-----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, CdA0U73IM67YT/+D1qwOaFhXttT7i52d8GJEmi0yVcQEvjcozAkdxuLga/7PU7iT XIAm6jEYgu8Epzs6UcOnWw== 0000950123-04-005006.txt : 20040423 0000950123-04-005006.hdr.sgml : 20040423 20040423072133 ACCESSION NUMBER: 0000950123-04-005006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040422 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040423 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: 04749346 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 y96590e8vk.txt CAMBREX CORPORATION 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) April 22, 2004 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 APRIL 22, 2004 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits (99.1) Press release issued by Cambrex Corporation dated April 22, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION UNDER ITEM 12 On April 22, 2004, Cambrex Corporation issued a press release announcing its financial results for the first quarter of 2004 and providing guidance for 2004. The press release is attached to this Form 8-K as Exhibit 99.1. 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 Senior Vice President Chief Financial Officer Dated: April 22, 2004 2 EXHIBIT INDEX 99.1 Press Release of Cambrex Corporation dated April 22, 2004 3 EX-99.1 3 y96590exv99w1.txt PRESS RELEASE [CAMBREX LOGO] Date: April 22, 2004 Contact: Luke M. Beshar Anne-Marie Hess Executive 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 FIRST QUARTER 2004 RESULTS FIRST QUARTER 2004 HIGHLIGHTS - Cambrex reports first quarter 2004 net income from continuing operations of $8.2 million or $0.31 diluted earnings per share versus $1.6 million or $0.06 diluted earnings per share in the first quarter 2003. - First quarter 2004 gross sales increased approximately 8% due to the strength of the Human Health and Bioproducts segments. - The Company decreased debt, net of cash-on-hand, by $17.3 million during the quarter as a result of $23.8 million of cash generated from operations partially offset by capital expenditures of $7.2 million. EAST RUTHERFORD, NJ - APRIL 22, 2004 - Cambrex Corporation (NYSE: CBM) today reported first quarter 2004 income from continuing operations of $8.2 million or $0.31 diluted earnings per share. The $3.0 million payment for the previously announced early termination of a Bioproducts customer contract is included in the results. Income from continuing operations in the first quarter 2003 was $1.6 million, or $0.06 diluted earnings per share, including special pre-tax charges of $11.3 million or $0.31 per diluted share, for the settlement of certain class action lawsuits involving Mylan Laboratories. Worldwide sales from continuing operations for the first quarter 2004 grew 7.9% to $113.6 million from $105.2 million in the first quarter 2003. The results reflect increased sales in the Human Health and Bioproducts segments partially offset by lower sales in the Biopharma segment. First quarter 2004 sales from continuing operations were favorably impacted by 6.6% due to foreign currency. Gross margins from continuing operations for the first quarter 2004 declined to 39.8% from 43.0% in the first quarter 2003 due to lower margins in the Human Health and Biopharma segments Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com [CAMBREX LOGO] partially offset by higher margins in the Bioproducts segment. Foreign currency unfavorably impacted first quarter 2004 gross margin by 0.8 percentage points. James A. Mack, Chairman, President, and CEO commented, "We are encouraged by the progress we've made in the Human Health and Bioproducts segments resulting from our new product programs, investments in sales and marketing, and more favorable market conditions. We continue to increase the resources dedicated to identifying and pursuing new development and manufacturing opportunities that will result in improved performance in the Biopharma business." As previously reported, on November 10, 2003 the Company closed on the sale of its Rutherford Chemicals business. This business has been treated as a discontinued operation for all periods presented. The $0.7 million loss on discontinued operations