EAST RUTHERFORD, N.J., May 8 /PRNewswire-FirstCall/ -- Cambrex
Corporation (NYSE: CBM) reports first quarter 2007 results for the period
ended March 31, 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO )
Highlights of Continuing Operations
-- First quarter 2007 sales increased by 20.1% (14.6% excluding foreign
currency) compared to first quarter 2006
-- Gross margin for the quarter increased to 37.5% of sales compared to
gross margin of 35.3% during first quarter 2006
-- Operating Profit before corporate expenses increased 33.4%, with the
Operating Margin reaching 22.7% of sales in the first quarter of 2007
versus 20.4% last year
-- Special dividend of $14 per share paid to shareholders on May 3rd
Strategic Alternatives and Basis of Reporting
As a result of its evaluation of strategic alternatives, Cambrex
completed sales of its Bioproducts and Biopharma businesses (the "Bio
Businesses") to Lonza for $460 million in February 2007 and Human Health
sites in Cork, Ireland and Landen, Belgium to ICIG during the fourth
quarter of 2006. Discontinued Operations in the 2007 financial results
includes the results of operations of the Bio Businesses through the date
of sale as well as the corresponding gain on sale. Discontinued Operations
in the 2006 financial results includes the results of operations of the Bio
Businesses and the Cork and Landen sites.
The Company used approximately $307 million of its cash on hand and
approximately $94 million borrowed under its previously announced new
credit facility to pay a special dividend of $14 per share to its
shareholders on May 3rd. James A. Mack, Chairman, President and Chief
Executive Officer of Cambrex Corporation, said: "We are pleased that our
comprehensive strategic review allowed us to return substantial value to
our shareholders in the form of a special dividend. We remain very positive
about our Human Health business as well as the outsourced active
pharmaceutical ingredient market in general and we continue to focus on
cost reduction, the implementation of strategic capital investments, and
building upon certain of our proprietary technologies."
First Quarter 2007 Operating Results
Cambrex provides products and services to accelerate the development
and commercialization of small molecule active pharmaceutical ingredients
("APIs"), advanced intermediates and other products for branded and generic
pharmaceuticals.
First quarter 2007 Sales increased 20.1% to $65.0 million from $54.1
million in the first quarter 2006 driven by strong demand for a broad range
of generic API products as well as tastemasking and other products
utilizing Cambrex proprietary technology. Revenues from custom development
projects also contributed to the sales growth. Foreign currency accounted
for 5.5% of the total sales increase.
First quarter 2007 Gross Profit increased 27.8% to $24.4 million (37.5%
of sales) from $19.1 million (35.3% of sales) during the first quarter
2006. The increase in Gross Margin resulted from favorable mix and higher
capacity utilization, particularly in the generic API manufacturing
operations, partially offset by lower pricing on selected products. Foreign
currency favorably impacted Gross Margin by 0.6% versus last year.
The Human Health business segment, which excludes Corporate operations,
achieved a 33.4% increase in Operating Profit to $14.8 million during the
first quarter of 2007 compared to $11.1 million during the first quarter of
2006. Operating Margin increased to 22.7% of first quarter 2007 sales, up
from 20.4% of sales during the comparable quarter last year, due to higher
Gross Margin and operating leverage. Foreign exchange had a 0.1%
unfavorable impact on Operating Margin during the first quarter of 2007.
First Quarter 2007 Operating, Interest and Tax Expenses
First quarter 2007 consolidated operating expenses increased to $42.8
million from $15.8 million in the first quarter 2006 primarily due to
Restructuring Expenses, Strategic Alternative Costs, and higher
Administrative Expenses.
Sales and Marketing Expense in the first quarter 2007 increased to $1.9
million, or 2.9% of sales, from $1.5 million, or 2.7% of sales in the first
quarter 2006. Research and Development Expense for the first quarter 2007
increased slightly to $2.6 million compared to $2.4 million in the first
quarter 2006. As a percentage of sales, Research & Development Expense was
4.0% of sales in the first quarter of 2007 compared to 4.4% of sales in the
first quarter of 2006.
