FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 under
the Securities Exchange Act of 1934
For the month of July, 2005
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 Reports Record Sales for Second Quarter and First Half
HAWTHORNE, N.Y.--(BUSINESS WIRE)--July 28, 2005--Taro
Pharmaceutical Industries Ltd. (Nasdaq:TARO) today reported results
for the Company's second quarter and six months ended June 30, 2005.
Second Quarter 2005 Results
Taro reported record second-quarter sales of $78.6 million,
compared with $49.1 million in the second quarter of 2004. Gross
profit for the quarter was $43.5 million, compared with $23.5 million
for the second quarter of 2004. The results for the second quarter of
2005 did not include certain sales and gross profit from proprietary
consumer products divested in the first quarter of 2005.
Selling, general and administrative ("SG&A") expenses for the
quarter were $23.3 million, compared with $30.6 million in the
year-ago quarter. The reduction in SG&A expenses for the second
quarter of 2005 reflects the impact of cost reduction initiatives and
a decrease in selling costs following the March 2005 divestiture of
the Company's proprietary over-the-counter products in the U.S. R&D
expenses in the second quarter of 2005 were $11.8 million, compared
with $10.5 million for the year-ago quarter.
The Company reported net income for the quarter of $6.5 million,
or $0.22 per diluted share, compared with a net loss of $8.9 million,
or a net loss of $0.31 per share, for the year-ago quarter.
"In addition to reporting record sales for the second quarter and
first half of 2005, the Company continued to show sequential
improvement in operating income and net income despite intensifying
competition in the U.S. market for generic pharmaceutical products,"
said Barrie Levitt, M.D., Chairman of the Company. "Net income
increased 29% compared with the first quarter of 2005 even after Taro
increased its investment in research by $2.1 million. In addition,
SG&A expenses, on both an absolute basis and as a percentage of sales,
are lower. Inventories decreased as we continued to be vigilant in our
expense control and cash management programs."
First Half 2005 Results
Taro reported record first-half sales for 2005 of $157.1 million,
compared with $133.2 million for the same period in 2004. The
Company's gross profit in the six-month period was $86.9 million,
compared with $79.9 million for the same period in 2004.
Selling, general and administrative expenses for the period were
$49.7 million, compared with $64.7 million for the first half of last
year. R&D expenses were $21.6 million, compared with $22.2 million for
the year-ago period.
Net income for the first half of 2005 was $11.5 million, or $0.39
per diluted share, compared with $2.3 million, or $0.08 per diluted
share, for the year-ago period.
Financial Position
At June 30, 2005, Taro's total assets were $702.5 million, an
increase of $5.7 million compared with $696.8 million at December 31,
2004.
Total liabilities were $324.1 million at June 30, 2005, a decrease
of $3.9 million compared with $328.0 million at the end of 2004.
Shareholders' equity at June 30, 2005 was $377.7 million, an
increase of $9.6 million compared with $368.1 million at the end of
2004.
Proprietary Research
Taro is conducting preliminary clinical research in preparation
for a Phase III clinical study in Canada of T2000 for the treatment of
essential tremor. The Company is also conducting research on T2000 and
other proprietary non-sedating barbiturate compounds for a variety of
neurological indications.
There can be no assurance of the successful completion of Phase
III testing, or of the approval by any regulatory authority of any of
these drugs for any indication, or their commercial success if and
when approved.
U.S. FDA Approvals and Filings
During the second quarter, Taro reported that it had received FDA
approval of its ANDA for ciclopirox olamine cream USP, 0.77%, a
topical antifungal product used for treating fungal infections of the
skin. This prescription pharmaceutical product is bioequivalent to
Medicis Pharmaceutical Corp.'s Loprox(R) Topical Cream.
In the second quarter, the Company also received approval of its
ANDA for fluticasone propionate ointment 0.005%, a topical
corticosteroid product used for treating inflammatory skin disorders.
This prescription pharmaceutical product is bioequivalent to
GlaxoSmithKline's Cutivate(R) Ointment.
Currently, Taro has 28 filings at the FDA. These consist of 27
ANDAs, including two tentative approvals, plus a New Drug Application
related to the Company's proprietary NonSpil(R) liquid drug delivery
system. In addition, the Company has regulatory filings in Israel,
Canada and other countries. According to industry sources, the ANDAs
address U.S. markets with annual sales in excess of $1 billion.
Conference Call
The Company will conduct a conference call to discuss second
quarter and six month results on Thursday, July 28, 2005 at 11 a.m.
