CAMBREX CORP, 10-K, 1996-03-22

CAMBREX CORP
10-K, 1996-03-22
CHEMICALS & ALLIED PRODUCTS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

[ ] 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)

<TABLE>
<S> <C>
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) (ZIP CODE)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201)-804-3000

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- --------------------------------------------------------------------------------------------
<S> <C>
Common Stock, $.10 par value American Stock Exchange
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

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 12 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $336,539,000 as of February 29, 1996.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

As of February 29, 1996, there were 7,690,229 shares outstanding of the
registrant's Common Stock, $.10 par value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement for the 1996 Annual
Meeting are incorporated by reference into Part III of this report.
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<PAGE> 2

PART I

ITEM 1 BUSINESS.

GENERAL

Cambrex Corporation (the "Company" or "Cambrex"), a Delaware corporation,
began business in December 1981 through its predecessor, and now wholly-owned
subsidiary, CasChem, Inc. ("CasChem").

The Company manufactures and markets a broad line of specialty chemicals
and commodity chemical intermediates and also manufactures chemicals to customer
specifications. There are five product categories: pharmaceutical bulk actives;
pharmaceutical intermediates; organic intermediates; performance enhancers; and
polymer systems. Currently the Company's overall strategy for these categories
is to focus on niche markets that have global opportunities, build on strong
customer relations to fill our new products' pipeline, and support the capital
and state-of-the-art technology, while being leaders in environmental, health
and safety performance.

Within each of the product categories, the Company uses a consistent
business approach:

1. It focuses on niche products requiring high technical experience.

2. Core products are those in which the Company is a leading supplier,
and for which price competition is not the primary market
determinant.

3. Products and product lines are continually reviewed and those not
meeting operating profit goals are eliminated and replaced with new
products with higher returns.

In order to manage a business with a large number of products and a dynamic
business mix, the Company runs a decentralized organization. The business is
conducted by eight subsidiary organizations headed by an experienced business
manager. Each subsidiary controls all the resources required for the success of
its business and is responsible for its financial performance. Cambrex
Corporation provides oversight of the subsidiaries and, where performance is
considered unsatisfactory, becomes directly involved to help correct any
deficiencies. It also provides support services that are not fundamental to the
success of the subsidiaries' business endeavors; such services include finances,
risk management, and pension and benefits management.

Important objectives of the Company are to expand its operations through
internal growth and to make strategic acquisitions of product lines, technology
and companies that have substantial positions in niche markets.

The Company's plans for internal growth include:

- developing new applications for technologies in which the Company has
expertise;

- expanding product offerings to increase use of existing equipment and
resources; and

- expanding domestic and international markets for existing products.

On October 12, 1994, the Company completed the acquisition of the stock of
Nobel's Pharma Chemistry Business ("Nobel/Profarmaco") from Akzo Nobel for
approximately $130,000. The business consists of Nobel Chemicals AB (now Nordic
Synthesis AB) in Karlskoga, Sweden, Profarmaco Nobel S.r.1. in Milan, Italy and
sales companies in Germany, England and the United States. Nobel/Profarmaco
manufactures fine chemical intermediates and bulk active ingredients for
pharmaceutical products.

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(Dollars in thousands, except share data)

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treatment, health care, and plastics industries. On May 27, 1994, the Company
purchased the Topanol product line from Zeneca Limited to complement the Seal
Sands operation for $4,600.

On March 12, 1993, the Company purchased substantially all of the assets of
Viscosity Oil's fiber optic gel business for $5,886.

PRODUCTS

During 1995, the Company changed the classifications used to analyze
individual product lines by establishing the following five product categories:
Pharmaceutical bulk actives, Pharmaceutical intermediates, Organic
intermediates, Performance enhancers and Polymer systems. Accordingly, the 1994
and 1993 gross revenues have been reclassified to conform to the 1995
presentation.

