Cambrex Reports Third Quarter 2012 Financial Results

             Cambrex Reports Third Quarter 2012 Financial Results

- Company reports strong third quarter sales growth; expects to meet 2012
guidance, including EBITDA growth of 15% to 23% -

- Company to host conference call at 4:45 p.m. ET on November 5, 2012 -

PR Newswire

EAST RUTHERFORD, N.J., Nov. 5, 2012

EAST RUTHERFORD, N.J., Nov.5, 2012 /PRNewswire/ --Cambrex Corporation (NYSE:
CBM) reports results for the third quarter ended September 30, 2012.

Third Quarter 2012 Highlights

  oReported sales increased by 2.8%, and excluding the impact of foreign
    currency, sales increased 6.9% compared to the same period last year.
  oEBITDA decreased 13.6% to $9.6 million, compared to $11.1 million in the
    same period last year.
  oDebt, net of cash was $34.5 million at the end of the quarter, an
    improvement of $23.7 million during the quarter which included $11.0
    million of advances related to a recently announced new supply agreement,
    and a positive $1.0 million currency impact on foreign cash balances.

"We had a strong quarter as sales increased across virtually all of our
product categories, with record quarterly cash flow, and excellent working
capital results," commented Steven M. Klosk, President and Chief Executive
Officer of Cambrex. "During the quarter, we were pleased to announce a
significant new agreement to supply an active pharmaceutical ingredient for a
customer's Phase 3 program, which is expected to contribute more than $20
million in sales in 2013 and potentially more in 2014. We continue to see
positive industry trends, remain confident in our full year 2012 sales and
profit guidance and believe we are well positioned for continued growth in
2013 and beyond."

Third Quarter 2012 Operating Results – Continuing Operations

Sales of $59.8 million were 2.8% higher compared to the same period last year,
despite the unfavorable impact of foreign exchange of 4.1%. This increase was
primarily due to higher custom development revenues and higher volumes of
generic active pharmaceutical ingredients partially offset by lower pricing.

Gross margins increased to 31.0% from 30.6% in the same period last year,
despite the unfavorable impact of foreign exchange of 2.0%. This increase is
due to favorable product mix and lower production costs partially offset by
lower pricing.

Selling, general and administrative expenses were $11.9 million compared to
$9.8 million in the same period last year. The increase was primarily the
result of higher expenses related to performance-based stock compensation,
which increased as a result of the Company's recent performance compared to
its peer group and the Company's higher share price, and accruals for higher
annual incentive awards partially offset by favorable foreign exchange.

Operating profit was $4.3 million compared to $5.4 million in the same period
last year. The unfavorable impact of foreign exchange, lower pricing and
higher operating expenses more than offset the favorable impact of higher
sales volumes. EBITDA was $9.6 million, compared to $11.1 million in the same
period last year.

Net interest expense was flat at $0.6 million for both the third quarters of
2012 and 2011. Higher interest rates were offset by lower average debt. The
average interest rate on debt was 2.3% compared to 1.5% in the same period
last year.

Equity in losses of partially-owned affiliates was $0.6 million compared to
$0.5 million in the same period last year, for the Company's share of losses
in Zenara Pharma (Zenara), a pharmaceutical company focused on the formulation
of finished dosage form products. Cambrex owns a 51% stake in Zenara. The
Company's share of Zenara's losses includes $0.2 million and $0.3 million of
non-cash amortization expense in the third quarters of 2012 and 2011,
respectively.

The provision for income taxes totaled $1.0 million and resulted in an
effective tax rate of 32.5% in the quarter, which was higher compared to the
same period last year due to an increase in tax reserves partially offset by
an increase in profitability in the U.S. where the Company is able to utilize
tax attributes to offset domestic tax expense.

Income from continuing operations for the third quarter of 2012 was $2.0
million or $0.07 per share compared to $3.1 million or $0.10 per share in the
same period last year.

Capital expenditures and depreciation were both $5.3 million compared to $4.7
million and $5.7 million in the same period last year, respectively.

