EX-99.1 2 y14043exv99w1.txt PRESS RELEASE Exhibit 99.1 (CAMBREX LOGO) Date: October 27, 2005 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 REPORTS THIRD QUARTER 2005 RESULTS EAST RUTHERFORD, NJ - October 27, 2005 - Cambrex Corporation (NYSE: CBM) reports third quarter 2005 results for the period ended September 30, 2005. Sales increased 5.3% to $104.5 million in the third quarter 2005, including a 0.6% unfavorable impact from foreign currency, from $99.3 million in the third quarter 2004 due to higher sales in the Human Health and Bioproducts segments. A record third quarter in Human Health sales resulted from higher sales of advanced intermediates, active pharmaceutical ingredients (APIs) and animal health products. The Company broke even in the third quarter 2005 compared to a loss from continuing operations of $44.9 million, or $1.72 per diluted share in the third quarter 2004. In the third quarter 2005 an environmental reserve of $1.3 million or $0.05 per diluted share was recorded in Administrative Expense for the expected cost of environmental remediation of a former site. In the third quarter 2004, a goodwill impairment of $48.7 million or $1.87 per diluted share was recorded within the Biopharma segment's Operating Expense. The Company has made progress on its top objective for 2005 of building its portfolio of contract development and manufacturing projects for its Biopharma, Cell Therapy (within the Bioproducts segment) and Human Health businesses. Through the end of the third quarter 2005, the Company is pleased to report that its total number of contract development and manufacturing projects has increased 66%. Number of projects
End End Project type 2004 Q3-2005 % Change ------------ ---- ------- -------- Biopharma 15 25 67% Cell Therapy 8 16 100% Human Health 39 62 59%
Cost reductions are also a priority in 2005. Year to date the Company's corporate operating expenses declined $1.7 million or approximately 10%, despite a $1.3 million environmental reserve expense described below. 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 products and services for research and therapeutic applications. Bioproducts sales in the third quarter 2005 increased 5.2% to $35.7 million, including a 0.2% unfavorable impact from foreign currency, from $34.0 million in the third quarter 2004 due to higher volumes and pricing in both research and therapeutic application categories. Third quarter 2005 Bioproducts gross margin decreased to 51.7% from 54.9% in the third quarter 2004 primarily due to higher production costs partially offset by better volumes and pricing. Foreign currency unfavorably impacted Bioproducts gross margin by 0.1 percentage point in the third quarter 2005. Third quarter 2005 Bioproducts operating profit margin decreased to 14.1% from 18.8% in the third quarter 2004 primarily due to additional sales and marketing personnel in Europe and higher R&D spending for rapid microbial detection product development. "We did see some weakness in the research market in the quarter and as a result, sales growth was slightly less than expected," commented John R. Leone, Cambrex President and Chief Executive Officer. "However, Bioproducts continues to perform well overall and we are on target on a year to date basis with revenue growth of 11%." BIOPHARMA The Biopharma segment consists of the Company's contract biopharmaceutical process development and manufacturing business. Sales in the third quarter 2005 decreased 26.3% to $8.4 million from $11.4 million in the third quarter 2004 due to lower suite revenues resulting from the timing of client projects partially offset by new client process development revenues. Third quarter 2005 Biopharma gross margin decreased to -25.5% versus 16.6% in the third quarter 2004 principally due to lower volume and adverse revenue mix. Third quarter 2005 Biopharma operating loss was $4.4 million versus $49.2 million in the third quarter 2004. The third quarter 2005 operating loss