in the first quarter 2004 reflects post-closing working capital adjustments, legal and other charges associated with the sale of Rutherford Chemicals. All amounts in the attached financial statements and tables are for continuing operations unless otherwise indicated. HUMAN HEALTH The Human Health segment consists of small molecule Active Pharmaceutical Ingredients (APIs), Advanced Intermediates, Imaging Chemicals, and Fine Custom Chemicals derived from organic chemistry. Human Health sales in the first quarter 2004 increased 14.4% to $70.0 million, including 8.4% favorable impact due to foreign currency, from $61.1 million in the first quarter 2003. Gross sales of generic APIs and innovator pharma products and services increased, partially offset by declines in the Imaging and Fine Custom Chemicals product categories. The increased sales for the quarter reflect higher shipments of certain central nervous system, cardiovascular and diuretic APIs. First quarter 2004 gross margin declined to 37.2% from 38.7% in the first quarter 2003 primarily due to a 2.2 percentage point unfavorable impact from foreign currency, partially offset by improved manufacturing absorption and favorable product mix. Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com [CAMBREX LOGO] BIOPRODUCTS The Bioproducts segment includes Cells & Media, Electrophoresis & Chromatography, and Endotoxin Detection product categories. Bioproducts sales in the first quarter 2004 increased 14.6% to $34.5 million, including a 6.2% favorable impact from foreign currency, from $30.1 million in the first quarter 2003. The increased sales for the quarter reflect higher sales across most product categories due to higher pricing, new products, investments in sales and marketing and favorable market conditions. First quarter 2004 gross margins increased to 52.1% from 51.2% in the first quarter 2003 primarily due to favorable currency impact, pricing and product mix partially offset by increased inventory reserves. Foreign currency favorably impacted gross margin by 1.2 percentage points in the first quarter 2004. BIOPHARMA The Biopharma segment consists of the Company's contract biopharmaceutical process development and manufacturing business. Biopharma sales in the first quarter 2004 decreased to $9.1 million from $14.0 million in the first quarter 2003 reflecting lower suite utilization. First quarter 2004 gross margin declined to 12.5% from 44.4% in the first quarter 2003 due to reduced suite utilization and reflects the high fixed costs in this segment. Foreign currency had no impact on Biopharma sales or gross margin in the first quarter 2004. FIRST QUARTER 2004 OPERATING, INTEREST AND INCOME TAX EXPENSES FOR CONTINUING OPERATIONS First quarter 2004 marketing, sales, administrative and amortization expenses increased to $27.5 million (24.2% of sales) primarily due to $1.3 million unfavorable impact from foreign currency and increased sales and marketing spending, from $25.1 million (23.9% of sales) in the first quarter 2003. First quarter 2004 research and development expenses increased to $4.7 million (4.2% of sales), including a $0.2 unfavorable impact from foreign currency, from $4.1 million (3.9% of sales) in the first quarter 2003 due to increased R&D spending in most segments. Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com [CAMBREX LOGO] First quarter 2004 "Other, net" expenses consist of $3.0 million of income due to the early termination of a Bioproducts customer contract and an unrelated $1.0 million charge associated with the reorganization and related workforce reductions at a European facility. The cancelled contract would have generated approximately $0.6 million of operating profit in 2004 and otherwise expired in 2005. First quarter 2003 total operating expenses include a special pre-tax charge of $11.3 million for the settlement of certain class action lawsuits involving Mylan Laboratories. First quarter 2004 net interest expense increased to $2.9 million from $2.3 million in the first quarter 2003. Interest expense increased due to a higher average rate partly offset by a lower average outstanding balance. The average interest rate was 5.8% in