TARO Taro Pharmaceutical Industries Ltd

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 January, 2022

Commission File Number 001-35463

Taro Pharmaceutical Industries Ltd.

(Translation of registrant’s name into English)

14 Hakitor Street, Haifa Bay 2624761, 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  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): _____

FOR IMMEDIATE RELEASE

CONTACTS:

TARO PROVIDES RESULTS FOR DECEMBER 31, 2021

Hawthorne, NY, January 27, 2022 ─ Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter and nine months ended December 31, 2021.

Quarter ended December 31, 2021 Highlights ─ compared to December 31, 2020

Nine Months ended December 31, 2021 Highlights ─ compared to December 31, 2020

Cash Flow and Balance Sheet Highlights

Mr. Uday Baldota, Taro’s CEO, stated, “Despite the challenging market conditions, particularly in the U.S. generic market, we successfully defended our market share across each business. Our current quarter and nine month performance reflects this. With the intent of ever strengthening the future, we remain focused on high return R&D investments as well as the exploration of new business development opportunities.”

FDA Approvals and Filings

The Company recently received approvals from the U.S. Food and Drug Administration (“FDA”) for the Abbreviated New Drug Applications (“ANDAs”): Sildenafil Powder for Oral Suspension, 10 mg/mL and Adapalene Gel, USP 0.1%. The Company currently has a total of seventeen ANDAs awaiting FDA approval, including four tentative approvals.

Taro Pharmaceuticals U.S.A., Inc. (“Taro USA”) Signs Settlement Agreement with the Direct Purchaser Plaintiffs

Taro USA entered into a settlement agreement with the direct purchaser class on November 4, 2021, which, if approved by the court, will resolve all claims brought by the direct purchaser class against Taro USA and its parents, affiliates, officers and directors in the In re: Generic Pharmaceuticals Pricing Antitrust Litigation. Under the terms of the settlement agreement, Taro USA will pay a maximum of $67.6 million, subject to a reduction of up to $8.0 million depending on the decisions of certain class members to opt out of the settlement. The settlement is subject to approval by the court.

The Company cautions that the foregoing financial information is presented on an unaudited basis and is subject to change.

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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 2022. 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

(Unaudited)

(U.S. dollars in thousands, except share data)

 

	Quarter Ended								Nine Months Ended
	December 31,								December 31,
	2021				2020				2021				2020
Sales, net	$	138,984			$	140,145			$	418,083			$	400,622
Cost of sales		62,937				66,957				202,293				180,900
Impairment		13				—				13				—
Gross profit		76,034				73,188				215,777				219,722
Operating Expenses:
Research and development		14,201				14,081				39,648				43,565
Selling, marketing, general and administrative		24,841				22,798				72,501				69,121
Settlements and loss contingencies		26				—				61,446				478,924
Operating income (loss) *		36,966				36,309				42,182				(371,888	)
Financial income, net:
Interest and other financial income		(2,090	)			(4,001	)			(7,501	)			(16,989	)
Foreign exchange expense		544				2,036				555				1,207
Other gain, net		990				863				3,714				2,792
Income (loss) before income taxes		39,501				39,137				52,842				(353,313	)
Tax expense		13,188				6,101				21,980				18,545
Net income (loss)		26,313				33,036				30,862				(371,858	)
Net income (loss) attributable to non-controlling interest		—				117				—				(14,991	)
Net income (loss) attributable to Taro *	$	26,313			$	32,919			$	30,862			$	(356,867	)
Net income (loss) per ordinary share attributable to Taro:
Basic and Diluted *	$	0.70			$	0.86			$	0.82			$	(9.33	)
Weighted-average number of shares used to compute net income (loss) per share:
Basic and Diluted		37,584,891				38,254,231				37,659,478				38,256,963
May not foot due to rounding.

