Taro Pharmaceutical Industries Reports Record First Quarter Sales and Earnings.Business Editors & Medical Writers HAWTHORNE, N.Y.--(BUSINESS WIRE)--April 18, 2000 Taro Pharmaceutical (Nasdaq/NMS:TARO): First Quarter Highlights: -- Sales Increase to a Record $22.2 Million, a 21% Gain Over Q1 1999 -- Net Income Increases 95% to a Record $1.6 Million, or $0.14 Per Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. Share, from $836,000, or $0.08 Per Diluted Share, for Q1 1999 -- Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Increases to $3.2 Million from $2.3 Million in Q1 1999 -- Gross Profit Margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. Increases to 60% from 58% in Q1 1999 -- Taro Establishes UK Subsidiary with Experienced Pharmaceutical Executives -- Approval of NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any for OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). Clotrimazole clotrimazole /clo·trim·a·zole/ (klo-trim´ah-zol) an imidazole derivative used as a broad-spectrum antifungal agent. clo·trim·a·zole n. Three-Day Vaginal vag·i·nal adj. 1. Of or relating to the vagina. 2. Relating to or resembling a sheath. vaginal pertaining to the vagina, the tunica vaginalis testis, or to any sheath. Cream 2% in April 2000 Taro Pharmaceutical Industries Ltd. (Nasdaq/NMS:TARO) today reported record results in first quarter 2000 sales and earnings. Financial Results The Company's sales increased to $22,232,000 for the first quarter ended March 31, 2000, compared with $18,432,000 for the first quarter of 1999, an increase of 21%. Operating income before R&D expenditures was $6,687,000, or 30% of sales for the first quarter of 2000, compared with $5,162,000, or 28% of sales, for the first quarter of 1999. In the first quarter of 2000, R&D expenditures remained steady as a percentage of sales, at $3,532,000, or 16% of sales, compared with $2,876,000, or 16% of sales, for the first quarter of 1999. Operating income for the first quarter of 2000 increased to $3,155,000 from $2,286,000 in the first quarter of 1999. Net income for the first quarter of 2000 was $1,628,000, or $0.14 per diluted share, compared with $836,000, or $0.08 per diluted share for the first quarter of 1999. Gross profit margins increased to 60% for the first quarter of 2000, up from 58% for the same quarter last year. "Taro's strong sales and outstanding profit performance was aided by the continued market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of the Company's solid dosage form A dosage form is the physical form of a dose of medication, such as a capsule or injection. The route of administration is dependent on the dosage form of a given drug. products such as Warfarin Sodium war·fa·rin sodium n. An anticoagulant with the same actions as dicumarol. warfarin sodium, (wôr´f Tablets and Ketoconazole ketoconazole /ke·to·co·na·zole/ (ke?to-kon´ah-zol) a derivative of imidazole used as an antifungal agent. ke·to·co·na·zole n. Tablets, both of which were approved for sale in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. during 1999," stated Barrie Levitt, M.D., Chairman of the Company. Proprietary Research Results in NDA Approval for Three-Day Vaginal Cream In April 2000, Taro's New Drug Application ("NDA") for its over-the-counter Clotrimazole Three-Day Vaginal Cream, 2% used in the treatment of yeast infections yeast infection: see candidiasis. Yeast infection An infection mainly caused by fungi of the genus Candida. Although members of the genus Candida was approved by the U.S. Food and Drug Administration ("FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. "). Taro will utilize its position as a leading supplier of store-brand over-the-counter topical products to sell the cream under private label to customers. Taro is the first company to offer a private label cream in the three-day vaginal yeast infection Vaginal yeast infection An overgrowth of fungus in the vaginal area. Mentioned in: Jock Itch market segment. This NDA approval resulted from Taro's proprietary research program, which includes other projects such as the patented NonSpil(TM) spill-resistant liquid delivery system, and T2000, Taro's patented novel anticonvulsant anticonvulsant /an·ti·con·vul·sant/ (-kon-vul´sant) inhibiting convulsions, or an agent that does this. an·ti·con·vul·sant n. A drug that prevents or relieves