a5857905.htm
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 December, 2008

Commission File Number 000-22286
 
Taro Pharmaceutical Industries Ltd.
(Translation of registrant's name into English)

14 Hakitor Street, Haifa Bay 26110, 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  x    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  x

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. (“Taro” or the “Company”) is supplementing its press release dated November 11, 2008 by providing in tabular form its preliminary, unaudited financial results for the nine months ended September 30, 2008, and updated information on its liquidity.
 
As of December 15, 2008, Taro’s cash and cash equivalents have increased to $77.6 million, after payments of debt principal and interest made in the fourth quarter of 2008 of approximately $12.0 million.  Debt principal and interest payable for the remaining portion of 2008 is approximately $1.2 million.  The following chart illustrates the Company’s net debt position over the last 20 months, which reflects the significant reduction of the Company’s financial indebtedness and increase in cash over the period.
 
 
GRAPHIC
 
 
 
The Company cautions 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 provided represents the best information currently available to Taro management.
 
 
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SAFE HARBOR STATEMENT
Certain statements in this 6-K filing 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, and statements with respect to the Company’s financial performance, availability of financial information and estimates of financial results and financial information for 2007 and 2008.  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 the audits of 2006, 2007 and/or 2008, 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.
 

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TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in Thousands)
 

 
   
Unaudited and Unreviewed
 
   
September 30,
   
December 31,
 
   
2008
   
2007
 
ASSETS
           
             
Current Assets:
           
Cash and Cash Equivalents
  $ 66,253     $ 45,178  
Accounts Receivable, net  – Trade
    72,037       68,497  
Accounts Receivable – Other and prepaid expenses
    35,269       26,733  
Inventories     70,999       66,036  
Total Current Assets     244,558       206,444  
                 
Long-Term Investments
    20,713       18,765  
Property, Plant and Equipment, net
    196,466       212,437  
Deferred Taxes and Other Assets     45,461       47,625  
TOTAL ASSETS   $ 507,198     $ 485,271  
                 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
Current Liabilities:
               
Short-Term Bank Liabilities*
  $ 93,248     $ 95,320  
Current Maturities of Long-Term Liabilities
    32,166       28,564  
Accounts Payable and Accrued Expenses     80,898       72,543  
Total Current Liabilities     206,312       196,427  
                 
Long-Term Liabilities
    86,479       94,048  
Deferred Taxes and Other Liabilities     8,365       8,402  
                 
TOTAL LIABILITIES
    301,156       298,877  
                 
Shareholders’ Equity     206,042       186,394  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 507,198     $ 485,271  


* Includes long-term debt reclassified by the Company, due to non-compliance with certain covenants, as short-term liabilities in the amount of $30,722 and $35,834 as of September 30, 2008 and December 31, 2007, respectively.
 
 
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TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(U.S. Dollars in Thousands, Except Per Share Data)


 
   
Unaudited and Unreviewed
 
       
   
Nine Months Ended September 30,
 
   
2008
   
2007
 
             
SALES
  $ 256,637     $ 231,800  
Cost of Sales
    115,801       105,998  
                 
Gross Profit
    140,836       125,802  
                 
Operating Expenses:
               
 Selling and Administrative
    68,276       72,450  
                 
 Operating Income before Research and
               
 Development
    72,560       53,352  
                 
 Research and Development
    27,595       20,605  
                 
Operating Income
    44,965       32,747  
                 
Financial  Expenses:
               
 Interest
    13,565       12,687  
 Foreign exchange fluctuations
    (6,245 )     6,113  
      7,320       18,800  
Other Income
    539       4,520  
      38,184       18,467  
Taxes on Income     5,068       4,229  
                 
NET INCOME
  $ 33,116     $ 14,238  
                 
                 
                 
Earnings per Ordinary Share
  $ 0.85     $ 0.43  
Diluted Earnings per Ordinary Share
  $ 0.82     $ 0.43  
                 
                 
Weighted Average Number of Shares-
               
BASIC EPS
    39,186,478       33,215,730  
DILUTED EPS
    40,398,799       33,306,038  
 
 
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TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. Dollars in Thousands)
 
 
 
   
Unaudited and Unreviewed
 
   
Nine Months Ended
   
Year Ended
 
   
September 30, 2008
   
December 31, 2007
 
             
             
Operating Activities:            
Net Income
  $ 33,116     $ 21,139  
                 
Adjustments required to reconcile net income to net cash
               
provided by operating activities:
               
     Depreciation and amortization
    17,523       26,094  
     Stock based compensation
    226       357  
     Gain on sales of property, plant and equipment
    -       (3,844 )
     Increase in fair value of derivative instruments
    (9,603 )     (6,776 )
     Increase in long-term debt due to currency fluctuations
    11,439       7,714  
     Amortization of deferred revenue
    (982 )     (5,894 )
     Increase in trade receivables
    (8,865 )     (26,775 )
     Increase in other receivables and tax assets
    (2,766 )     (305 )
     Increase in inventories
    (5,458 )     (3,175 )
     Foreign exchange effect on intercompany balances
    (4,397 )     6,959  
     Increase (decrease) in trade and other payables and accruals
    10,418       (10,798 )
Net Cash Provided by Operating Activities
    40,651       4,696  
                 
Investing Activities:
               
     Purchase of property, plant & equipment, net of related grants
    (2,631 )     (4,453 )
     Investment in other intangible assets
    (339 )     (271 )
     Proceeds from sale of marketable securities
    -       114  
     Proceeds from sales of property, plant and equipment
    -       10,321  
Net Cash (Used) Provided by Investing Activities
    (2,970 )     5,711  
                 
Financing Activities:
               
     Proceeds from issuance of shares, net
    -       56,417  
     Repayments of long-term debt
    (19,952 )     (31,965 )
     Proceeds (repayments) of short-term bank debt, net
    3,808       (6,754 )
Net Cash (Used) Provided by Financing Activities
    (16,144 )     17,698  
                 
Effect of Exchange Rate Changes
    (462 )     162  
                 
Net increase in cash
    21,075       28,267  
Cash at beginning of period
    45,178       16,911  
                 
Cash at End of Period
  $ 66,253     $ 45,178  
 
 
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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: December 18, 2008  
     
    TARO PHARMACEUTICAL INDUSTRIES LTD.
     
    By: /s/ Tal Levitt
      Name: Tal Levitt
      Title: Director and Secretary
 
 
 
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