EAST RUTHERFORD, N.J., Oct. 27 /PRNewswire-FirstCall/ -- Cambrex
Corporation (NYSE: CBM) reports third quarter 2005 results for the period
ended September 30, 2005. Sales increased 5.3% to $104.5 million in the third
quarter 2005, including a 0.6% unfavorable impact from foreign currency, from
$99.3 million in the third quarter 2004 due to higher sales in the Human
Health and Bioproducts segments. A record third quarter in Human Health sales
resulted from higher sales of advanced intermediates, active pharmaceutical
ingredients (APIs) and animal health products.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO )
The Company broke even in the third quarter 2005 compared to a loss from
continuing operations of $44.9 million, or $1.72 per diluted share in the
third quarter 2004. In the third quarter 2005 an environmental reserve of
$1.3 million or $0.05 per diluted share was recorded in Administrative Expense
for the expected cost of environmental remediation of a former site. In the
third quarter 2004, a goodwill impairment of $48.7 million or $1.87 per
diluted share was recorded within the Biopharma segment's Operating Expense.
The Company has made progress on its top objective for 2005 of building
its portfolio of contract development and manufacturing projects for its
Biopharma, Cell Therapy (within the Bioproducts segment) and Human Health
businesses. Through the end of the third quarter 2005, the Company is pleased
to report that its total number of contract development and manufacturing
projects has increased 66%.
Number of projects
End End
Project type 2004 Q3-2005 %Change
Biopharma 15 25 67%
Cell Therapy 8 16 100%
Human Health 39 62 59%
Cost reductions are also a priority in 2005. Year to date the Company's
corporate operating expenses declined $1.7 million or approximately 10%,
despite a $1.3 million environmental reserve expense described below.
Bioproducts
The Bioproducts segment includes products and services for research and
therapeutic applications. Bioproducts sales in the third quarter 2005
increased 5.2% to $35.7 million, including a 0.2% unfavorable impact from
foreign currency, from $34.0 million in the third quarter 2004 due to higher
volumes and pricing in both research and therapeutic application categories.
Third quarter 2005 Bioproducts gross margin decreased to 51.7% from 54.9%
in the third quarter 2004 primarily due to higher production costs partially
offset by better volumes and pricing. Foreign currency unfavorably impacted
Bioproducts gross margin by 0.1 percentage point in the third quarter 2005.
Third quarter 2005 Bioproducts operating profit margin decreased to 14.1%
from 18.8% in the third quarter 2004 primarily due to additional sales and
marketing personnel in Europe and higher R&D spending for rapid microbial
detection product development.
"We did see some weakness in the research market in the quarter and as a
result, sales growth was slightly less than expected," commented John R.
Leone, Cambrex President and Chief Executive Officer. "However, Bioproducts
continues to perform well overall and we are on target on a year to date basis
with revenue growth of 11%."
Biopharma
The Biopharma segment consists of the Company's contract biopharmaceutical
process development and manufacturing business. Sales in the third quarter
2005 decreased 26.3% to $8.4 million from $11.4 million in the third quarter
2004 due to lower suite revenues resulting from the timing of client projects
partially offset by new client process development revenues.
Third quarter 2005 Biopharma gross margin decreased to -25.5% versus 16.6%
in the third quarter 2004 principally due to lower volume and adverse revenue
mix.
Third quarter 2005 Biopharma operating loss was $4.4 million versus $49.2
million in the third quarter 2004. The third quarter 2005 operating loss
resulted from lower revenues and gross profit margins. The third quarter 2004
operating loss includes a goodwill impairment within the Biopharma business of
$48.7 million or $1.87 per diluted share.
Foreign currency had no impact on Biopharma sales, gross margin or
operating profit margin.
"While the timing of projects impacted the quarter, we have several late
stage projects which are expected to provide us with a sound foundation for
2006," commented Mr. Leone. "We anticipate the Biopharma business to
approximately break even in the fourth quarter 2005, a significant milestone
in its recovery."
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 third quarter 2005 increased
12.0% to $60.4 million, including a 1.0% unfavorable impact due to foreign
currency, from $53.9 million in the third quarter 2004. The increased sales
reflect higher volumes of advanced intermediates, APIs and animal health
products.
Third quarter 2005 Human Health gross margin decreased to 33.9% from 34.6%
in the third quarter 2004 primarily due to foreign currency which unfavorably
impacted gross margin by 1.4 percentage points in the third quarter 2005.
