<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 30, 1994
------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
------------------- ------------------
Commission file number 1-10638
-------
CAMBREX CORPORATION
-------------------
(Exact name of registrant as specified in its charter)
DELAWARE 22-2476135
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE MEADOWLANDS PLAZA, EAST RUTHERFORD, NEW JERSEY 07073
--------------------------------------------------------
(Address of principal executive offices)
(201) 804-3000
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
As of November 1, 1994, there were 5,298,604 shares outstanding of the
registrant's Common Stock, $.10 par value.
Page 1 of 16
<PAGE> 2
CAMBREX CORPORATION AND SUBSIDIARIES
Form 10-Q
For The Quarter Ended September 30, 1994
Table of Contents
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I Financial information
Condensed consolidated balance sheets as of
September 30, 1994 and December 31, 1993 3
Condensed consolidated income statements
for the three months and nine months
ended September 30, 1994 and 1993 4
Condensed consolidated statements of
cash flows for the nine months ended
September 30, 1994 and 1993 5
Notes to condensed consolidated financial
statements 6 - 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 12
Part II Other information
Item 4. Matters Submitted to a Vote of Securities
Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit 11 - Computation of Earnings Per Share 15
Exhibit 27 - Financial Data Schedule 16
</TABLE>
<PAGE> 3
Part 1 - FINANCIAL INFORMATION
CAMBREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
----------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48 $ 161
Trade and other receivables, less allowances
for doubtful accounts of $335 and $355
at respective dates . . . . . . . . . . . . . . . . . . 35,297 28,015
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . 35,171 33,730
Deferred tax asset . . . . . . . . . . . . . . . . . . . . . 1,213 1,315
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,421 3,557
------ ------
Total current assets . . . . . . . . . . . . . . . . . . 75,150 66,778
Property, plant and equipment, net . . . . . . . . . . . . . . . 98,167 89,784
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . 11,320 7,621
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . 1,287 2,662
------- -------
Total assets . . . . . . . . . . . . . . . . . . . . . . $185,924 $166,845
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities . . . . . . . . . . $ 27,229 $ 20,872
Income taxes payable . . . . . . . . . . . . . . . . . . . . 3,582 3,409
Current portion of long-term debt . . . . . . . . . . . . . . 4,010 4,000
------- -------
Total current liabilities . . . . . . . . . . . . . . . 34,821 28,281
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 38,306 36,261
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . 7,195 5,986
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . 8,748 8,748
------- -------
Total liabilities . . . . . . . . . . . . . . . . . . . 89,070 79,276
------- -------
Stockholders' equity:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 607 601
Additional paid-in capital . . . . . . . . . . . . . . . . . 73,423 72,627
Retained earnings . . . . . . . . . . . . . . . . . . . . . . 33,024 25,859
Cumulative translation adjustment . . . . . . . . . . . . . . 411
Additional minimum pension liability . . . . . . . . . . . . . (692) (1,030)
Treasury stock, at cost; 770,966 and 819,049
shares at respective dates . . . . . . . . . . . . . . . . ( 9,919) (10,488)
------ --------
Total stockholders' equity . . . . . . . . . . . . . . . 96,854 87,569
-------- --------
Total liabilities and stockholders' equity . . . . . . . $ 185,924 $ 166,845
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
- 3 -
<PAGE> 4
CAMBREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
(in thousands, except per-share amounts)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------- -------------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues . . . . . . . . . . . . . . . $ 57,608 $ 48,065 $166,879 $148,493
Operating expenses:
Cost of goods sold . . . . . . . . . . 44,343 34,654 127,618 108,954
Selling, general and administrative
expenses . . . . . . . . . . . . . . 7,559 7,453 21,773 22,130
Research and development . . . . . . . 1,211 1,535 3,612 4,358
------- ------- ------- -------
Total operating expenses . . . . . . 53,113 43,642 153,003 135,442
------- ------- ------- -------
Operating profit . . . . . . . . . . . . . 4,495 4,423 13,876 13,051
Other (income) expenses:
Interest expense - net . . . . . . . . 496 729 1,529 2,133
Other - net . . . . . . . . . . . . . . 121 75 74 248
------- ------- ------- -------