Eastern Time (8 a.m. Pacific Time). The call will be available live
via the Internet by accessing www.taro.com. An online replay will be
available through August 4, 2005 on www.taro.com. A telephone replay
will also be available through August 5, 2005 by dialing
1-888-286-8010 (domestic U.S.) or +617-801-6888 (international) and
providing the passcode 82524360 when prompted.
Taro 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.
Certain statements in this release may be considered
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements may 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 "anticipates," "expects," "plans," "intends," "designs,"
"believes," "hopes," or "wants" to happen or exist; statements about
which the Company is "optimistic" or has "confidence," or, similar
language. 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 general economic conditions, industry and market
conditions, slower than anticipated penetration of new markets,
changes in the Company's financial position, regulatory actions and
legislative actions in the countries in which Taro operates, future
demand and market size for products under development, marketplace
acceptance of new or existing products, either generic or proprietary,
sold directly by Taro or through other companies, 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.
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED BALANCE SHEETS
(US dollars in thousands)
June 30, March 31, December 31,
2005 2005 2004
---- ---- ----
Assets
Current Assets:
Cash and Cash Equivalents $78,665 $78,010 $98,630
Restricted Short-Term Bank Deposits 6,750 6,796 6,598
Accounts Receivable - Trade 138,965 129,955 124,674
Accounts Receivable - Other and
Prepaid Expenses 19,203 16,434 16,621
Inventories 79,003 80,618 86,591
------------------------------------- -------- -------- --------
Total Current Assets 322,586 311,813 333,114
Long Term Investments 18,512 21,300 19,984
Property, Plant and Equipment, net 260,383 257,935 241,966
Deferred Taxes and Other Assets 101,060 102,160 101,783
------------------------------------- -------- -------- --------
TOTAL ASSETS $702,541 $693,208 $696,847
===================================== ======== ======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Short-Term Bank Credits $67,282 $58,966 $64,961
Current Maturities of Long-Term
Liabilities 19,325 15,517 16,944
Accounts Payable and Accrued Expenses 50,036 51,592 49,624
------------------------------------- -------- -------- --------
Total Current Liabilities 136,643 126,075 131,529
Long -Term Liabilities 179,495 183,723 187,346
Deferred Taxes and Other Liabilities 8,003 8,644 9,158
------------------------------------- -------- -------- --------
Total Liabilities 324,141 318,442 328,033
Minority Interest 664 654 694
Shareholders' Equity 377,736 374,112 368,120
------------------------------------- -------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $702,541 $693,208 $696,847
===================================== ======== ======== ========
TARO PHARMACEUTICAL INDUSTRIES LTD.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(US dollars in thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
---- ---- ---- ----
SALES $78,571 $49,103 $157,112 $133,180
Cost of Sales 35,069 25,613 70,165 53,327
---------- ---------- ---------- ----------
Gross Profit 43,502 23,490 86,947 79,853
Operating Expenses:
Selling, General and
Administrative 23,322 30,575 49,739 64,723
Research and Development 11,848 10,510 21,599 22,229
---------- ---------- ---------- ----------
Operating Income (Loss) 8,332 (17,595) 15,609 (7,099)
Financial and Other
Expenses Net 1,595 2,183 3,630 3,987
---------- ---------- ---------- ----------
6,737 (19,778) 11,979 (11,086)
Taxes on Income 233 (10,352) 488 (12,610)
---------- ---------- ---------- ----------
6,504 (9,426) 11,491 1,524
Minority Share in Profits
(Loss) of Subsidiary 11 (566) (30) (736)
---------- ---------- ---------- ----------
NET INCOME (LOSS) $6,493 $(8,860) $11,521 $2,260
========== ========== ========== ==========
Earnings (Loss) per
Ordinary Share $0.22 $(0.31) $0.39 $0.08
Diluted Earnings per
Ordinary Share $0.22 $0.39 $0.08
Weighted Average Number of
Shares:
BASIC 29,235,878 29,023,594 29,213,941 29,006,821
DILUTED 29,646,402 29,630,724 29,762,244
CONTACT: Taro Pharmaceutical Industries Ltd.
Daniel Saks, 914-345-9000 ext. 6208
OR
Kevin Connelly, 914-345-9000 ext. 6338
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: July 28, 2005
Taro Pharmaceutical Industries Ltd.
By: /s/ Kevin Connelly
-----------------------------------
Name: Kevin Connelly
Title: Senior Vice President
Chief Financial Officer