Third quarter 2005 operating profit margins increased to 18.8% from 17.0%
due primarily to higher sales and cost controls.
"Custom development revenues increased 39% in the quarter, an encouraging
indicator of the future growth of the Human Health segment," commented Mr.
Leone. "We continue to build momentum with a robust project portfolio of late
phase projects."
Third Quarter 2005 Operating, Interest and Tax Expense
Sales and Marketing expense increased to $8.5 million, or 8.1% of sales,
from $7.6 million, or 7.6% of sales, principally due to additional sales and
marketing personnel in Europe in the Bioproducts segment.
Third quarter 2005 Research and Development Expense increased to $4.9
million, or 4.7% of sales, from $4.5 million, or 4.5% of sales, in the third
quarter 2004 primarily due to higher expenses in the Bioproducts and Human
Health segments to support new product launches and increased custom
development pipelines.
Third quarter 2005 Administrative Expense decreased to $16.8 million, or
16.0% of sales, from $17.7 million, or 17.8% of sales, in the third quarter
2004 primarily due to lower corporate expenses and approximately $0.1 million
impact from foreign currency. Included in third quarter 2005 Administrative
Expense is the previously mentioned environmental reserve of $1.3 million for
a former site. This operating site was moved to another location prior to
Cambrex purchasing the business and was never operated by Cambrex.
Third quarter 2005 Net Interest Expense decreased to $2.8 million from
$2.9 million in the third quarter 2004 due to a lower debt balance partially
offset by a higher average interest rate. The average interest rate in the
third quarter 2005 was 5.8% versus 5.5% reported in the third quarter 2004.
The tax rate in the third quarter 2005 increased to 101.4% compared to -
5.9% in the third quarter of 2004 primarily due to the geographic distribution
of income.
Capital expenditures for the third quarter 2005 were $9.9 million and
depreciation was $8.9 million compared to $9.6 million and $9.5 million,
respectively, in the third quarter 2004.
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 November 4, 2005. The dividend is payable on November 18, 2005.
Guidance
The Company is revising its full year 2005 guidance for sales growth to be
within the range of 1% to 3% and earnings for continuing operations to be in
the range of $0.55 to $0.65 per fully diluted share. Guidance is being
revised primarily due to delays in several early stage Biopharma projects,
currently under development agreements and expected to be completed in 2006,
and lower revenues from new business that was expected to be closed in 2005.
The Biopharma segment is still expected to approximately break even in the
fourth quarter 2005.
For the year 2005, guidance for capital expenditures, depreciation and
amortization for continuing operations has been revised and is currently
expected to be approximately $45 million, $37 million, and $2 million,
respectively.
The guidance for the full year 2005 tax rate has also been revised. The
Company expects the full year 2005 effective tax rate to be approximately
35-40%. 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 third quarter
2005 Form 10-Q is filed with the US Securities and Exchange Commission.
Conference Call and Webcast
The Conference Call to discuss third quarter 2005 earnings will begin at
8:30 a.m. Eastern Time on Friday, October 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
9939073 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,
November 4, 2005 by calling 1-800-642-1687 for Domestic, and +1-706-645-9291
for International. Please use the conference ID 9939073 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, interest 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 September 30, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
Gross Sales $104,500 $99,250
Operating Profit/(Loss) $6,135 $(39,714)
Income/(Loss) Before Tax $3,359 $(42,359)
Loss From Continuing Operations $(48) $(44,861)
Loss From Discontinued Operations $- $(236)
Net Loss $(48) $(45,097)
Earnings per share data (basic):
Loss From Continuing Operations $(0.00) $(1.72)
Loss From Discontinued
Operations $- $(0.01)
Net Loss $(0.00) $(1.73)
Average Shares Outstanding 26,418 26,109
Earnings per share data (diluted):
Loss From Continuing Operations $(0.00) $(1.72)
Loss From Discontinued
Operations $- $(0.01)
Net Loss $(0.00) $(1.73)
Average Shares Outstanding 26,418 26,109
Nine Months Ended September 30, 2005 and 2004
(in thousands, except earnings per share)
2005 2004
Gross Sales $331,133 $321,750
Operating Profit/(Loss) $26,113 $(11,652)
Income/(Loss) Before Tax $17,759 $(20,062)
Income/(Loss) From Continuing Operations $11,122 $(30,763)
Loss From Discontinued Operations $- $(978)
Net Income/(Loss) $11,122 $(31,741)
Earnings per share data (basic):
Income/(Loss) From Continuing Operations $0.42 $(1.18)
Loss From Discontinued Operations $- $(0.04)
Net Income/(Loss) $0.42 $(1.22)
Average Shares Outstanding 26,389 26,074
Earnings per share data (diluted):
Income/(Loss) From Continuing Operations $0.42 $(1.18)
Loss From Discontinued Operations $- $(0.04)
Net Income/(Loss) $0.42 $(1.22)
Average Shares Outstanding 26,550 26,074
Note: All amounts in these financial statements and tables are for
continuing operations unless otherwise indicated.
