HAWTHORNE, N.Y., Aug. 10, 2009 (GLOBE NEWSWIRE) -- Taro Pharmaceutical Industries Ltd. ("Taro," the "Company") (Pink Sheets:TAROF) today provided information on its financial performance for the first half of 2009.
For the six months ended June 30, 2009, Taro estimates net sales of $181.7 million compared to $166.2 million in the same period of the previous year, a 9% increase. Gross profit for the first half of 2009 was $104.4 million, or 57% of net sales, compared to a gross profit of $91.5 million, or 55% of net sales for the same period in 2008, an increase of 14%. Operating income for the six months ended June 30, 2009 was $34.7 million, compared to $29.2 million for the same period in 2008, an increase of 19%. Net income was $23.6 million, or $0.58 per diluted share, compared to $20.6 million, or $0.51 per diluted share for first half 2008, an increase of 15%.
For the second quarter ended June 30, 2009, Taro estimates net sales of $96.8 million compared to $88.1 million, a 10% increase compared to the second quarter of 2008. Gross profit for the second quarter was $57.9 million, or 60% of net sales, compared to $50.6 million, or 57% of net sales for the second quarter of 2008, an increase of 14%. Operating income for the second quarter of 2009 was $20.6 million compared to $17.7 million, an increase of 16% over the prior year. Net income was $12.5 million, or $0.31 per diluted share, compared to $13.0 million, or $0.32 per diluted share for the second quarter of 2008, a decrease of 4%. The decrease in net income is the result of increased financial expenses in the amount of $3.7 million, principally related to the weakening of the U.S. dollar against the Canadian dollar.
The Company noted that its first half 2009 earnings were impacted by $4.2 million of expenses related to operating the Company's Irish facility. In addition, first half 2009 expenses included approximately $13.0 million in professional, consulting and other fees related to the Company's continuing efforts to complete the 2004-2006 audits, and litigation related to its former merger partner, Sun Pharmaceutical Industries Ltd.
The Company also said that it continues to strengthen its balance sheet with net debt (total debt offset by the value of hedging instruments, less cash and cash equivalents) steadily declining from $103.7 million in December 2008 to $90.9 million in June 2009. As of June 30, 2009, Taro had $79.1 million in cash, cash equivalents and restricted cash, after making scheduled debt payments of $17.6 million in 2009. During the first half of 2009, cash provided by operations was $13.5 million. Amortization and depreciation expenses were $9.7 million during the period.
Trade accounts receivable at June 30, 2009 were $82.6 million, which represents 83 days sales outstanding. The increase in accounts receivable reflects the recent launch of carbamazepine extended release tablets as well as the launch of other new products. Inventories were $65.5 million at June 30, 2009, compared to $75.3 million at June 30, 2008, the result of improved inventory management.
The Company cautioned that the financial information presented herein does not constitute complete financial information, has not been reviewed by its independent auditors and is subject to possible change. However, subject to the foregoing caveats, the Company believes that the information above represents the best information currently available to Taro management.
Two Extraordinary General Meetings of Shareholders
The Company announced today that it has scheduled two Extraordinary General Meetings of Shareholders. The first is scheduled to convene on September 13, 2009, at 8:00 a.m. (Israel time), at the offices of the Company in Haifa, Israel. The purpose of the meeting is to elect, consistent with the requirements of Israeli law, two independent external directors to represent the public, as well as to ratify and approve indemnification for non-executive directors.
Taro's Board of Directors has carefully considered the background and qualifications of the two external director candidates, Irith Hausner, Esq. and Yaron Saporta, CPA (Israel), and found them to be highly qualified professionals who can meaningfully contribute to the Company. Ms. Hausner is an experienced attorney and businesswoman. Mr. Saporta, a prominent and experienced accountant and internal auditor, works with both private and public companies in Israel.
The full text of the Company's letter to shareholders, along with the notice of the meeting scheduled to be held on September 13, 2009, and the corresponding proxy statement can be accessed at the Company's website at www.taro.com or at www.sec.gov. Shareholders are urged to read both documents carefully.
A second meeting is scheduled to convene on September 14, 2009, at 8:00 a.m. (Israel time), at the offices of the Company in Haifa, Israel, to update shareholders on the status of the Company's financial statements for 2006-2008. This meeting is being held following receipt of a request by Franklin Templeton Investments.
About Taro
Taro 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.
The Taro Pharmaceutical Industries Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4733
SAFE HARBOR STATEMENT
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, "should" happen, or similar language, the Company's financial performance, including its financial performance during the last two years, availability of financial information, estimates of financial results and financial information for outstanding audits, review of results for prior years and estimates of expenses and reserves. Although Taro Pharmaceutical Industries Ltd. 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 the possible unavailability of financial information, completion of audits of 2004-2008 and any related restatement, actions of the Company's lenders, creditors and Sun Pharmaceutical Industries Ltd. ("Sun"), including but not limited to the outcome of litigation with Sun, 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 actions 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 speak 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.
