EAST RUTHERFORD, N.J., July 28 /PRNewswire-FirstCall/ -- Cambrex
Corporation (NYSE: CBM) reported second quarter 2005 financial results for the
period ended June 30, 2005. Net income for the second quarter 2005 was $7.1
million, or $0.27 per diluted share, compared to $6.3 million, or $0.24 per
diluted share in the second quarter 2004. Second quarter 2005 results include
a tax benefit of $3.2 million, or $0.12 per diluted share, principally due to
a favorable Swedish court decision.
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Sales increased 6.6% to $116.2 million in the second quarter 2005,
including a 1.9% favorable impact from foreign currency, from $109.0 million
in the second quarter 2004 due to higher sales in all business segments.
Bioproducts
The Bioproducts segment includes products and services for research and
therapeutic applications. Bioproducts sales in the second quarter 2005
increased 12.7% to $38.0 million, including a 1.7% favorable impact from
foreign currency, from $33.7 million in the second quarter 2004. This
represents the ninth consecutive quarter of double-digit sales growth
reflecting stronger demand and higher pricing.
Second quarter 2005 Bioproducts gross margin decreased to 50.9% from 55.3%
in the second quarter 2004 primarily due to higher allowances for doubtful
accounts and higher production costs partially offset by better volumes and
pricing. Foreign currency favorably impacted Bioproducts gross margin by
approximately 0.3 percentage points in the second quarter 2005.
John R. Leone, Cambrex President and Chief Executive Officer commented on
the continued performance in Bioproducts, "Our new product investments
continue to gain momentum. The new European media facility, recently opened
Australian subsidiary, expansion of our efforts in India and acquisition of a
rapid microbial detection business in 2004 have all contributed to the strong
sales of our research products, media, rapid microbial detection products, and
related bioservices."
Biopharma
The Biopharma segment consists of the Company's contract biopharmaceutical
process development and manufacturing business. Sales in the second quarter
2005 increased 3.6% to $11.7 million from $11.2 million in the second quarter
2004 due to higher reimbursements for labor and materials partially offset by
lower suite and process development fees.
Second quarter 2005 Biopharma gross margin decreased to -5.2% from 8.5% in
the second quarter 2004 principally due to the unfavorable mix of higher labor
and materials reimbursements and lower suite and process development fees.
Foreign currency had no impact on Biopharma sales or gross margin.
"We have continued to make progress generating new customers while the
regulatory process moves forward for three products awaiting approval,"
commented Mr. Leone. "We have added three projects that are in or will be
entering Phase III clinical trials. However, until we benefit from more
commercial scale production, sales growth is expected to be somewhat
unpredictable quarter to quarter."
For the three Phase III projects, tech transfer and process development
has either commenced or is expected to commence during 2005 and 2006 and cGMP
manufacturing is expected to commence in 2006 and 2007.
Mr. Leone continued, "It is critical that we reduce costs in the Biopharma
segment and we expect to achieve certain cost savings by leveraging the
synergies and infrastructure of the Biopharma and Bioproducts businesses."
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 second quarter 2005 increased
4.0% to $66.5 million, including a 2.5% favorable impact due to foreign
currency, from $64.0 million in the second quarter 2004. The increased sales
reflect higher volumes of branded and generic APIs and advanced intermediates.
Second quarter 2005 Human Health gross margin decreased to 32.4% from
35.0% in the second quarter 2004 primarily due to product mix. Foreign
currency favorably impacted gross margin by approximately 0.3 percentage
points in the second quarter 2005.
"Custom development revenues doubled in the quarter; a very positive
indicator of future growth," commented Mr. Leone. "Our excellent regulatory
record, customer service and ability to solve our customers' complex
development issues have allowed us to expand our portfolio of late-stage
projects."
Second Quarter 2005 Operating, Interest and Tax Expense
Second quarter 2005 total operating expenses were essentially flat as a
percentage of sales, increasing to $31.2 million (26.9% of sales) from $29.1
million (26.8% of sales) in the second quarter 2004 due to increased sales and
marketing and R&D expenses. Sales and marketing expenses increased to $8.8
million from $8.0 million principally due to additional resources for
Bioproducts and approximately $0.1 million impact from foreign currency.
Second quarter 2005 research and development expenses increased to $5.9
million (5.1% of sales) from $4.7 million (4.3% of sales) in the second
quarter 2004 primarily due to Bioproducts' new product development expenses
and additional headcount at the Cambrex Center of Technical Excellence and
approximately $0.1 million impact from foreign currency.
Second quarter 2005 administrative expenses decreased to $15.9 million
from $16.0 million in the second quarter 2004 primarily due to lower legal
fees that were partially offset by approximately $0.3 million impact from
foreign currency.
Second quarter 2005 net interest expense increased to $2.8 million from
$2.7 million in the second quarter 2004. The average interest rate decreased
to 5.4% in the second quarter 2005 from 5.6% in the second quarter 2004.
The tax rate in the second quarter 2005 decreased to -10.4% compared to
37.8% in the second quarter of 2004 primarily due to a $3.2 million ($0.12 per
diluted share) reduction in tax reserves primarily related to a Swedish tax
matter that was decided favorably during the second quarter 2005.