CAMBREX CORPORATION
Gross Sales, Gross Profit & Operating Profit/(Loss) by Segment
For the Quarters Ended September 30, 2005 and 2004
(in thousands)
Third Quarter 2005
Gross Gross Operating
Sales Profit/ Profit/
(Loss) GP% (Loss) OP%
Bioproducts $35,729 $18,481 51.7% $5,024 14.1%
Biopharma 8,385 (2,137) -25.5% (4,368) -52.1%
Human Health 60,386 20,478 33.9% 11,343 18.8%
Corporate - - (5,864)
Total $104,500 $36,822 35.2% $6,135 5.9%
Third Quarter 2004
Gross Gross Operating
Sales Profit GP% Profit/ OP%
(Loss)
Bioproducts $33,958 $18,632 54.9% $6,379 18.8%
Biopharma 11,375 1,892 16.6% (49,247) -432.9%
Human Health 53,917 18,670 34.6% 9,146 17.0%
Corporate - - (5,992)
Total $99,250 $39,194 39.5% $(39,714) -40.0%
Gross Sales Comparison
2005 2004
Gross Gross Change Change
Sales Sales $ %
Bioproducts $35,729 $33,958 $1,771 5.2%
Biopharma 8,385 11,375 (2,990) -26.3%
Human Health 60,386 53,917 6,469 12.0%
Total $104,500 $99,250 $5,250 5.3%
CAMBREX CORPORATION
Statement of Profit and Loss
For the Quarters Ended September 30, 2005 and 2004
(in thousands)
2005 2004
% of % of
Amount Sales Amount Sales
Gross Sales $104,500 100.0% $99,250 100.0%
Commissions and Allowances 1,031 1.0% 620 0.6%
Net Sales 103,469 99.0% 98,630 99.4%
Other Revenues 1,116 1.1% 1,706 1.7%
Net Revenue 104,585 100.1% 100,336 101.1%
Cost of Sales 67,763 64.9% 61,142 61.6%
Gross Profit 36,822 35.2% 39,194 39.5%
Operating Expenses
Marketing/Sales Expenses 8,468 8.1% 7,555 7.6%
Research & Development Expenses 4,862 4.7% 4,520 4.5%
Administrative Expenses 16,846 16.0% 17,650 17.8%
Goodwill Impairment - 0.0% 48,720 49.1%
Amortization 511 0.5% 463 0.5%
Total Operating Expenses 30,687 29.3% 78,908 79.5%
Operating Profit/(Loss) 6,135 5.9% (39,714) -40.0%
Other Expenses
Interest - Other 2,801 2.7% 2,854 2.9%
Other Income, net (25) 0.0% (209) -0.2%
Total Other Expenses 2,776 2.7% 2,645 2.7%
Income/(Loss) Before Taxes 3,359 3.2% (42,359) -42.7%
Income Tax Provision 3,407 3.2% 2,502 2.5%
Loss from Continuing Operations $(48) 0.0% $(44,861) -45.2%
Discontinued Operations
Loss From Discontinued Operations - (236)
Net Loss $(48) $(45,097)
Basic Earnings per Share
Loss From Continuing Operations $(0.00) $(1.72)
Loss From Discontinued Operations $- $(0.01)
Net Loss $(0.00) $(1.73)
Diluted Earnings per Share
Loss From Continuing Operations $(0.00) $(1.72)
Loss From Discontinued Operations $- $(0.01)
Net Loss $(0.00) $(1.73)
CAMBREX CORPORATION
Gross Sales, Gross Profit & Operating Profit/(Loss) by Segment
Nine Months Ended September 30, 2005 and 2004
(in thousands)
Nine Months 2005
Gross Gross Operating
Sales Profit/ Profit/
(Loss) GP% (Loss) OP%
Bioproducts $113,638 $59,952 52.8% $20,499 18.0%
Biopharma 27,747 (4,800) -17.3% (12,545) -45.2%
Human Health 189,748 65,202 34.4% 34,373 18.1%
Corporate - - (16,214)
Total $331,133 $120,354 36.3% $26,113 7.9%
Nine Months 2004
Gross Gross Operating
Sales Profit GP% Profit/ OP%
(Loss)
Bioproducts $102,190 $55,676 54.5% $21,872 21.4%
Biopharma 31,739 3,303 10.4% (53,065) -167.2%
