Navigation Links
Cambrex Reports Second Quarter 2009 Results
Date:8/4/2009

EAST RUTHERFORD, N.J., Aug. 4 /PRNewswire-FirstCall/ -- Cambrex Corporation (NYSE: CBM) reports second quarter results for the period ended June 30, 2009.

Highlights

  • Sales increased 2.1% compared to second quarter 2008 excluding the impact of foreign currency. Reported sales declined by 9.8% for the quarter.
  • EBITDA was $13.7 million versus adjusted EBITDA of $12.4 million in the same quarter last year (see attached table).
  • Debt, net of cash was $83.0 million at the end of second quarter 2009, a $12.3 million improvement during the quarter.

Basis of Reporting

The Company has provided a reconciliation from adjusted and other non-GAAP amounts to GAAP amounts at the end of this press release. Management believes that this basis of reporting provides a more meaningful representation of the Company's operating results for the periods presented due to the magnitude and nature of certain recorded expenses.

Second Quarter 2009 Operating Results

Second quarter 2009 sales of $59.8 million were 9.8% lower than the second quarter 2008. Excluding an 11.9% unfavorable impact of foreign exchange, reflecting a stronger U.S. dollar, sales increased 2.1%. The increase is primarily due to the timing of orders related to two active pharmaceutical ingredients ("APIs") manufactured under long-term supply agreements and an API that incorporates the Company's polymeric drug delivery technology. Partially offsetting these increases were lower sales of generic APIs and feed additives. Custom development revenues and controlled substances were flat quarter over quarter.

Second quarter 2009 Gross Margin increased to 32.9% of sales from 29.9% during the second quarter 2008, with foreign currency favorably impacting gross margin by 2.1%. Favorable product mix and cost reductions were the main drivers of the higher margins. This was partially offset by lower volume and pricing of generic APIs.

Selling, General and Administrative Expenses in the second quarter 2009 were $8.5 million compared to $11.4 million in the same period last year. The decrease is a result of lower personnel costs and professional fees at corporate headquarters, expense reductions within the Company's manufacturing sites and the favorable impact of foreign currency.

Research and Development ("R&D") Expenses for the second quarter 2009 were $2.2 million compared to $1.9 million in the second quarter 2008. The increase is primarily due to higher costs related to the development of new products and technology platforms.

Operating Profit increased to $9.0 million in the second quarter 2009 from $5.6 million in the second quarter 2008. Excluding Restructuring Expenses and Strategic Alternative Costs of $0.9 million and CEO retirement costs of $0.6 million recorded in 2008, Operating Profit increased $1.9 million quarter over quarter. EBITDA was $13.7 million, or 22.9% of sales, compared to Adjusted EBITDA of $12.4 million, or 18.7% of sales last year. This increase is due primarily to higher gross margins and lower operating expenses at corporate headquarters and the operating sites as discussed above.

Steven M. Klosk, President and Chief Executive Officer, said, "We are pleased to have achieved positive volume growth for the first half of the year despite the challenging economic environment and we are especially pleased with our cash generation so far this year. Our net debt position improved during the second quarter by $12.3 million, reflecting stronger earnings and improved working capital management. Ongoing cost reduction activities continue to positively impact our production and operating expenses and contributed to our increased profitability during the quarter.

"While our first half results were favorable, our current outlook reflects a weaker second half of the year. Sales volumes, adjusted for foreign currency, are expected to be somewhat negative compared to last year's second half. We continue to see weakness in the custom development sector, particularly where we support our customers' early clinical trial production requirements, and we are seeing price and volume pressure on our generic APIs due to competitive supply chain dynamics. We are on track to introduce new generic APIs beginning in 2010 and we continue to aggressively develop new products in support of our controlled substances and drug delivery initiatives."

Second Quarter 2009 Interest and Tax Expenses

Net Interest Expense in the second quarter 2009 was $1.1 million compared to $0.6 million in the second quarter 2008. The change is due primarily to capitalized interest of $0.3 million in the second quarter of 2009 compared to $0.7 million in the second quarter of 2008.

The Provision for Income Taxes totaled $2.4 million in the second quarter 2009. The effective tax rate was 30.7% in the second quarter 2009 compared to 62.0% in the second quarter 2008. The second quarter 2009 reflects a favorable geographic mix of income compared to the second quarter 2008, and this year's results benefited from a recently enacted reduction in tax rates in Sweden. 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 where there has been a recent history of losses, primarily the U.S.