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(US dollars in thousands, except per share data)
Unaudited and Unreviewed
-------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
NET SALES $96,817 $88,139 $181,710 $166,198
Cost of Sales 38,926 37,579 77,277 74,746
---------- ---------- ---------- ----------
Gross Profit 57,891 50,560 104,433 91,452
Operating Expenses:
Selling and
Administrative 27,675 23,800 51,340 43,982
-------------------------------------------
Operating Income before
Research and Development 30,216 26,760 53,093 47,470
Research and Development 9,583 9,063 18,439 18,265
---------- ---------- ---------- ----------
Operating Income 20,633 17,697 34,654 29,205
Financial Expenses:
Interest and other
Financial Expenses 1,873 3,398 4,139 6,725
Foreign Exchange
Fluctuations 5,645 443 3,069 (195)
Other Income 9 126 147 426
---------- ---------- ---------- ----------
13,124 13,982 27,593 23,101
Taxes on Income 633 933 3,998 2,514
---------- ---------- ---------- ----------
NET INCOME $12,491 $13,049 $23,595 $20,587
========== ========= ========== ==========
Basic Earnings Per
Ordinary Share $0.32 $0.33 $0.60 $0.53
Diluted Earnings Per
Ordinary Share $0.31 $0.32 $0.58 $0.51
Weighted Average Number of
Shares Used to Compute:
Basic EPS 39,217,276 39,186,478 39,202,769 39,186,478
Diluted EPS 40,509,103 40,404,283 40,547,049 40,254,164
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(US dollars in thousands)
Unaudited and Unreviewed
--------------------------
As of As of
June 30, December 31,
2009 2008
------------ ------------
Current Assets:
Cash and Cash Equivalents $72,862 $78,093
Restricted Short-Term Bank Deposits 6,250 6,250
Accounts Receivable - Trade 82,590 67,227
Accounts Receivable - Other and Prepaid
Expenses 17,133 8,144
Inventories 65,522 69,568
------------ ------------
Total Current Assets 244,357 229,282
Long-Term Investments 21,481 19,860
Property, Plant and Equipment, net 182,406 187,504
Other Assets 29,697 30,897
------------ ------------
TOTAL ASSETS $477,941 $467,543
============ ============
Liabilities and Shareholders' Equity
Current Liabilities:
Short-Term Bank Credits $87,285 $91,412
Current Maturities of Long-Term Liabilities 27,906 29,887
Accounts Payable and Accrued Expenses 77,868 75,716
------------ ------------
Total Current Liabilities 193,059 197,015
Long-Term Liabilities 54,767 66,696
Deferred Taxes and Other Liabilities 19,043 19,157
------------ ------------
Total Liabilities 266,869 282,868
Shareholders' Equity 211,072 184,675
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $477,941 $467,543
============ ============
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENT OF CASHFLOWS
(US dollars in thousands)
Unaudited and Unreviewed
--------------------------
Six Months Ended June 30,
2009 2008
------------ ------------
Operating Activities:
Net income $23,595 $20,587
Adjustments required to reconcile net
income to net cash provided by operating
activities:
Depreciation and amortization 9,708 11,700
Stock based compensation 152 141
Increase in fair value of derivative
instruments 292 (11,452)
Increase in long-term debt due to
currency fluctuations (1,083) 11,920
Amortization of deferred revenue -- (982)
Decrease (increase) in trade
receivables (16,105) 194
Increase in other receivables and
prepaid tax (4,896) (1,087)
Decrease in deferred tax asset -- (547)
Decrease (increase) in inventories 4,886 (6,012)
Foreign exchange effect on intercompany
balances 2,960 (3,448)
Increase (decrease) in trade and other
payables and accruals (5,978) 2,102
---------------------------------------------------------------------
Net cash provided by operating activities 13,531 23,116
Investing Activities:
Purchase of property plant & equipment,
net of related grants (1,636) (1,493)
Investment in other intangible assets (108) (339)
Proceeds from sales of property, plant
and equipment 96 --
---------------------------------------------------------------------
Net cash (used) in investing activities (1,648) (1,832)
Financing Activities:
Repayments of long term debt (14,652) (16,161)
Repayments of short-term bank debt, net (2,962) 794
---------------------------------------------------------------------
Net cash (used) in financing activities (17,614) (15,367)
Effect of exchange rate changes 500 84
---------------------------------------------------------------------
Net (decrease) increase in cash (5,231) 6,001
Cash at beginning of period 78,093 45,178
---------------------------------------------------------------------
Cash at end of period $72,862 $51,179
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