-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SjvyKM5b5uFmSmWBZ+0thi4mENaSd3aWQfFxLb5xJSnQVDm9yzjVOJeDZBk4pfOY NP+lAKWdLYNQJxCnTiHKxA== 0000950123-03-009114.txt : 20030808 0000950123-03-009114.hdr.sgml : 20030808 20030808105301 ACCESSION NUMBER: 0000950123-03-009114 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030807 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMBREX CORP CENTRAL INDEX KEY: 0000820081 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 222476135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10638 FILM NUMBER: 03830445 BUSINESS ADDRESS: STREET 1: ONE MEADOWLANDS PLZ CITY: E RUTHERFORD STATE: NJ ZIP: 07073 BUSINESS PHONE: 2018043000 MAIL ADDRESS: STREET 1: ONE MEADOWLANDS PLAZA CITY: E. RUTHERFORD STATE: NJ ZIP: 07073 8-K 1 y89097e8vk.txt CAMBREX CORPORATION CONFORMED COPY UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 7, 2003 ------------------------------ CAMBREX CORPORATION - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) DELAWARE - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 1-10638 22-2476135 - ------------------------ --------------------------------- (Commission File Number) (IRS Employer Identification No.) One Meadowlands Plaza, East Rutherford, New Jersey 07073 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (201) 804-3000 CAMBREX CORPORATION FORM 8-K CURRENT REPORT AUGUST 7, 2003 ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE. On August 7, 2003, Cambrex Corporation announced that it has entered into an agreement to sell its Rutherford Chemicals business for approximately $64 million in cash, subject to closing adjustments and transaction fees. Arsenal Capital Partners, a New York-based private equity firm, has agreed to purchase the assets and assume certain liabilities of Rutherford's U.S. operations and purchase the stock of the Rutherford subsidiary Seal Sands Chemicals Limited located in the United Kingdom. The sale is expected to close in approximately 45 to 65 days, subject to Hart Scott Rodino approval, other regulatory consents, closing on financing for the transaction, and other customary closing matters. The press release announcing the Agreement For Sale Of Rutherford Chemicals is attached to this Form 8-K as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits (99.1) Press release issued by Cambrex Corporation dated August 7, 2003. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned hereunto duly authorized. CAMBREX CORPORATION By: /s/ Luke M. Beshar ----------------------------- Luke M. Beshar 2 Senior Vice President and Chief Financial Officer Dated: August 7, 2003 EXHIBIT INDEX 99.1 Press Release of Cambrex Corporation dated August 7, 2003. 3 EX-99.1 3 y89097exv99w1.txt PRESS RELEASE (CAMBREX LOGO) News Release Date: August 7, 2003 Contacts: Luke M. Beshar Anne-Marie Hess Sr. Vice President & CFO Director Investor Relations Phone: 201-804-3010 201-804-3062 Email: luke.beshar@cambrex.com annemarie.hess@cambrex.com Release: Immediate CAMBREX ANNOUNCES AGREEMENT FOR SALE OF RUTHERFORD CHEMICALS East Rutherford, NJ - August 7, 2003 - Cambrex Corporation (NYSE: CBM), a leading provider to the life sciences industry, announced that it has entered into an agreement to sell its Rutherford Chemicals business for approximately $64 million in cash, subject to closing adjustments and transaction fees. Net proceeds from the sale of Rutherford will be used to repay outstanding debt under the Company's bank facility. "This transaction is a major milestone on our path towards completing the transition from a specialty chemical company to a life sciences company," commented James A. Mack, Chairman, President and CEO of Cambrex. "We are now able to focus entirely on our Human Health and Biosciences business segments in order to accelerate organic growth and pursue strategic acquisitions in the biotechnology and pharmaceutical markets." Arsenal Capital Partners, a New York-based private equity firm, has agreed to purchase the assets and assume certain liabilities of Rutherford's U.S. operations and purchase the stock of the Rutherford subsidiary Seal Sands Chemicals Limited located in the United Kingdom. The sale is expected to close in approximately 45 to 65 