EAST RUTHERFORD, N.J., Feb. 14 /PRNewswire-FirstCall/ -- Cambrex
Corporation (NYSE: CBM) reports fourth quarter and full-year 2007 results
for the period ended December 31, 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO )
Summary
-- Fourth quarter 2007 sales increased 5.7% (-0.2% excluding foreign
currency) compared to fourth quarter 2006. Full year sales were up
6.7% (2.0% excluding foreign currency) compared to 2006.
-- Gross Margin for the quarter increased to 34.9% of sales compared to
33.5% last year. Full year Gross Margin increased to 36.1% compared
to 35.4% in 2006.
-- Operating Profit before corporate, strategic alternatives and
restructuring expenses was $13.3 million or 19.1% of sales in the
fourth quarter of 2007 versus $12.9 million or 19.6% last year. For
the full year, Operating Profit before corporate, strategic
alternatives and restructuring expenses was $51.1 million or 20.2% of
sales, versus $49.2 million or 20.8% for 2006.
-- Debt, net of cash, was $63.3 million at the end of 2007.
-- Sales growth for 2008 is expected to be between 5% and 10% and
Adjusted EBITDA (EBITDA before restructuring and strategic
alternatives costs) is expected to be between $53 and $57 million.
Discontinued Operations and Basis of Reporting
As previously reported, Cambrex sold its Bioproducts and Biopharma
businesses (the "Bio Businesses") to Lonza for $463.9 million (after
working capital adjustments) in February 2007 and sites in Cork, Ireland
and Landen, Belgium to ICIG during the fourth quarter of 2006. Discontinued
Operations in the 2007 financial statements include the results of
operations of the Bio Businesses through the date of sale as well as the
corresponding gain on sale. Discontinued Operations for 2007 also include
charges related to the previously announced settlement of the Rutherford
litigation and environmental expenses related to a site of a divested
business. Discontinued Operations in the 2006 financial statements include
the results of operations of the Bio Businesses and the Cork and Landen
sites, as well as the loss on the sale of the Cork and Landen sites.
The Company has provided a reconciliation from adjusted amounts to GAAP
amounts at the end of this press release. Management believes that the
adjusted amounts provide a more meaningful representation of the Company's
operating results for the periods presented due to the magnitude and nature
of certain expenses recorded.
Fourth Quarter 2007 Operating Results - Continuing Operations
Fourth quarter 2007 sales of $69.8 million were 5.7% higher than sales
in the fourth quarter 2006, and were virtually flat excluding the effect of
foreign currency. Comparing the current quarter to the same quarter last
year, excluding the currency impact, Cambrex experienced lower custom
development revenues primarily as a result of customers ramping up
inventory during the fourth quarter of 2006 for expected product launches
in 2007 and lower pricing on custom manufacturing and crop protection
products, offset by higher demand for a neurological active pharmaceutical
ingredient ("API"), controlled substances and products based on our
proprietary polymeric drug delivery technology.
Fourth quarter 2007 Gross Margin increased to 34.9% of sales from 33.5%
during the fourth quarter 2006 resulting primarily from favorable product
mix partially offset by lower pricing on certain APIs. Foreign currency
favorably impacted gross margin, as a percentage of sales, by 1.2%.
Operating Profit was $4.0 million in the fourth quarter of 2007
compared to $2.5 million for the fourth quarter of 2006. Operating Profit
before corporate, strategic alternatives and restructuring expenses was
$13.3 million, or 19.1% of sales, compared to $12.9 million, or 19.6% of
sales, in the fourth quarter 2006 due to favorable foreign exchange
partially offset by higher Operating Expenses.
James A. Mack, Chairman, President, and Chief Executive Officer of
Cambrex Corporation, said "2007 was a very satisfying year for Cambrex. We
completed our strategic alternatives initiative during the first half of
the year culminating in a $400 million dividend, and further enhanced the
value of the business during the back half of the year by eliminating most
of our significant legal contingencies and dramatically reducing our
corporate overhead to a $17 million run rate heading into 2008. We continue
to grow sales of products based on our polymeric drug delivery technologies
and are very excited about the positive effect it has had and should
continue to have on our profitability mix. We will continue to add
dedicated resources to expand the application of our existing proprietary
technologies and enhance our portfolio of intellectual property. A few
weeks ago, we completed a small acquisition in Estonia that will allow us
to grow our early-stage custom development pipeline and free up internal
resources to focus on expanding our proprietary technologies. 2007 was also
a good year for our custom development pipeline. In addition to growing the
number of projects in the pipeline, we also completed 85 projects, a new
record for Cambrex. Lastly, our new state-of-the-art finishing facility in
Italy is in the start-up phase and the first APIs are going through the
validation process."