The following table sets forth for the periods indicated information
concerning gross revenues from these five product categories:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1995 1994(1) 1993(2)
-------- -------- --------
<S> <C> <C> <C>
Pharmaceutical bulk actives........................ $ 96,827 $ 23,774 $ 9,818
Pharmaceutical intermediates....................... 69,097 48,861 42,151
Organic intermediates.............................. 77,792 64,472 56,261
Performance enhancers.............................. 69,973 59,210 49,379
Polymer systems.................................... 54,381 53,366 45,699
-------- -------- --------
Gross revenues..................................... $368,070 $249,683 $203,308
======== ======== ========
</TABLE>

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(1) Revenues from Seal Sands, acquired in January 1994, and Nobel/Profarmaco,
acquired in October 1994, are included from the date of acquisition. The
Company expanded sales in all product categories through these acquisitions.

(2) Revenues from Viscosity Oil's fiber optic gel business, acquired in March
1993, are included from the date of acquisition. The Company expanded sales
in its polymer systems product category through this acquisition.

The Company manufactures and markets a broad line of specialty chemicals.
It uses its technical expertise in a wide range of chemical processes to meet
the needs of its customers for high quality products for specialized
applications. These applications include: pharmaceutical bulk actives produced
under Food and Drug Administration (FDA) regulation for use in prescription and
over-the-counter drug products; pharmaceutical intermediates produced in current
Good Manufacturing Practices (cGMP) facilities for use in the production of
pharmaceuticals, cosmetics, food additives and other healthcare products;
organic intermediates used in the production of herbicides, insecticides, feed
additives, pigments, and other complex organic molecules; performance enhancers
which are complex chemicals designed to impart special properties when small
quantities are included in the formulation of specific products; and polymer
systems which are monomers or two component polymer systems for use in small
volume high performance applications.

Pharmaceutical bulk actives. Pharmaceutical products are classified into
nine therapeutic product categories. Cambrex uses six of these principal product
groups: (1) gastro-intestinal preparations, (2) cardiovascular, (3) endocrine,
(4) central nervous system, (5) anti-inflammatory, and (6) other actives,
including anti-infective, respiratory products, immunology, diuretics and other
preparations. These products are sold to a diverse group of more than 400
customers. Many of these products are also sold through agents.

Products in this category are manufactured under FDA registration for use
as the active ingredients in prescription and over-the-counter drugs.

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(Dollars in thousands, except share data)

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This table summarizes the gross revenues for this product category:

<TABLE>
<CAPTION>
1995 1994 CHANGE
------- ------- -------
<S> <C> <C> <C>
Gastro-intestinal..................................... $31,928 $14,033 $17,895
Cardiovascular........................................ 20,229 2,171 18,058
Endocrine............................................. 8,919 1,227 7,692
Central Nervous System................................ 8,903 1,009 7,894
Anti-inflammatory..................................... 8,343 1,844 6,499
Other Actives......................................... 18,505 3,490 15,015
------- ------- -------
$96,827 $23,774 $73,053
======= ======= =======
</TABLE>

The total percentage increase in gross revenues of this category was 307%;
individual percentage increases of the principal product groups are not
presented as they are not considered to be meaningful.

The acquisition of the Nobel/Profarmaco business in the fourth quarter of
1994 brought to Cambrex many new pharmaceutical products and markets and
accounted for $72,869 of this increase. Increases in the existing business
included products used in anti-inflammatory applications which included
magnesium salicylate, the active ingredient in back-ache formulas.

Pharmaceutical intermediates. This category consists of four product
groups: (1) intermediates used in the manufacture of vitamins and other
healthcare products, (2) x-ray contrast media intermediates, (3) intermediates
for the cosmetic industry, and (4) other pharmaceutical intermediates. These
products are sold to approximately 700 customers, with two customers accounting
for 18% and 13% of 1995 revenues in this category. These products are mainly
produced in cGMP facilities.