convulsions. which is currently in Phase I clinical testing. Taro continues to invest between 14-17% of sales on Research and Development and remains committed to its proprietary and generic research programs. Taro Establishes UK Subsidiary During the first quarter of 2000, Taro announced that it had recruited and hired several experienced pharmaceutical executives to run its UK operations. Taro Pharmaceuticals (UK) Ltd. will serve as the Company's European headquarters as Taro pursues its global business development program. Taro UK is currently marketing Teril(R) CR, Taro's brand of carbamazepine carbamazepine /car·ba·maz·e·pine/ (kahr?bah-maz´e-pen) an anticonvulsant and analgesic used in the treatment of pain associated with trigeminal neuralgia and in epilepsy manifested by certain types of seizures. controlled release tablets in the UK, and has approvals to market this product in Germany and Italy. In addition, the Company is currently preparing files for regulatory submissions for a broad range of additional products to be launched in the UK and throughout Europe in the coming months and years. Future Outlook "Taro will continue to expand its generic drug generic drug, a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name. product offering while investing in its proprietary initiatives," stated Dr. Levitt. "As we continue to introduce new products and expand penetration into international markets, we expect to increase future sales and earnings." The Company has multiple regulatory filings in Canada and Israel, and eleven ANDAs currently submitted to the FDA. Industry sources estimate that the current annual markets in the U.S. for the drugs targeted by these ANDAs have an aggregate value exceeding $1.5 billion. About Taro Pharmaceutical Industries Ltd. 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., at no charge, dial 1-800-PRO-INFO and enter company code 104 or ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors TARO. You can also visit the Company's website at www.taropharma.com. Certain statements in this release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Although Taro Pharmaceutical Industries Ltd. believes the expectations reflected in such forward-looking statements to be based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include industry and market conditions, slower than anticipated penetrations of new markets, changes in the Company's financial position, regulatory actions, and other risks detailed from time to time in the Company's SEC reports, including its Annual Report on Form 20-F for the last fiscal year ended December 31, 1998.
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(US dollars in thousands)
MARCH 31, DECEMBER 31,
2000 1999
Assets
Current Assets:
Cash and Cash Equivalents $ 2,100 $ 3,003
Restricted Short-Term Bank Deposits 2,136 2,109
Accounts Receivable 30,680 27,406
Inventories 19,061 18,208
Total Current Assets 53,977 50,726
Property, Plant and Equipment, net 36,392 34,623
Other Assets 5,584 5,608
TOTAL ASSETS $95,953 $90,957
Liabilities and Shareholders' Equity
Current Liabilities:
Short-Term Bank Credits $ 9,925 $ 6,204
Current Maturities of Long-Term Liabilities 5,267 5,192
Accounts Payable and Accrued Expenses 13,795 13,364
Total Current Liabilities 28,987 24,760
Long-Term Liabilities 22,492 23,328
Deferred Taxes and Other Liabilities 2,261 2,168
Total Liabilities 53,740 50,256
Minority Interest 165 148
Shareholders' Equity 42,048 40,553
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $95,953 $90,957
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(US dollars in thousands, except per share data)
Three Months Ended
March 31,
2000 1999
SALES $ 22,232 $ 18,432
Cost of Sales 8,789 7,768
Gross Profit 13,443 10,664
Operating Expenses:
Selling and Administrative 6,756 5,502
Operating Income before
Research and Development 6,687 5,162
Research and Development 3,532 2,876
Operating Income 3,155 2,286
Financial Expenses - Net 958 950
2,197 1,336
Other Income - Net 3 1
2,200 1,337
Taxes on Income 555 493
1,645 844
Minority Share in Profits of Subsidiaries 17 8
NET INCOME $ 1,628 $ 836
Earnings per Ordinary Share $ 0.15 $ 0.08
Diluted Earnings per Ordinary Share $ 0.14 $ 0.08
Weighted Average Number of Shares-
BASIC EPS 10,692,386 10,057,237
DILUTED EPS 11,839,764 10,148,930
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