Guidance – Continuing Operations

The Company is reaffirming its sales and EBITDA guidance for 2012. It
continues to expect that full year 2012 sales, excluding the impact of foreign
currency, will increase between 10% and 13% over 2011, and that full year 2012
EBITDA will be between $54 and $58 million, an increase of 15% to 23% over
2011. EBITDA guidance is for continuing operations and excludes the impact of
any M&A or restructuring activities. The Company is also reaffirming its
guidance regarding depreciation expense, which it expects to be between $21
and $23 million in 2012.

This financial guidance does not reflect the company's stake in Zenara, which
is accounted for using the equity method, and as such is not consolidated into
the Company's results. Cambrex's income statement reflects 51% of Zenara's
net results within Equity in Losses of Partially-Owned Affiliates. For 2012,
the Company continues to expect Zenara to have revenues in the low single
digit millions and a small EBITDA loss.

The Company is decreasing its guidance for its full year 2012 capital
expenditures to between $27 and $30 million, as certain expenditures in
connection with a capital expansion project to support a new customer's Phase
3 product candidate and other important growth initiatives are now expected to
occur in early 2013.

The financial information contained in this press release is unaudited,
subject to revision and should not be considered final until the Company's
third quarter 2012 Form 10-Q is filed with the SEC.

Conference Call and Webcast

A conference call to discuss the Company's third quarter 2012 results will
begin at 4:45 p.m. Eastern Time on Monday, November 5, 2012 and last
approximately 45 minutes. Those wishing to participate should call
1-888-430-8705 for domestic and +719-325-2455 for international. Please use
the pass code 1704787 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. A telephone replay of the conference call will be
available through Monday, November 12, 2012 by calling 1-888-203-1112 for
domestic and +1-719-457-0820 for international. Please use the pass code
1704787 to access the replay.

Forward Looking Statements

This document contains "forward-looking statements," including statements
regarding expected performance, especially those set forth under the heading
"Guidance – Continuing Operations," including the Company's expectation that
full year 2012 sales, excluding the impact of foreign currency, will increase
between 10% and 13% versus 2011, that our new supply agreement will contribute
$20 million in 2013 and potentially more in 2014, that full year 2012 EBITDA
will be between $54 and $58 million, that Zenara will have revenues in the low
single digit millions and a small EBITDA loss, that capital expenditures will
be approximately $27 to $30 million and that depreciation will be $21 to $23
million in 2012. These statements may be identified by the fact that they use
words such as "expects," "anticipates," "intends," "estimates," "believes" or
similar expressions. 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. The factors described in Item 1A of Part I of the Company's
Annual Report on Form 10-K for the period ended December 31, 2011, captioned
"Risk Factors," or otherwise described in the Company's filings with the
Securities and Exchange Commission, as well as any cautionary language in the
Company's Annual Report on Form 10-K for the period ended December 31, 2011,
provide examples of such risks and uncertainties that may cause the Company's
actual results to differ materially from the expectations the Company
describes in its forward-looking statements, including, but not limited to,
pharmaceutical outsourcing trends, competitive pricing or product
developments, governmental 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, changes in foreign exchange rates, uncollectible
receivables, loss on disposition of assets, cancellations or delays in renewal
of contracts, lack of suitable raw materials or packaging materials, and the
Company's ability to receive regulatory approvals for its products, as well as
risks relating to the Company's new supply agreement including that the
Company will expend significant resources to expand its manufacturing
facilities without any assurance that the new agreement will generate any
revenue beyond revenue that would be earned under termination provisions
within the agreement, that the customer's product candidate will be successful
in Phase 3 trials or obtain the necessary regulatory approvals to
commercialize the product candidate, that the customer's Phase 3 program will
not be terminated early, that anticipated quantities will not be meaningfully
reduced, that the planned Phase 3 and pre-launch activities will proceed on
the timeline anticipated, if at all, that the Company's expansion will proceed
on the anticipated timeline without disruption to existing customers or our
new customer and without disruption to the Company's and its customers'
ability to meet key product delivery milestones.