This table summarizes the gross revenues for this product category:

<TABLE>
<CAPTION>
%
1995 1994 CHANGE CHANGE
------- ------- ------- ------
<S> <C> <C> <C> <C>
Health....................................... $20,003 $19,831 $ 172 1%
X-Ray Media.................................. 18,372 5,334 13,038 244
Cosmetics.................................... 6,411 9,378 (2,967) (32)
Other Pharmaceutical Intermediates........... 24,311 14,318 9,993 70
------- ------- ------- ----
$69,097 $48,861 $20,236 41%
======= ======= ======= ====
</TABLE>

The Nobel/Profarmaco acquisition accounted for $17,270 of the increase over
1994. The X-Ray media business included $1,339 in growth from domestically
produced 5 NIPA compounds (5-nitroisopthalic acid). The health products
maintained 1994 sales level even though we discontinued certain product lines
(citrates and hydrogels). The cosmetics business reduction was due to the sale
of the Wickhen product line in the fourth quarter 1994. The other pharmaceutical
intermediates increased due to sales of the two products (CHEA and PMPA) used in
the formulation of dextromethorphan, an over-the counter cough suppressant
($4,951 increase), and mandelic acid ($1,702 increase).

Organic intermediates. This category consists of three product groups: (1)
feed additives (2) intermediates used for crop protection chemicals, and (3)
pigment intermediates. These products are sold to approximately 200 customers.
Two customers accounted for 24% and 18% of 1995 revenues in this category.

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(Dollars in thousands, except share data)

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This table summarizes the gross revenues for this product category:

<TABLE>
<CAPTION>
%
1995 1994 CHANGE CHANGE
------- ------- ------- ------
<S> <C> <C> <C> <C>
Feed additives............................... $37,387 $36,755 $ 632 2%
Crop Protection.............................. 30,454 25,285 5,169 20
Pigment Intermediates........................ 9,951 2,432 7,519 309
------- ------- ------- ----
$77,792 $64,472 $13,320 21%
======= ======= ======= ====
</TABLE>

Organic intermediates were $13,320 above 1994. Feed additives were higher
than 1994 due in part to improved pricing of feed grade Vitamin B3. Sales of
organo-arsenical feed additives, the largest product in feed additives, remained
at 1994 levels. Increases occurred in pyridine derivatives used in the
manufacture of herbicides, which are applied as weed control, rice herbicides,
wheat fungicides and as a cotton growth regulator. Sales of pyridine, the
largest product in crop protection, remained at 1994 levels. Pigment
intermediates are Nobel products. These intermediates are used in various
industrial products including inks, dyes and color additives.

Performance enhancers: These products are complex chemicals designed to
impart special properties, such as flame retardancy or rapid curing, when small
quantities are included in the formulation of specific products. This category
consists of five product groups: (1) specialty additives, (2) catalysts, (3)
polymers, (4) photographic chemicals, and (5) additives for the fuel/oil
industry. These products are sold to approximately 1,300 customers.

This table summarizes the gross revenues for this product category:

<TABLE>
<CAPTION>
%
1995 1994 CHANGE CHANGE
------- ------- ------- ------
<S> <C> <C> <C> <C>
Specialty Additives.......................... $18,241 $14,263 $ 3,978 28%
Catalysts.................................... 16,985 13,857 3,128 23
Polymers..................................... 15,722 12,934 2,788 22
Photographic................................. 10,166 10,293 (127) 1
Fuel/Oil..................................... 8,859 7,863 996 13
------- ------- ------- ----
$69,973 $59,210 $10,763 18%
======= ======= ======= ====
</TABLE>

This category includes increases of $4,579 from a full year of the Nobel
operations and $6,184 from the other businesses. Key increases were in polymer
products including a crosslinking agent to improve the performance of
polycarbonate resins, a dye receptor in acrylic fibers for textiles, and an
anti-oxidant used in plastics. The catalyst growth was in products used as
reducing agents in pharmaceutical synthesis and phase transfer agents to promote
chemical reactions. Specialty additives includes increases in castor oil based
products.

Polymer systems: The products in this category are monomers or two
component polymer systems for use in small volume, high performance
applications. This category consists of four product groups: (1)
telecommunications and electronics industries, (2) coatings, (3) high
performance engineering plastics, and (4) biomedical. These systems are sold to
an estimated 400 customers.

