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, 2019

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): _____

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   ☒


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

 
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:
Mariano Balaguer
 William J. Coote
VP, Chief Financial Officer
 AVP, Business Finance, Treasurer and Investor Relations
(914) 345-9001 (914) 345-9001
Mariano.Balaguer@Taro.com William.Coote@Taro.com


TARO PROVIDES RESULTS FOR THE YEAR ENDED MARCH 31, 2019

Hawthorne, NY, May 22, 2019 - Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the quarter and year ended March 31, 2019.

Quarter ended March 31, 2019 Highlights ─ compared to March 31, 2018

●
Net sales of $179.9 million increased $4.7 million, mainly driven by a 4.1% increase in overall volumes.
●
Gross profit of $119.5 million (66.4% of net sales compared to 67.9%) increased $0.6 million.
●
Research and development (R&D) expenses of $20.5 million remained in line with prior year.
●
Selling, marketing, general and administrative expenses (SG&A) of $23.3 million decreased $0.5 million.
●
Operating income of $75.4 million (41.9% of net sales compared to 42.7%) increased $0.6 million.
●
Interest and other financial income increased $2.3 million to $8.2 million.
●
Foreign Exchange (FX) expense of $9.4 million compared to income of $16.0 million - an unfavorable impact of $25.4 million, principally the result of the weakening of the U.S. dollar vs. the Canadian dollar.  The FX impact is mainly balance sheet driven.
●
Tax expense of $15.6 million increased $5.0 million; with the effective tax rate of 21.1% compared to 11.0%.
●
Net income attributable to Taro was $58.4 million compared to $86.3 million, a $27.9 million decrease, resulting in diluted earnings per share of $1.52 compared to $2.17.

Year ended March 31, 2019 Highlights ─ compared to March 31, 2018

●
Net sales of $669.9 million increased $8.0 million, mainly driven by a 7.5% increase in overall volumes.
●
Gross profit of $445.7 million (66.5% of net sales compared to 70.0%) decreased $17.8 million.
●
R&D expenses of $63.2 million decreased $7.2 million, principally due to the continuous evaluation of our portfolio and adjusting for viable development of products.
●
SG&A of $90.0 million increased $1.8 million.
●
Operating income of $296.2 million (44.2% of net sales compared to 45.8%) decreased $6.8 million.
●
Interest and other financial income increased $13.6 million to $33.5 million.
●
FX income of $25.3 million compared to FX expense of $32.5 million - a favorable impact of $57.8 million, principally the result of the strengthening of the U.S. dollar vs. the Canadian dollar.  The FX impact is mainly balance sheet driven.
●
Tax expense of $74.7 million decreased $7.2 million; with the effective tax rate of 20.9% compared to 28.0%.  During the third quarter of 2018, the Company recorded a $38.0 million expense for the impact of the re-measurement of the Company's estimated net deferred tax asset, as a result of the Tax Cuts and Jobs Act.  Excluding the impact from the one-time re-measurement, the tax expense would have been $44.0 million with an effective tax rate of 15.0%.


Taro Pharmaceutical Industries Ltd.
Page 2 of 6


●
Net income attributable to Taro was $281.8 million compared to $211.2 million, a $70.6 million increase, resulting in diluted earnings per share of $7.23 compared to $5.26.  Excluding the impact of the one-time tax re-measurement, prior year net income attributable to Taro would have been $248.0 million, or diluted earnings per share of $6.18.

Cash Flow and Balance Sheet Highlights

●
Cash flow provided by operations for the year ended March 31, 2019 was $323.7, similar to the year ended March 31, 2018.
●
As of March 31, 2019, cash, including short-term bank deposits and marketable securities (both short and long-term) decreased $294.6 million to $1.4 billion from March 31, 2018.  The decrease reflects the impact from the $500.0 million special dividend paid in December 2018 and the $88.8 million impact from the completion of the Company’s share repurchase program.

Mr. Uday Baldota, Taro’s CEO stated, “Despite the challenging market conditions we face due primarily to the continuing pricing pressure, our team has delivered a good performance.  With a clearly defined strategy, we are shaping our business and product portfolio with internal and inorganic developments.  This effort is aimed at doing more for patients and staying relevant for our customers.”
 
FDA Approvals and Filings

The Company recently received approvals from the U.S. Food and Drug Administration (“FDA”) for five Abbreviated New Drug Applications (“ANDAs”): Minoxidil Topical Aerosol, 5% (for women); Clobazam Oral Suspension, 2.5 mg/mL; Naftifine Hydrochloride Gel USP, 2%; Dapsone Tablets USP, 25 mg and 100 mg and Deferiprone Tablets 500mg.  The Company currently has a total of twenty-six ANDAs awaiting FDA approval, including eight tentative approvals.