Human Health 187,821 67,692 36.0% 37,503 20.0%
Corporate - - (17,962)
Total $321,750 $126,671 39.4% $(11,652) -3.6%
Gross Sales Comparison
2005 2004
Gross Gross Change Change
Sales Sales $ %
Bioproducts $113,638 $102,190 $11,448 11.2%
Biopharma 27,747 31,739 (3,992) -12.6%
Human Health 189,748 187,821 1,927 1.0%
Total $331,133 $321,750 $9,383 2.9%
CAMBREX CORPORATION
Statement of Profit and Loss
For the Nine Months Ended September 30, 2005 and 2004
(in thousands)
2005 2004
% of % of
Amount Sales Amount Sales
Gross Sales $331,133 100.0% $321,750 100.0%
Commissions and Allowances 3,696 1.1% 2,278 0.7%
Net Sales 327,437 98.9% 319,472 99.3%
Other Revenues 5,827 1.7% 6,545 2.0%
Net Revenue 333,264 100.6% 326,017 101.3%
Cost of Sales 212,910 64.3% 199,346 61.9%
Gross Profit 120,354 36.3% 126,671 39.4%
Operating Expenses
Marketing/Sales Expenses 25,233 7.6% 23,413 7.3%
Research & Development Expenses 16,601 5.0% 13,936 4.3%
Administrative Expenses 50,689 15.3% 52,737 16.5%
Goodwill Impairment - 0.0% 48,720 15.1%
Other, net - 0.0% (1,863) -0.6%
Amortization 1,718 0.5% 1,380 0.4%
Total Operating Expenses 94,241 28.4% 138,323 43.0%
Operating Profit/(Loss) 26,113 7.9% (11,652) -3.6%
Other Expenses
Interest - Other 8,281 2.5% 8,471 2.6%
Other Expenses/(Income) 73 0.0% (61) 0.0%
Total Other Expenses 8,354 2.5% 8,410 2.6%
Income/(Loss) Before Taxes 17,759 5.4% (20,062) -6.2%
Provision for Income Taxes 6,637 2.0% 10,701 3.4%
Income/(Loss) From Continuing
Operations $11,122 3.4% $(30,763) -9.6%
Discontinued Operations
Loss From Discontinued Operations - (978)
Net Income/(Loss) $11,122 $(31,741)
Basic Earnings per Share
Income/(Loss) From Continuing
Operations $0.42 $(1.18)
Loss From Discontinued Operations $- $(0.04)
Net Income/(Loss) $0.42 $(1.22)
Diluted Earnings per Share
Income/(Loss) From Continuing
Operations $0.42 $(1.18)
Loss From Discontinued Operations $- $(0.04)
Net Income/(Loss) $0.42 $(1.22)
CAMBREX CORPORATION
Consolidated Balance Sheet
As of September 30, 2005 and December 31, 2004
(in thousands)
Assets 2005 2004
Cash and Cash Equivalents $32,760 $91,532
Trade Receivables, net 63,793 68,370
Inventories, net 101,716 91,039
Deferred Tax Asset 4,806 2,605
Other Current Assets 21,896 20,825
Total Current Assets 224,971 274,371
Property, Plant and Equipment, Net 258,446 280,790
Goodwill and Other Intangibles 225,325 230,656
Other Non-Current Assets 5,550 6,168
Total Assets $714,292 $791,985
Liabilities and Stockholders' Equity
Trade Accounts Payable $34,746 $38,552
Accrued Liabilities 48,925 52,181
Short-term Debt and Current Portion
of Long-term Debt 2,072 1,400
Total Current Liabilities 85,743 92,133
Long-term Debt 183,257 226,187
Deferred Tax Liabilities 20,383 21,686
Other Non-Current Liabilities 57,863 60,663
Total Liabilities $347,246 $400,669
Stockholders' Equity $367,046 $391,316
Total Liabilities and Stockholders' Equity $714,292 $791,985
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 Corporation
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