Fourth Quarter 2007 Operating, Interest and Tax Expenses - Continuing
Operations
Sales, General and Administrative ("SG&A") Expenses in the fourth
quarter 2007 were $12.3 million compared to $16.1 million in the same
period last year. The reduction is primarily due to significantly lower
expenses at the corporate headquarters due to restructuring activities
completed throughout 2007 and was partially offset by higher
personnel-related expenses at our operating sites. Within SG&A, corporate
expenses in the fourth quarter of 2007 were decreased to $4.7 million
compared to $9.7 million in the same period last year due to the
restructuring of the corporate headquarters.
Research and Development Expense for the fourth quarter 2007 was $3.5
million compared to $2.8 million in the fourth quarter 2006. The increase
is primarily due to investment in the growth and development of proprietary
technology platforms, and higher costs at the recently closed New Jersey
R&D facility due to lower utilization of scientists on revenue-generating
projects.
Strategic Alternative and Restructuring Costs totaling $4.6 million in
the fourth quarter 2007 include $2.1 million of costs related to the
previously announced consolidation of operations at our New Jersey R&D
facility into our Charles City facility resulting in the shutdown of the
New Jersey facility, $1.0 million of costs related to the exit of a feed
additive business at our Charles City facility, and $1.5 million of expense
related to change-in- control liabilities and a project to streamline our
legal structure to improve cash flow and reduce the Company's consolidated
effective tax rate.
Net Interest Expense in the fourth quarter of 2007 increased to $0.9
million from $0.2 million of income in the fourth quarter of 2006. The
increase is primarily due to the adjustment in 2006 results for
GAAP-required allocations of interest expense to Discontinued Operations.
Income taxes for the fourth quarter and full year 2007 include $1.1
million and $7.9 million, respectively, of benefit related to the
recognition of certain tax attributes as a result of the sale of the Bio
Businesses. Excluding these benefits, the fourth quarter and full year 2007
Provision for Income Taxes would have been $2.7 million and $13.7 million
respectively. The Company's effective tax rates have been, and are expected
to, remain highly sensitive to the geographic mix of income due to the
Company's inability to recognize tax benefits for GAAP purposes in certain
jurisdictions where there has been a recent history of losses, primarily
the U.S.
Fourth Quarter 2007 Capital Expenditures and Depreciation
Capital expenditures and depreciation for the fourth quarter 2007 were
$11.6 million and $5.3 million compared to $13.3 million and $4.4 million
in the fourth quarter 2006, respectively. The decrease in capital spending
is largely due to reduced spending on a new API finishing facility at our
Milan, Italy site that will be validated throughout 2008, partially offset
by early spending related to a mid-scale manufacturing facility in Sweden
that is expected to be validated in early 2009. Capital expenditures for
the full year 2007 were $33.6 million and depreciation was $19.8 million.
Guidance - Continuing Operations
Sales growth during 2008 is expected to be between 5% and 10% and
Adjusted EBITDA is expected to be $53 to $57 million, compared to $50.1
million for the full year 2007. Restructuring and strategic alternatives
costs are expected to be between $1.0 million and $1.5 million primarily
related to finalizing the closure of our New Jersey R&D facility,
completing the project to improve our legal entity structure and exiting a
feed additive business.
For 2008, capital expenditures are expected to be approximately $32 to
34 million and depreciation is expected to be $21 to 23 million.
Full year and quarterly effective tax rates will continue to be highly
sensitive due to the geographic mix of income or losses. Cambrex may not be
able to recognize tax benefits in certain jurisdictions.
The financial information contained in this press release is unaudited,
subject to revision and should not be considered final until the 2007 Form
10- K is filed with the SEC.
Conference Call and Webcast
The Conference Call to discuss fourth quarter and full-year 2007
earnings will begin at 8:30 a.m. Eastern Time on Friday, February 15, 2008
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 pass code 33830541 and call approximately 10 minutes prior to start
time. A webcast is available from the Investor Relations section on the
Cambrex website located at http://www.cambrex.com and can be accessed for
approximately a month following the call. A telephone replay of the
conference call will be available through Friday, February 22, 2008 by
calling 1-800-642-1687 for domestic and +1-706-645-9291 for international.
Please use the pass code 33830541 to access the replay.
Forward Looking Statements
This news release may contain "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, as amended, 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 or operating
performance. Any forward-looking statements are qualified in their entirety
by reference to the risk factors discussed in the Company's periodic
reports filed with the U.S. Securities and Exchange Commission. Any
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 or regulations (particularly environmental issues), tax rate,
interest rate, technology, manufacturing and legal issues, including the
outcome of outstanding litigation disclosed in the Company's public
filings, changes in foreign exchange rates, uncollectible receivables, loss
on disposition of assets, cancellation or delays in renewal of contracts,
lack of suitable raw materials or packaging materials, the Company's
ability to receive regulatory approvals for its products and the accuracy
of the Company's current estimate with respect to its earnings and profits
for tax purposes in 2007. Any forward-looking statement speaks only as of
the date on which it is made, and the Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result of new
information, future events or otherwise. New factors emerge from time to
time and it is not possible for the Company to predict which new factors
will arise. In addition, we cannot assess the impact of each factor on the
Company's business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained
in any forward-looking statements.