resulted from lower revenues and gross profit margins. The third quarter 2004 operating loss includes a goodwill impairment within the Biopharma business of $48.7 million or $1.87 per diluted share. Foreign currency had no impact on Biopharma sales, gross margin or operating profit margin. "While the timing of projects impacted the quarter, we have several late stage projects which are expected to provide us with a sound foundation for 2006," commented Mr. Leone. "We anticipate the Biopharma business to approximately break even in the fourth quarter 2005, a significant milestone in its recovery." Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com (CAMBREX LOGO) HUMAN HEALTH The Human Health segment consists of small molecule active pharmaceutical ingredients (APIs), advanced intermediates and other products derived from organic chemistry. Human Health sales in the third quarter 2005 increased 12.0% to $60.4 million, including a 1.0% unfavorable impact due to foreign currency, from $53.9 million in the third quarter 2004. The increased sales reflect higher volumes of advanced intermediates, APIs and animal health products. Third quarter 2005 Human Health gross margin decreased to 33.9% from 34.6% in the third quarter 2004 primarily due to foreign currency which unfavorably impacted gross margin by 1.4 percentage points in the third quarter 2005. Third quarter 2005 operating profit margins increased to 18.8% from 17.0% due primarily to higher sales and cost controls. "Custom development revenues increased 39% in the quarter, an encouraging indicator of the future growth of the Human Health segment," commented Mr. Leone. "We continue to build momentum with a robust project portfolio of late phase projects." THIRD QUARTER 2005 OPERATING, INTEREST AND TAX EXPENSE Sales and Marketing expense increased to $8.5 million, or 8.1% of sales, from $7.6 million, or 7.6% of sales, principally due to additional sales and marketing personnel in Europe in the Bioproducts segment. Third quarter 2005 Research and Development Expense increased to $4.9 million, or 4.7% of sales, from $4.5 million, or 4.5% of sales, in the third quarter 2004 primarily due to higher expenses in the Bioproducts and Human Health segments to support new product launches and increased custom development pipelines. Third quarter 2005 Administrative Expense decreased to $16.8 million, or 16.0% of sales, from $17.7 million, or 17.8% of sales, in the third quarter 2004 primarily due to lower corporate expenses and approximately $0.1 million impact from foreign currency. Included in third quarter 2005 Administrative Expense is the previously mentioned environmental reserve of $1.3 million for a former site. This operating site was moved to another location prior to Cambrex purchasing the business and was never operated by Cambrex. Third quarter 2005 Net Interest Expense decreased to $2.8 million from $2.9 million in the third quarter 2004 due to a lower debt balance partially offset by a higher average interest rate. The average interest rate in the third quarter 2005 was 5.8% versus 5.5% reported in the third quarter 2004. The tax rate in the third quarter 2005 increased to 101.4% compared to -5.9% in the third quarter of 2004 primarily due to the geographic distribution of income. Capital expenditures for the third quarter 2005 were $9.9 million and depreciation was $8.9 million compared to $9.6 million and $9.5 million, respectively, in the third quarter 2004. Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com (CAMBREX LOGO) CAMBREX DECLARES QUARTERLY DIVIDEND The Cambrex Board of Directors declared the Company's regular quarterly cash dividend on its common stock of $0.03 per share for its shareholders of record as of November 4, 2005. The dividend is payable on November 18, 2005. GUIDANCE The Company is revising its full year 2005 guidance for sales growth to be within the range of 1% to 3% and earnings for continuing operations to be in the range of $0.55 to $0.65 per fully diluted share. Guidance is being revised primarily due to delays in several early stage Biopharma projects, currently under development agreements and expected to be completed in 2006, and lower revenues from new business that was expected to be closed in 2005. The Biopharma segment is still expected to approximately break even in the fourth quarter 2005. For the year 2005, guidance for capital expenditures, depreciation and amortization for continuing operations has been revised and is currently expected to be approximately $45 million, $37 million, and $2 million, respectively. The guidance for the full year 2005 tax rate has also been revised. The Company expects the full year 2005 effective tax rate to be approximately 35-40%. The full year and quarterly effective tax rates will continue to be highly sensitive to the geographic mix of income. The financial information contained in this press release is unaudited, subject to revision and should not be considered final until the third quarter 2005 Form 10-Q is filed with the US Securities and Exchange Commission. CONFERENCE CALL AND WEBCAST The Conference Call to discuss third quarter 2005 earnings will begin at 8:30 a.m. Eastern Time on Friday, October 28, 2005 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 conference ID 9939073 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, November 4, 2005 by calling 1-800-642-1687 for Domestic, and +1-706-645-9291 for International. Please use the conference ID 9939073 to access the replay. Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com (CAMBREX LOGO) 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 Securities Exchange Act of 1934, 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, interest rate, technology, manufacturing and legal issues, 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. ABOUT CAMBREX Cambrex is a global, diversified life sciences company dedicated to providing products and services to accelerate and improve the discovery and commercialization of human therapeutics. The Company employs approximately 1,900 worldwide. For more information, please visit http://www.cambrex.com. 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 For the Quarters Ended September 30, 2005 and 2004 (in thousands, except earnings per share)
2005 2004 --------- -------- Gross Sales ........................... $ 104,500 $ 99,250 Operating Profit/(Loss) ............... $ 6,135 $(39,714) Income/(Loss) Before Tax .............. $ 3,359 $(42 359) Loss From Continuing Operations ....... $ (48) $(44,861) Loss From Discontinued Operations ..... $ -- $ (236) Net Loss .............................. $ (48) $(45,097) Earnings per share data (basic): Loss From Continuing Operations .... $ (0.00) $ (1.72) Loss From Discontinued Operations .. $ -- $ (0.01) --------- -------- Net Loss ........................... $ (0.00) $ (1.73) Average Shares Outstanding ......... 26,418 26,109 Earnings per share data (diluted): Loss From Continuing Operations .... $ (0.00) $ (1.72) Loss From Discontinued Operations .. $ -- $ (0.01) --------- -------- Net Loss ........................... $ (0.00) $ (1.73) Average Shares Outstanding ......... 26,418 26,109
Nine Months Ended September 30, 2005 and 2004 (in thousands, except earnings per share)
2005 2004 -------- -------- Gross Sales .................................. $331,133 $321,750 Operating Profit/(Loss) ...................... $ 26,113 $(11,652) lncome/(Loss) Before Tax ..................... $ 17,759 $(20,062) Income/(Loss) From Continuing Operations ..... $ 11,122 $(30,763) Loss From Discontinued Operations ............ $ -- $ (978) Net lncome/(Loss) ............................ $ 11,122 $(31,741) Earnings per share data (basic): Income/(Loss) From Continuing Operations .. $ 0.42 $ (1.18) Loss From Discontinued Operations ......... $ -- $ (0.04) -------- -------- Net lncome/(Loss) ......................... $ 0.42 $ (1.22) Average Shares Outstanding ................ 26,389 26,074 Earnings per share data (diluted): ........... Income/(Loss) From Continuing Operations .. $ 0.42 $ (1.18) Loss From Discontinued Operations ......... $ -- $ (0.04) -------- -------- Net lncome/(Loss) ......................... $ 0.42 $ (1.22) Average Shares Outstanding ................ 26,550 26,074
