Reports Double-Digit Sales Growth in Bioproducts and Human Health Segments
And Provides 2005 Earnings Guidance
EAST RUTHERFORD, N.J., Jan. 27 /PRNewswire-FirstCall/ -- Cambrex
Corporation (NYSE: CBM) reported today fourth quarter and full year 2004
financial results for the period ended December 31, 2004.
(LOGO: http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO )
* Fourth quarter worldwide sales increased 15.0% to $117.4 million
reflecting double-digit growth in the Bioproducts and Human Health
segments. Sales from continuing operations were favorably impacted by
4.4% due to foreign currency.
* Fourth quarter Income Before Taxes from continuing operations increased
22.3% to $9.1 million, while income from continuing operations
decreased 12.2% to $5.3 million or $0.20 per share due to higher income
tax expense resulting from the geographic mix of income.
* Full year worldwide sales increased 8.3% to $439.2 million reflecting
growth in the Bioproducts and Human Health segments. Full year
worldwide 2004 sales were favorably impacted by 4.5% due to foreign
currency.
* Full year pro forma income from continuing operations was $24.2 million
or $0.91 per share, excluding the previously announced Biopharma
goodwill impairment, within the Company's guidance of $0.90 - $1.00.
Including the impairment charge, the Company reported a full year 2004
loss from continuing operations of $24.6 million or $0.94 loss per
share.
"We are very pleased with the double-digit revenue growth in the
Bioproducts and Human Health segments resulting from new products, increased
market share and an exceptionally strong fourth quarter for Human Health
contract development services," commented John R. Leone, President and CEO.
"Building the Biopharma project pipeline remains a priority. We continue to
diversify our portfolio of projects and throughout the year have more than
doubled our project pipeline as the result of our investment in the sales
force."
Gross margin for the fourth quarter 2004 decreased to 37.6% from 39.1% in
the fourth quarter 2003 due to lower margins in the Biopharma and Human Health
segments partially offset by higher margins in the Bioproducts segment.
Foreign currency unfavorably impacted fourth quarter 2004 gross margin by
approximately 0.8 percentage points.
Full year gross margin for 2004 decreased to 39.0% from 40.0% in 2003 due
to lower margins in the Biopharma and Human Health segments partially offset
by higher margins in the Bioproducts segment. Foreign currency unfavorably
impacted full year 2004 gross margin by approximately 0.4 percentage points.
For the full year 2004, the Company decreased debt, net of cash-on-hand,
by about $13 million, generating approximately $50 million cash from
operations after funding approximately $40 million for capital expenditures.
This Press Release and accompanying financial tables include non-GAAP
financial information with reconciliation to GAAP measures. Cambrex
management believes that the non-GAAP information is an additional meaningful
measure of current operating performance and more comparable to historical
financial results. Pro forma results are presented to reflect the results of
operations before the previously announced Biopharma goodwill impairment.
The financial information contained in this press release is unaudited,
subject to revision and should not be considered final until the Annual Report
on Form 10-K is filed.
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.
Bioproducts
The Bioproducts segment includes Cells and Media, Endotoxin Detection and
Electrophoresis, Chromatography and Other product categories. Bioproducts
sales in the fourth quarter 2004 increased 13.4% to $33.9 million, including a
3.6% favorable impact from foreign currency, from $29.9 million in the fourth
quarter 2003. The increased sales in the quarter reflect strong demand for
essentially all product categories.
Fourth quarter 2004 gross margin increased to 56.6% from 50.3% in the
fourth quarter 2003 primarily due to favorable volume, mix and pricing,
foreign currency and lower bad debt reserves resulting from collection
efficiency partially offset by higher material costs. Foreign currency
favorably impacted gross margin by approximately 1.6 percentage points in the
fourth quarter 2004.
Biopharma
The Biopharma segment consists of the Company's contract biopharmaceutical
process development and manufacturing business. Sales in the fourth quarter
2004 decreased 8.7% to $11.5 million from $12.6 million in the fourth quarter
2003. This decrease reflects unfavorable project timing and lower material
and supplies billings.
Fourth quarter 2004 gross margin decreased to 15.1% from 29.1% in the
fourth quarter 2003 due to lower volumes, an unfavorable mix of projects and
higher costs from the 2800 liter expansion project. The 2800 liter expansion
is expected to be fully validated for cGMP production in the first quarter of
2005. Foreign currency had no impact on Biopharma sales or gross margin in
the fourth quarter 2004.
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 fourth
quarter 2004 increased 20.8% to $71.9 million, including 5.8% favorable impact
due to foreign currency, from $59.5 million in the fourth quarter 2003. The
increased sales reflect very strong custom development revenues, partially
offset by slightly decreased sales volumes of certain generic APIs.
