EAST RUTHERFORD, N.J., April 28 /PRNewswire-FirstCall/ -- Cambrex
Corporation (NYSE: CBM) reported today first quarter 2005 financial results
for the period ended March 31, 2005. Net income from continuing operations
for the first quarter 2005 was $4.1 million, or $0.15 per diluted share,
compared to $7.8 million, or $0.29 per diluted share in the first quarter
2004. Sales were $110.5 million in the first quarter 2005 compared to $113.5
million in the first quarter 2004 primarily due to lower volumes anticipated
in the Human Health and Biopharma segments, partially offset by a 2.3%
favorable impact from foreign currency and higher sales in the Bioproducts
segment.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO )
"We are encouraged by the continued strong growth in the Bioproducts
segment and the positive impact of cost reductions in selected areas that
enabled us to exceed our first quarter guidance," commented John R. Leone,
Cambrex President and Chief Executive Officer. "In order to improve the
results of the Human Health and Biopharma segments during the second half of
the year, we are aggressively adding new customer opportunities, implementing
further cost reductions and making the appropriate changes to management and
business processes."
Gross margin for the first quarter 2005 was 39.2% versus 40.0% in the
first quarter 2004 due to unfavorable currency exchange (0.4 percentage
points) as well as lower margins in both the Biopharma and Human Health
segments. These decreases were partially offset by higher gross margins in
the Bioproducts segment.
Bioproducts
The Bioproducts segment includes products and services for research and
therapeutic applications. Bioproducts sales in the first quarter 2005
increased 15.6% to $39.9 million, including a 1.9% favorable impact from
foreign currency, from $34.5 million in the first quarter 2004. This
represents the eighth consecutive quarter of double-digit sales growth
reflecting the continuing strong demand and higher pricing within the research
and therapeutic product categories. John Leone, President and CEO, remarked
on Bioproducts performance, "In addition to excellent performance in the
quarter, we have created the momentum to sustain growth with a pipeline of new
products and services resulting from a combination of recent acquisitions,
licensing and internal development."
First quarter 2005 Bioproducts gross margin increased to 55.4% from 53.3%
in the first quarter 2004 primarily due to favorable volume, mix, pricing, and
foreign currency. Foreign currency favorably impacted gross margin by
approximately 0.2 percentage points in the first quarter 2005.
Biopharma
The Biopharma segment consists of the Company's contract biopharmaceutical
process development and manufacturing business. Sales in the first quarter
2005 decreased 15.5% to $7.7 million from $9.1 million in the first quarter
2004 due to lower volumes resulting from the timing and completion of certain
projects. Four new client projects were added in the quarter.
First quarter 2005 Biopharma gross margin decreased to (26.7%) from 4.9%
in the first quarter 2004 due to lower volumes, unfavorable mix, costs
associated with the new 2800 liter bioreactor suite and the under absorption
of fixed overheads. Foreign currency had no impact on Biopharma sales or
gross margin.
"The Company is actively pursuing new commercial development and cost
reduction opportunities to continue to build project pipelines and drive
improvements in Biopharma performance," commented John Leone. "Additionally,
the 2800 liter suite has been fully validated for cGMP production and the
first manufacturing run was completed in the quarter."
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 first quarter 2005 decreased
10.1% to $62.8 million, including 2.8% favorable impact due to foreign
currency, from $69.9 million in the first quarter 2004. The decreased sales
reflect lower volumes and pricing in comparison to the particularly strong
first quarter of 2004.
First quarter 2005 Human Health gross margin declined to 36.9% from 38.1%
in the first quarter 2004 primarily due to the lower volumes and pricing and
the adverse impact of foreign currency. While sales were favorably impacted
by foreign currency, the relative proportion of Euro denominated revenue
versus Euro denominated expenses negatively impacted gross margin by
approximately 1.1 percentage points in the first quarter 2005.
"Following the best quarter for Human Health sales ever, the sequentially
softer first quarter of 2005 compared negatively to prior year, exhibiting the
inherent quarterly lumpiness in this segment," commented John R. Leone.
