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 June, 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 Provides Estimates for 2005 Sales and Net Income and Will Restate
2003 and 2004 Results; Non-Cash Adjustments to 2003 and 2004 Will
Reflect New Information Used in Estimating Accounts Receivable
Reserves
HAWTHORNE, N.Y.--(BUSINESS WIRE)--June 22, 2006--Taro
Pharmaceutical Industries Ltd. (NASDAQ: TARO) today said that it
expects to report 2005 sales in a range of approximately $295 million
to $305 million, and net income in a range of approximately $14.0
million to $16.0 million. These estimates are subject to change
pending completion of the audit of 2005 results. Although Taro does
not ordinarily provide estimates or guidance on earnings, the Company
is making an exception in light of the extended period for completion
of its 2005 audit.
The Company had previously reported that during its 2005 audit
process, its independent outside auditors were conducting additional
work related to how the Company estimated its accounts receivable
reserves. During this time, the Company received additional
information, previously unavailable to the Company, from certain
principal customers which is now being used to revise its estimates of
the Company's accounts receivable reserves for prior years. These
adjustments will result in a restatement of financial results for 2003
and 2004.
Restatement of 2003 and 2004 Results
Based upon the additional information, Taro's 2003 opening
balances for net accounts receivable will be reduced by approximately
$45.0 - 48.0 million. Sales and pre-tax income for 2003 will each be
reduced by approximately $37.0 - 40.0 million. Sales and pre-tax
income for 2004 will each be reduced by approximately $8.0 - 11.0
million.
As a result of these adjustments to accounts receivable reserves,
the Company will also fully reserve for its deferred tax assets.
Including this reserve for taxes, the 2003 opening balance for
retained earnings will be reduced by approximately $56.0 - 60.0
million, the net income for 2003 will be reduced by approximately
$28.0 - 30.0 million, and the net income for 2004 will be reduced by
approximately $28.0 - 30.0 million.
All of these estimates are subject to change pending completion of
the 2005 audit.
The Company is seeking to complete the restatement and finalize
the audit of its 2005 financial statements as soon as possible. Given
the steps which must be taken, the Company does not believe it will be
in a position to file its Annual Report on Form 20-F for the year
ended December 31, 2005 by June 30, 2006, but believes that it may be
able to file within the 15-day automatic extension period. The Company
intends to make an update announcement regarding the timing of its
Form 20-F filing and to report its earnings for 2005 upon completion
of the audit of its 2005 financial statements. The inability to
provide 2005 audited financial statements to date is resulting in the
Company not being in compliance with certain reporting obligations in
certain of its debt instruments, which the Company is discussing with
its lenders. While no assurances can be given, based in part on such
discussions, on the circumstances giving rise to the delay and on the
estimated financial impact of the anticipated adjustments, the Company
believes it will be able to resolve any non-compliance issues with its
lenders without any material adverse effects.
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," "expects," "believes," "intends," "seeking," "estimates,"
or similar language; and statements concerning the Company's sales and
profitability, estimates of 2005 results, estimates of restated
results for 2003 and 2004, policies regarding guidance, estimates of
accounts receivable reserves and retained earnings, expectations
regarding filing Form 20-F, expectations regarding reporting 2005
results and completion of the 2005 audit, resolution of non-compliance
issues with its lenders and the related filing of 2005 Form 20-F and
reporting of 2005 results. 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 the ability of the Company to finalize its 2005
audit, the use of new information from certain principal customers in
calculating reserve estimates, the need for further revisions to any
of the estimates contained herein, unanticipated lender actions,
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.
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: June 22, 2006
TARO PHARMACEUTICAL INDUSTRIES LTD.
By: /s/ Kevin Connelly
------------------
Name: Kevin Connelly
Title: Senior Vice President and
Chief Financial Officer