Capital expenditures for the second quarter 2005 were $9.0 million and
depreciation was $9.3 million compared to $10.9 million and $9.6 million,
respectively, in the second quarter 2004.
American Jobs Creation Act of 2004
During the second quarter 2005, the Company repatriated approximately $50
million of earnings from its foreign subsidiaries pursuant to the American
Jobs Creation Act of 2004 and recorded the related additional tax expense of
$0.2 million. The Company continues to evaluate the further repatriation of
foreign earnings.
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 August 5, 2005. The dividend is payable on August 19, 2005.
Guidance
Year-to-date performance is consistent with management expectations. A
disproportionate amount of sales and operating profit had been expected to
occur in the second half of the year, primarily due to the expected timing of
development projects and the expected close of a certain number of new
proposals in the Biopharma segment. Based on the latest information related
to the close rate on our Biopharma sales pipeline, the timing of new projects
and the timing of revenues related to these projects, we are revising our full
year 2005 sales growth guidance to be in the range of 3% to 6% and earnings
guidance for continuing operations to be in the range of $0.85 to $0.95 per
fully diluted share including the Swedish tax matter discussed above.
Based on current customer delivery schedules and seasonal fluctuations in
Human Health, and the timing of expected new business in Biopharma and product
introductions in Bioproducts, it is currently anticipated that a
disproportionate share of the second half 2005 earnings will occur in the
fourth quarter of the year.
For the year 2005, capital expenditures, depreciation and amortization for
continuing operations are expected to be approximately $49 million, $39
million, and $2 million respectively. The Company expects the full year 2005
effective tax rate to be approximately 28-32%. The full year and quarterly
effective tax rates will continue to be highly sensitive to the geographic mix
of income.
The financial information contained in this press release is unaudited,
subject to revision and should not be considered final until the second
quarter 2005 Form 10-Q is filed with the US Securities and Exchange
Commission.
Conference Call and Webcast
The Conference Call to discuss second quarter 2005 earnings will begin at
8:30 a.m. Eastern Time on Friday, July 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
7490192 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,
August 5, 2005 by calling 1-800-642-1687 for Domestic, and +1-706-645-9291 for
International. Please use the conference ID 7490192 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
1,900 worldwide. For more information, please visit http://www.cambrex.com.
CAMBREX CORPORATION
Financial Summary
For the Quarters Ended June 30, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
Gross Sales $116,171 $108,951
Operating Profit $9,071 $12,908
Income Before Tax $6,413 $10,199
Net Income $7,080 $6,339
Earnings per share data (basic):
Net Income $0.27 $0.24
Average Shares Outstanding 26,402 26,112
Earnings per share data (diluted):
Net Income $0.27 $0.24
Average Shares Outstanding 26,510 26,383
Six Months Ended June 30, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
Gross Sales $226,633 $222,500
Operating Profit $19,978 $28,062
Income Before Tax $14,400 $22,297
Income From Continuing Operations $11,170 $14,098
Loss From Discontinued Operations $- $(742)
Net Income $11,170 $13,356
Earnings per share data (basic):
Income From Continuing Operations $0.42 $0.54
Loss From Discontinued Operations $- $(0.03)
Net Income $0.42 $0.51
Average Shares Outstanding 26,373 26,057
Earnings per share data (diluted):
Income From Continuing Operations $0.42 $0.53
Loss From Discontinued Operations $- $(0.02)
Net Income $0.42 $0.51
Average Shares Outstanding 26,549 26,405
Note: All amounts in these financial statements and tables are for
continuing operations unless otherwise indicated.
