Taro second quarter net sales increase 14.2% to $111.6 million

Taro Pharmaceutical Industries Ltd. ("Taro," or the "Company," Pink Sheets: TAROF) today provided unaudited financial results for the quarter and year to date periods ended June 30, 2011.

Second Quarter 2011 Highlights vs. 2010

• Net sales of $111.6 million, increased $13.8 million or 14.2%,
• Gross profit, as a percentage of net sales was 60.1%, compared to 58.4%,
• Selling, general and administrative expenses decreased $2.1 million, and as a percentage of net sales decreased to 22.5%, compared to 27.8%,
• Operating income increased 75.8% to $34.2 million, or 30.6% of net sales, compared to $19.4 million, or 19.9% of net sales,
• Net income attributable to Taro was $35.7 million, compared to $16.4 million, an increase of $19.3 million, resulting in diluted earnings per share of $0.80 compared to $0.40.

Year to Date 2011 Highlights vs. 2010

• Net sales of $219.3 million, increased $32.5 million or 17.4%,
• Gross profit, as a percentage of net sales was 59.4%, compared to 59.0%,
• Selling, general and administrative expenses decreased $4.5 million, and as a percentage of net sales decreased to 21.7% as compared to 27.9%,
• Operating income increased 79.9% to $67.6 million, or 30.8% of net sales, compared to $37.5 million, or 20.1% of net sales,
• Net income attributable to Taro was $61.3 million compared to $25.0 million, a $36.3 million increase, resulting in diluted earnings per share of $1.38 compared to $0.61.

Taro's Interim Chief Executive Officer, Jim Kedrowski, commented, "These results reflect our continuing efforts to improve our business model and processes as we pursue operating efficiencies, cost efficiencies, and speed-to-market of quality products. We are focused on the successful execution of these important strategic and business development opportunities in order to remain well positioned for future growth." Mr. Kedrowski also noted that "Taro's second quarter benefited from a slower than expected ramp up in R&D expenditures, which we expect to be at higher levels in future periods, as well as a non-recurring tax benefit of approximately $6.6 million. In addition, new entrants into the therapeutic space occupied by Taro are likely to have some negative impact on sales and/or pricing in future quarters."

Cash Flows and Balance Sheet Highlights

• Cash flows from operations were $57.7 million compared to $24.1 million in the same period a year ago,
• Cash, including marketable securities, increased $63.3 million to $152.1 million from December 31, 2010.

Form 20-F Filings with the SEC

On June 29, 2011, the Company filed its annual report, which includes audited consolidated financial statements for the year ended December 31, 2010 on Form 20-F with the U.S. Securities and Exchange Commission (the "SEC"). On August 4, 2010, December 23, 2010 and March 31, 2011, the Company filed audited consolidated financial statements for the years ended December 31, 2007, 2008 and 2009, respectively, with the SEC, each on Form 6-K. The Company is in the process of addressing its SEC Form 20-F filing requirements for those years.

FDA Approvals and Filings

During the second quarter, Taro received four ANDA approvals from the U.S. Food and Drug Administration (the "FDA"): Imiquimod Cream, 5%, Cetirizine Hydrochloride Oral Solution, 1 mg/mL (Sugar Free, Bubble Gum), Meprobamate Tablets and Ranitidine Hydrochloride Syrup USP, 15 mg/mL. In addition, the Company received two tentative approvals from the FDA during the quarter: Clobetasol Propionate Lotion, 0.05% and Fluocinonide Cream USP, 0.1%. Total approvals received in 2011 are nine.

Also, during the quarter, Taro filed two ANDAs with the FDA. The total number of products awaiting approval at the FDA is twenty-one ANDAs and one NDA.