- Acquired Avista Pharma Solutions, broadening
capabilities, enhancing revenue growth and expanding customer base
-
Cambrex Corporation (NYSE: CBM), a leading provider of development,
manufacturing, testing and technology services for small molecules,
reports results for the fourth quarter and full year ended December
31, 2018.
Fourth Quarter 2018
Highlights
- Announced the acquisition of Avista Pharma Solutions
(“Avista”), an early clinical phase Contract Development,
Manufacturing and Testing Organization, for approximately $252
million in total cash consideration. This transaction closed
on January 2, 2019.
- Net revenue was $134.3 million under current U.S. GAAP, ASC 606
(“ASC 606”). Under ASC 605, the previous revenue recognition
standard, and the only standard under which fourth quarter 2017
results were reported, Net revenue increased 16% compared to the
same quarter last year.
- Under current U.S. GAAP, Income from continuing operations was
$1.3 million and Diluted EPS was $0.04 per share. This
reflects the impacts of the timing of certain tax charges related
to tax reform in New Jersey. Under previous U.S. GAAP
utilizing ASC 605, Income from continuing operations would have
been $32.3 million and Diluted EPS from continuing operations would
have been $0.96 per share compared to Income from continuing
operations of $40.2 million and Diluted EPS of $1.20 in the same
quarter last year. Adjusted Income from continuing operations
was $48.7 million and Diluted EPS was $1.44, compared to $42.3
million and $1.26, respectively, for the same quarter last year
(see table at the end of this press release).
- Under ASC 606, EBITDA was $33.5 million. Adjusted EBITDA,
which excludes the impact of adopting ASC 606, Halo’s results and
Acquisition and Integration costs, was $70.7 million compared to
$65.1 million in the same quarter last year (see table at the end
of this press release).
- Net debt was $204.1 million at the end of the quarter, a
decrease of $23.7 million during the quarter primarily driven by
cash flows from operations.
- The Company expects full year 2019 Net revenue, which excludes
the impact of foreign currency, to be between 21% and 25% higher
than 2018 Net revenue as recorded under ASC 606 for both
years. Adjusted EBITDA is expected to be between $150 and
$160 million (see Financial Expectations – Continuing Operations
section below for related explanations and additional financial
guidance).
“We’re very excited to add the early stage development and
testing capabilities of Avista Pharma, which when added to the drug
product capabilities of Halo Pharma, which we acquired a few months
ago, and Cambrex’s legacy drug substance capabilities, makes us a
leading global provider of end to end integrated services for small
molecules. Combining Cambrex, Halo and Avista will allow us
to follow a small molecule from pre-clinical through
commercialization and leverage hundreds of new customers and
molecule opportunities across a much broader services and
manufacturing platform. Integration efforts are well under
way with the goal of building a best-in-class fully integrated
contract development and manufacturing organization,” commented
Steven M. Klosk, President and Chief Executive Officer of
Cambrex.
“Looking forward, we continue to see strong
market conditions in the sectors that we serve. This is
especially true in early stage development and testing, where we
expect continued strong growth, creating the potential for a large
funnel of molecules for which we hope to deliver a broad range of
services all the way through commercial approval.”
Basis of
ReportingThe Company has provided a
reconciliation of GAAP to adjusted (i.e. Non-GAAP) amounts at the
end of this press release. Cambrex management believes that
the adjustments provide useful information to investors due to the
magnitude and nature of certain amounts recorded under GAAP.
Fourth Quarter 2018 Operating
Results – Consolidated, Continuing OperationsNet
revenue under ASC 606 was $134.3 million. Under ASC 605, the
revenue recognition standard for which 2017 results were reported,
Net revenue increased to $212.3 million, or 16%, from $182.3
million in the same quarter last year. Results under ASC 605
include a 2% unfavorable impact of foreign exchange compared to the
fourth quarter of 2017. Net revenue during the fourth quarter
of 2018 includes the acquisition of Halo, now our finished dosage
form segment, which contributed revenue of $23.4 million under ASC
606 and $23.2 million under ASC 605. Excluding finished
dosage form Net revenues, higher sales of controlled substances was
the primary driver of the increase under ASC 605 compared to the
same quarter last year.
Gross margin under ASC 606 was 36% for the
fourth quarter of 2018. Under ASC 605, Gross margin was 41%
compared to 43% in the same quarter last year. Excluding the
finished dosage form segment and the unfavorable impact of foreign
exchange, ASC 605 Gross margin during the quarter was 42%.
Selling, general and administrative expenses were $21.5 million,
compared to $18.3 million in the same quarter last year. The
increase was mainly due to higher amortization expense related to
purchased intangible assets of $3.0 million within the finished
dosage form segment.
Research and development expenses were $3.6 million, compared to
$4.3 million in the same quarter last year. The decrease is
primarily due to lower expenses related to the development of
generic drug products.
Acquisition and Integration expenses of $3.4 million for the
fourth quarter of 2018 represent costs associated with the
acquisitions of Halo and Avista. The acquisition of Avista
closed on January 2, 2019.