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 & Operating Profit/(Loss) by Segment For the Quarters Ended September 30, 2005 and 2004 (in thousands)
Third Quarter 2005 -------------------------------------------------------- Gross Gross Operating Sales Profit/(Loss) GP% Profit/(Loss) OP% -------- ------------- ----- ------------- ----- Bioproducts $ 35,729 $18,481 51.7% $ 5,024 14.1% Biopharma 8,385 (2,137) -25.5% (4,368) -52.1% Human Health 60,386 20,478 33.9% 11,343 18.8% Corporate -- -- (5,864) -------- ------- ------- Total $104,500 $36,822 35.2% $ 6,135 5.9% ======== ======= =======
Third Quarter 2004 ------------------------------------------------- Gross Gross Operating Sales Profit GP% Profit/(Loss) OP% ------- ------- ---- ------------- ------ Bioproducts $33,958 $18,632 54.9% $ 6,379 18.8% Biopharma 11,375 1,892 16.6% (49,247) -432.9% Human Health 53,917 18,670 34.6% 9,146 17.0% Corporate -- -- (5,992) ------- ------- -------- Total $99,250 $39,194 39.5% $(39,714) -40.0% ======= ======= ====
Gross Sales Comparison ------------------------------------- 2005 2004 Gross Gross Change Change Sales Sales $ % -------- ------- ------- ------ Bioproducts $ 35,729 $33,958 $ 1,771 5.2% Biopharma 8,385 11,375 (2,990) -26.3% Human Health 60,386 53,917 6,469 12.0% -------- ------- ------- Total $104,500 $99,250 $ 5,250 5.3% ======== ======= =======
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 September 30, 2005 and 2004 (in thousands)
2005 2004 ---------------- ---------------- % of % of Amount Sales Amount Sales -------- ----- -------- ----- Gross Sales $104,500 100.0% $ 99,250 100.0% Commissions and Allowances 1,031 1.0% 620 0.6% -------- -------- Net Sales 103,469 99.0% 98,630 99.4% Other Revenues 1,116 1.1% 1,706 1.7% -------- -------- Net Revenue 104,585 100.1% 100,336 101.1% Cost of Sales 67,763 64.9% 61,142 61.6% -------- -------- Gross Profit 36,822 35.2% 39,194 39.5% Operating Expenses Marketing/Sales Expenses 8,468 8.1% 7,555 7.6% Research & Development Expenses 4,862 4.7% 4,520 4.5% Administrative Expenses 16,846 16.0% 17,650 17.8% Goodwill Impairment -- 0.0% 48,720 49.1% Amortization 511 0.5% 463 0.5% -------- -------- Total Operating Expenses 30,687 29.3% 78,908 79.5% -------- -------- Operating Profit/(Loss) 6,135 5.9% (39,714) -40.0% Other Expenses Interest - Other 2,801 2.7% 2,854 2.9% Other Income, net (25) 0.0% (209) -0.2% -------- -------- Total Other Expenses 2,776 2.7% 2,645 2.7% -------- -------- Income/(Loss) Before Taxes 3,359 3.2% (42,359) -42.7% Income Tax Provision 3,407 3.2% 2,502 2.5% -------- -------- Loss from Continuing Operations $ (48) 0.0% $(44,861) -45.2% Discontinued Operations Loss From Discontinued Operations -- (236) -------- -------- Net Loss $ (48) $(45,097) ======== ======== Basic Earnings per Share Loss From Continuing Operations $ (0.00) $ (1.72) Loss From Discontinued Operations $ -- $ (0.01) -------- -------- Net Loss $ (0.00) $ (1.73) Diluted Earnings per Share Loss From Continuing Operations $ (0.00) $ (1.72) Loss From Discontinued Operations $ -- $ (0.01) -------- -------- Net Loss $ (0.00) $ (1.73)
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 & Operating Profit/(Loss) by Segment Nine Months Ended September 30, 2005 and 2004 (in thousands)
Nine Months 2005 ----------------------------------------------------------- Gross Operating Gross Sales Profit/(Loss) GP% Profit/(Loss) OP% ----------- ------------- ----- ------------- ----- Bioproducts $113,638 $ 59,952 52.8% $ 20,499 18.0% Biopharma 27,747 (4,800) -17.3% (12,545) -45.2% Human Health 189,748 65,202 34.4% 34,373 18.1% Corporate -- -- (16,214) -------- -------- -------- Total $331,133 $120,354 36.3% $ 26,113 7.9% ======== ======== ========