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(Dollars in thousands, except share data)

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This table summarizes the gross revenues for this product category:

<TABLE>
<CAPTION>
%
1995 1994 CHANGE CHANGE
------- ------- ------- ------
<S> <C> <C> <C> <C>
Telecommunications........................... $23,710 $25,030 $(1,320) (5)%
Coatings..................................... 17,574 18,231 (657) (4)
Engineering plastics......................... 8,093 5,123 2,970 58
Biomedical................................... 5,004 4,982 22 -
------- ------- ------- ----
$54,381 $53,366 $ 1,015 2%
======= ======= ======= ====
</TABLE>

Polymer systems were $1,015 above 1994. This was due to growth in a product
used in high performance polysulfone engineering plastics for electronic and
industrial applications, such as computer and television screens, and automobile
parts. Lower encapsulants sales to the telecommunications industry was due to
good weather and declining applications as domestic customers replace copper
cable lines with fiber optics.

MARKETING AND DISTRIBUTION

The Company's pharmaceutical bulk actives and pharmaceutical intermediates
are generally high value, low volume products requiring significant technical
efforts for the development and manufacture. Marketing generally requires
significant cooperative effort between a small highly trained marketing staff, a
technical staff who can assess the technical fit and estimate manufacturing
economics, and the business management to determine the strategic and business
fit. Such a process may take from two to five years before a commercial product
is fully established. Because of this long lead time and the complexity of the
technical efforts, these are usually long-term relationships with major
corporations who become significant customers. Sales of established products may
be handled by agents in those areas where direct sales efforts are uneconomic.

For other product categories, marketing and distribution is more typical of
chemical companies, with products being sold to customers from inventory in
volumes ranging from rail cars to five gallon pails. Sales may be handled by
company sales people, distributors or agents as appropriate.

RAW MATERIALS

The Company uses a wide array of raw materials in the conduct of its
businesses. The Company uses significant amounts of castor oil and compounds
derived from petroleum feedstocks in manufacturing a limited number of its
products.

The Company believes it is one of the largest purchasers of castor oil in
the United States, and has the ability to take delivery and store a large
quantity of castor oil on site. Castor oil is used primarily in the manufacture
of the Company's polymer systems for coatings and telecommunication
applications. Under advantageous market conditions, the Company sells this
commodity in bulk quantities as simple castor oil derivatives.

Castor oil, which is not produced in the United States, is an agricultural
product, the market price of which is affected by natural factors relating to
the castor bean crop from which the oil is produced. Castor oil is produced
commercially in a few foreign countries, with India currently being the largest
exporter. The Company has been able to obtain adequate supplies of castor oil
generally at acceptable prices in the past and expects to be able to do so in
the future.

Pyridine, which accounted for 8%, 13% and 13% of gross revenues in 1995,
1994 and 1993, respectively, is produced by the Company by a process involving
the high temperature reaction of acetaldehyde, formalin and ammonia.
Acetaldehyde is available from two suppliers in North America. The price of
acetaldehyde increased approximately 15% during 1995. Formalin's feedstock is
methanol, which is also used by the petro-chemical industry in the manufacture
of methyl-tert-butyl-ether (MTBE). The production of and demand for MTBE has
increased rapidly in connection with its use as a gasoline additive. This
increased demand has

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(Dollars in thousands, except share data)

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triggered an unfavorable effect on methanol pricing, which in turn has caused
the price of formalin to increase by approximately 50% in 1994 and an additional
23% in 1995. The pricing of formalin was back down to near normal levels by the
end of 1995. Ammonia is widely available, however, due to the increase in
methanol, the cost of ammonia increased in 1995 by 25%.

The Company obtains acetaldehyde and formalin pursuant to long-term supply
contracts under which the price for the raw material adjusts to market
conditions, with a time lag. The Company sometimes has difficulty passing on
these increases to its customers, particularly if the increases are precipitous
rather than general.

The other key raw materials used by the Company are advanced organic
intermediates and generally have been in adequate supply from multiple
suppliers.