CAMBREX CORPORATION
Gross Sales & Gross Profit by Segment
For the Quarters Ended June 30, 2005 and 2004
(in thousands)
Second Quarter 2005 Second Quarter 2004
Gross Gross Gross Gross
Sales Profit GP% Sales Profit GP%
Bioproducts $37,990 $19,336 50.9% $33,711 $18,647 55.3%
Biopharma 11,655 (606) -5.2% 11,245 961 8.5%
Human Health 66,526 21,540 32.4% 63,995 22,398 35.0%
Total $116,171 $40,270 34.7% $108,951 $42,006 38.6%
Gross Sales Comparison
2005 2004
Gross Gross Change Change
Sales Sales $ %
Bioproducts $37,990 $33,711 $4,279 12.7%
Biopharma 11,655 11,245 410 3.6%
Human Health 66,526 63,995 2,531 4.0%
Total $116,171 $108,951 $7,220 6.6%
CAMBREX CORPORATION
Statement of Profit and Loss
For the Quarters Ended June 30, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
% of % of
Amount Sales Amount Sales
Gross Sales $116,171 100.0% $108,951 100.0%
Commissions and Allowances 1,676 1.4% 699 0.6%
Net Sales 114,495 98.6% 108,252 99.4%
Other Revenues 2,251 1.9% 1,797 1.7%
Net Revenue 116,746 100.5% 110,049 101.1%
Cost of Sales 76,476 65.8% 68,043 62.5%
Gross Profit 40,270 34.7% 42,006 38.6%
Operating Expenses
Marketing/Sales Expenses 8,757 7.5% 7,951 7.3%
Research & Development Expenses 5,881 5.1% 4,673 4.3%
Administrative Expenses 15,893 13.7% 16,029 14.8%
Amortization 668 0.6% 445 0.4%
Total Operating Expenses 31,199 26.9% 29,098 26.8%
Operating Profit 9,071 7.8% 12,908 11.8%
Other Expenses
Interest - Other 2,751 2.4% 2,688 2.5%
Other (Income)/Expenses (93) -0.1% 21 0.0%
Total Other Expenses 2,658 2.3% 2,709 2.5%
Income Before Taxes 6,413 5.5% 10,199 9.3%
Income Tax (Benefit)/Provision (667) -0.6% 3,860 3.5%
Net Income $7,080 6.1% $6,339 5.8%
Basic Earnings per Share
Net Income $0.27 $0.24
Diluted Earnings per Share
Net Income $0.27 $0.24
CAMBREX CORPORATION
Gross Sales & Gross Profit by Segment
Six Months Ended June 30, 2005 and 2004
(in thousands)
Six Months 2005 Six Months 2004
Gross Gross Gross Gross
Sales Profit GP% Sales Profit GP%
Bioproducts $77,909 $41,471 53.2% $68,232 $37,044 54.3%
Biopharma 19,362 (2,663) -13.8% 20,364 1,411 6.9%
Human Health 129,362 44,724 34.6% 133,904 49,022 36.6%
Total $226,633 $83,532 36.9% $222,500 $87,477 39.3%
Gross Sales Comparison
2005 2004
Gross Gross Change Change
Sales Sales $ %
Bioproducts $77,909 $68,232 $9,677 14.2%
Biopharma 19,362 20,364 (1,002) -4.9%
Human Health 129,362 133,904 (4,542) -3.4%
Total $226,633 $222,500 $4,133 1.9%
CAMBREX CORPORATION
Statement of Profit and Loss
For the Six Months Ended June 30, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
% of % of
Amount Sales Amount Sales
Gross Sales $226,633 100.0% $222,500 100.0%
Commissions and Allowances 2,665 1.2% 1,658 0.7%
Net Sales 223,968 98.8% 220,842 99.3%
Other Revenues 4,711 2.1% 4,839 2.1%
Net Revenue 228,679 100.9% 225,681 101.4%
Cost of Sales 145,147 64.0% 138,204 62.1%
Gross Profit 83,532 36.9% 87,477 39.3%
Operating Expenses
Marketing/Sales Expenses 16,765 7.4% 15,858 7.1%
Research & Development Expenses 11,739 5.2% 9,416 4.2%
Administrative Expenses 33,843 15.0% 35,087 15.8%
Other, net - 0.0% (1,863) -0.8%
Amortization 1,207 0.5% 917 0.4%
Total Operating Expenses 63,554 28.1% 59,415 26.7%
Operating Profit 19,978 8.8% 28,062 12.6%
Other Expenses
Interest - Other 5,481 2.5% 5,617 2.5%
Other Expenses 97 0.0% 148 0.1%
Total Other Expenses 5,578 2.5% 5,765 2.6%
Income Before Taxes 14,400 6.3% 22,297 10.0%
Income Tax Provision 3,230 1.4% 8,199 3.7%
Income from Continuing Operations $11,170 4.9% $14,098 6.3%
Discontinued Operations
Loss From Discontinued Operations - (742)
Net Income $11,170 $13,356
Basic Earnings per Share
Income From Continuing Operations $0.42 $0.54
Loss From Discontinued Operations $- $(0.03)
Net Income $0.42 $0.51
Diluted Earnings per Share
Income From Continuing Operations $0.42 $0.53
Loss From Discontinued Operations $- $(0.02)
Net Income $0.42 $0.51
CAMBREX CORPORATION
Consolidated Balance Sheet
As of June 30, 2005 and December 31, 2004
(in thousands)
Current Assets 2005 2004
Cash and Cash Equivalents $45,606 $91,532
Trade Receivables, net 67,261 68,370
Inventories, net 97,688 91,039
Deferred Tax Asset 3,645 2,605
Other Current Assets 18,404 20,825
Total Current Assets 232,604 274,371
Property, Plant and Equipment, Net 259,458 280,790
Goodwill and Other Intangibles 225,853 230,656
Other Assets 5,240 6,168
Total Assets $723,155 $791,985
Current Liabilities
Trade Accounts Payable $35,354 $38,552
Accrued Liabilities 45,310 52,181
Short-term Debt and Current Portion
of Long-term Debt 1,608 1,400
Total Current Liabilities 82,272 92,133
Long-term Debt 199,632 226,187
Deferred Tax Liabilities 19,326 21,686
Other Liabilities 54,913 60,663
Total Liabilities $356,143 $400,669
Stockholders' Equity $367,012 $391,316
Total Liabilities and Stockholders'
Equity $723,155 $791,985
SOURCE Cambrex Corporation
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Related links:
http://www.cambrex.com
Company News On-Call:
http://www.prnewswire.com/comp/134219.html
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO
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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