For further details and a discussion of these and other risks and
uncertainties, investors and security holders are cautioned to review the
Cambrex 2006 Annual Report on Form 10-K, including the Forward-Looking
Statement section therein, and other subsequent filings with the U.S.
Securities and Exchange Commission , including Current Reports on Form 8-K.
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 provides products and services to accelerate the development
and commercialization of small molecule APIs, advanced intermediates and
other products for branded and generic pharmaceuticals. The Company
currently employs approximately 850 people worldwide. For more information,
please visit http://www.cambrex.com.
CAMBREX CORPORATION
Statement of Profit and Loss
For the Quarters Ended December 31, 2007 and 2006
(in thousands)
2007 2006
% of % of
Amount Sales Amount Sales
Gross Sales $69,754 100.0% $66,009 100.0%
Commissions and Allowances 367 0.5% 129 0.2%
Net Sales 69,387 99.5% 65,880 99.8%
Other Revenues 435 0.6% 274 0.4%
Net Revenues 69,822 100.1% 66,154 100.2%
Cost of Goods Sold 45,444 65.2% 44,073 66.7%
Gross Profit 24,378 34.9% 22,081 33.5%
Operating Expenses
Sales, General and Administrative
Expenses 12,286 17.5% 16,077 24.4%
Research and Development Expenses 3,534 5.1% 2,751 4.2%
Restructuring Expenses 2,039 2.9% - 0.0%
Strategic Alternative Costs 2,567 3.7% 726 1.1%
Total Operating Expenses 20,426 29.2% 19,554 29.7%
Operating Profit 3,952 5.7% 2,527 3.8%
Other Expenses/(Income):
Interest Expense/(Income), net 856 1.3% (163) -0.3%
Other Income, net (205) -0.3% (147) -0.2%
Income Before Income Taxes 3,301 4.7% 2,837 4.3%
Provision for Income Taxes 1,573 2.2% 4,046 6.1%
Income/(Loss) from Continuing
Operations $1,728 2.5% $(1,209) -1.8%
Loss from Discontinued Operations,
Net of Tax (948) -1.4% (24,158) -36.6%
Net Income/(Loss) $780 1.1% $(25,367) -38.4%
Basic (Loss)/Earnings per Share
Income/(Loss) from Continuing
Operations $0.06 $(0.04)
Loss from Discontinued Operations,
Net of Tax $(0.03) $(0.90)
Net Income/(Loss) $0.03 $(0.94)
Diluted (Loss)/Earnings per Share
Income/(Loss) from Continuing
Operations $0.06 $(0.04)
Loss from Discontinued Operations,
Net of Tax $(0.03) $(0.90)
Net Income/(Loss) $0.03 $(0.94)
Weighted Average Shares Outstanding
Basic 29,002 27,108
Diluted 29,040 27,108
CAMBREX CORPORATION
Statement of Profit and Loss
For the Years Ended December 31, 2007 and 2006
(in thousands)
2007 2006
% of % of
Amount Sales Amount Sales
Gross Sales $252,574 100.0% $236,659 100.0%
Commissions and Allowances 1,368 0.5% 1,026 0.4%
Net Sales 251,206 99.5% 235,633 99.6%
Other Revenues 1,299 0.5% (560) -0.3%
Net Revenue 252,505 100.0% 235,073 99.3%
Cost of Sales 161,273 63.9% 151,215 63.9%
Gross Profit 91,232 36.1% 83,858 35.4%
Operating Expenses
Sales, General and Administrative
Expenses 48,858 19.4% 58,279 24.6%
Research and Development Expenses 12,157 4.8% 10,813 4.6%
Restructuring Expenses 6,073 2.4% - 0.0%
Strategic Alternative Costs 31,127 12.3% 2,958 1.2%
Total Operating Expenses 98,215 38.9% 72,050 30.4%
Operating (Loss)/Profit (6,983) -2.8% 11,808 5.0%
Other (Income)/Expenses:
Interest (Income)/Expense, net (485) -0.2% 5,478 2.3%
Other Expense/(Income), net 725 0.3% (17) 0.0%
(Loss)/Income Before Income Taxes (7,223) -2.9% 6,347 2.7%
Provision for Income Taxes 5,773 2.2% 14,513 6.2%
Loss from Continuing Operations $(12,996) -5.1% $(8,166) -3.5%
Income/(Loss) from Discontinued
Operations, Net of Tax 222,759 88.2% (21,706) -9.1%
Income/(Loss) Before Cumulative Effect
of a Change in
Accounting Principle 209,763 83.1% (29,872) -12.6%
Cumulative Effect of a Change in
