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SEC Filings
6-K
TARO PHARMACEUTICAL INDUSTRIES LTD filed this Form 6-K on 02/04/2013
Entire Document
 
a50551215.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 February, 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 THIRD QUARTER AND FISCAL YEAR TO DATE RESULTS
Favorable Performance Over 2011 Periods Continues

Hawthorne, NY, February 4, 2013 - Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the three and nine month periods ended December 31, 2012.

Quarter ended December 31, 2012 Highlights - compared to December 31, 2011
Net sales of $185.7 million, increased $37.6 million, or 25.4%, however, sales volumes have slightly declined
Gross profit, as a percentage of net sales was 75.4%, compared to 71.6%
Research and development expenses increased 33.5% to $11.8 million
Selling, marketing, general and administrative expenses, which included a $3.3 million litigation provision in 2012,  increased $2.1 million
Operating income increased to $104.0 million, or 56.0% of net sales, compared to $74.5 million, or 50.3% of net sales
Net income attributable to Taro was $88.8 million compared to $62.4 million, resulting in diluted earnings per share of $1.98 compared to $1.40.

Nine months ended December 31, 2012 Highlights - compared to December 31, 2011
Net sales of $505.8 million, increased $107.9 million, or 27.1%, however, sales volumes have marginally declined
Gross profit, as a percentage of net sales was 74.2%, compared to 66.9%
Research and development expenses increased 45.3% to $34.3 million
Selling, marketing, general and administrative expenses, which included $11.3 million litigation provisions in 2012, increased $4.2 million
Operating income increased to $265.4 million, or 52.5% of net sales, compared to $170.6 million, or 42.9% of net sales
Income tax expense increased $33.5 million from $18.2 million to $51.7 million
Net income attributable to Taro was $217.0 million compared to $157.0 million, a $60.0 million increase, resulting in diluted earnings per share of $4.86 compared to $3.52.

Cash Flow and Balance Sheet Highlights
Cash flow provided by operations for the nine months ended December 31, 2012, as compared to December 31, 2011, was $173.1 million compared to $157.0 million, primarily due to the payment of income taxes as reflected in the significant decrease in trade and other payables
Cash, including marketable securities, increased $152.2 million to $486.6 million from March 31, 2012.

FDA Approvals and Filings

During the quarter, the Company filed one ANDA with the FDA.  With this, ANDAs representing seventeen products as well as two NDAs await FDA approval.

 
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Taro Pharmaceutical Industries Ltd.
Page 2 of  5
 
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 to Date  
   
December 31,
   
December 31,
 
   
2012
    2011    
2012
   
2011
 
Sales, net
  $ 185,695     $ 148,105     $ 505,821     $ 397,941  
Cost of sales
    45,769       42,056       130,470       131,526  
Gross Profit
    139,926       106,049       375,351       266,415  
                                 
                                 
Operating Expenses:
                               
Research and development, net
    11,838       8,867       34,306       23,609  
Selling, marketing, general and administrative
    24,053       21,930       75,612       71,458  
Impairment
    -       784       -       784  
Operating income
    104,035       74,468       265,433       170,564  
                                 
Financial Expenses, net:
                               
Interest and other financial (income) expenses, net
    (581 )     315       (440 )     2,445  
Foreign exchange (income) expense
    (1,992 )     6,312       (1,736 )     (7,329 )
Other income (loss), net
    1,359       (565 )     1,952       358  
Income before income taxes
    107,967       67,276       269,561       175,806  
Tax expense
    18,779       4,584       51,713       18,183  
Income from continuing operations
    89,188       62,692       217,848       157,623  
                                 
                                 
Net loss from discontinued operations
    (37 )     (344 )     (44 )     (298 )
Net income
    89,151       62,348       217,804       157,325  
Net income (loss) attributable to non-controlling interest
    374       (52 )     765       303  
                                 
Net income attributable to Taro
  $ 88,777     $ 62,400     $ 217,039     $ 157,022  
                                 
Net income per ordinary share from continuing operations attributable to Taro:
                               
Basic
  $ 1.98     $ 1.41     $ 4.86     $ 3.53  
Diluted
  $ 1.98     $ 1.41     $ 4.86     $ 3.53  
                                 
Net loss per ordinary share from discontinued operations attributable to Taro:
                               
