-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bWLQUCSpLEHjSsw72UzCHmtifB9Jblnhv5IzzKbmflVk2YQSORA3NIRc/GVHQjaP lZ65wC2TBFeke6zzRDwyCA== 0000950123-94-001862.txt : 19941122 0000950123-94-001862.hdr.sgml : 19941122 ACCESSION NUMBER: 0000950123-94-001862 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMBREX CORP CENTRAL INDEX KEY: 0000820081 STANDARD INDUSTRIAL CLASSIFICATION: 2800 IRS NUMBER: 222476135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10638 FILM NUMBER: 94559551 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 10-Q 1 CAMBREX CORPORATION FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q /X/ QUARTERLY REPORT PURSUANT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended September 30, 1994 ------------------ OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to ------------------- ------------------ Commission file number 1-10638 ------- CAMBREX CORPORATION ------------------- (Exact name of registrant as specified in its charter) DELAWARE 22-2476135 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE MEADOWLANDS PLAZA, EAST RUTHERFORD, NEW JERSEY 07073 -------------------------------------------------------- (Address of principal executive offices) (201) 804-3000 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS As of November 1, 1994, there were 5,298,604 shares outstanding of the registrant's Common Stock, $.10 par value. Page 1 of 16 2 CAMBREX CORPORATION AND SUBSIDIARIES Form 10-Q For The Quarter Ended September 30, 1994 Table of Contents
Page No. -------- Part I Financial information Condensed consolidated balance sheets as of September 30, 1994 and December 31, 1993 3 Condensed consolidated income statements for the three months and nine months ended September 30, 1994 and 1993 4 Condensed consolidated statements of cash flows for the nine months ended September 30, 1994 and 1993 5 Notes to condensed consolidated financial statements 6 - 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 12 Part II Other information Item 4. Matters Submitted to a Vote of Securities Holders 13 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 Exhibit 11 - Computation of Earnings Per Share 15 Exhibit 27 - Financial Data Schedule 16
3 Part 1 - FINANCIAL INFORMATION CAMBREX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands)
September 30, December 31, 1994 1993 ----------- ------------- ASSETS Current assets: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48 $ 161 Trade and other receivables, less allowances for doubtful accounts of $335 and $355 at respective dates . . . . . . . . . . . . . . . . . . 35,297 28,015 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . 35,171 33,730 Deferred tax asset . . . . . . . . . . . . . . . . . . . . . 1,213 1,315 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,421 3,557 ------ ------ Total current assets . . . . . . . . . . . . . . . . . . 75,150 66,778 Property, plant and equipment, net . . . . . . . . . . . . . . . 98,167 89,784 Intangible assets, net . . . . . . . . . . . . . . . . . . . . . 11,320 7,621 Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . 1,287 2,662 ------- ------- Total assets . . . . . . . . . . . . . . . . . . . . . . $185,924 $166,845 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued liabilities . . . . . . . . . . $ 27,229 $ 20,872 Income taxes payable . . . . . . . . . . . . . . . . . . . . 3,582 3,409 Current portion of long-term debt . . . . . . . . . . . . . . 4,010 4,000 ------- ------- Total current liabilities . . . . . . . . . . . . . . . 34,821 28,281 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 38,306 36,261 Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . 7,195 5,986 Other noncurrent liabilities . . . . . . . . . . . . . . . . . . 8,748 8,748 ------- ------- Total liabilities . . . . . . . . . . . . . . . . . . . 89,070 79,276 ------- ------- Stockholders' equity: Common stock . . . . . . . . . . . . . . . . . . . . . . . . 607 601 Additional paid-in capital . . . . . . . . . . . . . . . . . 73,423 72,627 Retained earnings . . . . . . . . . . . . . . . . . . . . . . 33,024 25,859 Cumulative translation adjustment . . . . . . . . . . . . . . 411 Additional minimum pension liability . . . . . . . . . . . . . (692) (1,030) Treasury stock, at cost; 770,966 and 819,049 shares at respective dates . . . . . . . . . . . . . . . . ( 9,919) (10,488) ------ -------- Total stockholders' equity . . . . . . . . . . . . . . . 96,854 87,569 -------- -------- Total liabilities and stockholders' equity . . . . . . . $ 185,924 $ 166,845 ======== ========