"However, we continue to build momentum with controlled substances, projects
requiring high containment and proprietary drug delivery technology."
First Quarter 2005 Operating Expenses for Continuing Operations
Excluding "Other, net" items recorded in the first quarter 2004, first
quarter 2005 total operating expenses are essentially flat compared to the
prior year. It should be noted that the first quarter 2004 includes a
$1.9 million reduction to total operating expenses recorded in "Other, net"
consisting of $2.9 million of income from the early termination of a
Bioproducts customer contract and an unrelated $1.0 million charge associated
with workforce reductions at a European facility.
First quarter 2005 marketing, sales, administrative and amortization
expenses decreased to $26.5 million (24.0% sales) from $27.4 million (24.2% of
sales) in the first quarter 2004 primarily due to a reduction of corporate
administrative expenses in the first quarter of 2005 partially offset by
$0.4 million impact from foreign currency.
First quarter 2005 research and development expenses increased to
$5.9 million (5.3% of sales) from $4.7 million (4.2% of sales) in the first
quarter 2004 primarily due to increased new product development spending in
the Bioproducts segment and approximately $0.1 million impact from foreign
currency.
First quarter 2005 net interest expense decreased to $2.7 million from
$2.9 million in the first quarter 2004. The average interest rate decreased
to 5.3% in the first quarter 2005 from 5.8% in the first quarter 2004. The
tax rate in the first quarter 2005 increased to 48.8% compared to 35.9% in the
first quarter of 2004 due to the geographic mix of income.
Capital expenditures for the first quarter 2005 were $9.0 million and
depreciation was $9.4 million.
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 May 6, 2005. The dividend is payable on May 20, 2005.
Guidance
The Company's annual earnings guidance is unchanged. Management expects
full year 2005 diluted earnings per share for continuing operations to be in
the range of $0.90 to $1.10 and sales growth to be in the range of 6% to 10%.
The stronger than expected results for the first quarter 2005 primarily
resulted from certain second quarter business moving into the first quarter.
As a result, second quarter expectations should reflect this quarterly shift
forward of earnings from the second quarter 2005 to the first quarter while
maintaining full year guidance. This is consistent with the Company's plan
for strong earnings results anticipated in the second half of the year.
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 - 35%. However, the full year
and quarterly effective tax rates will continue to be highly sensitive to the
geographic mix of income.
Guidance for the full year 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. The Financial
Accounting Standards Board (FASB) recently reissued FASB Statement No.123R
- "Share-Based Payment" which covers share-based compensation, including stock
options. This month, the SEC revised the implementation date for which
companies are required to expense options. As a result, Cambrex plans to
begin expensing stock options effective January 1, 2006.
The financial information contained in this press release is unaudited,
subject to revision and should not be considered final until the first quarter
2005 Form 10-Q is filed with the US Securities and Exchange Commission.
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.
Conference Call and Webcast
The Conference Call to discuss first quarter 2005 earnings will begin at
8:30 a.m. Eastern Time on Friday, April 29, 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
5413783 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,
May 6, 2005 by calling 1-800-642-1687 for Domestic, and +1-706-645-9291 for
International. Please use the conference ID 5413783 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 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, 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
1900 worldwide. For more information, please visit http://www.cambrex.com.
