Taro third quarter net sales increases 10.0% to $103.2 million

Oct 30 2010

Taro Pharmaceutical Industries Ltd. ("Taro," the "Company," Pink Sheets: TAROF) today provided preliminary, unaudited and unreviewed financial results for the third quarter and nine months ended September 30, 2010.

Third Quarter 2010 Highlights

• Net Sales of $103.2 million increased $9.4 million, or 10.0%, over the third quarter 2009.
• Operating Income margin was 23.3% compared to 17.9% in 2009.
• Net Income was $18.9 million.

Nine Month 2010 Highlights

• Net Sales of $290.5 million, increased $14.9 million, or 5.4%, over the 2009 nine month period.
• Operating Income margin was 21.0% compared to 18.7% in 2009.
• Net Income was $48.0 million.

The financial results do not include certain transaction costs for claims related to the change of control. The Company believes these claims are without merit.

Balance Sheet Highlights

• Total debt at September 30, 2010, was $131.8 million, a decrease of $25.8 million from December 2009. Subsequent to September 30, 2010, the Company retired additional debt of approximately $44.2 million.

Dilip Shanghvi, Taro's Chairman of the Board commented, "Though Taro provides a platform to expand generic opportunities, the organization requires a significant and sustained rebuilding effort. Single digit growth in sales at relatively low margins, compared to Sun's other core businesses, are indicative of the magnitude of this challenge. Now that the transfer of control to Sun Pharma has been completed, we will work to further move the Company forward. With the help of a committed team, we hope to deliver in line with the expectations of our stakeholders."

Sun Pharmaceutical Industries Ltd. Acquires Controlling Interest of Taro

On September 21, 2010, the Company announced an agreement between Sun Pharmaceutical Industries Ltd. (Reuters: SUN.BO, Bloomberg: SUNP IN, NSE: SUNPHARMA, BSE: 524715) (with its affiliates, "Sun Pharma") and the Levitt and Moros families, that facilitated the transfer of the Levitt and Moros families' controlling stake in the Company pursuant to a 2007 Option Agreement. Shortly thereafter, the Company issued 3,787,500 shares to Alkaloida Chemical Company Exclusive Group Ltd., a subsidiary of Sun Pharma, at $6.00 per share, or $22.7 million, pursuant to a certain Warrant No. 2 issued August 1, 2007. As a result of the closing, and exercise of such warrant, Sun Pharma has increased its ownership of Taro's Ordinary Shares to 52.9% and, with Taro's Founders' Shares, its voting rights to 68.6%.