Operating profit under ASC 606 was $19.8 million
for the fourth quarter of 2018. Under ASC 605, Operating
profit was $58.8 million compared to $56.3 million in the same
quarter last year. The increase was primarily the result of
higher gross profit partially offset by higher operating expenses
as described above. Adjusted EBITDA was $70.7 million
compared to $65.1 million in the same quarter last year (see table
at the end of this press release).
Income tax expense under ASC 606 was $17.5 million
resulting in an effective tax rate of 93% compared to $15.6 million
and an effective tax rate of 28% in the same quarter last year.
Income tax expense during the quarter reflects $11.4 million of
expense primarily for a state valuation allowance due to New Jersey
tax reform enacted during the fourth quarter of 2018. The
fourth quarter of 2018 also includes the immediate recognition of
certain effects of share-based compensation, acquisition and
integration expenses, amortization of purchased intangibles,
unrealized gain on investment in equity securities and the
finalization of the U.S. tax reform toll charge on undistributed
foreign earnings. Under ASC 605 and excluding these items, the
effective tax rate would have been approximately 22% during the
quarter.
Income from continuing operations under ASC 606
was $1.3 million. Under ASC 605, Income from continuing operations
was $32.3 million, or $0.96 per diluted share, compared to $40.2
million, or $1.20 per diluted share, in the same quarter last
year.
Adjusted Income from continuing operations,
calculated under ASC 605, to be comparable to the prior year
results, and including other adjustments described in the table at
the end of this press release, was $48.7 million or $1.44 per
share, compared to $42.3 million or $1.26 per share in the same
quarter last year.
Capital expenditures were $19.1 million and
depreciation and amortization was $13.7 million compared to $13.9
million and $8.8 million, respectively, in the same quarter last
year.
Net debt was $204.1 million at the end of the
quarter, a decrease of $23.7 million during the quarter primarily
driven by cash flows from operations.
As a result of the Halo acquisition in September
2018, and to be in alignment with how the business is managed, the
Company’s operating segments were aggregated to form two reportable
segments, Active Pharmaceutical Ingredients (“APIs”) and Finished
Dosage Form (“FDF”). The API segment consists of four operating
segments which manufactures APIs. The FDF segment consists of one
operating segment which manufactures and develops finished dosage
form products.
Fourth Quarter 2018 Operating Results –
Active Pharmaceutical Ingredients (“API”) segmentNet
revenue was $110.9 million under ASC 606. Under ASC 605, net
revenue was $189.1 million compared to $182.3 in the same quarter
last year, a 3.7% increase. Results under ASC 605 include a 2%
unfavorable impact of foreign exchange compared to the fourth
quarter of 2017. Higher sales of controlled substances was
the primary driver of the increase under ASC 605 compared to the
same quarter last year.
Gross profit in the fourth quarter of 2018 was $42.6 million.
Under ASC 605, Gross profit would have been $81.8 million compared
to $78.9 million in the same quarter last year. Gross margins
decreased to 38% from 43% in the same quarter last year.
Excluding the impact of the new revenue recognition standard, gross
margins would have been 43%.
Selling, general and administrative (“SG&A”) expenses were
$10.2 million in the fourth quarter 2018, compared to $14.0 million
in the same quarter last year. The decrease was mainly due to
lower personnel related costs and consulting expenses.
Operating profit was $29.3 million under ASC 606 in the fourth
quarter 2018. Under ASC 605, operating profit was $68.6
million compared to $61.9 in the fourth quarter 2017. The increase
in operating profit under ASC 605 was due to higher gross profit
and lower operating expenses.
Fourth Quarter 2018 Operating Results –
Finished Dosage Form (“FDF”) segmentResults on an ASC 605
basis were not materially different than the reported results under
ASC 606.
FDF Net revenue in the fourth quarter of 2018 was $23.4 million
under ASC 606.
Gross profit was $5.7 million and gross margin was 24% under ASC
606 in the fourth quarter of 2018.
Selling, general and administrative expenses were
$5.4 million in the fourth quarter of 2018 including amortization
of purchased intangibles of $3.0 million.
Acquisition and Integration expenses of $1.1
million for the fourth quarter of 2018 represent costs associated
with the acquisitions of Halo and Avista.
Operating loss under ASC 606 was $0.7 million.
Operating loss includes $1.1 million in integration costs and
approximately $3.3 million of increased depreciation and
amortization expense resulting from the application of purchase
accounting.
Fourth Quarter 2018 Operating Results –
Corporate Headquarters Selling, general and administrative
expenses were $5.9 million in the fourth quarter of 2018 compared
to $4.3 million in the same quarter last year. The increase is
primarily related to higher personnel related expenses.
Acquisition and Integration expenses of $2.3
million for the fourth quarter of 2018 represent costs associated
with the acquisitions of Halo and Avista.
Operating loss in the fourth quarter 2018 was $8.8
million compared to $5.6 million in the same quarter last year.
Financial Expectations – Continuing
OperationsThe following table shows the Company’s
current expectations for its full year 2019 financial performance.
The expectations in the table below reflect expected results
from the business including the recent acquisitions of Halo and
Avista. All expectations for 2019, including growth relative
to 2018, are based on actual and expected ASC 606 results for both
years.
|
Expectations |
Net revenue growth |
21% to
25% |
Adjusted EBITDA |
$150 -
$160 million |
Adjusted income from continuing operations per
share |
$1.87
- $2.09 |
Free cash flow |
$60 -
$70 million |
Capital
expenditures |
$60 -
$70 million |
Depreciation |
$46 -
$50 million |
Adjusted effective tax
rate |
25% -
27% |
Consistent with the Company’s usual guidance practices, these
financial expectations are for continuing operations and exclude
the impact of any potential future acquisitions and related
transaction and integration expenses, including those related to
the recent acquisitions of Halo Pharma and Avista Pharma Solutions,
divestitures, restructuring activities, certain tax items discussed
below, and the impact of foreign currency on Net revenue.
EBITDA, Adjusted EBITDA and Adjusted Income from
continuing operations per share for 2019 will be computed on a
basis consistent with the reconciliation of the current quarter
financial results in the tables at the end of this press release,
except that all 2019 results will be on an ASC 606 basis.
Free cash flow is defined as the change in debt, net of cash during
the year. Adjusted effective tax rate excludes the immediate
recognition of certain benefits of share-based compensation and
certain other items adjusted for in the non-GAAP reconciliation
tables at the end of this release.
The tax rate will be sensitive to the Company’s
geographic mix of income, changes in the tax laws or rates within
the countries in which the Company operates and the effects of
certain share-based payments. Reconciliations of these
measures to measures calculated in accordance with GAAP are not
available without unreasonable effort due to the unavailability of
certain information needed to calculate certain reconciling items,
including interest expense and income tax expense.
We expect M&A and related integration expenses
for 2019 to be between $9 and $11 million. These amounts are
excluded from our consolidated Adjusted EBITDA and Adjusted income
from continuing operations per share guidance included above.
These expenses consist of approximately $4.5 million of transaction
expenses paid in conjunction with our acquisition of Avista in
early January and the remainder will consist of integration
expenses incurred across most functional areas throughout 2019.
This estimate also includes certain immediate and one-time expenses
related to IT systems, but does not include costs to upgrade the
two newly acquired businesses to SAP, our ERP software, which will
likely happen over the course of 2019 and 2020.
Expectations above include preliminary estimates for
Depreciation expense associated with purchase accounting for the
Avista acquisition. We expect to finalize the purchase
accounting for Avista during the first half of 2019. As a
result, expected Depreciation expense and its impact on expected
Adjusted Income from continuing operations per share in the table
below will likely change when purchase accounting is
finalized.
Refer to the tables at the end of this press
release which includes items typically adjusted to arrive at the
Company’s non-GAAP results.
The financial information contained in this
press release is unaudited, subject to revision and should not be
considered final until the Company’s 2018 Form 10-K is filed with
the SEC.
Conference Call and
WebcastA conference call to discuss the Company’s
fourth quarter and full year 2018 results will begin at 8:30 a.m.
Eastern Time on February 13, 2019 and can be accessed by calling
1-877-260-1479 for domestic and +1-334-323-0522 for
international. Please use the passcode 2955208 and call
approximately 10 minutes prior to the start time. A webcast
will be available in the Investors section on the Cambrex website
located at www.cambrex.com. A telephone replay of the
conference call will be available through February 20, 2019 by
calling 1-888-203-1112 for domestic and +1-719-457-0820 for
international. Please use the passcode 2955208 to access the
replay.
About
CambrexCambrex Corporation is an innovative life
sciences company that provides products, services and technologies
to accelerate the development and commercialization of small
molecule therapeutics. The Company offers Active Pharmaceutical
Ingredients (APIs), finished dosage forms (FDF), advanced
intermediates and enhanced drug delivery products for branded and
generic pharmaceuticals. Development and manufacturing capabilities
include enzymatic biotransformations, high potency APIs, high
energy chemical synthesis, controlled substances and continuous
processing. For more information, please visit www.cambrex.com.
Forward-Looking
StatementsThis document contains “forward-looking
statements,” including statements or tables regarding expected
performance, especially those set forth under the heading
“Financial Expectations – Continuing Operations,” “Highlights” and
those attributed to the President and Chief Executive Officer in
this document. These and other forward-looking statements may
be identified by the fact that they use words such as “guidance,”
“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, 2017, and the
Company’s Annual Report on Form 10-K for the period ended December
31, 2018, once filed with the SEC, captioned “Risk Factors,” or
otherwise described in the Company’s filings with the SEC 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, customer and product concentration, the
Company’s ability to secure new customer contracts and renew
existing contracts on favorable terms, significant declines in
sales of products to our customers, pharmaceutical outsourcing
trends, competitive pricing or product developments, market
acceptance and adoption rate of its customers’ products, government
legislation and regulations (including those pertaining to
environmental issues), the possibility that the benefits from the
acquisitions of Halo Pharma and Avista Pharma Solutions may not be
as anticipated, the ability to successfully integrate acquisitions,
tax rate, interest rate, technology, manufacturing and legal
issues, including the outcome of outstanding litigation,
environmental matters, changes in foreign exchange rates,
uncollectible receivables, the timing and/or volume of orders or
shipments and the Company’s ability to meet its production plan and
customer delivery schedules, expected timing of completion of
capacity expansions, cancellations or delays in renewal of
contracts, lack of suitable raw materials, the Company’s ability to
receive regulatory approvals for its products, continued demand in
the U.S. for late stage clinical products and the successful
outcome of the Company’s investment in new products.
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, 2017, and the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2018, once filed with the SEC,
including the Forward-Looking Statement and Risk Factors sections
therein, and other filings with the SEC. The Company cautions
investors and potential investors not to place undue 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 the Company’s SEC filings. The
forward-looking statements in this press release speak only as of
the date of this document, and the Company undertakes no obligation
to update or revise any of these statements.
Use of Non-GAAP Financial
MeasuresEBITDA, Adjusted EBITDA, Adjusted
effective tax rate and Adjusted Income from continuing operations
are non-GAAP financial measures (“non-GAAP financial measures”).
Other companies may have different definitions of these non-GAAP
financial measures, and as a result they may not be comparable with
non-GAAP financial measures provided by other companies.
EBITDA, Adjusted EBITDA, Adjusted effective tax
rate and Adjusted Income from continuing operations are calculated
in a manner consistent with that shown in the table at the end of
this press release.
EBITDA, Adjusted EBITDA, Adjusted effective tax
rate and Adjusted Income from continuing operations should not be
considered alternatives to measurements required by U.S. GAAP, such
as Operating profit or Net income, and should not be considered a
measure of Cambrex’s liquidity.
Cambrex uses these non-GAAP financial measures,
among several other metrics, to assess and analyze its operational
results and trends. Cambrex also believes these measures are
useful to investors because they are common operating performance
metrics as well as metrics routinely used to assess potential
enterprise value. Cambrex has provided a reconciliation of
U.S. GAAP amounts to non-GAAP amounts at the end of this press
release.
CAMBREX
CORPORATION |
Statements of Profit and Loss |
For the Quarters Ended December 31, 2018 and 2017 |
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
% of |
|
|
|
|
% of |
|
|
Amount |
|
Net Revenue |
|
|
Amount |
|
Net Revenue |
|
|
|
|
|
|
|
|
|
|
Gross Sales |
$ |
124,422 |
|
|
|
|
$ |
175,505 |
|
|
Commissions, Allowances and Rebates |
377 |
|
|
|
|
|
527 |
|
|
Net Sales |
|
124,045 |
|
|
|
|
|
174,978 |
|
|
|
|
|
|
|
|
|
|
|
|
Other Revenues, Net |
10,287 |
|
|
|
|
|
7,299 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue |
134,332 |
|
|
|
|
|
182,277 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Goods Sold |
86,016 |
|
|
64.0 |
% |
|
|
103,351 |
|
56.7 |
% |
|
|
|
|
|
|
|
|
|
|
Gross
Profit |
48,316 |
|
|
36.0 |
% |
|
|
78,926 |
|
43.3 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
21,469 |
|
|
16.0 |
% |
|
|
18,306 |
|
10.0 |
% |
Research and Development Expenses |
3,604 |
|
|
2.7 |
% |
|
|
4,311 |
|
2.4 |
% |
Acquisition and Integration Expenses |
3,412 |
|
|
2.5 |
% |
|
|
- |
|
|
Total
Operating Expenses |
28,485 |
|
|
21.2 |
% |
|
|
22,617 |
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
Profit |
19,831 |
|
|
14.8 |
% |
|
|
56,309 |
|
30.9 |
% |
|
|
|
|
|
|
|
|
|
|
Other
Expenses/(Income): |
|
|
|
|
|
|
|
Interest Expense, Net |
3,143 |
|
|
|
|
|
262 |
|
|
Unrealized Gain on Investment in Equity Securities |
(2,266 |
) |
|
|
|
|
- |
|
|
Other Expenses, Net |
193 |
|
|
|
|
|
221 |
|
|
|
|
|
|
|
|
|
|
|
|
Income
Before Income Taxes |
18,761 |
|
|
14.0 |
% |
|
|
55,826 |
|
30.6 |
% |
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes |
17,468 |
|
|
|
|
|
15,577 |
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing
Operations |
$ |
1,293 |
|
|
1.0 |
% |
|
$ |
40,249 |
|
22.1 |
% |
|
|
|
|
|
|
|
|
|
|
(Loss)/Income from Discontinued Operations, Net of Tax |
(81 |
) |
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
1,212 |
|
|
0.9 |
% |
|
$ |
40,259 |
|
22.1 |
% |
|
|
|
|
|
|
|
|
|
|
Basic
Earnings/(Loss) per Share of Common Stock: |
|
|
|
|
|
Income from
Continuing Operations |
$ |
0.04 |
|
|
|
|
$ |
1.23 |
|
|
(Loss)/Income
from Discontinued Operations, Net of Tax |
$ |
(0.00 |
) |
|
|
|
$ |
0.00 |
|
|
Net Income |
$ |
0.04 |
|
|
|
|
$ |
1.23 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings/(Loss) per Share of Common Stock: |
|
|
|
|
|
Income from
Continuing Operations |
$ |
0.04 |
|
|
|
|
$ |
1.20 |
|
|
(Loss)/Income
from Discontinued Operations, Net of Tax |
$ |
(0.00 |
) |
|
|
|
$ |
0.00 |
|
|
Net Income |
$ |
0.04 |
|
|
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding |
|
|
|
|
|
|
Basic |
|
33,577 |
|
|
|
|
|
32,810 |
|
|
Diluted |
|
33,815 |
|
|
|
|
|
33,532 |
|
|
CAMBREX
CORPORATION |
Statements of Profit and Loss |
For the Twelve Months Ended December 31, 2018 and
2017 |
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
% of |
|
|
|
|
% of |
|
|
Amount |
|
Net Revenue |
|
|
Amount |
|
Net Revenue |
|
|
|
|
|
|
|
|
|
|
Gross Sales |
$ |
514,997 |
|
|
|
|
$ |
525,936 |
|
|
|
Commissions, Allowances and Rebates |
1,018 |
|
|
|
|
|
1,995 |
|
|
|
Net Sales |
|
513,979 |
|
|
|
|
|
523,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Revenues, Net |
18,114 |
|
|
|
|
|
10,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue |
532,093 |
|
|
|
|
|
534,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Goods Sold |
335,405 |
|
|
63.0 |
% |
|
|
304,153 |
|
|
56.9 |
% |
|
|
|
|
|
|
|
|
|
|
Gross
Profit |
196,688 |
|
|
37.0 |
% |
|
|
230,303 |
|
|
43.1 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
68,506 |
|
|
12.9 |
% |
|
|
68,984 |
|
|
12.9 |
% |
Research and Development Expenses |
15,547 |
|
|
2.9 |
% |
|
|
16,901 |
|
|
3.2 |
% |
Acquisition and Integration Expenses |
11,139 |
|
|
2.1 |
% |
|
|
- |
|
|
|
Total
Operating Expenses |
95,192 |
|
|
17.9 |
% |
|
|
85,885 |
|
|
16.1 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
Profit |
101,496 |
|
|
19.1 |
% |
|
|
144,418 |
|
|
27.0 |
% |
|
|
|
|
|
|
|
|
|
|
Other
Expenses/(Income): |
|
|
|
|
|
|
|
Interest Expense, Net |
3,967 |
|
|
|
|
|
1,253 |
|
|
|
Unrealized Gain on Investment in Equity Securities |
(13,023 |
) |
|
|
|
|
- |
|
|
|
Other Expenses, Net |
747 |
|
|
|
|
|
1,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Before Income Taxes |
109,805 |
|
|
20.6 |
% |
|
|
141,825 |
|
|
26.5 |
% |
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes |
16,596 |
|
|
|
|
|
38,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing
Operations |
$ |
93,209 |
|
|
17.5 |
% |
|
$ |
103,764 |
|
|
19.4 |
% |
|
|
|
|
|
|
|
|
|
|
Loss from
Discontinued Operations, Net of Tax |
(791 |
) |
|
|
|
|
(1,314 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
92,418 |
|
|
17.4 |
% |
|
$ |
102,450 |
|
|
19.2 |
% |
|
|
|
|
|
|
|
|
|
|
Basic
Earnings/(Loss) per Share of Common Stock: |
|
|
|
|
|
Income from
Continuing Operations |
$ |
2.80 |
|
|
|
|
$ |
3.18 |
|
|
|
Loss from
Discontinued Operations, Net of Tax |
$ |
(0.02 |
) |
|
|
|
$ |
(0.04 |
) |
|
|
Net Income |
$ |
2.78 |
|
|
|
|
$ |
3.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings/(Loss) per Share of Common Stock: |
|
|
|
|
|
Income from
Continuing Operations |
$ |
2.77 |
|
|
|
|
$ |
3.10 |
|
|
|
Loss from
Discontinued Operations, Net of Tax |
$ |
(0.02 |
) |
|
|
|
$ |
(0.04 |
) |
|
|
Net Income |
$ |
2.75 |
|
|
|
|
$ |
3.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding |
|
|
|
|
|
|
Basic |
|
33,243 |
|
|
|
|
|
32,662 |
|
|
|
Diluted |
|
33,665 |
|
|
|
|
|
33,486 |
|
|
|
CAMBREX CORPORATION |
Consolidated Balance Sheets |
As of December 31, 2018 and December 31, 2017 |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
December 31, |
Assets |
|
2018 |
|
|
2017 |
|
|
|
|
|
|
Cash and Cash
Equivalents |
$ |
95,852 |
|
$ |
183,284 |
Trade Receivables,
Net |
|
146,330 |
|
|
75,144 |
Contract Assets |
|
33,490 |
|
|
- |
Other Receivables |
|
5,198 |
|
|
20,891 |
Inventories, Net |
|
111,062 |
|
|
138,542 |
Prepaid Expenses and
Other Current Assets |
|
18,160 |
|
|
4,217 |
Total Current
Assets |
|
410,092 |
|
|
422,078 |
|
|
|
|
|
|
Property, Plant and
Equipment, Net |
|
360,528 |
|
|
254,299 |
Goodwill |
|
261,095 |
|
|
43,626 |
Intangible Assets,
Net |
|
187,205 |
|
|
13,868 |
Deferred Income
Taxes |
|
1,409 |
|
|
3,198 |
Other Non-Current
Assets |
|
3,099 |
|
|
3,496 |
|
|
|
|
|
|
Total
Assets |
$ |
1,223,428 |
|
$ |
740,565 |
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable |
$ |
47,012 |
|
$ |
35,017 |
Contract Liabilities,
Current |
|
11,713 |
|
|
4,707 |
Taxes Payable |
|
1,651 |
|
|
43 |
Accrued Expenses and
Other Current Liabilities |
|
44,036 |
|
|
42,774 |
Total Current
Liabilities |
|
104,412 |
|
|
82,541 |
|
|
|
|
|
|
Long-Term Debt |
|
300,000 |
|
|
- |
Contract Liabilities,
Non-Current |
|
42,701 |
|
|
39,000 |
Deferred Income
Taxes |
|
57,276 |
|
|
7,806 |
Accrued Pension
Benefits |
|
42,218 |
|
|
41,141 |
Other Non-Current
Liabilities |
|
23,094 |
|
|
25,213 |
|
|
|
|
|
|
Total
Liabilities |
$ |
569,701 |
|
$ |
195,701 |
|
|
|
|
|
|
Stockholders’
Equity |
$ |
653,727 |
|
$ |
544,864 |
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity |
$ |
1,223,428 |
|
$ |
740,565 |
CAMBREX
CORPORATION |
Impact of Adopting ASC 606 |
For the Three and Twelve Months Ended December 31,
2018 and 2017 |
(in thousands) |
|
|
Fourth Quarter 2018 |
|
Fourth Quarter 2017 |
|
As Reported |
|
Effect of Change |
|
|
Amount Without Adoption of ASC
606 |
|
As Reported |
|
Gross Sales |
|
$ |
124,422 |
|
$ |
(77,963 |
) |
|
$ |
202,385 |
|
$ |
175,505 |
Net Revenue |
|
|
134,332 |
|
|
(77,963 |
) |
|
|
212,295 |
|
|
182,277 |
Cost of Goods Sold |
|
|
86,016 |
|
|
(38,947 |
) |
|
|
124,963 |
|
|
103,351 |
Gross Profit |
|
|
48,316 |
|
|
(39,016 |
) |
|
|
87,332 |
|
|
78,926 |
Operating Profit |
|
|
19,831 |
|
|
(39,016 |
) |
|
|
58,847 |
|
|
56,309 |
Provision
for Income Taxes |
|
17,468 |
|
|
(8,004 |
) |
|
|
25,472 |
|
|
15,577 |
Income from
Continuing Operations |
|
1,293 |
|
|
(31,012 |
) |
|
|
32,305 |
|
|
40,249 |
Net Income |
|
|
1,212 |
|
|
(31,012 |
) |
|
|
32,224 |
|
|
40,259 |
Diluted
Earnings per Share |
|
0.04 |
|
|
(0.92 |
) |
|
|
0.96 |
|
|
1.20 |
|
|
|
|
|
|
|
|
|
|
Twelve Months 2018 |
|
Twelve Months 2017 |
|
As Reported |
|
Effect of Change |
|
|
Amount Without Adoption of ASC
606 |
|
As Reported |
|
Gross Sales |
|
$ |
514,997 |
|
$ |
(19,781 |
) |
|
$ |
534,778 |
|
$ |
525,936 |
Net Revenue |
|
|
532,093 |
|
|
(19,781 |
) |
|
|
551,874 |
|
|
534,456 |
Cost of Goods Sold |
|
|
335,405 |
|
|
(5,753 |
) |
|
|
341,158 |
|
|
304,153 |
Gross Profit |
|
|
196,688 |
|
|
(14,028 |
) |
|
|
210,716 |
|
|
230,303 |
Operating Profit |
|
|
101,496 |
|
|
(14,028 |
) |
|
|
115,524 |
|
|
144,418 |
Provision
for Income Taxes |
|
16,596 |
|
|
(2,928 |
) |
|
|
19,524 |
|
|
38,061 |
Income from
Continuing Operations |
|
93,209 |
|
|
(11,100 |
) |
|
|
104,309 |
|
|
103,764 |
Net Income |
|
|
92,418 |
|
|
(11,100 |
) |
|
|
103,518 |
|
|
102,450 |
Diluted
Earnings per Share |
|
2.77 |
|
|
(0.33 |
) |
|
|
3.10 |
|
|
3.10 |
CAMBREX CORPORATION |
Reconciliation of GAAP to non-GAAP Results |
For the Quarters and Twelve Months Ended December 31,
2018 and 2017 |
(in thousands) |
|
|
|
|
|
|
|
|
Fourth Quarter 2018 |
|
|
Fourth Quarter 2017 |
|
|
|
|
|
|
|
Operating Profit |
$ |
19,831 |
|
|
|
$ |
56,309 |
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
13,654 |
|
|
|
|
8,825 |
|
|
|
|
|
|
|
|
EBITDA |
|
33,485 |
|
|
|
|
65,134 |
|
|
|
|
|
|
|
|
Acquisition and Integration Expenses |
3,412 |
|
|
|
|
- |
|
|
|
|
|
|
|
|
Impact
of Adopting ASC 606 |
|
39,016 |
|
|
|
|
- |
|
|
|
|
|
|
|
|
FDF Acquisition Adjusted EBITDA 1. |
(5,184 |
) |
|
|
|
- |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
70,729 |
|
|
|
$ |
65,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months 2018 |
|
|
Twelve Months 2017 |
|
|
|
|
|
|
|
Operating Profit |
$ |
101,496 |
|
|
|
$ |
144,418 |
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
37,857 |
|
|
|
|
31,848 |
|
|
|
|
|
|
|
|
EBITDA |
|
139,353 |
|
|
|
|
176,266 |
|
|
|
|
|
|
|
|
Acquisition and Integration Expenses |
11,139 |
|
|
|
|
- |
|
|
|
|
|
|
|
|
Impact
of Adopting ASC 606 |
|
14,028 |
|
|
|
|
- |
|
|
|
|
|
|
|
|
FDF Acquisition Adjusted EBITDA 1. |
(6,869 |
) |
|
|
|
- |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
157,651 |
|
|
|
$ |
176,266 |
|
|
|
1. The FDF business was acquired in 2018 and to be
consistent with prior guidance is excluded. Please see below for
the reconciliation to Adjusted EBITDA. |
|
|
Fourth Quarter 2018 |
|
|
|
Since Acquisition |
|
FDF Operating
Profit |
$ |
(719 |
) |
|
$ |
(605 |
) |
|
|
|
|
Depreciation and Amortization |
|
5,017 |
|
|
6,081 |
|
|
FDF EBITDA |
|
4,298 |
|
|
5,476 |
|
|
Acquisition and Integration Expenses |
1,077 |
|
|
1,471 |
|
|
|
|
|
Impact
of Adopting ASC 606 |
|
(191 |
) |
|
(78 |
) |
|
|
|
|
|
FDF Adjusted
EBITDA |
$ |
5,184 |
|
|
$ |
6,869 |
|
|
CAMBREX
CORPORATION |
Reconciliation of GAAP to non-GAAP Results |
For the Quarter and Twelve Months Ended December 31,
2018 and 2017 |
(in thousands) |
|
|
Fourth Quarter 2018 |
|
Fourth Quarter 2017 |
|
|
|
|
|
Diluted EPS |
|
|
|
|
|
Diluted EPS |
Income from Continuing
Operations |
$ |
1,293 |
|
$ |
0.04 |
|
|
$ |
40,249 |
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Adopting ASC
606 |
|
39,016 |
|
|
1.15 |
|
|
|
- |
|
|
- |
|
Impact of Adopting ASC
606 Tax |
|
(8,004 |
) |
|
(0.24 |
) |
|
|
- |
|
|
- |