See accompanying notes to condensed consolidated financial statements. - 3 - 4 CAMBREX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) (in thousands, except per-share amounts)
Three months ended Nine months ended September 30, September 30, ------------------------- ------------------------- 1994 1993 1994 1993 ---- ---- ---- ---- Net revenues . . . . . . . . . . . . . . . $ 57,608 $ 48,065 $166,879 $148,493 Operating expenses: Cost of goods sold . . . . . . . . . . 44,343 34,654 127,618 108,954 Selling, general and administrative expenses . . . . . . . . . . . . . . 7,559 7,453 21,773 22,130 Research and development . . . . . . . 1,211 1,535 3,612 4,358 ------- ------- ------- ------- Total operating expenses . . . . . . 53,113 43,642 153,003 135,442 ------- ------- ------- ------- Operating profit . . . . . . . . . . . . . 4,495 4,423 13,876 13,051 Other (income) expenses: Interest expense - net . . . . . . . . 496 729 1,529 2,133 Other - net . . . . . . . . . . . . . . 121 75 74 248 ------- ------- ------- ------- Income before income taxes . . . . . . . . 3,878 3,619 12,273 10,670 Provision for income taxes . . . . . . . . 1,438 1,425 4,325 4,255 ------- ------ ------- ------- Net income . . . . . . . . . . . . . . . $ 2,440 $ 2,194 $ 7,948 $ 6,415 ======= ====== ======= ======= Weighted average shares outstanding: Primary . . . . . . . . . . . . . 5,679 5,273 5,655 5,208 Fully diluted . . . . . . . . . . 5,711 5,482 5,693 5,473 Net income per share: Primary . . . . . . . . . . . . . $ 0.43 $ 0.42 $ 1.41 $ 1.23 ======= ======= ======= ====== Fully diluted . . . . . . . . . . $ 0.43 $ 0.41 $ 1.40 $ 1.20 ======= ======= ======= ======
See accompanying notes to condensed consolidated financial statements. - 4 - 5 CAMBREX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
Nine months ended September 30, ------------------------- 1994 1993 ------- ------- Cash flows from operations . . . . . . . . . . . . . . . . . . . . . . . . $ 17,849 $16,367 Changes in assets and liabilities: Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,043) 1,329 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,155 (3,075) Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . 238 (276) Accounts payable and accrued liabilities . . . . . . . . . . . . . . . 4,091 (546) Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . 71 (410) Other noncurrent assets and liabilities . . . . . . . . . . . . . . . . 3,175 660 ------- ------- Net cash provided from operations . . . . . . . . . . . . . . . . 20,536 14,049 ------- ------- Cash flows from investing activities: Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . (11,842) (10,558) Acquisition of businesses . . . . . . . . . . . . . . . . . . . . . . . (11,840) ( 5,904) ------ ------ Net cash (used in) investing activities . . . . . . . . . . . . . (23,682) (16,462) ------ ------ Cash flows from financing activities: Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (783) (725) Long-term debt activity (including current portion): Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,714 27,800 Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,679) (25,616) Proceeds from the issuance of common stock . . . . . . . . . . . . . . 285 330 Proceeds from the sale of treasury stock . . . . . . . . . . . . . . . 1,085 1,018 ------- ------- Net cash provided from financing activities . . . . . . . . . . . 2,622 2,807 ------- ------- Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . 411 - ------- ------- Net increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . (113) 394 Cash at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . 161 564 ------- ------- Cash at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48 $ 958 ======= ======= Supplemental disclosure: Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,757 $ 2,167 Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,038 $ 3,997 Noncash investing and financing activity: Conversion of subordinated notes to common stock . . . . . . . . . . . - $ 3,990