Second Quarter 2009 Capital Expenditures and Depreciation

Capital expenditures and depreciation for the second quarter 2009 were $6.4 million and $4.7 million compared to $20.4 million and $5.3 million in the second quarter 2008, respectively. The decrease in capital expenditures is largely due to second quarter 2008 spending on two large capital projects for which the majority of work has since been completed.

Guidance

The Company currently expects that sales for 2009, excluding the impact of foreign currency, will be between a decline of 2% and an increase of 2% versus 2008, compared to prior guidance of a 2% to 6% increase. EBITDA is currently expected to be between $43 and $48 million compared to a prior range of $42 to $49 million. EBITDA for guidance purposes excludes the impact of any potential M&A, restructuring, or strategic alternatives expenses. As mentioned earlier in this release, the Company continues to see soft demand for its custom development services and recent order trends for generic APIs suggest that sales of those APIs during the second half of the year may be lower than previously expected. Ongoing cost reductions are expected to mitigate potentially lower sales volumes during the second half of the year.

For 2009, capital expenditures are expected to be approximately $13 to $16 million and depreciation is expected to be $20 to $22 million. The Company currently expects restructuring and strategic alternatives expenses for 2009 to be minimal.

The financial information contained in this press release is unaudited, subject to revision and should not be considered final until the second quarter 2009 Form 10-Q is filed with the SEC.

Conference Call and Webcast

The Conference Call to discuss second quarter 2009 results will begin at 8:30 a.m. Eastern Time on Wednesday, August 5, 2009 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 21874877 and call approximately 10 minutes prior to start time. A webcast is available from the Investors section on the Cambrex website located at www.cambrex.com and can be accessed for 30 days following the conference call. A telephone replay of the conference call will be available through Wednesday, August 12, 2009 by calling 1-800-642-1687 for domestic and +1-706-645-9291 for international. Please use the pass code 21874877 to access the replay.

Forward Looking Statements

This document 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 they use words such as "expects," "anticipates," "intends," "estimates," "believes" or similar expressions in connection with any discussion of future financial and operating performance. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout the Company's public filings. 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 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, the Company's ability to satisfy the continued listing standards of the New York Stock Exchange, 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 other factors described under the caption "Risk Factors That May Affect Future Results" in the Company's Quarterly Report on Form 10-Q for the period ending March 31, 2009. 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 will arise. In addition, the Company cannot assess the impact of each factor on its 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 are cautioned to review the Cambrex 2008 Annual Report on Form 10-K, including the Forward-Looking Statement section therein, and other filings with the U.S. 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 provides products and services to accelerate the development and commercialization of small molecule therapeutics including APIs, advanced intermediates, enhanced drug delivery, and other products for branded and generic pharmaceuticals. The Company currently employs approximately 850 people worldwide. For more information, please visit www.cambrex.com.

                              CAMBREX CORPORATION
                          Statement of Profit and Loss
                 For the Quarters Ended June 30, 2009 and 2008
                                 (in thousands)

                                                  2009            2008
                                                       % of            % of
                                              Amount  Sales    Amount  Sales
                                              ------  -----    ------  -----

    Gross Sales                              $59,766  100.0%  $66,226  100.0%
         Allowances and Rebates                    5    0.0%      553    0.8%
                                              ------           ------
    Net Sales                                 59,761  100.0%   65,673   99.2%

         Other Revenues                         (480)  -0.8%      140    0.2%
                                              ------           ------

    Net Revenues                              59,281   99.2%   65,813   99.4%

         Cost of Goods Sold                   39,598   66.3%   46,002   69.5%
                                              ------           ------

    Gross Profit                              19,683   32.9%   19,811   29.9%

    Operating Expenses
         Selling, General and Administrative
          Expenses                             8,546   14.3%   11,410   17.2%
         Research and Development Expenses     2,161    3.6%    1,917    2.9%
         Restructuring Expenses                    -    0.0%      514    0.8%
         Strategic Alternative Costs               -    0.0%      398    0.6%
                                              ------           ------
    Total Operating Expenses                  10,707   17.9%   14,239   21.5%
                                              ------           ------

    Operating Profit                           8,976   15.0%    5,572    8.4%

    Other Expenses/(Income):
         Interest Expense, net                 1,142    1.9%      640    1.0%
         Other (Income)/Expense, net             (41)  -0.1%       99    0.1%
                                              ------           ------