days, subject to Hart Scott Rodino approval, other regulatory consents, closing on financing for the transaction, and other customary closing matters. Banc of America Securities LLC acted as exclusive financial advisor to Cambrex in connection with this transaction. Cambrex Corporation - One Meadowlands Plaza - East Rutherford, NJ 07073 Phone 201.804.3000 - Fax 201.804.9852 - www.cambrex.com EARNINGS FROM CONTINUING/DISCONTINUED OPERATIONS Effective with the signing of the agreement to sell the business, the Company will begin to report Rutherford Chemicals as a discontinued operation. As such, the discontinued operations accounting treatment will be applied in the Company's third quarter 2003 financial statements. To assist in understanding how the Company's financial results will appear after the sale is completed, the following is a summary of first half 2003 and 2002 earnings per share which indicate separately the continuing operations and Rutherford Chemicals results included in the consolidated financial statements. For the six months ended June 30, 2003, diluted earnings per share from continuing operations were approximately $0.35 per share and diluted earnings per share from discontinued operations were approximately $0.05 per share. The year-to-date June 30, 2003 results from continuing operations include a pre-tax charge of $11.3 million for the previously disclosed Mylan settlement that had a $0.30 per diluted share unfavorable impact, including related tax effects. For the six months ended June 30, 2002, diluted earnings per share from continuing operations were approximately $0.93 per share, which included a pre-tax charge of $2.5 million for an investment write-down resulting in a $0.07 per diluted share unfavorable impact including related tax effects. Earnings from discontinued operations for the six months ended 6/30/02 were approximately $0.24 per diluted share which included a net favorable impact of $0.13 per diluted share, including related tax effects, from the following pre-tax special items: a $1.8 million favorable insurance settlement, a $3.8 million favorable arbitration award and an asset impairment charge of $0.4 million. EARNINGS GUIDANCE Cambrex expects to record a book loss on the sale of approximately $50 million, including estimated expenses of the transaction, subject to working capital and other adjustments through the date of closing. Cambrex expects its full year effective tax rate for 2003 to be 39.2% for continuing operations and 1.8% for discontinued operations. The effective tax rate for continuing operations in 2003 will be negatively impacted by 11.2 percentage points due to a non-cash net write-down of certain deferred tax assets that were deemed unrealizable due to the domestic net operating loss generated by the Rutherford sale transaction. The Company currently expects its 2004 effective tax rate for continuing operations to be approximately 28.0%. The Company expects diluted earnings per share from continuing operations for 2003 to be in the range of $0.46 to $0.66, which includes the unfavorable impact of the previously disclosed Mylan Settlement of $0.28 diluted earnings per share, and $0.14 diluted earnings per share for the write-down of certain deferred taxes resulting from the Rutherford sale transaction described above. Cambrex indicated that the previously disclosed full-year 2003 diluted earnings per share guidance of $0.75 to $0.95 included earnings from discontinued operations of approximately $0.15 per share (based on full-year 2003 Rutherford Chemicals earnings) and approximately $0.28 per share for the cost of the previously disclosed Mylan Settlement. ABOUT CAMBREX Cambrex is a global, diversified life sciences company dedicated to providing high quality products and services to accelerate drug discovery, development, and manufacturing processes for customers focused on health and the prevention of disease. The Company employs approximately 2200 worldwide. For more information, please visit our website at http://www.cambrex.com. ABOUT ARSENAL CAPITAL PARTNERS Arsenal Capital Partners is a $300 million New York-based private equity firm that makes control investments in manufacturing and business