RESEARCH AND DEVELOPMENT

The Company's research and development program is designed to increase the
Company's competitiveness through improving its technology and developing
processes for the manufacture of new products to meet customer requirements. The
goals are to improve the Company's manufacturing processes so as to reduce
costs, improve quality and increase capacity; and to identify market
opportunities which warrant a significant technical effort, and offer the
prospects of a longterm, profitable business relationship. Research and
development activities are carried on at most of the Company's manufacturing
facilities in both the United States and Europe. Eighty-five employees are
involved directly in research and development activities. In November 1995, the
Company formed a strategic alliance with Oxford Asymmetry, Ltd. (located near
Oxford in the United Kingdom). The Company will commercialize technologies and
products developed by Oxford Asymmetry, and provide financial support for their
research and development group. The Company will provide Oxford Asymmetry with
$1,000 per year.

The Company spent approximately $7,500, $5,700 and $5,800 in 1995, 1994 and
1993, respectively, on research and development.

PATENTS AND TRADEMARKS

The Company has patent protection in some of its product areas. However,
the Company mostly relies on know-how in many of its manufacturing processes and
techniques not generally known to other chemical companies, for developing and
maintaining its market position.

The Company currently owns approximately 68 United States patents which
have varying durations and which cover selected items in each of the Company's
major product areas. The Company also owns the foreign equivalent of many of its
United States patents. In addition, the Company has applied for patents for
various concepts and is in the process of preparing patent applications for
other concepts.

The Company has trademarks registered in the United States and a number of
foreign countries for use in connection with the Company's products and
business. The Company believes that many of its trademarks are generally
recognized in its industry. Such trademarks include Naturechem(R), Bufferite(R)
and Vitride(R).

The Company requires employees to sign confidentiality and non-compete
agreements where appropriate.

COMPETITION

Because of the nature of the Company's products in its pharmaceutical bulk
actives and pharmaceutical intermediates categories and its strategic approach,
it is not possible to identify a group of direct competitors. Where competition
exists, it is typically specific to a certain product, or is focused early in
the process, when an initial market position is being established. If the
Company perceives significant competitive risk and a need for large technical or
financial commitment, it generally negotiates long-term contracts or capital
guarantees from its targeted customer before proceeding.

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(Dollars in thousands, except share data)

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The rest of the Company's business competition is more typical of chemical
markets. Competition exists from other producers of the Company's products and
other products that may offer equivalent properties. Competition in these areas
are generally based on customer service, product quality and pricing.

ENVIRONMENTAL AND SAFETY REGULATIONS AND PROCEEDINGS

General. Production of certain of the Company's chemicals involves the
use, storage and transportation of toxic and hazardous materials. The Company's
operations are subject to extensive international and domestic federal, state
and local laws and regulations relating to the storage, handling, emission,
transportation and discharge of materials into the environment and the
maintenance of safe conditions in the work place. The Company maintains
environmental and industrial safety and health compliance programs at its
plants, and believes that its manufacturing operations are in general compliance
with all applicable safety, health and environmental laws.

The Company's acquisitions were made subject to known environmental
conditions. Also, risks of substantial costs and liabilities are inherent in
certain plant operations and certain products produced at the Company's plants,
as they are with other companies engaged in the chemical business, and there can
be no assurance that significant costs and liabilities will not be incurred.
Additionally, prevailing legislation tends to hold chemical companies primarily
responsible for the proper disposal of their chemical wastes even after
transferral to third party waste disposal facilities. Moreover, other future
developments, such as increasingly strict environmental, safety and health laws
and regulations, and enforcement policies thereunder, could result in
substantial costs and liabilities to the Company and could subject the Company's
handling, manufacture, use, reuse, or disposal of substances or pollutants at
its plants to more rigorous scrutiny than at present. Although the Company has
no direct operations and conducts its business through subsidiaries, certain
legal principles that provide the basis for the assertion against a parent
company of liability for the actions of its subsidiaries may support the direct
assertion against the Company of environmental liabilities of its subsidiaries.