Basic
  $ (0.00 )*   $ (0.01 )   $ (0.00 )*   $ (0.01 )
Diluted
  $ (0.00 )*   $ (0.01 )   $ (0.00 )*   $ (0.01 )
                                 
Net income per ordinary share attributable to Taro:
                               
Basic
  $ 1.98     $ 1.40     $ 4.86     $ 3.53  
Diluted
  $ 1.98     $ 1.40     $ 4.86     $ 3.52  
                                 
Weighted-average number of shares used to compute net income per share:
                               
Basic
    44,725,898       44,474,727       44,651,534       44,527,689  
Diluted
    44,740,427       44,550,022       44,699,715       44,587,620  

* 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)

    December 31,     March 31,  
   
2012
   
2012
 
             
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 276,995     $ 238,266  
Short-term bank deposits
    198,973       72,440  
Restricted short-term bank deposits
    7,430       15,780  
Marketable securities
    3,172       7,835  
Accounts receivable and other:                 
Trade, net
    134,590       111,130  
Other receivables and prepaid expenses
    109,711       98,501  
Inventories
    110,732       109,638  
Long-term assets held for sale, net
    69       71  
TOTAL CURRENT ASSETS
    841,672       653,661  
                 
Long-term receivables and other assets
    27,929       19,972  
Property, plant and equipment, net
    145,762       150,750  
Other assets
    29,945       32,041  
TOTAL ASSETS
  $ 1,045,308     $ 856,424  
                 
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
                 
CURRENT LIABILITIES:
               
Current maturities of long-term debt
  $ 11,086     $ 10,957  
Trade payables and other current liabilities
    162,756       187,942  
TOTAL CURRENT LIABILITIES
    173,842       198,899  
                 
Long-term debt, net of current maturities
    17,244       27,949  
Deferred taxes and other long-term liabilities
    6,116       6,618  
TOTAL LIABILITIES
    197,202       233,466  
                 
Taro shareholders’ equity
    843,391       619,008  
Non-controlling interest
    4,715       3,950  
                 
TOTAL LIABILITIES AND  SHAREHOLDERS’ EQUITY
  $ 1,045,308     $ 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)
 
    Nine Months Ended December 31,  
    2012     2011  
Operating Activities:
           
Net income
  $ 217,804     $ 157,325  
Adjustments required to reconcile net income to net cash
               
provided by operating activities:
               
Depreciation and amortization
    13,493       14,021  
Impairment of long-lived assets
    -       784  
Share-based compensation expense
    8       39  
Loss on sale of long-lived assets and marketable securities, net
    106       571  
Decrease in long-term debt due to currency fluctuations
    (23 )     (2,971 )
Increase in trade receivables, net
    (23,417 )     (39,295 )
Change in derivative instruments, net
    1,048       6,070  
Increase in other receivables, prepaid expenses and other assets
    (10,622 )     (23,544 )
Increase in inventories, net
    (1,021 )     (22,872 )
Effect of exchange differences on inter-company balances
    367       (2,881 )
(Decrease) increase in trade and other payables and liabilities
    (24,647 )     69,802  
Net cash provided by operating activities
     173,096       157,049  
                 
Investing Activities:
               
Purchase of property, plant & equipment
    (6,183 )     (5,406 )
Investment in other intangible assets
    (765 )     -  
(Investment in) proceeds from long-term security deposits and other assets
    (5,289 )     1,127  
Investment in short-term bank deposits
    (126,415 )     (49,928 )
Proceeds from (investment in) restricted bank deposits
    8,350       (15,562 )
Proceeds from sale of long-lived assets
    1        431  
Net cash used in investing activities
     (130,301 )     (69,338 )
                 
Financing Activities:
               
Proceeds from issuance of shares, net     5,877       296  
Repayments of long-term debt
    (10,554 )     (12,907 )
Repayments of short-term bank debt, net     -       (2,428 )
Net cash used in financing activities
    (4,677 )     (15,039 )
                 
Effect of exchange rate changes
    611       (1,543 )
Net increase in cash
    38,729       71,129  
Cash at beginning of period
    238,266       78,872  
                 
Cash at end of period
  $ 276,995     $ 150,001  

 
 
#####
 
 

 
 
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:  February 4, 2013
 
TARO PHARMACEUTICAL INDUSTRIES LTD.

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