Taro Pharmaceuticals Reports Fourth Quarter and Record Annual Sales.HAWTHORNE, N.Y.--(BUSINESS WIRE)--March 13, 1998-- Company Continues Investments in R&D and Infrastructure in Preparation for New Product Launches Expected in 1998 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. Approves ANDA ANDA abbr. abbreviated new drug application for Etodolac etodolac /eto·do·lac/ (e-to-do´lak) a nonsteroidal antiinflammatory drug used as an analgesic and antiinflammatory, especially to treat arthritis. e·to·do·lac n. Tablets, 400mg Taro Pharmaceutical Industries Ltd. (Nasdaq/NNM:TAROF) Friday reported sales for the fourth quarter and year ended Dec. 31, 1997. The company noted that its results were partially offset by increased investments in R&D and infrastructure resulting in decreased net income for the fourth quarter and year ended Dec. 31, 1997. The company reported sales of $16,034,000 for the fourth quarter, compared with $15,064,000 for the fourth quarter of 1996. R&D expenditures were $2,993,000, or 19 percent of sales, compared with $2,518,000, or 17 percent of sales, for the fourth quarter of 1996. Investments in R&D and infrastructure to increase efficiency and prepare for new product launches expected in 1998 accounted for the decline in fourth quarter net income to $179,000, or 2 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with $714,000, or 7 cents per share for the fourth quarter of 1996. Preparation for New Product Launches "Over the past two years Taro has invested $17 million in capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) designed to spur our growth. These investments in infrastructure were primarily concentrated in the areas of state-of-the-art equipment and facilities to enhance production efficiency and to foster development of approved products and products awaiting approval," stated Barrie Levitt, M.D., chairman of the company. "These investments are fortifying our 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. business and newer topical dermatologic dermatological, dermatologic pertaining to dermatology; of or affecting the skin. products in the U.S., and are expected to pave the way to profitable product launches in 1998. In fact, 1997 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. , excluding R&D expenditures, was $13.7 million, or 22 percent of sales." The company reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $60,971,000 for fiscal 1997, compared with $56,528,000 for the previous year. R&D expenditures increased 9 percent to $9,695,000, or 16 percent of sales for fiscal 1997, compared with an expenditure of $8,913,000, or 16 percent of sales for fiscal 1996. Net income for fiscal 1997 was $1,413,000, or 14 cents per share, compared with $2,196,000, or 21 cents per share for fiscal 1996. Despite overall price erosion in the generic-pharmaceutical industry, Taro successfully maintained its gross-profit percentage on sales of prescription products. Increased sales of OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). products and bulk pharmaceutical chemicals, which have lower margins, slightly reduced the company's consolidated 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. . New Product Approval The company reported that it received notification from the U.S. Food and Drug Administration (FDA) that its Abbreviated New Drug Application abbreviated new drug application Pharmacology An application made in the US by a pharmaceutical company requesting authority to market a 'new' drug for which both its therapeutic indications and formulation were previously approved by the FDA in another similar (ANDA) for Etodolac Tablets, 400mg was approved for marketing 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. . This is Taro's fourth solid dosage form product to be manufactured in Israel for the U.S. market. Taro's Etodolac Tablets are bioequivalent bi·o·e·quiv·a·lent n. A value indicating the rate at which a substance enters the bloodstream and becomes available to the body. to Lodine(see note) Tablets, and are used in the treatment of arthritis and other pain management indications. Industry sources estimate the U.S. market for Etodolac Tablets to be approximately $100 million. Capital Expenditure Program Advances The company's capital expenditure program for new plant and equipment is nearing completion in Canada and Israel. This program, which includes new and improved compounding and state-of-the-art packaging equipment, additional research laboratories and pilot plants to support R&D, has doubled production capacity and is expected to further increase production efficiency and profitability in 1998. The company expects its business growth, including the newer solid dosage form products and topical dermatologic products, to be supported by these critical investments in production and operations. Proprietary Development Program The company continues to make substantial investments in the development of its 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. drug. To date, the results of toxicity studies in animals are encouraging, with no unanticipated adverse effects reported. The company expects to begin testing the drug in humans during the second half of 1998. The company, having secured patents for its Nonspil delivery system in Australia and South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , is working on commercialization of the delivery system in those countries. Taro is continuing its Nonspil development program with formulations using various active ingredients An active ingredient, also active pharmaceutical ingredient (or API), is the substance in a drug that is pharmaceutically active. Some medications may contain more than one active ingredient. . Taro also continues work on its projects involving the short-term treatment of vaginal yeast infections Vaginal yeast infection An overgrowth of fungus in the vaginal area. Mentioned in: Jock Itch . The company is in discussions with outside parties regarding the commercialization of these products. Building International Markets To date, the company has entered into several agreements to expand its international distribution. These agreements include a