Fourth quarter 2004 gross margin declined to 32.3% from 35.7% in the
fourth quarter 2003 primarily due to the adverse impact of foreign currency
and lower volumes and pricing of certain generic APIs. Foreign currency
negatively impacted gross margin by approximately 2.1 percentage points in the
fourth quarter 2004.
Fourth Quarter 2004 Operating and Interest Expenses for Continuing
Operations
Fourth quarter 2004 marketing, sales, administrative and amortization
expenses increased to $26.7 million (22.7% of sales) from $24.1 million (23.6%
of sales) in the fourth quarter 2003, primarily due to increased investment in
Bioproducts and Human Health sales and marketing, sales commissions related to
the revenue growth, and approximately $0.7 million impact from foreign
currency.
Fourth quarter 2004 research and development expenses increased to
$5.7 million (4.9% of sales) from $4.5 million (4.4% of sales) in the fourth
quarter 2003 primarily due to increased new product development spending in
the Bioproducts segment and approximately $0.2 million impact from foreign
currency.
Fourth quarter 2004 net interest expense declined to $2.5 million compared
to $3.5 million in the fourth quarter 2003. The average interest rate
decreased to 5.4% in the fourth quarter 2004 from 5.9% in the fourth quarter
2003.
Certain Accounting Adjustments
During the year-end financial reporting process, the Company identified
potential accounting adjustments related to reporting periods from 1995 to
2003. While research and analysis is on-going, it is currently estimated that
the cumulative effect of such adjustments over this nine year period is less
than $1.5 million on a pre-tax basis. The final amount and treatment of
potential adjustments, if any, will be communicated as soon as the assessment
is complete. The accompanying financial information does not reflect any
adjustments related to these matters.
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 February 4, 2005. The dividend is payable on February 18, 2005.
Guidance
The Company expects full year 2005 diluted earnings per share for
continuing operations to be in the range of $0.90 to $1.10 and targets sales
growth in the range of 6% to 10%. Management expects first quarter 2005
earnings to be disproportionately low, in the range of $0.02 to $0.12, due to
lower volumes, the timing of projects, and an unusually high tax rate
resulting from the geographic mix of income.
For the year 2005, capital expenditures, depreciation and amortization for
continuing operations are expected to be approximately $50 million, $38
million, and $2 million respectively. The Company expects the full year 2005
effective tax rate to be approximately 30 - 32%; however, the full year and
quarterly effective tax rates will continue to be highly sensitive to changes
in the geographic mix of income.
Guidance for 2005 does not include the effect of any potential future
decision to repatriate foreign earnings for purposes consistent with the
American Jobs Creation Act of 2004, or the effect of new accounting rules
requiring the expensing of stock options. The Financial Accounting Standards
Board (FASB) has recently reissued FASB Statement No.123 - "Share-Based
Payment" which covers share-based compensation, including stock options.
Cambrex plans to begin the expensing of stock options effective July 1, 2005,
in accordance with the requirements of FASB Statement No. 123 and expects to
provide the estimated impact of this change during Cambrex's second-quarter
earnings conference call.
Conference Call and Webcast
The Conference Call to discuss fourth quarter 2004 earnings will begin at
8:30 a.m. Eastern Time on Friday, January 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
2866959 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 http://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,
February 4, 2005 by calling 1-800-642-1687 for Domestic, and +1-706-645-9291
for International. Please use the conference ID 2866959 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,
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
Financial Summary
For the Quarters Ended December 31, 2004 and 2003
(in thousands, except earnings per share)
(unaudited)
2004 2003
Gross Sales $117,365 $102,065
Operating Profit $11,751 $11,314
Income Before Tax $9,087 $7,429
Income From Continuing Operations $5,332 $6,070
Loss From Discontinued Operations $ -- $(1,031)
Net Income $5,332 $5,039
Earnings per share data (basic):
Income From Continuing Operations $0.20 $0.24
Loss From Discontinued Operations $ -- $(0.04)
Net Income $0.20 $0.20
Average Shares Outstanding 26,154 25,796
Earnings per share data (diluted):
Income From Continuing Operations $0.20 $0.23
Loss From Discontinued Operations $ -- $(0.04)
Net Income $0.20 $0.19
Average Shares Outstanding 26,532 26,255
Financial Summary
For the Years Ended December 31, 2004 and 2003
(in thousands, except earnings per share)
(unaudited)
2004 2003
Gross Sales $439,158 $405,591
Operating Profit $252 $38,824
(Loss) /Income Before Tax $(10,822) $26,845
(Loss)/ Income From Continuing Operations $(24,555) $245
Loss From Discontinued Operations $(978) $(54,308)
Net Loss $(25,533) $(54,063)
Earnings per share data (basic):
(Loss)/ Income From Continuing Operations $(0.94) $0.01
Loss From Discontinued Operations $(0.04) $(2.11)
Net Loss $(0.98) $(2.10)
Average Shares Outstanding 26,094 25,755
Earnings per share data (diluted):
(Loss)/ Income From Continuing Operations $(0.94) $0.01
Loss From Discontinued Operations $(0.04) $(2.08)
Net Loss $(0.98) $(2.07)
Average Shares Outstanding 26,094 26,174
Note: All amounts in these financial tables are for continuing operations
unless otherwise indicated.
