EX-99.1 2 y99375exv99w1.txt PRESS RELEASE EXHIBIT 99.1 (CAMBREX LOGO) Date: July 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 SECOND QUARTER 2004 RESULTS SECOND QUARTER 2004 HIGHLIGHTS - Cambrex reports second quarter 2004 net income from continuing operations of $6.1 million or $0.23 diluted earnings per share versus $7.5 million or $0.29 diluted earnings per share in the second quarter 2003. - Second quarter 2004 gross sales increased approximately 5.7% due to the strength of the Bioproducts and Biopharma segments. - Bioproducts second quarter 2004 sales increased approximately 14% compared to the second quarter 2003 and reported its highest gross margin level in two years. - Biopharma second quarter 2004 sales increased 27% compared to the second quarter 2003, and 23% compared to the first quarter 2004. EAST RUTHERFORD, NJ - JULY 22, 2004 - Cambrex Corporation (NYSE: CBM) today reported second quarter 2004 income from continuing operations of $6.1 million or $0.23 diluted earnings per share. Income from continuing operations in the second quarter 2003 was $7.5 million, or $0.29 diluted earnings per share. Worldwide sales from continuing operations for the second quarter 2004 grew 5.7% to $109.0 million from $103.1 million in the second quarter 2003 reflecting increased sales in the Bioproducts and Biopharma segments partially offset by lower sales in the Human Health segment. Second quarter 2004 sales from continuing operations were favorably impacted by 3.1% due to foreign currency versus the second quarter 2003. "We are very pleased with the growth in the Bioproducts and Biopharma segments which is the result of our new product introductions and the continued investment in sales and marketing," commented James A. Mack, Chairman, President, and CEO. "The Bioproducts segment had an outstanding quarter with double-digit sales growth in most product categories and an exceptional Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) gross margin of 55%. Progress is continuing towards our 2004 Biopharma sales target with two thirds under contract and the last third identified and expected to close." Gross margins from continuing operations for the second quarter 2004 declined slightly to 38.6% from 39.0% in the second quarter 2003 due to lower margins in the Human Health and Biopharma segments partially offset by higher margins in the Bioproducts segment. Foreign currency did not impact second quarter 2004 gross margin percentage but increased gross profit by $1.2 million. The second quarter 2004 tax rate of 39% was unusually high versus the 28% tax rate in the second quarter of 2003 due to a shift in the geographic mix of income and the Company no longer recognizing the tax benefit from domestic operating losses. The higher rate negatively impacted diluted earnings per share by $0.03 when compared to the forecasted full year tax rate of approximately 32%. See discussion below regarding effective tax rate guidance for the full-year 2004. The Company increased debt, net of cash-on-hand, by $14.5 million during the quarter as $2.9 million cash was used in operations and $10.9 was used for capital expenditures. The cash used in operations resulted principally from the timing of foreign tax payments and working capital requirements. 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. 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 second quarter 2004 decreased 1.0% to $64.0 million, including 3.7% favorable impact due to foreign currency, from $64.6 million in the second quarter 2003. Gross sales of pharmaceutical advanced intermediates decreased, partially offset by increased sales of generic and branded APIs and Imaging Chemicals categories. The decreased sales for the quarter reflect lower shipments of certain intermediates used in the manufacture of allergy and central nervous system APIs. Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) Second quarter 2004 gross margin declined to 34.9% from 37.0% in the second quarter 2003 primarily due to lower pricing and the negative impact of foreign exchange partially offset by favorable product mix. Foreign currency negatively impacted gross margin by 0.8 percentage points in the second quarter 2004. BIOPRODUCTS The Bioproducts segment includes Cells and Media, Endotoxin Detection and Electrophoresis, Chromatography & Other product categories. Bioproducts sales in the second quarter 2004 increased 13.7% to $33.7 million, including a 2.7% favorable impact from foreign currency, from $29.6 million in the second quarter 2003. The increased sales for the quarter reflect higher sales in most product categories due to stronger demand, higher pricing, and new products. Second quarter 2004 gross margin increased to 55.2% from 51.2% in the second quarter 2003 primarily due to favorable volume and pricing, lower bad debt reserves and currency impact. Foreign currency favorably impacted gross margin by 1.4 percentage points in the second quarter 2004. BIOPHARMA The Biopharma segment consists of the Company's contract biopharmaceutical process development and manufacturing business. Biopharma sales in the second quarter 2004 increased 27.2% to $11.2 million from $8.8 million in the second quarter 2003 reflecting higher suite utilization. Second quarter 2004 gross margin declined to 10.0% from 12.6% in the second quarter 2003 due to higher production costs, lower pricing, and adverse mix of revenues. Foreign currency had no impact on Biopharma sales or gross margin in the second quarter 2004. Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) SECOND QUARTER 2004 OPERATING AND INTEREST EXPENSES FOR CONTINUING OPERATIONS Second quarter 2004 marketing, sales, administrative and amortization expenses increased to $24.7 million (22.7% of sales) from $23.0 million (22.3% of sales) in the second quarter 2003, primarily due to increased sales and marketing spending and approximately $0.4 million impact from foreign currency. Second quarter 2004 research and development expenses increased to $4.7 million (4.3% of sales) from $4.4 million (4.3% of sales) in the second quarter 2003 primarily due to increases in spending and approximately $0.1 million impact from foreign currency. Second quarter 2004 net interest expense remained flat at $2.7 million compared to the second quarter 2003. The average interest rate increased to 5.6% in the second quarter 2004 from 4.2% in the second quarter 2003 but was offset by lower outstanding borrowings. GUIDANCE The Company expects full year 2004 diluted earnings per share for continuing operations to be in the range of $1.10 to $1.20. The Company continues to target 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. For the year 2004, capital expenditures, depreciation and amortization for continuing operations are expected to be approximately $48.0 million, $40.0 million, and $1.9 million respectively. The Company expects the full year 2004 effective tax rate to be approximately 32%; however, the full year and quarterly effective tax rates will continue to be highly sensitive to changes in the geographic mix of income. CONFERENCE CALL AND WEBCAST The Conference Call to discuss second quarter 2004 earnings will begin at 8:30 a.m. Eastern Time on Friday, July 23, 2004 and last approximately 45 minutes. Those wishing to participate should call 1-888-634-4003 for Domestic, and +1-706-634-6653 for International. Please use the Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) conference ID 8192882 and call approximately 10 minutes before the start time. The Conference 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 two hours after the completion of the call through the end of business day, Friday, July 30, 2004 by calling 1-800-642-1687 for Domestic, and +1-706-645-9291 for International. Please use the conference ID 8192882 to access the replay. 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 words such as "expects", "anticipates", "intends", "estimates", "believes" or similar expressions are used 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 June 30, 2004 and 2003 (in thousands, except earnings per share)
2004 2003 ---------- ---------- Gross Sales .............................. $ 108,951 $ 103,116 Operating Profit ......................... $ 12,676 $ 12,824 Income Before Tax ........................ $ 9,967 $ 10,435 Income From Continuing Operations ........ $ 6,110 $ 7,512 Income From Discontinued Operations ...... $ -- $ 539 Net Income ............................... $ 6,110 $ 8,051 Earnings per share data (basic): Income From Continuing Operations ..... $ 0.23 $ 0.29 Income From Discontinued Operations ... $ -- $ 0.02 ---------- ---------- Net Income ............................ $ 0.23 $ 0.31 Average Shares Outstanding ............ 26,112 25,732 Earnings per share data (diluted): Income From Continuing Operations ..... $ 0.23 $ 0.29 Income From Discontinued Operations ... $ -- $ 0.02 ---------- ---------- Net Income ............................ $ 0.23 $ 0.31 Average Shares Outstanding ............ 26,383 25,973