the first quarter 2004 versus 3.9% in the first quarter 2003. GUIDANCE The Company continues to expect full year 2004 diluted earnings per share for continuing operations to be in the range of $1.10 to $1.30 and the Company targets sales growth of 5-10% in the Human Health segment, 10-15% in the Bioproducts segment, and 20-30% in the Biopharma segment. Based on the anticipated timing of Biopharma and Human Health custom development revenues, the Company currently expects the fourth quarter to generate an uncharacteristically higher proportion of the year's earnings. The sum of second and third quarter earnings is expected to contribute approximately $0.40 - $0.50 per diluted share. For the year 2004, capital expenditures, depreciation and amortization for continuing operations are expected to be approximately $48.0 million, $40.0 million, and $1.5 million respectively. The Company expects the full year 2004 effective tax rate to be approximately 32%. The Company's tax rate will continue to be highly sensitive to changes in the geographic mix of income. CONFERENCE CALL The Conference Call to discuss first quarter 2004 earnings will begin at 8:30 a.m. Eastern Time on Friday, April 23, 2004 and last approximately 45 minutes. Those wishing to participate should call 1-888-730-9134 for Domestic, and +1-630-395-0024 for International. Please use the password CAMBREX and call approximately 10 minutes before the start time. The Conference Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com [CAMBREX LOGO] Call will also be webcast in the Investor Relations section of the Cambrex website located at www.cambrex.com. The webcast will be available for approximately thirty (30) days following the call. A replay of the Conference Call will be available approximately 1 hour after the completion of the call through the end of business day, Friday, April 30, 2004 by calling 1-800-385-2546 for Domestic, and +1-402-220-9808 for International. FORWARD LOOKING STATEMENTS This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Rule 3B-6 under The Exchange Act, including, 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. These statements may be identified by the fact that they use words such as "expects", "anticipates", "intends", "estimates", "believes" or similar expressions in connection with any discussion of future financial and operating performance. The forward-looking statements contained herein are based on current plans and expectations and involve risks and uncertainties that could cause actual outcomes and results to differ materially from current 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), tax rate, 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. For further details and a discussion of these and other risks and uncertainties, investors are cautioned to review the Cambrex Annual Report on Form 10-K, including the Forward-Looking Statement section therein, and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com [CAMBREX LOGO] CAMBREX CORPORATION Financial Summary Quarters Ended March 31, 2004 and 2003 (in thousands, except earnings per share)
2004 2003 ---- ---- Gross Sales ................................ $ 113,592 $ 105,231 Operating Profit ........................... $ 14,820 $ 4,707 Income Before Tax .......................... $ 11,764 $ 2,173 Income From Continuing Operations .......... $ 8,198 $ 1,564 (Loss)/Income From Discontinued Operations . $ (742) $ 795 Net Income ................................. $ 7,456 $ 2,359 Earnings per share data (basic): Income From Continuing Operations ........ $ 0.32 $ 0.06 (Loss)/Income From Discontinued Operations $ (0.03) $ 0.03 --------- --------- Net Income ............................... $ 0.29 $ 0.09 Average Shares Outstanding ............... 26,001 25,853 Earnings per share data (diluted): Income From Continuing Operations ........ $ 0.31 $ 0.06 (Loss)/Income From Discontinued Operations $ (0.03) $ 0.03 --------- --------- Net Income ............................... $ 0.28 $ 0.09 Average Shares Outstanding ............... 26,605 26,154