See accompanying notes to condensed consolidated financial statements. - 5 - 6 CAMBREX CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in thousands) (1) Basis of Presentation Unless otherwise indicated by the context, "Cambrex" or the "Company" means Cambrex Corporation and subsidiaries. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared from the records of the Company. In the opinion of management, the financial statements include all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation of financial position and results of operations in conformity with generally accepted accounting principles. These interim financial statements should be read in conjunction with the financial statements for the year ended December 31, 1993. The results of operations for the nine months ended September 30, 1994 are not necessarily indicative of the results to be expected for the full year. (2) Inventories Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or market and include material, labor, and overhead. Inventories at September 30, 1994 and December 31, 1993 consist of the following:
September 30, December 31, 1994 1993 -------------- -------------- Finished goods . . . . . . . . . . . . . $ 17,623 $ 17,988 Raw materials . . . . . . . . . . . . . 15,269 13,878 Fuel oil and supplies . . . . . . . . . 2,279 1,864 ------- ------- $ 35,171 $ 33,730 ======= =======
(3) Earnings Per Common Share The calculation of primary earnings per common share is based on the weighted average number of common shares and common share equivalents outstanding during the applicable period. For 1993, fully diluted earnings per share assumes conversion of the outstanding convertible subordinated notes that were converted in September 1993, and the elimination of related interest expense net of tax. - 6 - 7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 4) Acquisitions On October 12, 1994, the Company completed the acquisition of the stock of Nobel's Pharma Chemistry Business (the "Business") from Akzo Nobel for approximately $126,000. The Business consists of Nobel Chemicals A.B. in Karlskoga, Sweden, Profarmaco Nobel S.r.l. in Milan, Italy, and sales companies in Germany, England and the United States. On January 31, 1994, the Company completed the acquisition of the assets of Hexcel Corporation's fine chemicals business located in Middlesbrough, England, for approximately $7,300 and the assumption of certain current liabilities in the amount of $2,700. The facility is now known as Seal Sands Chemicals Ltd. On May 27, 1994, the Company purchased the Topanol product line from Zeneca Limited to compliment its operations at the Seal Sands facility. Financial results are included in the consolidated financial statements for the nine months ended September 30, 1994. 5) Long-term Debt Long-term debt at September 30, 1994 and December 31, 1993 consists of the following:
September 30, December 31, 1994 1993 ---- ---- Bank credit facilities . . . . . . . . . . . . . . . . . $ 38,149 $ 36,111 Capital lease . . . . . . . . . . . . . . . . . . . . . 17 0 Industrial development revenue bond . . . . . . . . . . 4,150 4,150 ------ ------ Subtotal . . . . . . . . . . . . . . . . . . . 42,316 40,261 Less: current portion . . . . . . . . . . . . . . . . . 4,010 4,000 ------ ------ Total . . . . . . . . . . . . . . . . . . . . $ 38,306 $ 36,261 ====== ======
On September 21, 1994, the Company entered into a new Loan Agreement (Credit Agreement) with NBD Bank, N.A., United Jersey Bank, National Westminster Bank NJ, Wachovia Bank of Georgia, N.A., BHF-Bank, the First National Bank of Boston, Chemical Bank New Jersey, N.A., and National City Bank. This new Loan Agreement replaces the existing Revolving Credit and Term Loan Agreement with NBD Bank, N.A., United Jersey Bank, and National Westminster Bank NJ. The new Credit Agreement provides for a bridge loan in the aggregate principal amount of $50,000, a term loan in the aggregate principal amount of $75,000, and a revolving credit facility in the aggregate principal amount of $100,000. - 7 - 8 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Long-Term Debt continued The new Credit Agreement permits the Company to choose between various interest rate options and to specify the portion of the borrowing to be covered by specific interest rate options. Under the Revolving Credit Agreement and Bridge Loan, the interest rate options available to the Company are: (a) U.S. prime rate plus the applicable margin (ranging from 0% to 3/4 of 1%) or (b) LIBOR plus the applicable margin (ranging from 1/2 of 1% to 2%). The applicable margin is adjusted based upon the Funded Indebtedness to Cash Flow Ratio of Cambrex Corporation. The Term Loan will have the same options plus 1/2%. Additionally, the Company pays a commitment fee of between 1/5 of 1% and 3/8 of 1% on the unused portion of the Revolving Credit facilities. On October 11, 1994, $32,200 and L4,265 ($6,734) from the new Loan Agreement were used to satisfy the prior Credit Agreement. On October 12, 1994, $126,000 from the new Loan Agreement was used to purchase the stock of Nobel's Pharma Chemistry Business. The Company met all the bank covenants for the third quarter of 1994. 