service companies that offer significant opportunities for growth and productivity gains. The firm invests where it has substantial prior experience and broad operating and functional expertise that can support management teams to drive growth and improve productivity. More information about Arsenal is available at www.arsenalcapital.com. FORWARD LOOKING STATEMENTS This news release may contain "forward-looking statements" for the purposes of the Securities and Exchange Commission's "safe harbor" provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3B-6 under The Exchange Act, without limitation, statements regarding expected performance, especially expectations with respect to sales, research and development expenditures, earnings per share, capital expenditures, acquisitions, divestitures, collaborations, or other expansion opportunities. The forward-looking statements contained herein involve risks and uncertainties that may cause results to differ materially from the Company's expectations including but not limited to, global economic trends, pharmaceutical outsourcing trends, competitive pricing or product developments, government legislation and/or regulations (particularly environmental issues), technology, manufacturing and legal issues, unfavorable results shipments, changes in foreign exchange rates, performance of minority investments, un-collectable receivables, loss on disposition of assets, cancellation or delays in renewal of contracts, and lack of suitable raw materials or packaging materials. Investors are cautioned to review risk factors in the Cambrex Annual Report on Form 10K and other filings with the Securities and Exchange Commission. CAMBREX CORPORATION Statement of Profit and Loss (Adjusted to Reflect Rutherford Chemicals & Continuing Operations) For the Quarter Ended June 30, 2003 (in thousands)
Cambrex Cambrex Rutherford Continuing Consolidated Chemicals Operations ------------ --------- ---------- Gross Sales $ 136,363 $ 33,248 $ 103,115 Commissions and Allowances 1,427 360 1,067 --------- --------- ------- Net Sales 134,936 32,888 102,048 Other Revenue(Expense), net 2,067 (53) 2,120 --------- --------- ------- Net Revenues 137,003 32,835 104,168 Cost of Sales 92,824 29,500 63,324 --------- --------- ------- Gross Profit 44,179 3,335 40,844 Operating Expenses Selling, General & Administrative Expenses 25,831 2,233* 23,598 Research & Development Expenses 5,014 592 4,422 --------- --------- ------- Total Operating Expenses 30,845 2,825 28,020 --------- --------- ------- Operating Profit 13,334 510 12,824 Other Expenses/(Income) Interest, net 2,689 (13) 2,702 Other, net (235) 78 (313) --------- --------- ------- Total Other Expenses 2,454 65 2,389 --------- --------- ------- Profit Before Tax 10,880 445 10,435 Provision for Income Taxes 2,829 (94) 2,923 --------- --------- ------- Net Income $ 8,051 $ 539 $ 7,512 ========= ========= ======= Average Shares Outstanding (diluted) 25,973 25,973 25,973 Earnings per share (diluted) $ 0.31 $ 0.02 $ 0.29
* Selling, general and administrative expenses for Rutherford Chemicals exclude Cambrex corporate expense allocations. CAMBREX CORPORATION Statement of Profit and Loss (Adjusted to Reflect Rutherford Chemicals & Continuing Operations) For the Quarter Ended June 30, 2002 (in thousands)
Cambrex Cambrex Rutherford Continuing Consolidated* Chemicals* Operations* ------------- ---------- ----------- Gross Sales $ 134,263 $ 31,558 $ 102,705 Commissions and Allowances 564 94 470 --------- --------- --------- Net Sales 133,699 31,464 102,235 Other Revenue(Expense), net 1,168 151 1,017 Net Revenues 134,867 31,615 103,252 Cost of Sales 81,827 25,196 56,631 --------- --------- --------- Gross Profit 53,040 6,419 46,621 Operating Expenses Selling, General & Administrative Expenses 24,593 2,461** 22,132 Research & Development Expenses 4,692 420 4,272 --------- --------- --------- Total Operating Expenses 29,285 2,881 26,404 --------- --------- --------- Operating Profit 23,755 3,538 20,217 Other Expenses/(Income) Interest, net 2,852 (6) 2,858 Other, net (953) (3,617) 2,664 --------- --------- --------- Total Other Expenses 1,899 (3,623) 5,522 --------- --------- --------- Profit Before Tax 21,856 7,161 14,695 Provision for Income Taxes 5,683 2,278 3,405 --------- --------- --------- Net Income $ 16,173 $ 4,883 $ 11,290 ========= ========= ========= Average Shares Outstanding (diluted) 26,644 26,644 26,644 Earnings per share (diluted) $ 0.61 $ 0.19 $ 0.42
