Taro reported an overall improved financial performance this quarter, particularly in terms of operating income.
The company's net sales increased to $148.2 million, up from $130.49 million in the same period last year. Sales growth in the quarter was also aided by a one-time gross-to-net adjustment (GTN). Excluding the GTN, sales still showed growth in the mid-single digits.
The company's operating income improved both year-on-year and quarter-on-quarter. It reported an operating income of $4.77 million with margin of 3.2%, compared to an operating loss of $6.8 million in the previous year and a loss of $7.9 million the previous quarter.
The company reported that its adjusted operating income was $10.9 million which equals to margin of 7.4%.
Elara Capital said the company's earnings before interest, taxes, depreciation and amortization (EBITDA) were impacted by additional expenses related to Sun Pharma’s offer to buy out the remaining Taro shareholders
The company was in the black as compared to a loss, the same time last year. It reported profits of $8.5 million versus a loss of $2.8 million in the previous year. However, profits were lower quarter-on-quarter at $8.5 million vs $10.1 million last quarter.
The increase in R&D spending by $2.8 million year-on-year to $14.3 million was attributed to increased clinical studies.
Sun Pharma holds 78% stake in Taro. The arm which is listed in NYSE has operations in US, Canada and Israel with 1,500 employees across the globe. It was bought by Sun Pharma in 2010 after a long drawn court battle. Taro has a portfolio of 200+ pharma products across generics, prescription and OTC.
Additionally, Sun Pharma has made a non-binding offer to buy out the remaining shares in Taro. The offer is at $38 per share. The proposal is under consideration by the Taro Board.
Taro stock closed at $33.5 in US trade.
(Edited by : Shloka Badkar)
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