Income before income taxes . . . . . . . . 3,878 3,619 12,273 10,670
Provision for income taxes . . . . . . . . 1,438 1,425 4,325 4,255
------- ------ ------- -------
Net income . . . . . . . . . . . . . . . $ 2,440 $ 2,194 $ 7,948 $ 6,415
======= ====== ======= =======
Weighted average shares outstanding:
Primary . . . . . . . . . . . . . 5,679 5,273 5,655 5,208
Fully diluted . . . . . . . . . . 5,711 5,482 5,693 5,473
Net income per share:
Primary . . . . . . . . . . . . . $ 0.43 $ 0.42 $ 1.41 $ 1.23
======= ======= ======= ======
Fully diluted . . . . . . . . . . $ 0.43 $ 0.41 $ 1.40 $ 1.20
======= ======= ======= ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
- 4 -
<PAGE> 5
CAMBREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
-------------------------
1994 1993
------- -------
<S> <C> <C>
Cash flows from operations . . . . . . . . . . . . . . . . . . . . . . . . $ 17,849 $16,367
Changes in assets and liabilities:
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,043) 1,329
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,155 (3,075)
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . 238 (276)
Accounts payable and accrued liabilities . . . . . . . . . . . . . . . 4,091 (546)
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . 71 (410)
Other noncurrent assets and liabilities . . . . . . . . . . . . . . . . 3,175 660
------- -------
Net cash provided from operations . . . . . . . . . . . . . . . . 20,536 14,049
------- -------
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . (11,842) (10,558)
Acquisition of businesses . . . . . . . . . . . . . . . . . . . . . . . (11,840) ( 5,904)
------ ------
Net cash (used in) investing activities . . . . . . . . . . . . . (23,682) (16,462)
------ ------
Cash flows from financing activities:
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (783) (725)
Long-term debt activity (including current portion):
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,714 27,800
Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,679) (25,616)
Proceeds from the issuance of common stock . . . . . . . . . . . . . . 285 330
Proceeds from the sale of treasury stock . . . . . . . . . . . . . . . 1,085 1,018
------- -------
Net cash provided from financing activities . . . . . . . . . . . 2,622 2,807
------- -------
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . 411 -
------- -------
Net increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . (113) 394
Cash at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . 161 564
------- -------
Cash at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48 $ 958
======= =======
Supplemental disclosure:
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,757 $ 2,167
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,038 $ 3,997
Noncash investing and financing activity:
Conversion of subordinated notes to common stock . . . . . . . . . . . - $ 3,990
</TABLE>
See accompanying notes to condensed consolidated financial statements.
- 5 -
<PAGE> 6
CAMBREX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands)
(1) Basis of Presentation
Unless otherwise indicated by the context, "Cambrex" or the "Company"
means Cambrex Corporation and subsidiaries.
The accompanying unaudited Condensed Consolidated Financial Statements
have been prepared from the records of the Company. In the opinion of
management, the financial statements include all adjustments, consisting of
only normal recurring accruals, necessary for a fair presentation of financial
position and results of operations in conformity with generally accepted
accounting principles. These interim financial statements should be read in
conjunction with the financial statements for the year ended December 31, 1993.
The results of operations for the nine months ended September 30, 1994
are not necessarily indicative of the results to be expected for the full year.
(2) Inventories
Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market and include material, labor, and overhead.
Inventories at September 30, 1994 and December 31, 1993 consist of the
following:
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
-------------- --------------
<S> <C> <C>
Finished goods . . . . . . . . . . . . . $ 17,623 $ 17,988
Raw materials . . . . . . . . . . . . . 15,269 13,878
Fuel oil and supplies . . . . . . . . . 2,279 1,864
------- -------
$ 35,171 $ 33,730
======= =======
</TABLE>
(3) Earnings Per Common Share
The calculation of primary earnings per common share is based on the
weighted average number of common shares and common share equivalents
outstanding during the applicable period. For 1993, fully diluted earnings per
share assumes conversion of the outstanding convertible subordinated notes that
were converted in September 1993, and the elimination of related interest
expense net of tax.