CAMBREX CORPORATION
Gross Sales & Gross Profit by Segment
For the Quarters Ended December 31, 2004 and 2003
(in thousands)
(unaudited)
Fourth Quarter 2004 Fourth Quarter 2003
Gross Gross Gross Gross
Sales Profit GP% Sales Profit GP%
Bioproducts $33,918 19,191 56.6% $29,915 15,049 50.3%
Biopharma 11,531 1,745 15.1% 12,631 3,671 29.1%
Human Health 71,916 23,222 32.3% 59,519 21,225 35.7%
Total $117,365 $44,158 37.6% $102,065 $39,945 39.1%
Gross Sales Comparison
2004 2003
Gross Gross Change Change
Sales Sales $ %
Bioproducts $33,918 $29,915 $4,003 13.4%
Biopharma 11,531 12,631 (1,100) -8.7%
Human Health 71,916 59,519 12,397 20.8%
Total $117,365 $102,065 $15,300 15.0%
CAMBREX CORPORATION
Gross Sales & Gross Profit by Segment
For the Years Ended December 31, 2004 and 2003
(in thousands)
(unaudited)
Twelve Months 2004 Twelve Months 2003
Gross Gross Gross Gross
Sales Profit GP% Sales Profit GP%
Bioproducts $136,108 74,815 55.0% $119,298 60,056 50.3%
Biopharma 43,270 6,071 14.0% 44,128 11,829 26.8%
Human Health 259,780 90,392 34.8% 242,165 90,521 37.4%
Total $439,158 $171,278 39.0% $405,591 $162,406 40.0%
Gross Sales Comparison
2004 2003
Gross Gross Change Change
Sales Sales $ %
Bioproducts $136,108 119,298 $16,810 14.1%
Biopharma 43,270 44,128 (858) -1.9%
Human Health 259,780 242,165 17,615 7.3%
Total $439,158 $405,591 $33,567 8.3%
CAMBREX CORPORATION
Statement of Profit and Loss - GAAP
For the Quarters Ended December 31, 2004 and 2003
(in thousands, except earnings per share)
(unaudited)
2004 2003
% of % of
Amount Sales Amount Sales
Gross Sales $117,365 100.0% $102,065 100.0%
Commissions and Allowances (20) 0.0% 889 0.9%
Net Sales 117,385 100.0% 101,176 99.1%
Other Revenues 255 0.2% 1,934 1.9%
Net Revenue 117,640 100.2% 103,110 101.0%
Cost of Sales 73,482 62.6% 63,165 61.9%
Gross Profit 44,158 37.6% 39,945 39.1%
Operating Expenses
Marketing/Sales Expenses 9,163 7.8% 6,242 6.1%
Research & Development
Expenses 5,714 4.9% 4,547 4.4%
Administrative Expenses 16,989 14.4% 17,359 17.0%
Amortization 541 0.5% 483 0.5%
Total Operating Expenses 32,407 27.6% 28,631 28.0%
Operating Profit 11,751 10.0% 11,314 11.1%
Other Expenses
Interest - Other 2,479 2.1% 3,539 3.5%
Other Expenses, net 185 0.2% 346 0.3%
Total Other Expenses 2,664 2.3% 3,885 3.8%
Income Before Taxes 9,087 7.7% 7,429 7.3%
Provision for Income Taxes 3,755 3.2% 1,359 1.4%
Income from Continuing Operations $5,332 4.5% $6,070 5.9%
Discontinued Operations
Loss From Discontinued
Operations -- (926)
Provision for Income Taxes -- 105
Loss From Discontinued Operations -- (1,031)
Net Income $5,332 $5,039
Basic Earnings per Share
Income From Continuing Operations $0.20 $0.24
Loss From Discontinued Operations $ -- $(0.04)
Net Income $0.20 $0.20
Diluted Earnings per Share
Income From Continuing Operations $0.20 $0.23
Loss From Discontinued Operations $ -- $(0.04)
Net Income $0.20 $0.19
CAMBREX CORPORATION
Statement of Profit and Loss - Proforma
For the Year Ended December 31, 2004
(in thousands, except in earnings per share)
(unaudited)
2004
% of
Amount Sales
Gross Sales $439,158 100.0%
Commissions and Allowances 2,258 0.5%
Net Sales 436,900 99.5%
Other Revenues 6,800 1.5%
Net Revenue 443,700 101.0%
Cost of Sales 272,422 62.0%
Gross Profit 171,278 39.0%
Operating Expenses
Marketing/Sales Expenses 32,584 7.4%
Research & Development Expenses 19,613 4.5%