Restructuring Expenses in the first quarter of 2007 consist primarily
of severance and costs incurred as part of downsizing the corporate
headquarters following the divestiture of the Bio Businesses. Strategic
Alternative Costs for the first quarter of 2007 include costs for change in
control benefits, retention bonuses and expenses for the special dividend
paid on May 3, 2007. Strategic Alternative Costs for the first quarter of
2006 consist of external advisor costs related to the Bio Businesses
divestiture. Administrative Expenses include $2.0 million of litigation
fees incurred during the first quarter of 2007 versus $0.2 million in the
first quarter of 2006. Administrative Expenses also include expenses for
salaries, benefits and professional services that will be reduced or
eliminated over the balance of 2007 as part of the corporate restructuring.
Net Interest Income in the first quarter of 2007 was $1.5 million,
reflecting the income generated from the net proceeds of the Bio Businesses
sale offset by the write-off of unamortized bank fees related to a credit
facility terminated in conjunction with the sale of the Bio Businesses.
During the first quarter of 2006, Net Interest Expense after adjustment for
the effect of Discontinued Operations was $5.4 million, which included $5.3
million in costs associated with the prepayment of senior notes.
Income taxes for the first quarter of 2007 include $6.8 million of
benefits related to the recognition of certain tax attributes triggered by
the sale of the Bio Businesses. Additional tax benefits triggered by this
divestiture will be recognized within Continuing Operations over the
balance of 2007 based on the level of losses within the U.S., where the
Company otherwise does not record a tax benefit related to these losses.
First Quarter 2007 Capital Expenditures and Depreciation
Capital expenditures and depreciation for the first quarter 2007 were
$5.5 million and $4.8 million compared to $4.3 million and $4.7 million in
the first quarter 2006, respectively.
Guidance
Cambrex reiterates its previously disclosed guidance for 2007 financial
results. Sales growth during 2007 for the continuing business operations of
Cambrex (excluding Corporate operations) is expected to be within the range
of 5% to 10% and operating profit is expected to be in the range of $50 to
$55 million. The Company remains on target to complete its corporate
restructuring by the end of 2007 and will report further progress on this
initiative as the year progresses. Significant charges will be incurred
during the remainder of 2007 related to the restructuring and related
activities.
For 2007, capital expenditures and depreciation for continuing
operations are currently expected to be approximately $30 to $33 million
and $21 to $23 million, respectively.
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 first
quarter 2007 Form 10-Q is filed with the US Securities and Exchange
Commission.
Conference Call and Webcast
The Conference Call to discuss first quarter 2007 earnings will begin
at 8:30 a.m. Eastern Time on Wednesday, May 9, 2007 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
7068999 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 Wednesday, May 16, 2007 by calling 1-800-642-1687 for
domestic and +1-706-645- 9291 for international. Please use the pass code
7068999 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 and/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 SEC. 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 and/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, performance of minority investments, 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, the outcome of the evaluation of strategic alternatives and the
accuracy of the Company's current estimate set forth in this release 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 us 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 SEC,
including Current Reports on Form 8-K.
About Cambrex
Cambrex provides products and services to accelerate the development
and commercialization of branded and generic small molecule therapeutics.
The Company currently employs approximately 850 worldwide. For more
information, please visit http://www.cambrex.com.