- 6 -
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
4) Acquisitions
On October 12, 1994, the Company completed the acquisition of the
stock of Nobel's Pharma Chemistry Business (the "Business") from Akzo Nobel for
approximately $126,000. The Business consists of Nobel Chemicals A.B. in
Karlskoga, Sweden, Profarmaco Nobel S.r.l. in Milan, Italy, and sales companies
in Germany, England and the United States.
On January 31, 1994, the Company completed the acquisition of the
assets of Hexcel Corporation's fine chemicals business located in
Middlesbrough, England, for approximately $7,300 and the assumption of certain
current liabilities in the amount of $2,700. The facility is now known as Seal
Sands Chemicals Ltd. On May 27, 1994, the Company purchased the Topanol
product line from Zeneca Limited to compliment its operations at the Seal Sands
facility. Financial results are included in the consolidated financial
statements for the nine months ended September 30, 1994.
5) Long-term Debt
Long-term debt at September 30, 1994 and December 31, 1993 consists of
the following:
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
---- ----
<S> <C> <C>
Bank credit facilities . . . . . . . . . . . . . . . . . $ 38,149 $ 36,111
Capital lease . . . . . . . . . . . . . . . . . . . . . 17 0
Industrial development revenue bond . . . . . . . . . . 4,150 4,150
------ ------
Subtotal . . . . . . . . . . . . . . . . . . . 42,316 40,261
Less: current portion . . . . . . . . . . . . . . . . . 4,010 4,000
------ ------
Total . . . . . . . . . . . . . . . . . . . . $ 38,306 $ 36,261
====== ======
</TABLE>
On September 21, 1994, the Company entered into a new Loan Agreement
(Credit Agreement) with NBD Bank, N.A., United Jersey Bank, National
Westminster Bank NJ, Wachovia Bank of Georgia, N.A., BHF-Bank, the First
National Bank of Boston, Chemical Bank New Jersey, N.A., and National City
Bank. This new Loan Agreement replaces the existing Revolving Credit and Term
Loan Agreement with NBD Bank, N.A., United Jersey Bank, and National
Westminster Bank NJ. The new Credit Agreement provides for a bridge loan in
the aggregate principal amount of $50,000, a term loan in the aggregate
principal amount of $75,000, and a revolving credit facility in the aggregate
principal amount of $100,000.
- 7 -
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Long-Term Debt continued
The new Credit Agreement permits the Company to choose between various
interest rate options and to specify the portion of the borrowing to be covered
by specific interest rate options. Under the Revolving Credit Agreement and
Bridge Loan, the interest rate options available to the Company are: (a) U.S.
prime rate plus the applicable margin (ranging from 0% to 3/4 of 1%) or (b)
LIBOR plus the applicable margin (ranging from 1/2 of 1% to 2%). The
applicable margin is adjusted based upon the Funded Indebtedness to Cash Flow
Ratio of Cambrex Corporation. The Term Loan will have the same options plus
1/2%. Additionally, the Company pays a commitment fee of between 1/5 of 1% and
3/8 of 1% on the unused portion of the Revolving Credit facilities.
On October 11, 1994, $32,200 and L4,265 ($6,734) from the new Loan
Agreement were used to satisfy the prior Credit Agreement. On October 12,
1994, $126,000 from the new Loan Agreement was used to purchase the stock of
Nobel's Pharma Chemistry Business.
The Company met all the bank covenants for the third quarter of 1994.
6) Postemployment Benefits
Statement of Financial Accounting Standard No. 112 "Employers'
Accounting for Postemployment Benefits" (SFAS 112) requires the recognition on
an accrual basis of all types of postemployment benefits provided to former or
inactive employees subsequent to employment but before retirement. The Company
currently provides limited benefits in this regard and has determined the
implementation effect of SFAS 112 to be immaterial.
(7) Contingencies
Refer to Form 10-K for the fiscal year ended December 31, 1993, for
disclosure of existing contingencies related to environmental issues.
Presented below is a subsequent development in a matter that was disclosed in
Form 10-K.
On October 21, 1994, CasChem, Inc., a subsidiary of Cambrex announced
that it had agreed to a settlement of legal proceedings associated with a 1990
investigation by agents of the Federal Bureau of Investigation and the
Environmental Protection Agency at Caschem's Bayonne, New Jersey facility.
Under an agreement with the United States Attorney's office in Newark, CasChem
agreed to pay a fine of $1 million in connection with a drum of material
determined to be hazardous waste that was stored longer than the legally
permitted 90-day period. There will be no impact on the Company's financial
results since current reserves are adequate to cover the payments.
- 8 -
<PAGE> 9
CAMBREX CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The third quarter 1994 net revenues increased 20% to $57,608,000 from
$48,065,000 in the previous year. The $9,543,000 of increased revenue included
sales from the Company's Seal Sands Chemicals Ltd. facility in England,
acquired on January 31, 1994. Third quarter sales increased in our health and
pharmaceuticals, specialty and fine chemicals, and coatings products.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- -----------------------
(in thousands) (in thousands)
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Health & pharmaceuticals . . . . . . . . . . . $ 15,167 $ 13,007 $ 43,777 $ 42,553
Agricultural intermediates
& additives . . . . . . . . . . . . . . . 13,593 11,304 44,252 36,378
Specialty & fine chemicals . . . . . . . . . . 17,607 12,318 47,490 37,408
Performance chemicals . . . . . . . . . . . . 8,523 8,915 24,011 23,294
Coatings . . . . . . . . . . . . . . . . . . . 4,450 4,012 13,438 13,037
------ ------ ------- -------
Total gross revenues . . . . . . . . . . . $ 59,340 $ 49,556 $ 172,968 $ 152,670
====== ====== ======= =======
Total net revenues . . . . . . . . . . . . $ 57,608 $ 48,065 166,879 148,493
====== ====== ======= =======
</TABLE>
Health and Pharmaceuticals' revenues increased $2,160,000 (17%) from
third quarter 1993. Growth in this category has been achieved with a contract
for producing a new product used in the synthesis of an over-the-counter cough
suppressant, and the continued strong increase in sales of a generic drug used
for the treatment of ulcerative colitis. A portion of this increase is from
export markets.
Agricultural Intermediates and Additives' revenues increased by
$2,289,000 (20%) over 1993. Feed grade Vitamin B3 and its intermediates
increased in sales due to volume increases worldwide. However, these sales
were adversely affected by pricing competition. Other pyridine derivatives
used in crop protection had higher sales to India and China. Price increases
for pyridine derivatives are occurring in the fourth quarter, with feed grade
Vitamin B3 price increases due to take effect at the beginning of 1995.
Specialty and Fine Chemicals' revenues increased $5,289,000 (43%) over
1993. Seal Sands Chemicals Ltd. (acquired on January 31, 1994) accounted for
$4,134,000 in sales of specialty chemicals of which $3,800,000 are new products
to Cambrex. Increases occurred due to the addition of several new catalyst
customers; new use of a fire retardant material now used as a dye receptor in
acrylic yarns; and growth in pyridine derivatives.
- 9 -
<PAGE> 10
Performance Chemicals' revenues decreased $392,000 (4%) from prior
year. The decline was due to a customer's delay in starting up a new line
which uses our fiber optic gel product, and reduced sales of encapsulants due
to the loss of a major domestic customer.
Coatings' revenues increased $438,000 (11%) over 1993. This
improvement was due to additional sales to two customers not present in 1993,
and to general market improvement in the paints and coatings industry which
uses our castor oil based products.
Gross profit in the third quarter 1994 of $13,265,000 (23.0% of sales),
compared to $13,411,000 (27.9% of sales) in the third quarter 1993. The margin
percentage was adversely affected by continued decreases in the price of
pyridine and its derivatives, and the increased costs of major raw materials
used in the pyridine synthesis. The gross margin has also been negatively
affected by additional startup costs associated with a contract for production
of a new product.
Selling, general and administrative expenses as a percentage of net
revenues was 15.2% in the third quarter 1994 versus 18.7% in 1993. The third
quarter 1994 expense of $8,770,000 was $218,000 below 1993. Reductions in
sales and marketing, and outside research and development expenditures were due
mainly to cost reduction efforts put in practice during the first quarter 1994.
Higher administrative costs included the added cost of the Seal Sands
acquisition, but even these additions have been offset by cost reductions.
Interest expense for the third quarter decreased $233,000 from 1993.
This decrease is due to recording the capitalization of interest costs and the
elimination in the third and fourth quarters 1993 of higher interest debt
including a capital lease and convertible 9% notes.
The provision for income taxes was reduced from 39.5% to approximately
37% for the third quarter. A favorable adjustment of $120,000 was recorded in
the third quarter. The income tax rate for nine months is 35% and is expected
to be approximately 34% by year end.
Net income for the third quarter 1994 was $2,440,000 compared to
$2,194,000 for the third quarter 1993. The earnings per share (fully diluted)
in the third quarter 1994 were 43 cents, compared with 41 cents in 1993.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and capital resources, in the opinion of
management, adequately enable the Company to meet its needs for cash. Net cash
flow from operations increased by $6,487,000, when compared to the first nine
months of 1993. The majority of this increase is derived from higher net
income and additional depreciation and amortization charges.
- 10 -
<PAGE> 11
The key expenditures in the quarter were from investing activities.
Capital expenditures of $11,842,000 for the first nine months of 1994 were
$1,284,000 higher than the prior year. The major capital expenditures were for
a new facility to generate steam at our Charles City, Iowa plant and for a
project at our Zeeland, Michigan plant providing facilities to manufacture a
new product for a major customer. Funds were expended to acquire the assets of
Hexcel's fine chemicals business in Middlesbrough, England, and to subsequently
acquire a product line complimentary to this business.
On October 12, 1994, the Company, through wholly owned subsidiaries,
purchased Nobel's Pharma Chemistry Business (the "Business") from Akzo Nobel
for approximately $126 million. The Business consists of Nobel Chemicals A.B.,
in Karlskoga, Sweden, Profarmaco Nobel S.r.l. in Milan, Italy, and sales
companies in Germany, England, and the United States. Operations include the
manufacture and sales of pharmaceutical active ingredients and intermediates,
and specialty and fine chemicals.
The funds used by the Company for the acquisition were supplied from
borrowings under a new $225 million credit facility provided by a group of
banks with NBD Bank, N.A., as agent. The Company entered into this new Loan
Agreement (Credit Agreement) on September 21, 1994 with NBD Bank, N.A., United
Jersey Bank, National Westminster Bank NJ, Wachovia Bank of Georgia, N.A.,
GHF-Bank, The First National Bank of Boston, Chemical Bank New Jersey, N.A.,
and National City Bank. This new Loan Agreement replaces the existing
Revolving Credit and Term Loan Agreement with NBD Bank, N.A., United Jersey
Bank, and National Westminster Bank NJ. The new Credit Agreement provides for
a bridge loan in the aggregate principal amount of $50,000,000, a term loan in
the aggregate principal amount of $75,000,000 and a revolving credit facility
in the aggregate principal amount of $100,000,000.
The new Credit Agreement permits the Company to choose between various
interest rate options and to specify the portion of the borrowing to be covered
by specific interest rate options. Under the Revolving Credit Agreement and
Bridge Loan, the interest rate options available to the Company are: (a) U.S.
prime rate plus the applicable margin (ranging from 0% to 3/4 of 1%) or (b)
LIBOR plus the applicable margin (ranging from 1/2 of 1% to 2%). The
applicable margin is adjusted based upon the Funded Indebtedness to Cash Flow
Ratio of Cambrex Corporation. The Term Loan will have the same options plus
1/2%. Additionally, the Company pays a commitment fee of between 1/5 of 1% and
3/8 of 1% on the unused portion of the Revolving Credit facilities.
On October 11, 1994, $32,200,000 and L4,265,000 ($6,734,000) from the
New Loan Agreement were used to satisfy the prior Credit Agreement.
The quarterly cash dividend declared on July 28, 1994 was paid on
August 26, 1994. On October 27, 1994, the Board of Directors declared a
quarterly cash dividend on its common stock of 5 cents per share for all
shareholders of record as of November 11, 1994. The dividend is payable on
November 25, 1994.
- 11 -
<PAGE> 12
ENVIRONMENTAL
On October 21, 1994, CasChem, Inc., a subsidiary of Cambrex announced
that it had agreed to a settlement of legal proceedings associated with a 1990
investigation by agents of the Federal Bureau of Investigation and the
Environmental Protection Agency at CasChem's Bayonne, New Jersey facility.
Under an agreement with the Unites States Attorney's office in Newark, CasChem
agreed to pay a fine of $1 million in connection with a drum of material
determined to be hazardous waste that was stored longer than the legally
permitted 90-day period.
This case has been defended for more than four and a half years. The
settlement was reached in an effort to avoid large legal fees associated with a
lengthy trial, as well as to alleviate continued distraction of management from
operating the current business. There will be no impact on the Company's
financial results since current reserves are adequate to cover the payment.
- 12 -
<PAGE> 13
PART II - OTHER INFORMATION
CAMBREX CORPORATION AND SUBSIDIARIES
Item 4. Matters Submitted to a Vote of Securities Holders.
Refer to Form 10-Q for the quarterly period ended March 31, 1994.
Item 6. Exhibits and Reports on Form 8-K
a) The exhibits filed as part of this report are listed below.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
11 Statement of computation of per share earnings.
27 Financial Data Schedule
</TABLE>
- 13 -
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAMBREX CORPORATION
By /s/ Peter Tracey
----------------------------------
Peter Tracey
Vice President
(On behalf of the Registrant and
as the Registrant's Principal
Financial Officer)
Date: November 10, 1994
-----------------
- 14 -
<PAGE> 15
EXHIBIT INDEX
-------------
Exhibit
No. Description
- - ------- -----------
11 Statement of computation of per
share earnings.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11
CAMBREX CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(in thousands)
<TABLE>
<CAPTION>
Three months ended Nine Months ended
September 30, September 30,
--------------------- ----------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income applicable to common shares:
Primary earnings . . . . . . . . . . . . . . $ 2,440 $ 2,194 $ 7,948 $ 6,415
Add:
Interest reduction from assumed
conversion of convertible
subordinated notes (net of taxes):
Notes issued June 11, 1985 . . . . . . . - 28 - 96
Notes issued October 3, 1985 . . . . . . - 17 - 57
------ ------ ------ -----
Fully diluted earnings . . . . . . . . . . . $ 2,440 $ 2,239 $ 7,948 $6,568
====== ====== ====== =====
Weighted average number of common
shares and common share equivalents
outstanding during the period:
Common Stock . . . . . . . . . . . . . . 5,255 4,948 5,231 4,885
Stock Options . . . . . . . . . . . . . 424 325 424 323
----- ----- ----- -----
Shares outstanding - primary . . . . . . . . 5,679 5,273 5,655 5,208
Notes issued June 11, 1985 . . . . . . . - 131 - 163
Notes issued October 3, 1985 . . . . . . - 78 - 98
Additional stock options . . . . . . . . 32 - 38 4
----- ----- ----- -----
Shares outstanding - fully diluted . . . . . 5,711 5,482 5,693 5,473
===== ===== ===== =====
</TABLE>
- 15 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 48,000
<SECURITIES> 0
<RECEIVABLES> 34,182,000
<ALLOWANCES> 335,000
<INVENTORY> 35,171,000
<CURRENT-ASSETS> 75,150,000
<PP&E> 163,921,000
<DEPRECIATION> 65,754,000
<TOTAL-ASSETS> 185,924,000
<CURRENT-LIABILITIES> 34,821,000
<BONDS> 38,306,000
<COMMON> 607,000
0
0
<OTHER-SE> 96,247,000
<TOTAL-LIABILITY-AND-EQUITY> 185,924,000
<SALES> 166,879,000
<TOTAL-REVENUES> 166,879,000
<CGS> 127,618,000
<TOTAL-COSTS> 127,618,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,558,000
<INCOME-PRETAX> 12,273,000
<INCOME-TAX> 4,325,000
<INCOME-CONTINUING> 7,948,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,948,000
<EPS-PRIMARY> 1.41
<EPS-DILUTED> 1.40
</TABLE>