 

 

 

* Excluding the settlement and loss contingencies charges of $61.4 million and $478.9 million for the nine months ended December 31, 2021 and 2020, Operating income was $103.6 million and $107.0 million, Net income attributable to Taro was $99.2 million and $107.1 million, and basic and diluted earnings per share was $2.64 and $2.80, respectively.

 

 

 

 

 

 

 

 

 

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TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)
 

	December 31,				December 31,
	2021				2020
ASSETS	(unaudited)				(audited)
CURRENT ASSETS:
Cash and cash equivalents	$	318,103			$	605,177
Short-term and current maturities of long-term bank deposits		35,573				—
Marketable securities		433,403				418,480
Accounts receivable and other:
Trade, net		224,666				213,539
Other receivables and prepaid expenses		43,047				53,347
Inventories		182,446				180,292
TOTAL CURRENT ASSETS		1,237,238				1,470,835
Marketable securities		536,348				557,209
Property, plant and equipment, net		193,995				205,508
Deferred income taxes		125,659				142,007
Other assets		29,779				31,314
TOTAL ASSETS	$	2,123,019			$	2,406,873
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables	$	43,685			$	61,166
Other current liabilities		351,108				615,135
TOTAL CURRENT LIABILITIES		394,793				676,301
Deferred taxes and other long-term liabilities		31,672				35,115
TOTAL LIABILITIES		426,465				711,416
Taro shareholders' equity		1,696,554				1,703,649
Non-controlling interest		—				(8,192	)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,123,019			$	2,406,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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TARO PHARMACEUTICAL INDUSTRIES LTD.

SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(U.S. dollars in thousands)
 

	Nine Months Ended December 31,
	2021				2020
Cash flows from operating activities:
Net income (loss)	$	30,862			$	(371,858	)
Adjustments required to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		19,248				17,337
Impairment of long-lived assets		13				—
Realized loss on sale of long-lived assets		551				—
Change in derivative instruments, net		(536	)			(390	)
Effect of change in exchange rate on marketable securities and bank deposits		(39	)			(4,288	)
Deferred income taxes, net		15,003				(31,877	)
(Increase) decrease in trade receivables, net		(11,129	)			6,395
Increase in inventories, net		(2,154	)			(16,454	)
Decrease (increase) in other receivables, income tax receivables, prepaid expenses and other		10,973				(11,962	)
(Decrease) increase in trade, income tax, accrued expenses and other payables		(270,482	)			405,233
Expense from amortization of marketable securities bonds, net		7,734				2,579
Net cash used in operating activities		(199,956	)			(5,285	)
Cash flows from investing activities:
Purchase of plant, property & equipment, net		(9,121	)			(14,210	)
Investment in other intangible assets		(120	)			(117	)
Investment in short-term bank deposits, net		(35,573	)			—
(Investment in) proceeds from marketable securities, net		(17,161	)			60,122
Net cash (used in) provided by investing activities		(61,975	)			45,795
Cash flows from financing activities:
Purchase of treasury stock		(24,934	)			(3,243	)
Net cash used in financing activities		(24,934	)			(3,243	)
Effect of exchange rate changes on cash and cash equivalents		(209	)			2,297
(Decrease) increase in cash and cash equivalents		(287,074	)			39,564
Cash and cash equivalents at beginning of period		605,177				513,354
Cash and cash equivalents at end of period	$	318,103			$	552,918
Cash Paid during the year for:
Income taxes	$	5,667			$	24,169
Cash Received during the year for:
Income taxes	$	2,351			$	4,093
Non-cash investing transactions:
Purchase of property, plant and equipment included in accounts payable	$	763			$	453
Non-cash financing transactions:
Purchase of treasury stock	$	—			$	559
Purchase of marketable securities, net	$	—			$	580

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SIGNATURES

 

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: January 27, 2022

TARO PHARMACEUTICAL INDUSTRIES LTD.
 

By: /s/ Uday Baldota

Name: Uday Baldota

Title: Chief Executive Officer and Director

 

 

 

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