Administrative Expenses 70,051 16.0%
Other, net (1,863) -0.4%
Amortization 1,921 0.4%
Total Operating Expenses 122,306 27.9%
Operating Profit 48,972 11.2%
Other Expenses
Interest - Other 10,950 2.6%
Other Expenses, net 124 0.0%
Total Other Expenses 11,074 2.6%
Income Before Taxes 37,898 8.6%
Provision for Income Taxes 13,733 3.1%
Income From Continuing Operations $24,165 5.5%
Discontinued Operations
Loss From Discontinued Operations (978)
Income Tax Benefit --
Loss From Discontinued Operations (978)
Net Income/ (Loss) $23,187
Basic Earnings per Share
Income From Continuing
Operations $0.93
Loss From Discontinued
Operations $(0.04)
Net Income/ (Loss) $0.89
Diluted Earnings per Share
Income From Continuing
Operations $0.91
Loss From Discontinued
Operations $(0.03)
Net Income/ (Loss) $0.88
CAMBREX CORPORATION
Statement of Profit and Loss - GAAP
For the Years Ended December 31, 2004 and 2003
(in thousands, except earnings per share)
(unaudited)
2004 2003
% of % of
Amount Sales Amount Sales
Gross Sales $439,158 100.0% $405,591 100.0%
Commissions and Allowances 2,258 0.5% 3,780 0.9%
Net Sales 436,900 99.5% 401,811 99.1%
Other Revenues 6,800 1.5% 8,833 2.1%
Net Revenue 443,700 101.0% 410,644 101.2%
Cost of Sales 272,422 62.0% 248,238 61.2%
Gross Profit 171,278 39.0% 162,406 40.0%
Operating Expenses
Marketing/Sales Expenses 32,584 7.4% 25,300 6.2%
Research & Development
Expenses 19,613 4.4% 17,123 4.2%
Administrative Expenses 70,051 16.0% 68,191 16.8%
Goodwill Impairment 48,720 11.1% - 0.0%
Legal Settlement - 0.0% 11,342 2.8%
Other, net (1,863) -0.4% - 0.0%
Amortization 1,921 0.4% 1,626 0.4%
Total Operating Expenses 171,026 38.9% 123,582 30.4%
Operating Profit 252 0.1% 38,824 9.6%
Other Expenses
Interest - Other 10,950 2.6% 11,840 3.0%
Other Expenses, net 124 0.0% 139 0.0%
Total Other Expenses 11,074 2.6% 11,979 3.0%
(Loss)/ Income Before Taxes (10,822) -2.5% 26,845 6.6%
Provision for Income Taxes 13,733 3.1% 26,600 6.5%
(Loss)/ Income From Continuing
Operations $(24,555) -5.6% $245 0.1%
Discontinued Operations
Loss From Discontinued
Operations (978) (54,341)
Income Tax Benefit -- (33)
Loss From Discontinued
Operations (978) (54,308)
Net Loss $(25,533) $(54,063)
Basic Earnings per Share
(Loss)/ Income From
Continuing Operations $(0.94) $0.01
Loss From Discontinued
Operations $(0.04) $(2.11)
Net Loss $(0.98) $(2.10)
Diluted Earnings per Share
(Loss)/ Income From
Continuing Operations $(0.94) $0.01
Loss From Discontinued
Operations $(0.04) $(2.08)
Net Loss $(0.98) $(2.07)
Cambrex Corporation
GAAP to Proforma Reconciliation
For the Year Ended December 31, 2004
(in thousands, except for earnings per share)
(unaudited)
Twelve Months ended
2004
Net (Loss)
Income EPS
Loss From Continuing Operations -
GAAP $(24,555) $(0.94)
Goodwill Impairment 48,720 1.85
Income from Continuing Operations -
Proforma $24,165 $0.91
SOURCE Cambrex Corporation
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Related links:
http://www.cambrex.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO
Company News On-Call:
http://www.prnewswire.com/comp/134219.html
CONTACT:
Luke M. Beshar, Executive Vice President &
CFO, +1-201-804-3010, luke.beshar@cambrex.com; or Anne-Marie
Hess, Director, Investor Relations, +1-201-804-3062,
annemarie.hess@cambrex.com both of Cambrex
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