Beginning in 1990, CasChem, Inc., one of the Company's subsidiaries, was
the subject of an investigation by the Environmental Protection Agency and the
Federal Bureau of Investigation concerning the handling, storage, and disposal
of hazardous wastes. During 1994, a settlement was reached wherein that
subsidiary pleaded guilty to the unpermitted storage of one drum of hazardous
waste and the payment of a $1,000 fine, which was paid in January 1995. As a
related liability had been previously accrued, the resolution of this matter has
had no effect upon the results of operations in 1995 or 1994.

Known environmental matters which may result in liabilities to the Company
and the related estimates and accruals are summarized in Note #20 to the Cambrex
Corporation and Subsidiaries Consolidated Financial Statements.

Present and Future Environmental Expenditures. The Company's policy is to
comply with all legal requirements of applicable environmental, health and
safety laws and regulations, and the Company believes it is in general
compliance with such requirements and has adequate professional staff and
systems in place to remain in compliance. In some cases, compliance can only be
achieved by capital expenditures, and the Company made capital expenditures of
approximately $4,000 in 1995, $2,500 in 1994 and $1,700 in 1993 for
environmental projects. The Company anticipates that capital requirements will
increase in subsequent years as a result of the Clean Air Act Amendments and
other pending environmental laws. Additionally, as the environmental proceedings
in which the Company is involved progress from the remedial investigation and
feasibility study stage to implementation of remedial measures, related
expenditures will probably increase. The Company considers costs for
environmental compliance to be a normal cost of doing business, and includes
such costs in pricing decisions.

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(Dollars in thousands, except share data)

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EMPLOYEES

At December 31, 1995 the Company had 1,336 employees (598 of whom were from
our international operations).

All hourly plant employees at the Bayonne, New Jersey facility are
represented by Local 8-406 of the Oil, Chemical and Atomic Workers International
Union under a contract expiring September 17, 1997; the hourly plant employees
at the Carlstadt, New Jersey plant are represented by the Amalgamated Industrial
Union of East Orange, New Jersey under a contract expiring November 30, 1997;
and the hourly plant employees at the Harriman, New York facility are
represented by Local 810 of the International Brotherhood of Teamsters under a
contract expiring June 30, 1998. Nobel and Profarmaco production,
administration, scientific and technical employees are represented by various
local and national unions. The contracts with these unions expire at various
times through December 31, 1998. The Company believes its labor relations are
satisfactory.

SEASONALITY

Like many other businesses in the specialty chemicals industry, the Company
experiences some seasonality as sales traditionally increase during the second
quarter. Operating results for any quarter, however, are not necessarily
indicative of results for any future period. In particular, as a result of
various factors such as acquisitions and plant shutdowns, the Company believes
that period-to-period comparisons of its operating results should not be relied
upon as an indication of future performance.

EXPORT AND INTERNATIONAL SALES

The Company exports numerous products to various areas, principally Western
Europe, Asia and Latin America. Export sales from the domestic sites in 1995,
1994 and 1993 amounted to $50,608, $44,135 and $37,296, respectively. Sales from
international operations were $144,883 in 1995 and $34,803 in 1994, due to
acquisition activity in 1994. Refer to Note #18 to the Cambrex Corporation and
Subsidiaries Consolidated Financial Statements.

Set forth below is information relating to the Company's manufacturing
facilities:

<TABLE>
<CAPTION>
OPERATING
LOCATION ACREAGE SUBSIDIARY PRODUCT LINES MANUFACTURED
- ----------------------- --------- ----------- -----------------------------------------------
<S> <C> <C> <C>
Bayonne, NJ 8 acres CasChem Pharmaceutical intermediates; Performance
enhancers; Polymer systems
Carlstadt, NJ 3 acres Cosan Performance enhancers; Polymer systems
Harriman, NY 29 acres Nepera Pharmaceutical intermediates; Organic
intermediates; Performance enhancers
Delaware Water Gap, PA 12 acres Heico Pharmaceutical bulk actives; Pharmaceutical
intermediates; Performance enhancers; Polymer
systems
North Haven, CT 4 acres Humphrey Pharmaceutical intermediates; Performance
enhancers
Charles City, IA 57 acres Salsbury Pharmaceutical bulk actives; Pharmaceutical
intermediates; Organic intermediates;
Performance enhancers
Zeeland, MI 14 acres Zeeland Pharmaceutical intermediates; Performance
enhancers
Middlesbrough, England 12 acres Seal Sands Pharmaceutical bulk actives; Pharmaceutical
intermediates; Performance enhancers; Polymer
systems
Karlskoga, Sweden 42 acres Nordic Pharmaceutical bulk actives; Pharmaceutical
Synthesis intermediates; Organic intermediates;
Performance enhancers
Paullo (Milan), Italy 13 acres Profarmaco Pharmaceutical bulk actives
</TABLE>