Earnings Call (8:00 am ET, May 23, 2019)

As previously announced, the Company will host an earnings call at 8:00 am ET on Thursday, May 23, 2019, where senior management will discuss the Company’s performance and answer questions from participants.  This call will be accessible through an audio dial-in and a web-cast. Audio conference participants can dial-in on the numbers below:
●
               Participant Toll-Free Dial-In Number: +1 (844) 421-0601    ID: 8698095
●
               Participant International Dial-In Number: +1 (716) 247-5800   ID: 8698095
●
              Web-cast:  More details are provided on our website, www.taro.com

To participate in the audio call, please dial the numbers provided above five to ten minutes ahead of the scheduled start time.  The operator will provide instructions on asking questions before the call.  The transcript of the event will be available on the Company’s website at www.taro.com.  An audio playback will be available for ten (10) days following the call.

The Company cautions that the foregoing financial information is unaudited and could be 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 www.taro.com.


Taro Pharmaceutical Industries Ltd.
Page 3 of 6


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 2019.  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.
Page 4 of 6


TARO PHARMACEUTICAL INDUSTRIES LTD.
  
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS  
(U.S. dollars in thousands, except share data)  

                       

                       
   
Quarter Ended
    
Year Ended
  
   
March 31,
    
March 31,
  
   
2019
    
2018
    
2019
    
2018
  
   
(unaudited)
    
(unaudited)
    
(unaudited)
    
(audited)
  
Sales, net
  
$
179,921
    
$
175,216
    
$
669,893
    
$
661,913
  
Cost of sales
    
60,384
      
56,287
      
224,169
      
198,405
  
Gross profit
    
119,537
      
118,929
      
445,724
      
463,508
  
                                 
Operating Expenses:
                                
   Research and development
    
20,512
      
20,308
      
63,238
      
70,418
  
   Selling, marketing, general and administrative
    
23,321
      
23,775
      
89,971
      
88,196
  
   Settlements and loss contingencies
    
322
      
24
      
(3,678
)
    
1,884
  
Operating income
    
75,382
      
74,822
      
296,193
      
303,010
  
                                 
Financial (income) expense, net:
                                
   Interest and other financial income
    
(8,241
)
    
(5,894
)
    
(33,542
)
    
(19,934
)
   Foreign exchange expense (income)
    
9,397
      
(16,041
)
    
(25,309
)
    
32,465
  
Other (loss) gain, net
    
(100
)
    
458
      
1,810
      
1,889
  
Income before income taxes
    
74,126
      
97,215
      
356,854
      
292,368
  
Tax expense
    
15,649
      
10,691
      
74,732
      
81,954
  
Income from continuing operations
    
58,477
      
86,524
      
282,122
      
210,414
  
Net loss from discontinued operations attributable to Taro
    
—
      
(96
)
    
—
      
(335
)
Net income
    
58,477
      
86,428
      
282,122
      
210,079
  
Net income (loss) attributable to non-controlling interest
    
42
      
141
      
345
      
(1,071
)
Net income attributable to Taro
  
$
58,435
    
$
86,287
    
$
281,777
    
$
211,150
  
                                 
Net income per ordinary share from continuing operations attributable to Taro:
                                
Basic and Diluted
  
$
1.52
    
$
2.17
    
$
7.23
    
$
5.27
  
                                 
Net loss per ordinary share from discontinued operations attributable to Taro:
                                
Basic and Diluted
  
$
 —    
$
(0.00
)
 *
$
 —    
$
(0.01
)
                                 
Net income per ordinary share attributable to Taro:
                                
Basic and Diluted
  
$
1.52
    
$
2.17
    
$
7.23
    
$
5.26
  
                                 
Weighted-average number of shares used to compute net income per share:
                                
Basic and Diluted
    
38,548,516
      
39,729,942
      
38,990,058
      
40,155,087
  
                                 
* Amount is less than $0.01
                                
May not foot due to rounding.
                                