CAMBREX CORPORATION
Financial Summary
For the Quarters Ended March 31, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
Gross Sales $110,462 $113,549
Operating Profit $10,907 $15,154
Income Before Tax $7,987 $12,098
Income From Continuing Operations $4,090 $7,759
Loss From Discontinued Operations $- $(742)
Net Income $4,090 $7,017
Earnings per share data (basic):
Income From Continuing Operations $0.16 $0.30
Loss From Discontinued Operations $- $(0.03)
Net Income $0.16 $0.27
Average Shares Outstanding 26,346 26,001
Earnings per share data (diluted):
Income From Continuing Operations $0.15 $0.29
Loss From Discontinued Operations $- $(0.03)
Net Income $0.15 $0.26
Average Shares Outstanding 26,630 26,605
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 March 31, 2005 and 2004
(in thousands)
First Quarter 2005 First Quarter 2004
Gross Gross Gross Gross
Sales Profit GP% Sales Profit GP%
Bioproducts $39,919 $22,135 55.4% $34,521 $18,397 53.3%
Biopharma 7,707 (2,057) -26.7% 9,119 450 4.9%
Human Health 62,836 23,184 36.9% 69,909 26,624 38.1%
Total $110,462 $43,262 39.2% $113,549 $45,471 40.0%
Gross Sales Comparison
2005 2004
Gross Gross Change Change
Sales Sales $ %
Bioproducts $39,919 $34,521 $5,398 15.6%
Biopharma 7,707 9,119 (1,412) -15.5%
Human Health 62,836 69,909 (7,073) -10.1%
Total $110,462 $113,549 $(3,087) -2.7%
CAMBREX CORPORATION
Statement of Profit and Loss
For the Quarters Ended March 31, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
% of % of
Amount Sales Amount Sales
Gross Sales $110,462 100.0% $113,549 100.0%
Commissions and Allowances 989 0.9% 959 0.8%
Net Sales 109,473 99.1% 112,590 99.2%
Other Revenues 2,460 2.2% 3,042 2.6%
Net Revenue 111,933 101.3% 115,632 101.8%
Cost of Sales 68,671 62.1% 70,161 61.8%
Gross Profit 43,262 39.2% 45,471 40.0%
Operating Expenses
Marketing/Sales Expenses 8,007 7.2% 7,907 7.0%
Research & Development Expenses 5,858 5.3% 4,743 4.2%
Administrative Expenses 17,951 16.3% 19,058 16.7%
Other, net - 0.0% (1,863) -1.6%
Amortization 539 0.5% 472 0.4%
Total Operating Expenses 32,355 29.3% 30,317 26.7%
Operating Profit 10,907 9.9% 15,154 13.3%
Other Expenses
Interest - Other 2,730 2.5% 2,929 2.6%
Other Expenses 190 0.2% 127 0.1%
Total Other Expenses 2,920 2.7% 3,056 2.7%
Income Before Taxes 7,987 7.2% 12,098 10.6%
Provision for Income Taxes 3,897 3.5% 4,339 3.8%
Income from Continuing Operations $4,090 3.7% $7,759 6.8%
Discontinued Operations
Loss From Discontinued Operations - (742)
Loss From Discontinued Operations - (742)
Net Income $4,090 $7,017
Basic Earnings per Share
Income From Continuing Operations $0.16 $0.30
Loss From Discontinued Operations $- $(0.03)
Net Income $0.16 $0.27
Diluted Earnings per Share
Income From Continuing Operations $0.15 $0.29
Loss From Discontinued Operations $- $(0.03)
Net Income $0.15 $0.26
CAMBREX CORPORATION
Consolidated Balance Sheet
As of March 31, 2005 and December 31, 2004
(in thousands)
Current Assets 2005 2004
Cash and Cash Equivalents $91,375 $91,532
Trade Receivables, net 67,076 68,370
Inventories, net 96,875 91,039
Deferred Tax Asset 4,291 2,605
Other Current Assets 16,937 20,825
Total Current Assets 276,554 274,371
Property, Plant and Equipment, Net 272,148 280,790
Goodwill and Other Intangibles 229,998 230,656
Other Assets 5,226 6,168
Total Assets $783,926 $791,985
Current Liabilities
Trade Accounts Payable $35,894 $38,552
Accrued Liabilities 49,516 52,181
Short-term Debt and Current Portion
of Long-term Debt 1,400 1,400
Total Current Liabilities 86,810 92,133
Long-term Debt 234,602 226,187
Deferred Tax Liabilities 21,887 21,686
Other Liabilities 60,139 60,663
Total Liabilities $403,438 $400,669
Stockholders' Equity $380,488 $391,316
Total Liabilities and Stockholders'
Equity $783,926 $791,985
SOURCE Cambrex Corporation
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Related links:
http://www.cambrex.com
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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 Corporation
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