Taro Provides Results for the Year Ended March 31, 2020

Taro Pharmaceutical Industries Ltd. (NYSE:TARO) ("Taro" or the "Company") today provided unaudited financial results for the quarter and year ended March 31, 2020.

Quarter ended March 31, 2020 Highlights ? compared to March 31, 2019

• Net sales of $174.9 million decreased $5.0 million.
• Gross profit of $102.3 million (58.5% of net sales compared to 66.4%) decreased $17.3 million.
• Research and development (R&D) expenses of $15.8 million decreased $4.7 million.
• Selling, marketing, general and administrative expenses (SG&A) of $29.1 million increased $5.8 million.
• Operating income of $57.2 million (32.7% of net sales compared to 41.9%) decreased $18.2 million.
• Interest and other financial income of $6.6 million decreased $1.6 million.
• Foreign Exchange (FX) income of $3.7 million compared to FX expense of $9.4 million in the comparable period, an increase of $13.1 million ?principally the result of the commencement of hedging accounting in accordance with ASU No. 2017-12 and the change in our Canadian subsidiary's functional currency to U.S. dollar.
• Tax expense of $13.9 million decreased $1.7 million, with a resulting effective tax rate of 20.4% compared to 21.1%.
• Net income attributable to Taro was $54.2 million compared to $58.4 million, a $4.2 million decrease, resulting in diluted earnings per share of $1.42 compared to $1.52.

Year ended March 31, 2020 Highlights ? compared to March 31, 2019

• Net sales of $644.8 million decreased $25.1 million.
• Gross profit of $399.7 million (62.0% of net sales compared to 66.5%) decreased $46.0 million.
• R&D expenses of $59.8 million decreased $3.5 million.
• SG&A of $93.4 million increased $3.4 million.
• Operating income of $246.5 million (38.2% of net sales compared to 44.2%) decreased $49.7 million.
• Interest and other financial income of $33.6 million remained in line with the prior year.
• FX income of $14.8 million compared to $25.3 million in 2019 ? an unfavorable impact of $10.5 million ? principally the result of the aforementioned commencement of hedging accounting and the change in our Canadian subsidiary's functional currency to U.S. dollar effective April 1, 2019.
• Tax expense of $53.5 million decreased $21.2 million, with a resulting effective tax rate of 17.9% compared to 20.9%; principally the result of non-recurring items in the current year.
• Net income attributable to Taro was $244.2 million compared to $281.8 million, a $37.5 million decrease, resulting in diluted earnings per share of $6.35 compared to $7.23.

Cash Flow and Balance Sheet Highlights

• Cash flow provided by operations for the year ended March 31, 2020, was $271.6 million compared to $323.7 million for the year ended March 31, 2019.
• As of March 31, 2020, cash and cash equivalents and marketable securities (both short and long-term) increased $214.7 million to $1.6 billion from March 31, 2019. Cash and cash equivalents reflects the impact from the $27.0 million Tender Offer paid in December 2019.

Mr. Uday Baldota, Taro's CEO, stated, "Despite the leading market position of many of our products, we continue to face a challenging U.S. generic market. In the short-term, even as we commercialize recently approved products, we expect operations and profitability to be temporarily impacted as a result of the COVID-19 pandemic?now more than ever, we continue to focus on better serving the needs of our customers and patients. We continue to concentrate on creating shareholder value by continuing our R&D investment, as well as exploring investments in inorganic strategic opportunities."

FDA Approvals and Filings

The Company recently received approvals from the U.S. Food and Drug Administration ("FDA") for four Abbreviated New Drug Applications ("ANDAs"); Mupirocin Cream USP, 2%, Ivermectin Lotion, 0.5%, Clindamycin Phosphate Foam, 1% and Clocortolone Pivalate Cream USP, 0.1%. The Company currently has a total of twenty-one ANDAs awaiting FDA approval, including five tentative approvals.

Earnings Call (8:00 am ET, May 20, 2020)

As previously announced, the Company will host an earnings call at 8:00 am ET on Wednesday, May 20, 2020, where senior management will discuss the Company's performance and answer questions from participants. This call will be accessible through an audio dial-in and a web-cast. Audio conference participants can dial-in on the numbers below:

• Participant Toll-Free Dial-In Number: +1 (844) 421-0601 ID: 5275616
• Participant International Dial-In Number: +1 (716) 247-5800 ID: 5275616
• Web-cast: Details are provided on our website, www.taro.com

To participate in the audio call, please dial the numbers provided above five to ten minutes ahead of the scheduled start time. The transcript of the event will be available on the Company's website at www.taro.com. An audio playback will be available for ten (10) days following the call.

The Company cautions that the foregoing financial information is unaudited and could be subject to change.

About Taro

Taro Pharmaceutical Industries Ltd. 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.

SAFE HARBOR STATEMENT

The unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments necessary to present fairly the financial condition and results of operations of the Company. The unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 20-F, as filed with the SEC.

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 or that refer or relate to events or circumstances the Company "estimates," "believes," or "expects" to happen or similar language, and statements with respect to the Company's financial performance, availability of financial information, and estimates of financial results and information for fiscal year 2020. Although the Company 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 domestic and international economic conditions, industry and market conditions, changes in the Company's financial position, litigation brought by any party in any court in Israel, the United States, or any country in which Taro operates, regulatory 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 are applicable 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.