Six Months Ended June 30, 2004 and 2003 (in thousands, except earnings per share)
2004 2003 ---------- ---------- Gross Sales .............................. $ 222,543 $ 208,347 Operating Profit ......................... $ 27,496 $ 17,531 Income Before Tax ........................ $ 21,731 $ 12,608 Income From Continuing Operations ........ $ 14,308 $ 9,076 (Loss)/Income From Discontinued Operations $ (742) $ 1,334 Net Income ............................... $ 13,566 $ 10,410 Earnings per share data (basic): Income From Continuing Operations ..... $ 0.55 $ 0.35 (Loss)/Income From Discontinued Operations.......................... $ (0.03) $ 0.05 ---------- ---------- Net Income ............................ $ 0.52 $ 0.40 Average Shares Outstanding ............ 26,057 25,792 Earnings per share data (diluted): Income From Continuing Operations ..... $ 0.54 $ 0.35 (Loss)/Income From Discontinued Operations.......................... $ (0.03) $ 0.05 ---------- ---------- Net Income ............................ $ 0.51 $ 0.40 Average Shares Outstanding ............ 26,405 26,092
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 LOGO) CAMBREX CORPORATION Gross Sales & Gross Profit by Segment Quarters Ended June 30, 2004 and 2003 (in thousands)
Second Quarter 2004 Second Quarter 2003 ------------------------------- ------------------------------- Gross Gross Gross Gross Sales Profit GP% Sales Profit GP% -------- -------- ----- -------- -------- ----- Human Health $ 63,995 $ 22,349 34.9% $ 64,628 $ 23,917 37.0% Bioproducts 33,711 18,602 55.2% 29,648 15,175 51.2% Biopharma 11,245 1,129 10.0% 8,840 1,117 12.6% -------- -------- -------- -------- Total $108,951 $ 42,080 38.6% $103,116 $ 40,209 39.0% ======== ======== ======== ========
Gross Sales Comparison ------------------------------------------------ 2004 2003 Gross Gross Change Change Sales Sales $ % -------- -------- -------- -------- Human Health $ 63,995 $ 64,628 $ (633) -1.0% Bioproducts 33,711 29,648 4,063 13.7% Biopharma 11,245 8,840 2,405 27.2% -------- -------- -------- -------- Total $108,951 $103,116 $ 5,835 5.7% -------- -------- -------- --------
Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) CAMBREX CORPORATION Gross Sales & Gross Profit by Segment Six Months Ended June 30, 2004 and 2003 (in thousands)
Six Months 2004 Six Months 2003 ------------------------------- ------------------------------- Gross Gross Gross Gross Sales Profit GP% Sales Profit GP% -------- -------- ----- -------- -------- ----- Human Health $133,947 $ 48,388 36.1% $125,754 $ 47,554 37.8% Bioproducts 68,232 36,584 53.6% 59,776 30,588 51.2% Biopharma 20,364 2,266 11.1% 22,817 7,321 32.1% -------- -------- -------- -------- Total $222,543 $ 87,238 39.2% $208,347 $ 85,463 41.0% ======== ======== ======== ========
Gross Sales Comparison ----------------------------------------------- 2004 2003 Gross Gross Change Change Sales Sales $ % -------- -------- -------- -------- Human Health $133,947 $125,754 $ 8,193 6.5% Bioproducts 68,232 59,776 8,456 14.1% Biopharma 20,364 22,817 (2,453) -10.8% -------- -------- -------- ----- Total $222,543 $208,347 $ 14,196 6.8% ======== ======== ======== =====
Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) CAMBREX CORPORATION Statement of Profit and Loss For the Quarters Ended June 30, 2004 and 2003 (in thousands)
2004 2003 ---------------------- ---------------------- % of % of Amount Sales Amount Sales ---------- ------- ---------- ------- Gross Sales $ 108,951 100.0% $ 103,116 100.0% Commissions and Allowances 699 0.6% 1,067 1.0% ---------- ---------- Net Sales 108,252 99.4% 102,049 99.0% Other Revenues 1,797 1.6% 2,120 2.0% ---------- ---------- Net Revenue 110,049 101.0% 104,169 101.0% Cost of Sales 67,969 62.4% 63,960 62.0% ---------- ---------- Gross Profit 42,080 38.6% 40,209 39.0% Operating Expenses Marketing/Sales Expenses 7,951 7.3% 6,548 6.4% Research & Development Expenses 4,665 4.3% 4,422 4.3% Administrative Expenses 16,338 15.0% 16,062 15.6% Amortization 450 0.4% 353 