CAMBREX CORPORATION
Statement of Profit and Loss
For the Quarters Ended March 31, 2007 and 2006
(in thousands)
2007 2006
% of % of
Amount Sales Amount Sales
Gross Sales $64,997 100.0% $54,120 100.0%
Commissions and Allowances 590 0.9% 386 0.7%
Net Sales 64,407 99.1% 53,734 99.3%
Other Revenues 807 1.2% (647) -1.2%
Net Revenue 65,214 100.3% 53,087 98.1%
Cost of Sales 40,819 62.8% 34,002 62.8%
Gross Profit 24,395 37.5% 19,085 35.3%
Operating Expenses
Sales and Marketing Expense 1,898 2.9% 1,450 2.7%
Research and Development Expense 2,600 4.0% 2,362 4.4%
Administrative Expense 13,388 20.6% 11,030 20.4%
Restructuring Expenses 1,682 2.6% - 0.0%
Strategic Alternative Costs 23,130 35.6% 988 1.8%
Amortization 61 0.1% 10 0.0%
Total Operating Expenses 42,759 65.8% 15,840 29.3%
Operating (Loss)/Profit (18,364) -28.3% 3,245 6.0%
Other (Income)/Expenses
Interest - Other (1,539) -2.4% 5,444 10.1%
Other (Income)/Expense, net (19) 0.0% 5 0.0%
Total Other (Income)/Expenses (1,558) -2.4% 5,449 10.1%
Loss Before Taxes (16,806) -25.9% (2,204) -4.1%
Income Tax (Benefit)/Provision (2,363) -3.6% 2,500 4.6%
Loss from Continuing Operations $(14,443) -22.3% $(4,704) -8.7%
Income from Discontinued
Operations, Net of Tax 219,659 338.0% 3,527 6.5%
Cumulative Effect of a Change in
Accounting Principle - 0.0% (228) -0.4%
Net Income/(Loss) $205,216 315.7% $(1,405) -2.6%
Basic (Loss)/Earnings per Share
Loss from Continuing Operations $(0.51) $(0.18)
Income from Discontinued
Operations, Net of Tax $7.82 $0.14
Cumulative Effect of a Change in
Accounting Principle $(0.01)
Net Income/(Loss) $7.31 $(0.05)
Diluted (Loss)/Earnings per Share
Loss from Continuing Operations $(0.51) $(0.18)
Income from Discontinued
Operations, Net of Tax $7.82 $0.14
Cumulative Effect of a Change in
Accounting Principle $- $(0.01)
Net Income/(Loss) $7.31 $(0.05)
Weighted Average Shares Outstanding
Basic 28,071 26,661
Diluted 28,071 26,661
CAMBREX CORPORATION
Gross Sales, Gross Profit & Operating Profit by Segment
For the Quarters Ended March 31, 2007 and 2006
(in thousands)
First Quarter 2007
Gross Gross Operating
Sales Profit GP% Profit/(Loss) OP%
Human Health $64,997 $24,395 37.5% $14,756 22.7%
Corporate - - (33,120)
Total $64,997 $24,395 37.5% $(18,364) -28.3%
First Quarter 2006
Gross Gross Operating
Sales Profit GP% Profit/(Loss) OP%
Human Health $54,120 $19,085 35.3% $11,060 20.4%
Corporate - - (7,815)
Total $54,120 $19,085 35.3% $3,245 6.0%
Gross Sales Comparison
1Q07 1Q06
Gross Gross Change Change
Sales Sales $ %
Human Health $64,997 $54,120 $10,877 20.1%
Total $64,997 $54,120 $10,877 20.1%
CAMBREX CORPORATION
Consolidated Balance Sheet
As of March 31, 2007 and December 31, 2006
(in thousands)
March 31, December 31,
Assets 2007 2006
Cash and Cash Equivalents $344,915 $33,746
Trade Receivables, net 35,311 38,552
Inventories, net 56,193 53,893
Assets of Discontinued Operations -
Short Term - 79,383
Other Current Assets 20,289 19,176
Total Current Assets 456,708 224,750
Property, Plant and Equipment, Net 141,933 141,863
Goodwill and Other Intangibles 32,886 32,645
Assets of Discontinued Operations -
Long Term - 202,292
Other Non-Current Assets 3,106 4,826
Total Assets $634,633 $606,376
Liabilities and Stockholders' Equity
Trade Accounts Payable $24,722 $28,592
Accrued Expenses and Other Current
Liabilities 63,329 45,141
Liabilities of Discontinued
Operations - Short Term - 33,401
Total Current Liabilities 88,051 107,134
Long-term Debt 118 158,745
Deferred Tax Liabilities 22,037 14,268
Liabilities of Discontinued
Operations - Long Term - 24,208
Other Non-Current Liabilities 55,250 55,375
Total Liabilities $165,456 $359,730
Stockholders' Equity $469,177 $246,646
Total Liabilities and Stockholders'
Equity $634,633 $606,376
SOURCE Cambrex Corporation
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Related links:
http://www.cambrex.com/
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
http://www.prnewswire.com/comp/134219.html/
CONTACT:
Gregory P. Sargen, Vice President & CFO,
+1-201-804-3055, or gregory.sargen@cambrex.com, or Bob Thomson,
Director, Investor Relations, +1-201-804-3047, or
bob.thomson@cambrex.com, both of Cambrex Corporation
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