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(Dollars in thousands, except share data)

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<PAGE> 10

The Company owns all the above facilities and properties, with the
exception of the twelve acre tract it leases in Middlesbrough, England. In
addition, the Company owns thirty-one acres of undeveloped land adjacent to the
North Haven facility, one hundred and three acres of undeveloped land adjacent
to the Harriman facility and sixty-six acres of undeveloped land adjacent to the
Zeeland facility. The Company believes its facilities to be in good condition,
well maintained and adequate for its current needs.

Most of the Company's products are manufactured in multipurpose facilities.
Each product has a unique requirement for equipment, and occupies such equipment
for varying amounts of time. This, combined with the variations in demand for
individual products, makes it difficult to estimate actual overall capacity
subject to regulatory approval. It is generally possible to transfer manufacture
of a particular product to another facility should capacity constraints dictate.
However, the Company's pyridine and arsenical feed additive product groups are
each manufactured at a single facility, and production of such products would
not be transferrable to another site.

The Company plans to continue to expand capacity to meet growing needs by
process improvements and construction of new facilities where needed.

ITEM 3 LEGAL PROCEEDINGS.

See "Environmental and Safety Regulations and Proceedings" under Item 1
hereof with respect to various proceedings involving the Company in connection
with environmental matters. The Company is party to a number of other
proceedings. Management is of the opinion that while the ultimate liability
resulting from those proceedings, as well as environmental matters, may have a
material effect upon the results of operations in any given year, they will not
have a material adverse effect upon the Company's liquidity nor its financial
position.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table lists the executive officers of the Company and the
chief operating officers of the Company's operating subsidiaries:

<TABLE>
<CAPTION>
NAME AGE OFFICE(1)
- --------------------------------------------- --- ----------------------------------
<S> <C> <C>
James A. Mack................................ 58 President and Chief Executive
Officer
Peter Tracey................................. 54 Executive Vice President, Finance,
Chief Financial Officer
Peter E. Thauer.............................. 56 Vice President, Law & Environment,
General Counsel & Corporate
Secretary
Steven M. Klosk.............................. 38 Vice President, Administration
Burton M. Rein............................... 57 Senior Vice President of Cambrex
and General Manager of Heico
Chemicals, Inc. and The Humphrey
Chemical Company, Inc.
Albert L. Eilender........................... 52 Executive Vice President
Salvatore J. Guccione........................ 33 Vice President, Corporate
Development
Richard J. Seidel............................ 54 President and Chief Operating
Officer of Nepera, Inc.
Russell C. Smith............................. 54 Vice President and General Manager
of Salsbury Chemicals, Inc.
</TABLE>

- ---------------
(Dollars in thousands, except share data)

9
<PAGE> 11

<TABLE>
<CAPTION>
NAME AGE OFFICE(1)
- --------------------------------------------- --- ----------------------------------
<S> <C> <C>
Robert M. Parlman............................ 45 Vice President and General Manager
of Zeeland Chemicals, Inc.
John V. Van Hulle............................ 38 President of CasChem, Inc. and
Cosan Chemical Corporation
Claes Glassell............................... 44 Vice President of Cambrex
Managing Director of Cambrex
Limited
Cyril C. Baldwin, Jr......................... 68 Chairman of the Board
</TABLE>

- ---------------
(1) Unless otherwise indicated, positions shown are with the Company.

The Company's executive officers are elected by the Board of Directors and
serve at the Board's discretion.