Accounting Principle - 0.0% (228) -0.1%
Net Income/(Loss) $209,763 83.1% $(30,100) -12.7%
Basic (Loss)/Earnings per Share
Loss from Continuing Operations $(0.45) $(0.30)
Income/(Loss) from Discontinued
Operations, Net of Tax $7.76 $(0.81)
Cumulative Effect of a Change in
Accounting Principle $- $(0.01)
Net Income/(Loss) $7.31 $(1.12)
Diluted (Loss)/Earnings per Share
Loss from Continuing Operations $(0.45) $(0.30)
Income/(Loss) from Discontinued
Operations, Net of Tax $7.76 $(0.81)
Cumulative Effect of a Change in
Accounting Principle $- $(0.01)
Net Income/(Loss) $7.31 $(1.12)
Weighted Average Shares Outstanding
Basic 28,683 26,816
Diluted 28,683 26,816
CAMBREX CORPORATION
Reconciliation of Gross Sales, Gross Profit & Operating Profit
For the Quarters and Years Ended December 31, 2007 and 2006
(in thousands)
Fourth Quarter 2007
Gross Gross Operating
Sales Profit GP% Profit/(Loss) OP%
Pre-Corporate Results
Before Strat. Alt.
& Restructuring
Expenses $69,754 $24,378 34.9% $13,293 19.1%
Corporate Results - - (4,735)
Strat. Alt. &
Restructuring Expenses - - (4,606)
As Reported $69,754 $24,378 34.9% $3,952 5.7%
Fourth Quarter 2006
Gross Gross Operating
Sales Profit GP% Profit/(Loss) OP%
Pre-Corporate Results $66,009 $22,081 33.5% $12,911 19.6%
Corporate Results - - (9,658)
Strategic Alternative
Costs - - (726)
As Reported $66,009 $22,081 33.5% $2,527 3.8%
Twelve Months 2007
Gross Gross Operating
Sales Profit GP% Profit/(Loss) OP%
Pre-Corporate Results
Before Strat. Alt.
& Restructuring
Expenses $252,574 $91,232 36.1% $51,076 20.2%
Corporate Results - - (20,859)
Strat. Alt. &
Restructuring Expenses - - (37,200)
As Report $252,574 $91,232 36.1% $(6,983) -2.8%
Twelve Months 2007
Pre-Corporate Operating Profit Before
Strat. Alt. & Restructuring Expenses $51,076
Corporate Results (20,859)
Depreciation and Amortization 19,878
Adjusted EBITDA $50,095
Twelve Months 2006
Gross Gross Operating
Sales Profit GP% Profit/(Loss) OP%
Pre-Corporate Results $236,659 $83,858 35.4% $49,213 20.8%
Corporate Results - - (34,447)
Strategic Alternative
Costs - - (2,958)
As Reported $236,659 $83,858 35.4% $11,808 5.0%
CAMBREX CORPORATION
Consolidated Balance Sheet
As of December 31, 2007 and 2006
(in thousands)
December 31, December 31,
Assets 2007 2006
Cash and Cash Equivalents $38,488 $33,746
Trade Receivables, net 45,003 38,552
Inventories, net 61,440 53,893
Assets of Discontinued Operations - 79,527
Prepaid Expenses and Other Current
Assets 22,294 19,032
Total Current Assets 167,225 224,750
Property, Plant and Equipment, Net 165,657 141,863
Goodwill 35,552 32,573
Assets of Discontinued Operations - 202,292
Other Non-Current Assets 10,383 4,898
Total Assets $378,817 $606,376
Liabilities and Stockholders' Equity
Accounts Payable $26,185 $28,592
Accrued Expenses and Other Current
Liabilities 71,274 45,101
Liabilities of Discontinued
Operations - 33,441
Total Current Liabilities 97,459 107,134
Long-term Debt 101,600 158,600
Deferred Tax Liabilities 19,918 14,209
Liabilities of Discontinued
Operations - 24,267
Accrued Pension and Postretirement
Benefits 32,104 39,911
Other Non-Current Liabilities 25,244 15,609
Total Liabilities $276,325 $359,730
Stockholders' Equity $102,492 $246,646
Total Liabilities and Stockholders'
Equity $378,817 $606,376
SOURCE Cambrex Corporation
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Related links:
http://www.cambrex.com
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CONTACT:
Gregory P. Sargen, Vice President & CFO,
Cambrex Corporation, +1-201-804-3055, or
gregory.sargen@cambrex.com
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