distributorship with Lagap, a pharmaceutical company in the United Kingdom, a licensing agreement with Cipla, one of the largest domestic pharmaceutical companies in India, and a distribution agreement with United Laboratories of the Philippines, the Philippines, The (fĭl`əpēnz'), officially Republic of the Philippines, republic (2005 est. pop. 87,857,000), 115,830 sq mi (300,000 sq km), SW Pacific, in the Malay Archipelago off the SE Asia mainland. largest domestic pharmaceutical company in Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. . During the fourth quarter, the United Kingdom Medicines Control Agency conducted a preapproval inspection of Taro's pharmaceutical facilities in Israel in preparation for permitting the marketing of Taro's products in the United Kingdom. Outlook for Growth "During 1997, Taro successfully concentrated on building relationships with major U.S. customers. Taro expanded its presence in the U.S. market by establishing a solid reputation as a reliable supplier with major drug chains and wholesalers," stated Rebecca Pike, Group vice president, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . "These strong relationships should allow Taro to increase sales of current products and launch anticipated 1998 approvals successfully and profitably." The company has multiple regulatory filings in Canada and Israel, and twelve ANDAs currently submitted to the FDA. Industry sources estimate that the current markets in the U.S. for the drugs targeted by these ANDAs have an aggregate value of approximately $825 million. Taro received approval for four ANDAs from the FDA during 1997: Miconazole Nitrate mi·con·a·zole nitrate n. An antifungal used topically or parenterally. Vaginal Cream for the treatment of vaginal yeast infections; Acetazolamide Tablets, a glaucoma glaucoma (glôkō`mə), ocular disorder characterized by pressure within the eyeball caused by an excessive amount of aqueous humor (the fluid substance filling the eyeball). treatment, and part of Taro's entrance into the solid dosage form market in the U.S.; and two topical corticosteroids Topical corticosteroids Cortisone and related drugs used on the skin and in the eye, usually for allergic conditions. Mentioned in: Corneal Ulcers , Fluocinonide Gel, and Triamcinolone Acetonide triamcinolone acetonide (topical) (as´  tō´nīd),n brand names: Cream. "Our investments in capital expenditures, research and marketing are beginning to pay off in the marketplace. We expect these investments to enable a substantial improvement in Taro's performance in 1998," Dr. Levitt concluded. Taro Pharmaceutical is a multinational pharmaceutical company whose research and development program has resulted in the company being the first generic marketer of several branded drugs, as well as the developer of several novel pharmaceutical compounds. For further information on Taro Pharmaceutical, visit the company's Website at http://www.taropharma.com. To receive further information on Taro Pharmaceutical, at no charge, dial 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 TAROF. NOTE: Lodine is a registered trademark of Wyeth-Ayerst Laboratories. -0- Certain statements in this release regarding expected success in various markets by the company's products, with respect to the results expected from research and development, and as to expected approvals by the U.S. Food and Drug Administration 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 penetration 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, which ended on Dec. 31, 1997 -0-
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(US dollars in thousands, except per share data)
Three Months Ended Year Ended
Dec. 31, Dec. 31,
1997 1996 1997 1996
Sales $16,034 $15,064 $60,971 $56,528
Cost of sales 7,646 6,885 29,275 25,145
------- ------- ------- -------
Gross profit 8,388 8,179 31,696 31,383
Operating expenses:
Selling and administrative 4,647 4,502 18,002 17,659
------- ------- ------- -------
3,741 3,677 13,694 13,724
Research and development 2,993 2,518 9,695 8,913
------- ------- ------- -------
Operating income 748 1,159 3,999 4,811
Financial expenses - net 643 330 2,173 1,644
------- ------- ------- -------
105 829 1,826 3,167
Other income (expense) - net 188 (9) 201 106
------- ------- ------- -------
293 820 2,027 3,273
Taxes on income 88 105 597 1,061
------- ------- ------- -------
205 715 1,430 2,212
Minority share in profits of
subsidiaries 26 1 17 16
------- ------- ------- -------
Net income $179 $714 $1,413 $2,196
======= ======= ======= =======
Earnings per Ordinary Share $0.02 $0.07 $0.14 $0.22
Diluted earnings per
Ordinary Share $0.02 $0.07 $0.14 $0.21
Weighted average number of shares -
BASIC EPS 9,987,637 9,975,081 9,980,470 9,955,758
DILUTED EPS 10,106,133 10,393,252 10,413,067 10,388,953
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(US dollars in thousands)
Dec. 31, Dec. 31,
1997 1996
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 2,706 $ 2,422
Accounts receivable 21,443 17,479
Inventories 14,795 13,109
------- -------
Total current assets 38,944 33,010
Property, plant and equipment, net 28,731 23,672
Other assets 4,942 5,198
------- -------
Total assets $72,617 $61,880
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Short-term bank credits $11,139 $ 7,883
Current maturities of long-term liabilities 2,533 1,131
Accounts payable and accrued expenses 14,852 11,200
------- -------
Total current liabilities 28,524 20,214
Long-term liabilities 16,115 14,740
Deferred taxes and other liabilities 570 526
------- -------
Total liabilities 45,209 35,480
Minority interest 100 82
Shareholders' equity 27,308 26,318
------- -------
Total liabilities and shareholders' equity $72,617 $61,880
======= =======
CONTACT: Taro Pharmaceutical Industries Ltd., Hawthorne Kevin Connelly Kevin Connelly was born in Middlesbrough, England. He is an impressionist comedian, and after dinner speaker and is probably most famous for his role on the popular BBC television programme 'Dead Ringers'. , 914/345-9001 or The Financial Relations Board Inc. Daniel Saks, 310/442-0599 (general info) Kathy Brunson, 312/266-7800 (analysts) |
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