    Income Before Income Taxes                 7,875   13.2%    4,833    7.3%

         Provision for Income Taxes            2,416    4.1%    2,997    4.5%
                                              ------           ------

    Net Income                                $5,459    9.1%   $1,836    2.8%
                                              ======           ======

    Earnings per Share of Common Stock
         Basic                                 $0.19            $0.06
         Diluted                               $0.19            $0.06

    Weighted Average Shares Outstanding
         Basic                                29,222           29,090
         Diluted                              29,247           29,101


                                CAMBREX CORPORATION
                           Statement of Profit and Loss
                  For the Six Months Ended June 30, 2009 and 2008
                                  (in thousands)

                                                  2009             2008
                                                       % of              % of
                                              Amount   Sales   Amount   Sales
                                              ------   -----   ------   -----

    Gross Sales                              $119,766  100.0% $127,932  100.0%
         Allowances and Rebates                   338    0.3%      944    0.7%
                                              -------          -------
    Net Sales                                 119,428   99.7%  126,988   99.3%

         Other Revenues                           885    0.8%     (185)  -0.2%
                                              -------          -------

    Net Revenues                              120,313  100.5%  126,803   99.1%

         Cost of Goods Sold                    81,497   68.1%   85,063   66.5%
                                              -------          -------

    Gross Profit                               38,816   32.4%   41,740   32.6%

    Operating Expenses
         Selling, General and Administrative
          Expenses                             17,594   14.6%   22,744   17.8%
         Research and Development Expenses      3,898    3.3%    4,173    3.3%
         Restructuring Expenses                     -    0.0%    1,148    0.9%
         Strategic Alternative Costs                -    0.0%      575    0.4%
                                              -------          -------
    Total Operating Expenses                   21,492   17.9%   28,640   22.4%
                                              -------          -------

    Operating Profit                           17,324   14.5%   13,100   10.2%

    Other Expenses/(Income):
         Interest Expense, net                  2,299    2.0%    1,346    1.0%
         Other Income, net                       (108)  -0.1%      (26)   0.0%
                                              -------          -------

    Income Before Income Taxes                 15,133   12.6%   11,780    9.2%

         Provision for Income Taxes             4,936    4.1%    5,698    4.4%
                                              -------          -------

    Net Income                                $10,197    8.5%   $6,082    4.8%
                                              =======           ======

    Earnings per Share of Common Stock
         Basic                                  $0.35            $0.21
         Diluted                                $0.35            $0.21

    Weighted Average Shares Outstanding
         Basic                                 29,211           29,063
         Diluted                               29,227           29,112


                               CAMBREX CORPORATION
                    Reconciliation of GAAP to non-GAAP Results
          For the Quarters and Six Months Ended June 30, 2009 and 2008
                                  (in thousands)

                                   Second Quarter 2009    Second Quarter 2008
                                   -------------------    -------------------

    Operating Profit, as Reported        8,976                    5,572

    Depreciation and Amortization        4,729                    5,283

    Strat. Alt. & Restructuring
     Expenses*                               -                      912

    CEO Retirement**                         -                      597
                                        ------                   ------

    Adjusted EBITDA                    $13,705                  $12,364
                                       =======                  =======

                                   Six Months 2009        Six Months 2008
                                   ---------------        ---------------

    Operating Profit, as Reported       17,324                   13,100

    Depreciation and Amortization        9,415                   10,432

    Strat. Alt. & Restructuring
     Expenses*                               -                    1,723

    CEO Retirement**                         -                      597
                                        ------                   ------

    Adjusted EBITDA                    $26,739                  $25,852
                                       =======                  =======

    *  During 2008, the Company incurred expenses related to restructuring
    activities and strategic alternative expenses pursuant to the sale of
    its Bioproducts and Biopharma businesses in February 2007 and for the
    consolidation of the New Jersey R&D facility.  These costs are
    identified within the 2008 income statement and have been excluded from
    the calculation of certain profit measurements, including Adjusted
    EBITDA for 2008.

    **  During 2008, the Company incurred expenses related to the
    acceleration of equity awards to its former CEO. These costs are
    included within Selling, General and Administrative Expenses and have
    been excluded from the calculation of certain profit measurements,
    including Adjusted EBITDA for 2008.