0.3% ---------- ---------- Total Operating Expenses 29,404 27.0% 27,385 26.6% ---------- ---------- Operating Profit 12,676 11.6% 12,824 12.4% Other Expenses Interest - Other 2,688 2.5% 2,702 2.6% Other Expenses, net 21 0.0% (313) -0.3% ---------- ---------- Total Other Expenses 2,709 2.5% 2,389 2.3% ---------- ---------- Income Before Taxes 9,967 9.1% 10,435 10.1% Provision for Income Taxes 3,857 3.5% 2,923 2.8% ---------- ---------- Income from Continuing Operations $ 6,110 5.6% $ 7,512 7.3% DISCONTINUED OPERATIONS Income From Discontinued Operations -- 445 Income Tax Benefit -- (94) ---------- ---------- Income From Discontinued Operations -- 539 ---------- ---------- Net Income $ 6,110 $ 8,051 ========== ========== Basic Earnings per Share Income From Continuing Operations $ 0.23 $ 0.29 Income From Discontinued Operations $ -- $ 0.02 ---------- ---------- Net Income $ 0.23 $ 0.31 Diluted Earnings per Share Income From Continuing Operations $ 0.23 $ 0.29 Income From Discontinued Operations $ -- $ 0.02 ---------- ---------- Net Income $ 0.23 $ 0.31
Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) CAMBREX CORPORATION Statement of Profit and Loss For the Six Months Ended June 30, 2004 and 2003 (in thousands)
2004 2003 ----------------------- ----------------------- % of % of Amount Sales Amount Sales ---------- ------- ---------- ------- Gross Sales $ 222,543 100.0% $ 208,347 100.0% Commissions and Allowances 1,658 0.7% 2,200 1.1% ---------- ---------- Net Sales 220,885 99.3% 206,147 98.9% Other Revenues 4,839 2.1% 5,008 2.4% ---------- ---------- Net Revenue 225,724 101.4% 211,155 101.3% Cost of Sales 138,486 62.2% 125,692 60.3% ---------- ---------- Gross Profit 87,238 39.2% 85,463 41.0% Operating Expenses Marketing/Sales Expenses 15,858 7.1% 12,904 6.2% Research & Development Expenses 9,387 4.2% 8,515 4.1% Administrative Expenses 35,438 15.9% 34,427 16.5% Legal Settlement -- 0.0% 11,342 5.4% Other, net (1,863) -0.8% -- 0.0% Amortization 922 0.4% 744 0.4% ---------- ---------- Total Operating Expenses 59,742 26.8% 67,932 32.6% ---------- ---------- Operating Profit 27,496 12.4% 17,531 8.4% Other Expenses Interest - Other 5,617 2.6% 5,050 2.4% Other Expenses, net 148 0.1% (127) -0.1% ---------- ---------- Total Other Expenses 5,765 2.7% 4,923 2.3% ---------- ---------- Income Before Taxes 21,731 9.7% 12,608 6.1% Provision for Income Taxes 7,423 3.3% 3,532 1.7% ---------- ---------- Income from Continuing Operations $ 14,308 6.4% $ 9,076 4.4% DISCONTINUED OPERATIONS (Loss)/Income From Discontinued Operations (742) 1,460 Income Tax Provision -- 126 ---------- ---------- (Loss)/Income From Discontinued Operations (742) 1,334 ---------- ---------- Net Income $ 13,566 $ 10,410 ========== ========== Basic Earnings per Share Income From Continuing Operations $ 0.55 $ 0.35 (Loss)/Income From Discontinued Operations $ (0.03) $ 0.05 ---------- ---------- Net Income $ 0.52 $ 0.40 Diluted Earnings per Share Income From Continuing Operations $ 0.54 $ 0.35 (Loss)/Income From Discontinued Operations $ (0.03) $ 0.05 ---------- ---------- Net Income $ 0.51 $ 0.40
Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com (CAMBREX LOGO) CAMBREX CORPORATION Consolidated Balance Sheet As of June 30, 2004 and December 31, 2003 (in thousands)
Current Assets 2004 2003 -------------- -------- -------- Cash and Cash Equivalents $ 76,137 $ 64,294 Trade Receivables, net 57,167 58,324 Inventories, net 84,519 82,013 Deferred Tax Asset 8,757 8,757 Other Current Assets 21,653 16,294 -------- -------- Total Current Assets 248,233 229,682 Property, Plant and Equipment, Net 262,100 269,147 Goodwill and Other Intangibles 270,289 272,133 Other Assets 6,717 7,541 -------- -------- Total Assets $787,339 $778,503 ======== ======== Current Liabilities Trade Accounts Payable $ 27,869 $ 35,326 Accrued Liabilities 56,658 54,522 Short-term Debt and Current Portion of Long-term Debt 1,811 1,376 -------- -------- Total Current Liabilities 86,338 91,224 Long-term Debt 220,970 212,369 Deferred Tax Liabilities 28,998 29,196 Other Liabilities 46,993 49,084 -------- -------- Total Liabilities $383,299 $381,873 Stockholders' Equity $404,040 $396,630 -------- -------- Total Liabilities and Stockholders' $787,339 $778,503 -------- --------
### Cambrex Corporation One Meadowlands Plaza East Rutherford, NJ 07073 Phone 201.804.3000 Fax 201.804.9852 www.cambrex.com