Note: All amounts in these financial statements and tables are for continuing operations unless otherwise indicated. Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com CAMBREX CORPORATION Gross Sales & Gross Profit by Segment Quarters Ended March 31, 2004 and 2003 (in thousands)
First Quarter 2004 First Quarter 2003 ----------------------------------- ---------------------------------- Gross Gross Gross Gross Sales Profit GP% Sales Profit GP% ----- ------ --- ----- ------ --- Human Health $ 69,952 $ 26,039 37.2% $ 61,126 $ 23,637 38.7% Bioproducts 34,521 17,982 52.1% 30,128 15,413 51.2% Biopharma 9,119 1,137 12.5% 13,977 6,204 44.4% -------- -------- -------- -------- Total $113,592 $ 45,158 39.8% $105,231 $ 45,254 43.0% ======== ======== ======== ========
Gross Sales Comparison -------------------------------------------------- 2004 2003 Gross Gross Change Change Sales Sales $ % ----- ----- ------ ------ Human Health $ 69,952 $ 61,126 $ 8,826 14.4% Bioproducts 34,521 30,128 4,393 14.6% Biopharma 9,119 13,977 (4,858) -34.8% -------- -------- -------- ---- Total $113,592 $105,231 $ 8,361 7.9% -------- -------- -------- ----
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com CAMBREX CORPORATION Statement of Profit and Loss For the Quarters Ended March 31, 2004 and 2003 (in thousands)
2004 2003 ------------------------ ----------------------- % of % of Amount Sales Amount Sales ------ ----- ------ ----- Gross Sales $ 113,592 100.0% $ 105,231 100.0% Commissions and Allowances 959 0.8% 1,133 1.0% --------- --------- Net Sales 112,633 99.2% 104,098 99.0% Other Revenues 3,042 2.7% 2,888 2.7% --------- --------- Net Revenue 115,675 101.9% 106,986 101.7% Cost of Sales 70,517 62.1% 61,732 58.7% --------- --------- Gross Profit 45,158 39.8% 45,254 43.0% Operating Expenses Marketing/Sales Expenses 7,907 7.0% 6,356 6.0% Research & Development Expenses 4,722 4.2% 4,093 3.9% Administrative Expenses 19,100 16.8% 18,365 17.4% Legal Settlement -- 0.0% 11,342 10.8% Other, net (1,863) -1.6% -- 0.0% Amortization 472 0.4% 391 0.4% --------- --------- Total Operating Expenses 30,338 26.8% 40,547 38.5% --------- --------- Operating Profit 14,820 13.0% 4,707 4.5% Other Expenses Interest - Other 2,929 2.5% 2,349 2.2% Other Expenses, net 127 0.1% 185 0.2% --------- --------- Total Other Expenses 3,056 2.6% 2,534 2.4% --------- --------- Income Before Taxes 11,764 10.4% 2,173 2.1% Provision for Income Taxes 3,566 3.2% 609 0.6% --------- --------- Income from Continuing Operations $ 8,198 7.2% $ 1,564 1.5% DISCONTINUED OPERATIONS (Loss)/Income From Discontinued Operations (742) 1,015 Income Tax Provision -- 220 --------- --------- (Loss)/Income From Discontinued Operations (742) 795 --------- --------- Net Income $ 7,456 $ 2,359 ========= ========= Basic Earnings per Share Income From Continuing Operations $ 0.32 $ 0.06 (Loss)/Income From Discontinued Operations $ (0.03) $ 0.03 --------- --------- Net Income $ 0.29 $ 0.09 Diluted Earnings per Share Income From Continuing Operations $ 0.31 $ 0.06 (Loss)/Income From Discontinued Operations $ (0.03) $ 0.03 --------- --------- Net Income $ 0.28 $ 0.09
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com CAMBREX CORPORATION Consolidated Balance Sheet As of March 31, 2004 and December 31, 2003 (in thousands)
Current Assets 2004 2003 - -------------- ---- ---- Cash and Cash Equivalents $ 73,682 $ 64,294 Trade Receivables, net 56,263 58,324 Inventories, net 84,324 82,013 Deferred Tax Asset 8,757 8,757 Other Current Assets 11,164 16,294 -------- -------- Total Current Assets 234,190 229,682 Property, Plant and Equipment, Net 261,173 269,147 Goodwill and Other Intangibles 270,996 272,133 Other Assets 6,877 7,541 -------- -------- Total Assets $773,236 $778,503 ======== ======== Current Liabilities Trade Accounts Payable $ 32,815 $ 35,326 Accrued Liabilities 58,626 54,522 Short-term Debt and Current Portion of Long-term Debt 3,445 1,376 -------- -------- Total Current Liabilities 94,886 91,224 Long-term Debt 202,422 212,369 Deferred Tax Liabilities 28,998 29,196 Other Liabilities 48,592 49,084 -------- -------- Total Liabilities $374,898 $381,873 Stockholders' Equity $398,338 $396,630 -------- -------- Total Liabilities and Stockholders' Equity $773,236 $778,503 ======== ========
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