                             CAMBREX CORPORATION
                         Consolidated Balance Sheet
                  As of June 30, 2009 and December 31, 2008
                               (in thousands)

                                                    June 30,    December 31,
    Assets                                            2009          2008
    ------                                            ----          ----

    Cash and Cash Equivalents                       $40,321       $32,540
    Trade Receivables, net                           36,346        36,685
    Inventories, net                                 64,164        61,133
    Prepaid Expenses and Other Current Assets         8,635         8,798
                                                    -------       -------
      Total Current Assets                          149,466       139,156

    Property, Plant and Equipment, Net              160,599       161,500
    Goodwill                                         35,811        35,374
    Other Non-Current Assets                          4,480         5,042
                                                    -------       -------

      Total Assets                                 $350,356      $341,072
                                                   ========      ========

    Liabilities and Stockholders' Equity
    ------------------------------------

    Accounts Payable                                $17,426       $19,700
    Accrued Expenses and Other Current Liabilities   42,014        45,080
                                                     ------        ------
      Total Current Liabilities                      59,440        64,780

    Long-term Debt                                  123,300       123,800
    Deferred Tax Liabilities                         16,304        16,138
    Accrued Pension and Postretirement Benefits      44,070        44,165
    Other Non-Current Liabilities                    16,279        17,403
                                                     ------        ------

      Total Liabilities                            $259,393      $266,286

      Stockholders' Equity                          $90,963       $74,786
                                                    -------       -------

      Total Liabilities and Stockholders' Equity   $350,356      $341,072
                                                   ========      ========


'/>"/>
SOURCE Cambrex Corporation
Copyright©2009 PR Newswire.
All rights reserved


Related medicine news :

1. Cambrex To Announce Third Quarter 2007 Financial Results on November 1, 2007
2. Cambrex Signs Agreement To Acquire ProSyntest AS
3. Cambrex Reports Fourth Quarter and Full-Year 2007 Results
4. Cambrex Customer Announced Recall
5. Cambrex to Announce First Quarter 2008 Financial Results on May 1, 2008
6. Cambrex Presentation at The JPMorgan Healthcare Conference to be Webcast
7. Skinvisible and Cambrex Enter Into Agreement to Develop Acne Products
8. Cambrex to Announce Fourth Quarter 2008 Financial Results on February 11, 2009
9. Cambrex Reports Fourth Quarter and Full Year 2008 Results
10. Cambrex Regains Compliance With Revised NYSE Listing Standards
11. Cambrex To Announce Second Quarter 2009 Financial Results on August 4, 2009
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/12/2016)... ... 2016 , ... The ThedaCare Center for Healthcare Value is ... April 5-7. The series is a multi-day, multi-workshop event designed to teach leaders ... broad range of topics, including coaching skills, the scientific method of problem solving ...
(Date:2/12/2016)... , ... February 12, 2016 , ... Every winter, someone ... This winter the West Penn Burn Center, part of the Allegheny Health ... to bring you the “Space Heaters Need Space” campaign. , “Space ...
(Date:2/12/2016)... ... February 12, 2016 , ... AssureVest Insurance Group, a locally ... a charity drive that will raise funds earmarked to purchase computers and software for ... School. , “My school is in a low-income area and has more than 60 ...
(Date:2/12/2016)... ... February 12, 2016 , ... Vail knee specialist Robert LaPrade, MD, ... in 2016 . The list consists of physicians establishing, leading and partnering with ambulatory ... , An Ambulatory Surgery Center, also known as an ASC, is a modern ...
(Date:2/12/2016)... ... February 12, 2016 , ... ... metro area, celebrates the beginning of the latest charity campaign in their community ... through art. Donations to this worthy cause are currently being accepted at: ...
Breaking Medicine News(10 mins):
(Date:2/12/2016)... , 12 februari 2016 AAIPharma ... toonaangevende leverancier van productie en ontwikkeling op ... kondigt vandaag een uitbreiding aan van steriele ... locatie in Charleston, SC ... tot meerdere recente investeringen. http://photos.prnewswire.com/prnh/20150806/256637LOGO ...
(Date:2/11/2016)... 2016 The primary goal of this research ... on the usage of liquid biopsy. Key information the ... - Timeframe of liquid biopsy adoption amidst future users ... organization type - Sample inflow to conduct liquid biopsy ... serum, and so on. - Correlation analysis of sample ...
(Date:2/11/2016)... OAKLAND, Calif. , Feb. 11, 2016  Walgreens ... stores across 39 states and Washington, D.C. ... in a move that was commended by shareholder advocacy organization ... President at As You Sow. "Many people hold on to ... options, which can have tragic consequences." --> ...
Breaking Medicine Technology: