Cambrex Reports First Quarter 2012 Results

03 May, 2012, 16:06 ET from Cambrex Corporation

EAST RUTHERFORD, N.J., May 3, 2012 /PRNewswire/ -- Cambrex Corporation (NYSE: CBM) reports first quarter results for the period ended March 31, 2012.

Highlights

  • Reported sales increased by 14.4%, and excluding the impact of foreign currency, sales increased 16.7% compared to the first quarter of 2011. 
  • EBITDA increased by 41% to $15.6 million in the quarter, compared to $11.0 million in the first quarter of 2011. 
  • Debt, net of cash was $63.2 million at the end of the quarter, an improvement of $2.9 million during the quarter which includes a positive $0.6 million currency impact on foreign cash balances. 

First Quarter of 2012 Operating Results – Continuing Operations The Company has provided a reconciliation from GAAP amounts to non-GAAP amounts at the end of this press release.

Sales in the first quarter of 2012 of $70.6 million were 14.4% higher than the first quarter of 2011.  Foreign exchange unfavorably impacted sales by 2.3%.  The increase is primarily due to higher volumes of controlled substances and generic active pharmaceutical ingredients ("APIs").            

Gross margins in the first quarter of 2012 increased to 31.8% from 28.3% in the first quarter of 2011.  Excluding a favorable impact from foreign currency, first quarter of 2012 margins increased to 30.7%.  The increase is due to higher production volumes, leading to increased plant efficiencies. 

Selling, General and Administrative Expenses in the first quarter of 2012 were $10.0 million compared to $9.1 million in the same period last year.  The increase is primarily the result of increased sales and marketing expenses, higher medical expenses and higher personnel related expenses.

Operating Profit increased to $10.1 million in the first quarter of 2012 from $5.3 million in the first quarter of 2011.  As described above, increased profits, primarily driven by higher sales volumes, were partially offset by lower pricing and slightly higher operating expenses.          

Net Interest Expense increased to $0.7 million in the first quarter of 2012 from $0.6 million in the same period last year.  This increase is primarily due to higher average interest rates partially offset by lower average debt in the first quarter of 2012.  The average interest rate on debt was 2.0% in the first quarter of 2012 versus 1.6% in the first quarter of 2011. 

Equity in Losses of Partially-Owned Affiliates includes $0.5 million and $0.4 million in the first quarters of 2012 and 2011, respectively, for the Company's share of losses in Zenara Pharma, 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 $0.3 million of amortization expense in both first quarters of 2012 and 2011.  Equity in Losses of Partially-Owned Affiliates for the first quarter of 2012 also includes income of $0.3 million related to an investment in a European joint venture.

The Provision for Income Taxes totaled $2.2 million and resulted in an effective tax rate of 23.9% in the first quarter of 2012.  The Company's effective tax rate has been and is 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 in the U.S.

Income from continuing operations for the first quarter of 2012 was $7.0 million or $0.24 per share compared to $2.9 million or $0.10 per share in the first quarter of 2011.

Capital expenditures and depreciation for the first quarter of 2012 were $2.6 million and $5.4 million, respectively, compared to $1.7 million and $5.6 million in the first quarter of 2011, respectively.

Steven M. Klosk, President and Chief Executive Officer, said, "We are very pleased with the strong sales and profit growth in the first quarter driven by most of our product categories.  The business generated significant volume increases in controlled substances and generic APIs and we continue to make progress with new product development programs to support future growth."

Guidance – Continuing Operations The Company continues to expect that full year 2012 sales, excluding the impact of foreign currency, will increase between 2% and 6% versus 2011, and that full year 2012 EBITDA, defined as operating profit plus depreciation and amortization expense, will be between $47 and $53 million.  EBITDA guidance is for continuing operations and excludes the impact of any M&A or restructuring activities.  The above guidance does not reflect 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 currently expects Zenara to have revenues in the low single digit millions and a small EBITDA loss.

Capital expenditures are expected to be approximately $16 to $19 million and depreciation is expected to be $21 to $23 million in 2012.

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

Conference Call and Webcast The Conference Call to discuss first quarter results will begin at 8:30 a.m. Eastern Time on Friday, May 4, 2012 and last approximately 45 minutes.  Those wishing to participate should call 1-800-499-7921 for domestic and +1-719-325-2412 for international.  Please use the pass code 8201647 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 Friday, May 11, 2012 by calling 1-888-203-1112 for domestic and +1-719-457-0820 for international.  Please use the pass code 8201647 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 2% and 6% versus 2011, that full year 2012 EBITDA will be between $47 and $53 million, that Zenara will have revenues in the low single digit millions and a small EBITDA loss, that capital expenditures will be approximately $16 to $19 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.

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. 

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 March 31, 2012 and 2011

(in thousands, except per-share data)

2012

2011

% of

% of

Amount

Sales

Amount

Sales

Gross Sales

$

70,559

$

61,654

     Commissions, Allowances and Rebates

535

291

Net Sales

70,024

61,363

     Other

204

(778)

Net Revenues

70,228

60,585

     Cost of Goods Sold

47,800

67.7%

43,130

70.0%

Gross Profit

22,428

31.8%

17,455

28.3%

Operating Expenses

     Selling, General and Administrative Expenses

9,960

14.1%

9,088

14.7%

     Research and Development Expenses

2,358

3.3%

3,060

5.0%

Total Operating Expenses

12,318

17.5%

12,148

19.7%

Operating Profit

10,110

14.3%

5,307

8.6%

Other Expenses/(Income):

     Interest Expense, net

651

573

     Other Expenses/(Income), net

8

(3)

     Equity in Losses of Partially-Owned Affiliates

208

364

Income Before Income Taxes

9,243

13.1%

4,373

7.1%

     Provision for Income Taxes

2,205

1,518

Income from Continuing Operations

$

7,038

10.0%

$

2,855

4.6%

Loss from Discontinued Operations, Net of Tax

-

(146)

Net Income

$

7,038

10.0%

$

2,709

4.4%

Basic Earnings/(Loss) per Share of Common Stock:

   Income from Continuing Operations

$

0.24

$

0.10

   Loss from Discontinued Operations, Net of Tax

$

-

$

(0.01)

   Net Income

$

0.24

$

0.09

Diluted Earnings/(Loss) per Share of Common Stock:

   Income from Continuing Operations

$

0.24

$

0.10

   Loss from Discontinued Operations, Net of Tax

$

-

$

(0.01)

   Net Income

$

0.24

$

0.09

Weighted Average Shares Outstanding

     Basic

29,602

29,448

     Diluted

29,886

29,518

  

CAMBREX CORPORATION

Consolidated Balance Sheets

As of March 31, 2012 and December 31, 2011

(in thousands)

March 31,

December 31,

Assets

2012

2011

Cash and Cash Equivalents

$

20,777

$

31,921

Trade Receivables, net

39,216

36,510

Inventories, net

67,325

62,095

Prepaid Expenses and Other Current Assets

5,348

6,083

  Total Current Assets

132,666

136,609

Property, Plant and Equipment, net

140,825

139,628

Goodwill

37,680

36,731

Intangible Assets, net

4,334

4,261

Investment in Partially-Owned Affiliates

15,563

15,090

Other Non-Current Assets

3,264

3,425

  Total Assets

$

334,332

$

335,744

Liabilities and Stockholders' Equity

Accounts Payable

$

21,635

$

21,200

Accrued Expenses and Other Current Liabilities

37,312

37,933

  Total Current Liabilities

58,947

59,133

Long-term Debt

84,000

98,000

Deferred Income Taxes

16,588

16,243

Accrued Pension and Postretirement Benefits

51,358

52,089

Other Non-Current Liabilities

9,909

9,938

  Total Liabilities

$

220,802

$

235,403

  Stockholders' Equity

$

113,530

$

100,341

  Total Liabilities and Stockholders' Equity

$

334,332

$

335,744

 

 

CAMBREX CORPORATION

Reconciliation of EBITDA

For the Quarters Ended March 31, 2012 and 2011

(in thousands)

First Quarter 2012

First Quarter 2011

Operating Profit

$

10,110

$

5,307

Depreciation and Amortization

5,486

5,725

EBITDA

$

15,596

$

11,032

SOURCE Cambrex Corporation



RELATED LINKS

http://www.cambrex.com