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 October, 2006
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 Receives Investigation Report
Company Also Announces Appointment of Interim Chief Administrative
and Restructuring Officer
HAWTHORNE, N.Y.--(BUSINESS WIRE)--Oct. 30, 2006--Taro
Pharmaceutical Industries Ltd. ("Taro," the "Company," NASDAQ: TARO)
today announced that Jenner & Block LLP, the independent law firm
retained by the Company's Audit Committee to investigate facts related
to the Company's previously announced decision to restate financial
results for the years 2003 and 2004, has presented its report to the
Company's Board of Directors.
In its report, Jenner & Block advised that, based on its
investigation, it did not find in the Company's 2003 and 2004
financial statements an intentional misstatement of reserves relating
to sales to wholesale customers. However, Jenner & Block further
reported that it found that a member of the Company's senior financial
management caused the Company to make misleading statements in
correspondence to members of the staff of the U.S. Securities and
Exchange Commission ("SEC") and that such individual and another
member of the Company's financial management also made
misrepresentations to employees of Ernst & Young, the
Company's independent auditor. No other Company personnel were
found to have engaged in such conduct. Jenner & Block also found that
the Audit Committee had adequately investigated certain matters that
the Company's independent auditor had brought to its attention in
connection with its work on the audit of the Company's 2005 financial
statements.
After Jenner & Block delivered its report, Kevin P. Connelly, the
Company's Senior Vice President and Chief Financial Officer, as well
as another member of financial management employed by Taro
Pharmaceuticals U.S.A., Inc., located in New York, resigned from their
positions, effective immediately. Both individuals advised the Board
that they vigorously disagreed with the Jenner & Block findings with
respect to their actions. The Company will immediately initiate a
search for a new chief financial officer.
The Company has provided a report on the results of the
investigation to the Nasdaq Listing Qualifications Panel in connection
with the Company's request for continued listing of its ordinary
shares on The Nasdaq Global Select Market. As previously announced,
subject to the Panel's review of the report, a further extension, to
November 17, 2006, was granted for Taro to file its Annual Report on
Form 20-F for the year ended December 31, 2005 with the SEC. If these
conditions and other relevant listing requirements are met, the
Company's ordinary shares will maintain their current listing.
The Company understands that Ernst & Young will need to review the
results of Jenner & Block's investigation before the 2005 audit can be
completed and the Company will be in a position to file its 2005
Annual Report on Form 20-F with the SEC. The Company expects to work
with Ernst & Young to review the results of the independent
investigation and to complete the 2005 audit. However, the Company
cautioned that there was no assurance that it would be able to file
its 2005 Form 20-F by November 17, 2006 and retain its Nasdaq listing.
If delisted from The Nasdaq Global Select Market, the Company stated
that it planned to re-apply for listing following the filing of the
2005 Form 20-F.
The Company also announced that it is undertaking certain
restructuring initiatives to address liquidity needs and identify cost
reduction and debt refinancing and restructuring opportunities. The
Company has appointed Rebecca A. Roof, a Managing Director at
AlixPartners LLP, as interim Chief Administrative and Restructuring
Officer to oversee this process. As part of these initiatives, the
Company has recently reduced annual personnel costs by approximately
$10 million. AlixPartners is a global performance improvement,
corporate turnaround, and financial advisory services firm.
The Company is current on its debt service payments to its banks
and bondholders, but remains out of compliance with respect to certain
reporting requirements to its banks because it has not timely filed
financial statements. The Company has commenced discussions with its
lenders in connection with obtaining the appropriate waivers from its
banks.
Barrie Levitt, M.D., Chairman of the Board of Directors, said that
Board members were surprised and saddened at the findings of the
independent counsel. "Nevertheless," he stated, "we are committed to
moving forward and putting these unfortunate matters behind us. We are
pleased to have added Rebecca Roof to Taro's senior management team as
interim Chief Administrative and Restructuring Officer. Her experience
will be important as we seek to devote our full resources to running
our business and serving our customers. She has the full support and
confidence of our management team."
The Company also announced that it has scheduled its Annual
General Meeting of Shareholders for December 6, 2006.
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 more information on Taro, please visit
www.taro.com.
SAFE HARBOR STATEMENT
Certain statements in this release 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 include the
word "will," "intend," "expects," or similar language; and statements
concerning the continued listing of the Company's securities on The
Nasdaq Global Select Market, the report of the independent
investigation and any consequences therefrom, changes in the Company's
costs or financial structure, the completion of the 2005 audit and the
filing of Taro's Annual Report on Form 20-F for 2005, interim 2006
financial statements, and the scheduling of the Annual General Meeting
of Shareholders. Although the Company believes that such statements
are based on reasonable assumptions and reliable sources, it has no
assurance thereof. Factors that could cause actual results to differ
include, but are not limited to, actions by Nasdaq staff, actions
related to the report of the independent investigation, the ability of
the Company to finalize its 2005 audit, the ability of the Company to
further control costs or refinance its capital structure, actions by
the Company's lenders and debt holders, general economic conditions,
industry and market conditions, 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.
CONTACT: Taro Pharmaceutical Industries Ltd.
Vice President, Corporate Affairs
Daniel Saks, 914-345-9000 ext. 6208
or
Interim Chief Administrative and Restructuring Officer
Rebecca A. Roof, 914-345-9000 ext. 6355
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: November 9, 2006
TARO PHARMACEUTICAL INDUSTRIES LTD.
By: /s/Avraham Yacobi
-------------------------------
Name: Avraham Yacobi
Title: Senior Vice President,
Research and Development