Taro Provides Third Quarter and Fiscal Year to Date Results

Favorable Performance Over 2011 Periods Continues

Hawthorne, New York, United States, Tuesday, February 05, 2013 — (Business Wire India) –

Taro Pharmaceutical Industries Ltd. (NYSE: TARO) (“Taro” or the “Company”) today provided unaudited financial results for the three and nine month periods ended December 31, 2012.

Quarter ended December 31, 2012 Highlights – compared to December 31, 2011

• Net sales of $185.7 million, increased $37.6 million, or 25.4%, however, sales volumes have slightly declined
• Gross profit, as a percentage of net sales was 75.4%, compared to 71.6%
• Research and development expenses increased 33.5% to $11.8 million
• Selling, marketing, general and administrative expenses, which included a $3.3 million litigation provision in 2012, increased $2.1 million
• Operating income increased to $104.0 million, or 56.0% of net sales, compared to $74.5 million, or 50.3% of net sales
• Net income attributable to Taro was $88.8 million compared to $62.4 million, resulting in diluted earnings per share of $1.98 compared to $1.40.

Nine months ended December 31, 2012 Highlights – compared to December 31, 2011

• Net sales of $505.8 million, increased $107.9 million, or 27.1%, however, sales volumes have marginally declined
• Gross profit, as a percentage of net sales was 74.2%, compared to 66.9%
• Research and development expenses increased 45.3% to $34.3 million
• Selling, marketing, general and administrative expenses, which included $11.3 million litigation provisions in 2012, increased $4.2 million
• Operating income increased to $265.4 million, or 52.5% of net sales, compared to $170.6 million, or 42.9% of net sales
• Income tax expense increased $33.5 million from $18.2 million to $51.7 million
• Net income attributable to Taro was $217.0 million compared to $157.0 million, a $60.0 million increase, resulting in diluted earnings per share of $4.86 compared to $3.52.

Cash Flow and Balance Sheet Highlights

• Cash flow provided by operations for the nine months ended December 31, 2012, as compared to December 31, 2011, was $173.1 million compared to $157.0 million, primarily due to the payment of income taxes as reflected in the significant decrease in trade and other payables
• Cash, including marketable securities, increased $152.2 million to $486.6 million from March 31, 2012.

FDA Approvals and Filings
During the quarter, the Company filed one ANDA with the FDA. With this, ANDAs representing seventeen products as well as two NDAs await FDA approval.

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 and statements 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 financial information for fiscal year 2013. 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 actions of the Company’s lenders and creditors, 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.

**Financial Tables Follow**

* Amount is less than $0.01.
May not foot due to rounding.

CONTACT DETAILS

Taro Pharmaceutical Industries Ltd.
Michael Kalb, 914-345-9001
GVP, CFO
Michael.Kalb@taro.com
or
William J. Coote, 914-345-9001
VP, Treasurer
William.Coote@taro.com