* The second quarter ended June 30, 2002 results include the following pre-tax benefits and charges: a benefit recorded in cost of sales related to a favorable insurance settlement of $1,776, an asset impairment charge of $425 recorded in administration expense, and a benefit of $3,760 due to an arbitration award recorded in other income; all related to the Rutherford Chemicals Business which is included in the Cambrex Consolidated and Rutherford Chemicals columns. Cambrex also recorded an Investment write-down of $2,500 reflected in Other Expenses, net which is included in the Cambrex Consolidated and Cambrex Continuing Operations columns. ** Selling, general and administrative expenses for Rutherford Chemicals exclude Cambrex corporate expense allocations. CAMBREX CORPORATION Statement of Profit and Loss (Adjusted to Reflect Rutherford Chemicals & Continuing Operations) For the Six Months Ended June 30, 2003 (in thousands)
Cambrex Cambrex Rutherford Continuing Consolidated* Chemicals Operations* ------------- --------- ----------- Gross Sales $ 276,283 $ 67,724 $ 208,559 Commissions and Allowances 2,516 316 2,200 --------- --------- --------- Net Sales 273,767 67,408 206,359 Other Revenue(Expense), net 5,040 32 5,008 --------- --------- --------- Net Revenues 278,807 67,440 211,367 Cost of Sales 184,943 60,308 124,635 --------- --------- --------- Gross Profit 93,864 7,132 86,732 Operating Expenses Selling, General & Administrative Expenses 65,231 4,545** 60,686 Research & Development Expenses 9,656 1,141 8,515 --------- --------- --------- Total Operating Expenses 74,887 5,686 69,201 --------- --------- --------- Operating Profit 18,977 1,446 17,531 Other Expenses/(Income) Interest, net 5,023 (27) 5,050 Other, net (114) 13 (127) --------- --------- --------- Total Other Expenses 4,909 (14) 4,923 --------- --------- --------- Profit Before Tax 14,068 1,460 12,608 Provision for Income Taxes 3,658 126 3,532 --------- --------- --------- Net Income $ 10,410 $ 1,334 $ 9,076 ========= ========= ========= Average Shares Outstanding (diluted) 26,092 26,092 26,092 Earnings per share (diluted) $ 0.40 $ 0.05 $ 0.35
* The six months ended June 30, 2003 results reflect an $11,342 pre-tax charge for a legal settlement that is included in the Cambrex Consolidated and Cambrex Continuing Operations Columns. ** Selling, general and administrative expenses for Rutherford Chemicals exclude Cambrex corporate departmental expense allocations. CAMBREX CORPORATION Statement of Profit and Loss (Adjusted to Reflect Rutherford Chemicals & Continuing Operations) For the Six Months Ended June 30, 2002 (in thousands)
Cambrex Cambrex Rutherford Continuing Consolidated* Chemicals* Operations* ------------- ---------- ----------- Gross Sales $ 266,718 $ 64,395 $ 202,323 Commissions and Allowances 2,032 331 1,701 --------- --------- --------- Net Sales 264,686 64,064 200,622 Other Revenue(Expense), net 2,736 723 2,013 --------- --------- --------- Net Revenues 267,422 64,787 202,635 Cost of Sales 164,688 52,838 111,850 --------- --------- --------- Gross Profit 102,734 11,949 90,785 Operating Expenses Selling, General & Administrative Expenses 47,201 4,692** 42,509 Research & Development Expenses 8,627 846 7,781 --------- --------- --------- Total Operating Expenses 55,828 5,538 50,290 --------- --------- --------- Operating Profit 46,906 6,411 40,495 Other Expenses/(Income) Interest, net 5,779 (17) 5,796 Other, net (987) (3,574) 2,587 --------- --------- --------- Total Other Expenses 4,792 (3,591) 8,383 --------- --------- --------- Profit Before Tax 42,114 10,002 32,112 Provision for Income Taxes 10,950 3,510 7,440 --------- --------- --------- Net Income $ 31,164 $ 6,492 $ 24,672 ========= ========= ========= Average Shares Outstanding (diluted) 26,606 26,606 26,606 Earnings per share (diluted) $ 1.17 $ 0.24 $ 0.93