Nine Months 2004 ---------------------------------------------------------- Operating Gross Sales Gross Profit GP% Profit/(Loss) OP% ----------- ------------ ---- ------------- ------ Bioproducts $102,190 $ 55,676 54.5% $ 21,872 21.4% Biopharma 31,739 3,303 10.4% (53,065) -167.2% Human Health 187,821 67,692 36.0% 37,503 20.0% Corporate -- -- (17,962) -------- -------- -------- Total $321,750 $126,671 39.4% $(11,652) -3.6% ======== ======== ========
Gross Sales Comparison -------------------------------------------- 2005 2004 Change Change Gross Sales Gross Sales $ % ----------- ----------- ------- ------ Bioproducts $113,638 $102,190 $11,448 11.2% Biopharma 27,747 31,739 (3,992) -12.6% Human Health 189,748 187,821 1,927 1.0% -------- -------- ------- Total $331,133 $321,750 $ 9,383 2.9% ======== ======== =======
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 Nine Months Ended September 30, 2005 and 2004 (in thousands)
2005 2004 ---------------- ---------------- % of % of Amount Sales Amount Sales -------- ----- -------- ----- Gross Sales $331,133 100.0% $321,750 100.0% Commissions and Allowances 3,696 1.1% 2,278 0.7% -------- -------- Net Sales 327,437 98.9% 319,472 99.3% Other Revenues 5,827 1.7% 6,545 2.0% -------- -------- Net Revenue 333,264 100.6% 326,017 101.3% Cost of Sales 212,910 64.3% 199,346 61.9% -------- -------- Gross Profit 120,354 36.3% 126,671 39.4% Operating Expenses Marketing/Sales Expenses 25,233 7.6% 23,413 7.3% Research & Development Expenses 16,601 5.0% 13,936 4.3% Administrative Expenses 50,689 15.3% 52,737 16.5% Goodwill Impairment -- 0.0% 48,720 15.1% Other, net -- 0.0% (1,863) -0.6% Amortization 1,718 0.5% 1,380 0.4% -------- -------- Total Operating Expenses 94,241 28.4% 138,323 43.0% -------- -------- Operating Profit/(Loss) 26,113 7.9% (11,652) -3.6% Other Expenses Interest - Other 8,281 2.5% 8,471 2.6% Other Expenses/(Income) 73 0.0% (61) 0.0% -------- -------- Total Other Expenses 8,354 2.5% 8,410 2.6% -------- -------- Income/(Loss) Before Taxes 17,759 5.4% (20,062) -6.2% Provision for Income Taxes 6,637 2.0% 10,701 3.4% -------- -------- Income/(Loss) From Continuing Operations $ 11,122 3.4% $(30,763) -9.6% Discontinued Operations Loss From Discontinued Operations -- (978) -------- -------- Net Income/(Loss) $ 11,122 $(31,741) ======== ======== Basic Earnings per Share Income/(Loss) From Continuing Operations $ 0.42 $ (1.18) Loss From Discontinued Operations $ -- $ (0.04) -------- -------- Net Income/(Loss) $ 0.42 $ (1.22) Diluted Earnings per Share Income/(Loss) From Continuing Operations $ 0.42 $ (1.18) Loss From Discontinued Operations $ -- $ (0.04) -------- -------- Net Income/(Loss) $ 0.42 $ (1.22)
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 September 30, 2005 and December 31, 2004 (in thousands)
2005 2004 -------- -------- Assets Cash and Cash Equivalents $ 32,760 $ 91,532 Trade Receivables, net 63,793 68,370 Inventories, net 101,716 91,039 Deferred Tax Asset 4,806 2,605 Other Current Assets 21,896 20,825 -------- -------- Total Current Assets 224,971 274,371 Property, Plant and Equipment, Net 258,446 280,790 Goodwill and Other Intangibles 225,325 230,656 Other Non-Current Assets 5,550 6,168 -------- -------- Total Assets $714,292 $791,985 ======== ======== Liabilities and Stockholders' Equity Trade Accounts Payable $ 34,746 $ 38,552 Accrued Liabilities 48,925 52,181 Short-term Debt and Current Portion of Long-term Debt 2,072 1,400 -------- -------- Total Current Liabilities 85,743 92,133 Long-term Debt 183,257 226,187 Deferred Tax Liabilities 20,383 21,686 Other Non-Current Liabilities 57,863 60,663 -------- -------- Total Liabilities $347,246 $400,669 Stockholders' Equity $367,046 $391,316 -------- -------- Total Liabilities and Stockholders' Equity $714,292 $791,985 ======== ========
### Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073 Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com