61  

Net loss per ordinary share from discontinued operations attributable to Taro:
                       
Basic
  $ ( 0.03 )   $ 0.00 *   $ ( 0.03 )   $ ( 0.02 )
Diluted
  $ ( 0.03 )   $ 0.00 *   $ ( 0.03 )   $ ( 0.02 )

Net income per ordinary share attributable to Taro:
                       
Basic
  $ 1.10     $ 1.06     $ 5.96     $ 4.59  
Diluted
  $ 1.10     $ 1.06     $ 5.95     $ 4.59  

Weighted-average number of shares used to compute net income per share:
                       
Basic
    44,757,257       44,476,429       44,677,603       44,468,209  
Diluted
    44,762,748       44,589,007       44,715,111       44,541,302  

* Amount is less than $0.01.
   May not foot due to rounding.

 
 

 

Taro Pharmaceutical Industries Ltd.
Page 4 of 5


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

    March 31,     March 31,  
   
2013
   
2012
 
             
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 237,284     $ 238,266  
Short-term bank deposits
    312,603       72,440  
Restricted short-term bank deposits
    7,430       15,780  
Marketable securities
    3,183       7,835  
Accounts receivable and other:                
Trade, net
    119,810       111,130  
Other receivables and prepaid expenses
   
119,768
      98,501  
Inventories
    109,626       109,638  
Long-term assets held for sale, net
    67       71  
TOTAL CURRENT ASSETS
   
909,771
      653,661  
                 
Long-term receivables and other assets
    23,227       19,972  
Property, plant and equipment, net
    145,265       150,750  
Other assets
   
28,373
      32,041  
TOTAL ASSETS
  $ 1,106,636     $ 856,424  
                 
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
                 
CURRENT LIABILITIES:
               
Current maturities of long-term debt
  $ 11,330     $ 10,957  
Trade payables and other current liabilities
    181,201       187,942  
TOTAL CURRENT LIABILITIES
    192,531       198,899  
                 
Long-term debt, net of current maturities
    17,269       27,949  
Deferred taxes and other long-term liabilities
    5,875       6,618  
TOTAL LIABILITIES
    215,675       233,466  
                 
Taro shareholders’ equity
    886,347       619,008  
Non-controlling interest
    4,614       3,950  
                 
TOTAL LIABILITIES AND  SHAREHOLDERS’ EQUITY
  $ 1,106,636     $ 856,424  

 
 

 

Taro Pharmaceutical Industries Ltd.
Page 5 of 5


TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(U.S. dollars in thousands)
         
     Year Ended March 31,  
       2013       2012  
                 
Operating Activities:                
Net income
  $ 266,870     $ 204,728  
Adjustments required to reconcile net income to net cash
               
provided by operating activities:
               
     Depreciation and amortization
    17,765       18,619  
     Impairment of long-lived assets
    -       784  
     Share-based compensation expense
    8       39  
     Loss on sale of long-lived assets and marketable securities, net
    925       593  
     Increase (decrease) in long-term debt due to currency fluctuations
    440       (2,157 )
     Increase in trade receivables, net
    (8,912 )     (29,492 )
     Change in derivative instruments, net
    1,550       2,678  
     Increase in other receivables, prepaid expenses and other assets
    (19,560 )     (20,175 )
     Increase in inventories, net
    (630 )     (24,455 )
     Effect of exchange differences on inter-company balances
    (1,510 )     (776 )
     (Decrease) increase in trade and other payables and liabilities
    (8,296 )     84,757  
Net cash provided by operating activities
     248,650       235,143  
                 
Investing Activities:
               
     Purchase of property, plant & equipment
    (9,466 )     (7,016 )
     Investment in other intangible assets
    (777 )     -  
     Investment in long-term security deposits and other assets
    (242 )     (3,764 )
     Investment in short-term bank deposits
    (241,671 )     (31,883 )
     Proceeds from (investment in) restricted bank deposits
    8,224       (11,548 )
     Proceeds from sale of long-lived assets
     1        459  
Net cash used in investing activities
     (243,931 )     (53,752 )

Financing Activities:
           
     Excess tax benefits from share-based payment arrangements
    838       -  
     Proceeds from issuance of shares, net
    6,584       303  
     Repayments of long-term debt
    (10,748 )     (19,502 )
     Repayments of short-term bank debt, net
    -        (2,428 )
Net cash used in financing activities
     (3,326 )     (21,627 )
                 
Effect of exchange rate changes
     (2,375 )     (370 )
Net (decrease) increase in cash
    (982 )     159,394  
Cash at beginning of period
   
238,266
      78,872  
                 
Cash at end of period
  $ 237,284     $ 238,266  

#####

 
 

 
 
SIGNATURE

 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Date:  May 23, 2013
 
TARO PHARMACEUTICAL INDUSTRIES LTD.

 
By:  /s/ James Kedrowski   
  Name:  James Kedrowski   
  Title:  Interim Chief Executive Officer and Director