For further details and a discussion of these and other risks and
uncertainties, investors are encouraged to review the Cambrex Annual Report on
Form 10-K for the fiscal year ended December 31, 2011, including the
Forward-Looking Statement sections therein, and other filings with the U.S.
Securities and Exchange Commission. We caution investors and potential
investors not to place significant reliance on the forward-looking statements
contained in this press release and to give careful consideration to the risks
and uncertainties listed above and contained in our SEC filings. The
forward-looking statements in this press release speak only as of the date of
this document, and we undertake no obligation to update or revise any of these
statements.

Use of Non-GAAP Financial Measures

EBITDA is a non-GAAP financial measure, which the Company defines as operating
profit plus depreciation and amortization expense. Other companies may have a
different definition of EBITDA and, therefore, EBITDA may not be comparable
with non-GAAP financial measures provided by other companies. EBITDA should
not be considered an alternative to measurements required by U.S. GAAP, such
as net income or operating profit, and should not be considered a measure of
Cambrex's liquidity. Cambrex uses EBITDA as one of several metrics to assess
and analyze its operational results and trends. Cambrex also believes it is
useful to investors because it is a common operating performance metric as
well as a metric routinely used to assess potential enterprise value. Cambrex
has provided a reconciliation from U.S. GAAP amounts to non-GAAP amounts at
the end of this press release.

About Cambrex

Cambrex Corporation is an innovative life sciences company that provides
products, services and technologies to accelerate the development and
commercialization of small molecule therapeutics. We offer Active
Pharmaceutical Ingredients ("APIs"), advanced intermediates and enhanced drug
delivery products for branded and generic pharmaceuticals. Our development and
manufacturing capabilities include enzymatic biotransformations, high potency
APIs, high energy chemical synthesis, controlled substances and formulation of
finished dosage form products. For more information, please visit
www.cambrex.com. 



CAMBREX CORPORATION
Statements of Profit and Loss
For the Quarters Ended September 30, 2012 and 2011
(in thousands, except per-share data)
                                               2012             2011
                                                        % of             % of
                                               Amount   Sales   Amount   Sales
Gross Sales                                  $ 59,841         $ 58,203
 Commissions, Allowances and Rebates        456              412
Net Sales                                      59,385           57,791
 Other                                      (175)            1,364
Net Revenues                                   59,210           59,155
 Cost of Goods Sold                         40,679   68.0%   41,326   71.0%
Gross Profit                                   18,531   31.0%   17,829   30.6%
Operating Expenses
 Selling, General and Administrative        11,910   19.9%   9,818    16.9%
Expenses
 Research and Development Expenses          2,347    3.9%    2,615    4.5%
Total Operating Expenses                       14,257   23.8%   12,433   21.4%
Operating Profit                               4,274    7.1%    5,396    9.3%
Other Expenses:
 Interest Expense, net                      576              564
 Other Expenses, net                        72               14
 Equity in Losses of Partially-Owned        630              497
Affliliates
Income Before Income Taxes                     2,996    5.0%    4,321    7.4%
 Provision for Income Taxes                 975              1,227
Income from Continuing Operations            $ 2,021    3.4%  $ 3,094    5.3%
Loss from Discontinued Operations, Net of      (332)            (333)
Tax
Net Income                                   $ 1,689    2.8%  $ 2,761    4.7%
Basic Earnings/(Loss) per Share of Common
Stock:
 Income from Continuing Operations         $ 0.07           $ 0.10
 Loss from Discontinued Operations, Net of $ (0.01)         $ (0.01)
Tax
 Net Income                                $ 0.06           $ 0.09
Diluted Earnings/(Loss) per Share of Common
Stock:
 Income from Continuing Operations         $ 0.07           $ 0.10
 Loss from Discontinued Operations, Net of $ (0.01)         $ (0.01)
Tax
 Net Income                                $ 0.06           $ 0.09
Weighted Average Shares Outstanding
 Basic                                       29,711           29,483
 Diluted                                     30,587           29,528
CAMBREX CORPORATION
Statements of Profit and Loss
For the Nine Months Ended September 30, 2012 and 2011
(in thousands, except per-share data)
                                               2012             2011
                                                        % of             % of
                                               Amount   Sales   Amount   Sales
Gross Sales                                  $ 207,542        $ 187,341
 Commissions, Allowances and Rebates        1,772            1,226
Net Sales                                      205,770          186,115
 Other                                      801              2,007
Net Revenues                                   206,571          188,122
 Cost of Goods Sold                         137,167  66.1%   133,781  71.4%
Gross Profit                                   69,404   33.4%   54,341   29.0%
Operating Expenses
 Selling, General and Administrative        33,829   16.3%   28,097   15.0%
Expenses
 Research and Development Expenses          7,297    3.5%    8,247    4.4%
Total Operating Expenses                       41,126   19.8%   36,344   19.4%
Operating Profit                               28,278   13.6%   17,997   9.6%
Other Expenses/(Income):
 Interest Expense, net                      1,905            1,742
 Other Expenses/(Income), net               96               (271)
 Equity in Losses of Partially-Owned        1,221            1,164
Affliliates
Income Before Income Taxes                     25,056   12.1%   15,362   8.2%
 Provision for Income Taxes                  6,069            4,656
Income from Continuing Operations            $ 18,987   9.1%  $ 10,706   5.7%
Loss from Discontinued Operations, Net of      (332)            (479)
Tax
Net Income                                   $ 18,655   9.0%  $ 10,227   5.5%
Basic Earnings/(Loss) per Share of Common
Stock:
 Income from Continuing Operations         $ 0.64           $ 0.36
 Loss from Discontinued Operations, Net of $ (0.01)         $ (0.01)
Tax
 Net Income                                $ 0.63           $ 0.35
Diluted Earnings/(Loss) per Share of Common
Stock:
 Income from Continuing Operations         $ 0.63           $ 0.36
 Loss from Discontinued Operations, Net of $ (0.01)         $ (0.01)
Tax
 Net Income                                $ 0.62           $ 0.35
Weighted Average Shares Outstanding
 Basic                                       29,645           29,450
 Diluted                                     30,140           29,517