* The six months ended June 30, 2002 results include the following pre-tax benefits and charges: a benefit recorded in cost of sales related to a favorable insurance settlement of $1,776, an asset impairment charge of $425 recorded in administration expense, and a benefit of $3,760 due to an arbitration award recorded in other income; all related to the Rutherford Chemicals Business which is included in the Cambrex Consolidated and Rutherford Chemicals columns. Cambrex also recorded an Investment write-down of $2,500 reflected in Other Expenses, net which is included in the Cambrex Consolidated and Cambrex Continuing Operations columns. ** Selling, general and administrative expenses for Rutherford Chemicals exclude Cambrex corporate expense allocations. CAMBREX CORPORATION Consolidated Balance Sheet (Adjusted to Reflect Rutherford Chemicals & Continuing Operations) As of June 30, 2003 (in thousands)
Cambrex With Discontinued Cambrex Rutherford Operations Consolidated Chemicals* Adjustments Treatment ------------ ---------- ----------- --------- Current Assets Cash and Cash Equivalents $ 41,311 $ -- $ -- $ 41,311 Trade Receivables, net 79,813 19,684 -- 60,129 Inventories, net 108,613 33,013 -- 75,600 Deferred Tax Asset 31,627 -- -- 31,627 Net Assets Held for Sale -- -- (109,669) 109,669 Other Current Assets 21,110 914 -- 20,196 --------- --------- --------- --------- Total Current Assets 282,474 53,611 (109,669) 338,532 Property, Plant and Equipment, Net 317,464 63,800 -- 253,664 Goodwill and Other Intangibles 270,049 3,488 -- 266,561 Other Assets 13,395 374 -- 13,021 --------- --------- --------- --------- Total Assets $ 883,382 $ 121,273 $(109,669) $ 871,778 ========= ========= ========= ========= Current Liabilities Trade Accounts Payable $ 35,363 $ 8,736 $ -- $ 26,627 Accrued Liabilities 53,457 2,868 -- 50,589 Short-term Debt and Current Portion of Long-term Debt 3,450 -- -- 3,450 --------- --------- --------- --------- Total Current Liabilities 92,270 11,604 -- 80,666 Long-term Debt 247,657 -- -- 247,657 Deferred Tax Liabilities 52,630 -- -- 52,630 Other Liabilities 51,907 -- -- 51,907 --------- --------- --------- --------- Total Liabilities $ 444,464 $ 11,604 $ -- $ 432,860 Stockholders' Equity $ 438,918 $ 109,669 $(109,669) $ 438,918 --------- --------- --------- --------- Total Liabilities and Stockholders' Equity $ 883,382 $ 121,273 $(109,669) $ 871,778 ========= ========= ========= =========
* The Rutherford Chemicals column represents those net assets included in the sale. CAMBREX CORPORATION Consolidated Balance Sheet (Adjusted to Reflect Rutherford Chemicals & Continuing Operations) As of December 31, 2002 (in thousands)
Cambrex With Discontinued Cambrex Rutherford Operations Consolidated Chemicals* Adjustments Treatment ------------ ---------- ----------- --------- Current Assets Cash and Cash Equivalents $ 33,296 $ -- $ -- $ 33,296 Trade Receivables, net 79,571 21,317 -- 58,254 Inventories, net 109,832 35,188 -- 74,644 Deferred Tax Asset 35,612 -- -- 35,612 Net Assets Held for Sale -- -- (118,165) 118,165 Other Current Assets 17,447 1,773 -- 15,674 --------- --------- --------- --------- Total Current Assets 275,758 58,278 (118,165) 335,645 Property, Plant and Equipment, Net 310,501 70,557 -- 239,944 Goodwill and Other Intangibles 267,752 3,488 -- 264,264 Other Assets 13,517 374 -- 13,143 --------- --------- --------- --------- Total Assets $ 867,528 $ 132,697 $(118,165) $ 852,996 ========= ========= ========= ========= Current Liabilities Trade Accounts Payable $ 39,627 $ 11,706 $ -- $ 27,921 Accrued Liabilities 49,391 2,826 -- 46,565 Short-term Debt and Current Portion of Long-term Debt 2,364 -- -- 2,364 --------- --------- --------- --------- Total Current Liabilities 91,382 14,532 -- 76,850 Long-term Debt 267,434 -- -- 267,434 Deferred Tax Liabilities 52,630 -- -- 52,630 Other Liabilities 43,400 -- -- 43,400 --------- --------- --------- --------- Total Liabilities $ 454,846 $ 14,532 $ -- $ 440,314 Stockholders' Equity $ 412,682 $ 118,165 $(118,165) $ 412,682 --------- --------- --------- --------- Total Liabilities and Stockholders' Equity $ 867,528 $ 132,697 $(118,165) $ 852,996 ========= ========= ========= =========
* The Rutherford Chemicals column represents those net assets included in the sale. # # # -----END PRIVACY-ENHANCED MESSAGE-----