6) Postemployment Benefits Statement of Financial Accounting Standard No. 112 "Employers' Accounting for Postemployment Benefits" (SFAS 112) requires the recognition on an accrual basis of all types of postemployment benefits provided to former or inactive employees subsequent to employment but before retirement. The Company currently provides limited benefits in this regard and has determined the implementation effect of SFAS 112 to be immaterial. (7) Contingencies Refer to Form 10-K for the fiscal year ended December 31, 1993, for disclosure of existing contingencies related to environmental issues. Presented below is a subsequent development in a matter that was disclosed in Form 10-K. On October 21, 1994, CasChem, Inc., a subsidiary of Cambrex announced that it had agreed to a settlement of legal proceedings associated with a 1990 investigation by agents of the Federal Bureau of Investigation and the Environmental Protection Agency at Caschem's Bayonne, New Jersey facility. Under an agreement with the United States Attorney's office in Newark, CasChem agreed to pay a fine of $1 million in connection with a drum of material determined to be hazardous waste that was stored longer than the legally permitted 90-day period. There will be no impact on the Company's financial results since current reserves are adequate to cover the payments. - 8 - 9 CAMBREX CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The third quarter 1994 net revenues increased 20% to $57,608,000 from $48,065,000 in the previous year. The $9,543,000 of increased revenue included sales from the Company's Seal Sands Chemicals Ltd. facility in England, acquired on January 31, 1994. Third quarter sales increased in our health and pharmaceuticals, specialty and fine chemicals, and coatings products.
Three months ended Nine months ended September 30, September 30, --------------------- ----------------------- (in thousands) (in thousands) 1994 1993 1994 1993 ---- ---- ---- ---- Revenues: Health & pharmaceuticals . . . . . . . . . . . $ 15,167 $ 13,007 $ 43,777 $ 42,553 Agricultural intermediates & additives . . . . . . . . . . . . . . . 13,593 11,304 44,252 36,378 Specialty & fine chemicals . . . . . . . . . . 17,607 12,318 47,490 37,408 Performance chemicals . . . . . . . . . . . . 8,523 8,915 24,011 23,294 Coatings . . . . . . . . . . . . . . . . . . . 4,450 4,012 13,438 13,037 ------ ------ ------- ------- Total gross revenues . . . . . . . . . . . $ 59,340 $ 49,556 $ 172,968 $ 152,670 ====== ====== ======= ======= Total net revenues . . . . . . . . . . . . $ 57,608 $ 48,065 166,879 148,493 ====== ====== ======= =======
Health and Pharmaceuticals' revenues increased $2,160,000 (17%) from third quarter 1993. Growth in this category has been achieved with a contract for producing a new product used in the synthesis of an over-the-counter cough suppressant, and the continued strong increase in sales of a generic drug used for the treatment of ulcerative colitis. A portion of this increase is from export markets. Agricultural Intermediates and Additives' revenues increased by $2,289,000 (20%) over 1993. Feed grade Vitamin B3 and its intermediates increased in sales due to volume increases worldwide. However, these sales were adversely affected by pricing competition. Other pyridine derivatives used in crop protection had higher sales to India and China. Price increases for pyridine derivatives are occurring in the fourth quarter, with feed grade Vitamin B3 price increases due to take effect at the beginning of 1995. Specialty and Fine Chemicals' revenues increased $5,289,000 (43%) over 1993. Seal Sands Chemicals Ltd. (acquired on January 31, 1994) accounted for $4,134,000 in sales of specialty chemicals of which $3,800,000 are new products to Cambrex. Increases occurred due to the addition of several new catalyst customers; new use of a fire retardant material now used as a dye receptor in acrylic yarns; and growth in pyridine derivatives. - 9 - 10 Performance Chemicals' revenues decreased $392,000 (4%) from prior year. The decline was due to a customer's delay in starting up a new line which uses our fiber optic gel product, and reduced sales of encapsulants due to the loss of a major domestic customer. Coatings' revenues increased $438,000 (11%) over 1993. This improvement was due to additional sales to two customers not present in 1993, and to general market improvement in the paints and coatings industry which uses our castor oil based products. Gross profit in the third quarter 1994 of $13,265,000 (23.0% of sales), compared to $13,411,000 (27.9% of sales) in the third quarter 1993. The margin percentage was adversely affected by continued decreases in the price of pyridine and its derivatives, and the increased costs of major raw materials used in the pyridine synthesis. The gross margin has also been negatively affected by additional startup costs associated with a contract for production of a new product. Selling, general and administrative expenses as a percentage of net revenues was 15.2% in the third quarter 1994 versus 18.7% in 1993. The third quarter 1994 expense of $8,770,000 was $218,000 below 1993. Reductions in sales and marketing, and outside research and development expenditures were due mainly to cost reduction efforts put in practice during the first quarter 1994. Higher administrative costs included the added cost of the Seal Sands acquisition, but even these additions have been offset by cost reductions. Interest expense for the third quarter decreased $233,000 from 1993. This decrease is due to recording the capitalization of interest costs and the elimination in the third and fourth quarters 1993 of higher interest debt including a capital lease and convertible 9% notes. The provision for income taxes was reduced from 39.5% to approximately 37% for the third quarter. A favorable adjustment of $120,000 was recorded in the third quarter. The income tax rate for nine months is 35% and is expected to be approximately 34% by year end. Net income for the third quarter 1994 was $2,440,000 compared to $2,194,000 for the third quarter 1993. The earnings per share (fully diluted) in the third quarter 1994 were 43 cents, compared with 41 cents in 1993. LIQUIDITY AND CAPITAL RESOURCES The Company's liquidity and capital resources, in the opinion of management, adequately enable the Company to meet its needs for cash. Net cash flow from operations increased by $6,487,000, when compared to the first nine months of 1993. The majority of this increase is derived from higher net income and additional depreciation and amortization charges. - 10 - 11 The key expenditures in the quarter were from investing activities. Capital expenditures of $11,842,000 for the first nine months of 1994 were $1,284,000 higher than the prior year. The major capital expenditures were for a new facility to generate steam at our Charles City, Iowa plant and for a project at our Zeeland, Michigan plant providing facilities to manufacture a new product for a major customer. Funds were expended to acquire the assets of Hexcel's fine chemicals business in Middlesbrough, England, and to subsequently acquire a product line complimentary to this business. On October 12, 1994, the Company, through wholly owned subsidiaries, purchased Nobel's Pharma Chemistry Business (the "Business") from Akzo Nobel for approximately $126 million. The Business consists of Nobel Chemicals A.B., in Karlskoga, Sweden, Profarmaco Nobel S.r.l. in Milan, Italy, and sales companies in Germany, England, and the United States. Operations include the manufacture and sales of pharmaceutical active ingredients and intermediates, and specialty and fine chemicals. The funds used by the Company for the acquisition were supplied from borrowings under a new $225 million credit facility provided by a group of banks with NBD Bank, N.A., as agent. The Company entered into this new Loan Agreement (Credit Agreement) on September 21, 1994 with NBD Bank, N.A., United Jersey Bank, National Westminster Bank NJ, Wachovia Bank of Georgia, N.A., GHF-Bank, The First National Bank of Boston, Chemical Bank New Jersey, N.A., and National City Bank. This new Loan Agreement replaces the existing Revolving Credit and Term Loan Agreement with NBD Bank, N.A., United Jersey Bank, and National Westminster Bank NJ. The new Credit Agreement provides for a bridge loan in the aggregate principal amount of $50,000,000, a term loan in the aggregate principal amount of $75,000,000 and a revolving credit facility in the aggregate principal amount of $100,000,000. The new Credit Agreement permits the Company to choose between various interest rate options and to specify the portion of the borrowing to be covered by specific interest rate options. Under the Revolving Credit