CAMBREX CORPORATION
Consolidated Balance Sheets
As of September 30, 2012 and December 31, 2011
(in thousands)
                                                 September 30,    December 31,
Assets                                           2012             2011
Cash and Cash Equivalents                      $ 33,517         $ 31,921
Trade Receivables, net                           35,561           36,510
Inventories, net                                 69,465           62,095
Prepaid Expenses and Other Current Assets        6,666            6,083
 Total Current Assets                           145,209          136,609
Property, Plant and Equipment, net               138,794          139,628
Goodwill                                         36,711           36,731
Intangible Assets, net                           4,071            4,261
Investments in and Advances to                   15,415           15,090
Partially-Owned Affliliates
Other Non-Current Assets                         3,008            3,425
 Total Assets                                 $ 343,208        $ 335,744
Liabilities and Stockholders' Equity
Accounts Payable                               $ 19,159         $ 21,200
Deferred Revenue                                 11,966           425
Accrued Expenses and Other Current               44,117           37,508
Liabilities
 Total Current Liabilities                      75,242           59,133
Long-Term Debt                                   68,000           98,000
Deferred Income Taxes                            15,741           16,243
Accrued Pension Benefits                         50,613           52,089
Other Non-Current Liabilities                    10,345           9,938
 Total Liabilities                            $ 219,941        $ 235,403
 Stockholders' Equity                         $ 123,267        $ 100,341
 Total Liabilities and Stockholders' Equity   $ 343,208        $ 335,744



CAMBREX CORPORATION
Reconciliation of EBITDA
For the Quarters and Nine Months Ended September 30, 2012 and 2011
(in thousands)
                                 Third Quarter 2012    Third Quarter 2011
Operating Profit               $      4,274          $        5,396
Depreciation and Amortization         5,324                   5,718
EBITDA                         $      9,598          $        11,114
                                 Nine Months 2012      Nine Months 2011
Operating Profit               $      28,278         $        17,997
Depreciation and Amortization         16,134                  17,321
EBITDA                         $      44,412         $        35,318



SOURCE Cambrex Corporation

Website: http://www.cambrex.com
Contact: Gregory P. Sargen, Executive Vice President & CFO, +1-201-804-3055,
gregory.sargen@cambrex.com
 
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