|
Stock-Based
Compensation |
|
(12 |
) |
|
(0.00 |
) |
|
|
2,593 |
|
|
0.08 |
|
Stock-Based
Compensation Tax 1. |
|
202 |
|
|
0.01 |
|
|
|
(1,030 |
) |
|
(0.03 |
) |
Acquisition and
Integration Expenses |
|
3,412 |
|
|
0.10 |
|
|
|
- |
|
|
- |
|
Acquisition and
Integration Expenses Tax |
|
580 |
|
|
0.02 |
|
|
|
- |
|
|
- |
|
Amortization of
Purchased Intangibles |
|
3,505 |
|
|
0.10 |
|
|
|
503 |
|
|
0.02 |
|
Amortization of
Purchased Intangibles, Tax |
|
(722 |
) |
|
(0.02 |
) |
|
|
(171 |
) |
|
(0.01 |
) |
Unrealized Gain on
Investment in Equity Securities |
|
(2,266 |
) |
|
(0.07 |
) |
|
|
- |
|
|
- |
|
Unrealized Gain on
Investment in Equity Securities, Tax |
|
171 |
|
|
0.01 |
|
|
|
- |
|
|
- |
|
United States Tax
Reform Toll Charge |
|
- |
|
|
- |
|
|
|
117 |
|
|
0.00 |
|
New Jersey Tax
Reform |
|
11,453 |
|
|
0.34 |
|
|
|
- |
|
|
- |
|
Net Interest Expense -
Halo Acquisition |
|
3,543 |
|
|
0.10 |
|
|
|
- |
|
|
- |
|
Net Interest Expense -
Halo Acquisition Tax |
|
(744 |
) |
|
(0.02 |
) |
|
|
- |
|
|
- |
|
Halo's Adjusted Income
from Continuing Operations |
|
(3,510 |
) |
|
(0.10 |
) |
|
|
- |
|
|
- |
|
Halo's Adjusted Income
from Continuing Operations, Tax |
|
761 |
|
|
0.02 |
|
|
|
- |
|
|
- |
|
Adjusted Income from
Continuing Operations 2. |
$ |
48,678 |
|
$ |
1.44 |
|
|
$ |
42,261 |
|
$ |
1.26 |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months 2018 |
|
Twelve Months 2017 |
|
|
|
|
|
Diluted EPS |
|
|
|
|
|
Diluted EPS |
Income from Continuing
Operations |
$ |
93,209 |
|
$ |
2.77 |
|
|
$ |
103,764 |
|
$ |
3.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Adopting ASC
606 |
|
14,028 |
|
|
0.42 |
|
|
|
- |
|
|
- |
|
Impact of Adopting ASC
606 Tax |
|
(2,928 |
) |
|
(0.09 |
) |
|
|
- |
|
|
- |
|
Stock-Based
Compensation |
|
4,094 |
|
|
0.12 |
|
|
|
8,914 |
|
|
0.27 |
|
Stock-Based
Compensation Tax 1. |
|
(4,581 |
) |
|
(0.14 |
) |
|
|
(8,356 |
) |
|
(0.25 |
) |
Acquisition and
Integration Expenses |
|
11,139 |
|
|
0.33 |
|
|
|
- |
|
|
- |
|
Acquisition and
Integration Expenses Tax |
|
(1,043 |
) |
|
(0.03 |
) |
|
|
- |
|
|
- |
|
Amortization of
Purchased Intangibles |
|
5,662 |
|
|
0.17 |
|
|
|
1,878 |
|
|
0.06 |
|
Amortization of
Purchased Intangibles, Tax |
|
(1,175 |
) |
|
(0.03 |
) |
|
|
(637 |
) |
|
(0.02 |
) |
Unrealized Gain on
Investment in Equity Securities |
|
(13,023 |
) |
|
(0.39 |
) |
|
|
- |
|
|
- |
|
Unrealized Gain on
Investment in Equity Securities, Tax |
|
982 |
|
|
0.03 |
|
|
|
- |
|
|
- |
|
United States Tax
Reform Toll Charge |
|
(2,105 |
) |
|
(0.06 |
) |
|
|
117 |
|
|
0.00 |
|
New Jersey Tax
Reform |
|
(736 |
) |
|
(0.02 |
) |
|
|
- |
|
|
- |
|
Net Interest Expense -
Halo Acquisition |
|
4,330 |
|
|
0.13 |
|
|
|
- |
|
|
- |
|
Net Interest Expense -
Halo Acquisition Tax |
|
(909 |
) |
|
(0.03 |
) |
|
|
- |
|
|
- |
|
Halo's Adjusted Income
from Continuing Operations |
|
(4,434 |
) |
|
(0.13 |
) |
|
|
- |
|
|
- |
|
Halo's Adjusted Income
from Continuing Operations, Tax |
|
961 |
|
|
0.03 |
|
|
|
- |
|
|
- |
|
Adjusted Income from
Continuing Operations 2. |
$ |
103,471 |
|
$ |
3.07 |
|
|
$ |
105,680 |
|
$ |
3.16 |
|
|
1.
Amount represents the tax effect for non-cash stock-based
compensation expense and the immediate recognition of certain
benefits of share-based compensation. |
|
2.
Diluted earnings per share for adjusted income from continuing
operations is based on the weighted number of diluted shares
outstanding for the quarter and year. As such, the sum of the
quarters may not necessarily equal the full year. In addition, the
sum of the line items may not equal due to rounding. |
Contact:
Gregory
Sargen
Executive Vice President &
CFO
Tel:
+201.804.3055
Email: gregory.sargen@cambrex.com
Cambrex (NYSE:CBM)
Historical Stock Chart
From Jul 2024 to Aug 2024
Cambrex (NYSE:CBM)
Historical Stock Chart
From Aug 2023 to Aug 2024