Taro Pharmaceutical Industries Ltd.
Page 5 of 6


TARO PHARMACEUTICAL INDUSTRIES LTD.  
SUMMARY CONSOLIDATED BALANCE SHEETS
  
(U.S. dollars in thousands)  
             
             
   
March 31,
    
March 31,
  
   
2019
    
2018
  
ASSETS
  
(unaudited)
    
(audited)
  
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
567,451
    
$
576,611
  
Short-term and current maturities of long-term bank deposits
    
—
      
296,188
  
Marketable securities
    
481,883
      
549,821
  
Accounts receivable and other:
                
Trade, net
    
237,945
      
206,455
  
Corporate tax receivable
    
25,969
      
100,380
  
Other receivables and prepaid expenses
    
21,393
      
22,585
  
Inventories
    
148,079
      
144,595
  
TOTAL CURRENT ASSETS
    
1,482,720
      
1,896,635
  
Long-term deposits and marketable securities
    
304,322
      
225,639
  
Property, plant and equipment, net
    
206,242
      
193,727
  
Deferred income taxes
    
110,974
      
87,257
  
Other assets
    
31,068
      
29,952
  
TOTAL ASSETS
  
$
2,135,326
    
$
2,433,210
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
CURRENT LIABILITIES:
                
Trade payables
  
$
35,060
    
$
25,697
  
Other current liabilities
    
181,761
      
190,059
  
TOTAL CURRENT LIABILITIES
    
216,821
      
215,756
  
Deferred taxes and other long-term liabilities
    
7,383
      
7,055
  
TOTAL LIABILITIES
    
224,204
      
222,811
  
                 
Taro shareholders' equity
    
1,905,536
      
2,205,158
  
Non-controlling interest
    
5,586
      
5,241
  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
2,135,326
    
$
2,433,210
  


Taro Pharmaceutical Industries Ltd.
Page 6 of 6


TARO PHARMACEUTICAL INDUSTRIES LTD.
  
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS  
(U.S. dollars in thousands)  
             
             
   
Year Ended March 31,
  
   
2019
    
2018
  
   
(unaudited)
    
(audited)
  
Cash flows from operating activities:
            
Net income
  
$
282,122
    
$
210,079
  
Adjustments required to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
    
18,597
      
16,496
  
Realized loss on sale of marketable securities and long-lived assets
    
27
      
275
  
Change in derivative instruments, net
    
3,115
      
(893
)
Effect of change in exchange rate on inter-company balances, marketable securities and bank deposits
    
(29,533
)
    
34,970
  
Deferred income taxes, net
    
12,262
      
56,007
  
Increase in trade receivables, net
    
(32,088
)
    
(2,297
)
Increase in inventories, net
    
(5,515
)
    
(1,978
)
Decrease in other receivables, income tax receivable, prepaid expenses and other
    
74,256
      
12,644
  
Increase (decrease) in trade, income tax, accrued expenses, and other payables
    
529
      
(936
)
Income from marketable securities, net
    
(63
)
    
(678
)
Net cash provided by operating activities
    
323,709
      
323,689
  
                 
Cash flows from investing activities:
                
Purchase of plant, property & equipment, net
    
(27,018
)
    
(26,886
)
Investment in other intangible assets
    
(3,666
)
    
(2,650
)
Proceeds from short-term bank deposits, net
    
225,503
      
161,032
  
Proceeds from long-term deposits and other assets
    
70,685
      
396,281
  
Investment in marketable securities, net
    
(8,368
)
    
(770,490
)
Proceeds from the sale of long-lived assets
    
—
      
1,075
  
Net cash provided by (used in) investing activities
    
257,136
      
(241,638
)
                 
Cash flows from financing activities:
                
Purchase of treasury stock
    
(88,849
)
    
(106,986
)
Dividends paid
    
(500,000
)
    
—
  
Net cash used in financing activities
    
(588,849
)
    
(106,986
)
                 
Effect of exchange rate changes on cash and cash equivalents
    
(1,156
)
    
1,147
  
Decrease in cash and cash equivalents
    
(9,160
)
    
(23,788
)
Cash and cash equivalents at beginning of period
    
576,611
      
600,399
  
Cash and cash equivalents at end of period
  
$
567,451
    
$
576,611
  
                 
Cash Paid during the year for:
                
Income taxes
  
$
71,096
    
$
55,051
  
Cash Received during the year for:
                
Income taxes
  
$
69,436
    
$
36,668
  
Non-cash investing transactions:
                
Purchase of property, plant and equipment included in accounts payable
  
$
4,740
    
$
2,281
  
Non-cash financing transactions:
                
Purchase of treasury stock
  
$
—
    
$
4,348
  
Purchase of marketable securities
  
$
2,003
    
$
3,491
  

#####
 
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:  May 22, 2019
 
TARO PHARMACEUTICAL INDUSTRIES LTD.
By:
 /s/ Uday Baldota
 
 
Name:
Uday Baldota
 
 
 Title:
 Chief Executive Officer and Director