Agreement and Bridge Loan, the interest rate options available to the Company are: (a) U.S. prime rate plus the applicable margin (ranging from 0% to 3/4 of 1%) or (b) LIBOR plus the applicable margin (ranging from 1/2 of 1% to 2%). The applicable margin is adjusted based upon the Funded Indebtedness to Cash Flow Ratio of Cambrex Corporation. The Term Loan will have the same options plus 1/2%. Additionally, the Company pays a commitment fee of between 1/5 of 1% and 3/8 of 1% on the unused portion of the Revolving Credit facilities. On October 11, 1994, $32,200,000 and L4,265,000 ($6,734,000) from the New Loan Agreement were used to satisfy the prior Credit Agreement. The quarterly cash dividend declared on July 28, 1994 was paid on August 26, 1994. On October 27, 1994, the Board of Directors declared a quarterly cash dividend on its common stock of 5 cents per share for all shareholders of record as of November 11, 1994. The dividend is payable on November 25, 1994. - 11 - 12 ENVIRONMENTAL On October 21, 1994, CasChem, Inc., a subsidiary of Cambrex announced that it had agreed to a settlement of legal proceedings associated with a 1990 investigation by agents of the Federal Bureau of Investigation and the Environmental Protection Agency at CasChem's Bayonne, New Jersey facility. Under an agreement with the Unites States Attorney's office in Newark, CasChem agreed to pay a fine of $1 million in connection with a drum of material determined to be hazardous waste that was stored longer than the legally permitted 90-day period. This case has been defended for more than four and a half years. The settlement was reached in an effort to avoid large legal fees associated with a lengthy trial, as well as to alleviate continued distraction of management from operating the current business. There will be no impact on the Company's financial results since current reserves are adequate to cover the payment. - 12 - 13 PART II - OTHER INFORMATION CAMBREX CORPORATION AND SUBSIDIARIES Item 4. Matters Submitted to a Vote of Securities Holders. Refer to Form 10-Q for the quarterly period ended March 31, 1994. Item 6. Exhibits and Reports on Form 8-K a) The exhibits filed as part of this report are listed below.
Exhibit No. Description ----------- ----------- 11 Statement of computation of per share earnings. 27 Financial Data Schedule
- 13 - 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CAMBREX CORPORATION By /s/ Peter Tracey ---------------------------------- Peter Tracey Vice President (On behalf of the Registrant and as the Registrant's Principal Financial Officer) Date: November 10, 1994 ----------------- - 14 - 15 EXHIBIT INDEX ------------- Exhibit No. Description - - ------- ----------- 11 Statement of computation of per share earnings. 27 Financial Data Schedule EX-11 2 STATEMENT OF COMPUTATION OF PER SHARE EARNINGS 1 EXHIBIT 11 CAMBREX CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (in thousands)
Three months ended Nine Months ended September 30, September 30, --------------------- ---------------------- 1994 1993 1994 1993 ---- ---- ---- ---- Income applicable to common shares: Primary earnings . . . . . . . . . . . . . . $ 2,440 $ 2,194 $ 7,948 $ 6,415 Add: Interest reduction from assumed conversion of convertible subordinated notes (net of taxes): Notes issued June 11, 1985 . . . . . . . - 28 - 96 Notes issued October 3, 1985 . . . . . . - 17 - 57 ------ ------ ------ ----- Fully diluted earnings . . . . . . . . . . . $ 2,440 $ 2,239 $ 7,948 $6,568 ====== ====== ====== ===== Weighted average number of common shares and common share equivalents outstanding during the period: Common Stock . . . . . . . . . . . . . . 5,255 4,948 5,231 4,885 Stock Options . . . . . . . . . . . . . 424 325 424 323 ----- ----- ----- ----- Shares outstanding - primary . . . . . . . . 5,679 5,273 5,655 5,208 Notes issued June 11, 1985 . . . . . . . - 131 - 163 Notes issued October 3, 1985 . . . . . . - 78 - 98 Additional stock options . . . . . . . . 32 - 38 4 ----- ----- ----- ----- Shares outstanding - fully diluted . . . . . 5,711 5,482 5,693 5,473 ===== ===== ===== =====
- 15 - EX-27 3 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1994 SEP-30-1994 48,000 0 34,182,000 335,000 35,171,000 75,150,000 163,921,000 65,754,000 185,924,000 34,821,000 38,306,000 607,000 0 0 96,247,000 185,924,000 166,879,000 166,879,000 127,618,000 127,618,000 0 0 1,558,000 12,273,000 4,325,000 7,948,000 0 0 0 7,948,000 1.41 1.40
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