Mr. Mack has been Chief Executive Officer since Mr. Baldwin's retirement on
April 1, 1995. Mr. Mack was appointed President and Chief Operating Officer and
a director of the Company in February 1990. For five years prior thereto he was
Vice President in charge of the worldwide Performance Chemicals businesses of
Olin Corporation, a manufacturer of chemical products, metal products, and
ammunition and defense-related products. Mr. Mack was Executive Vice President
of Oakite Products, Inc. from 1982 to 1984. Prior to joining Oakite, he held
various positions with The Sherwin-Williams Company, most recently as President
and General Manager of the Chemicals Division from 1977 to 1981. Mr. Mack is a
past Chairman of the Board of Governors of the Synthetic Organic Chemical
Manufacturing Association and is a member of the Board of Trustees of the
Michigan Tech Alumni Fund.

Mr. Tracey was appointed Executive Vice President and Chief Financial
Officer in November 1994. Mr. Tracey joined the Company in November 1990 as Vice
President and Chief Financial Officer. For three years prior to joining Cambrex,
he was Vice President-Finance and Chief Financial Officer for Joyce
International Inc., a manufacturer of office products. From 1986 to 1987, he was
Vice President-Finance and Chief Financial Officer for Robotic Vision Systems,
Inc., a manufacturer of industrial automation systems. Prior to 1986, Mr. Tracey
was a principal in the firm of Sirius Management Consultants.

Mr. Thauer was appointed Vice President-Law & Environment in December 1992,
and General Counsel and Corporate Secretary in August 1989. From 1987 until he
joined Cambrex, he was Counsel to the business and finance group of the firm of
Crummy, Del Deo, Dolan, Griffinger and Vecchione. From 1971 to 1987, Mr. Thauer
had held various positions with Avon Products, Inc., including U. S. Legal
Department Head and Corporate Assistant Secretary.

Mr. Klosk joined the Company in October 1992 as Vice President,
Administration. From February 1988 until he joined Cambrex, he was Vice
President, Administration and Corporate Secretary for the Genlyte Group, Inc., a
lighting fixture manufacturer. From 1985 to January 1988, he was Vice President,
Administration for Lightolier, Inc., a subsidiary of the Genlyte Group, Inc.

Dr. Rein was appointed Senior Vice President in April 1993. On October 1,
1995, he was also appointed General Manager of Heico Chemicals, Inc. and The
Humphrey Chemical Company. He joined the Company in May 1991 as President of
Cambrex Fine Chemicals Group. For more than five years prior thereto, he was
Director of Commercial Planning for W. R. Grace & Company.

Mr. Eilender was appointed Executive Vice President in December 1994. He
previously held the position of President of CasChem, Inc. and Cosan Chemical
Corporation. He was employed by the Company's Cosan Chemical Corporation
subsidiary when it was acquired by the Company in October 1985, and joined the
Company as a result of the acquisition. For more than three years prior to
October 1985, he held various executive positions with Cosan, including Vice
President, Research and Development and Executive Vice

- ---------------
(Dollars in thousands, except share data)

10
<PAGE> 12

President. He was President of Cosan from October 1986 until July 1989, at which
time he was appointed to the additional position of President of CasChem, Inc.

Mr. Guccione joined the Company in December 1995 as Vice President,
Corporate Development. Prior to joining the Company, from 1993 to 1995, he held
the position of Vice President and General Manager of the International
Specialty Products (ISP) Personal Care Division. He also served as Director of
Corporate Development for International Specialty Products.

Mr. Seidel joined the Company in November 1995 as President and Chief
Operating Officer of Nepera, Inc. He was most recently Vice President/General
Manager for the Petreco Division of Petrolite Corporation. Prior to this, he
served in various management positions at Petrolite and Gulf Oil Corporation.

Mr. Smith was appointed Vice President, General Manager of Salsbury
Chemicals, Inc. upon its acquisition by the Company in July 1991. Prior to the
acquisition, Mr. Smith had many years of service with Solvay Animal Health,
Inc., starting in 1968 as Chemical Engineer through his appointment as Director,
Chemical Operations in 1982.

Dr. Parlman joined the Company as Vice President and General Manager of
Zeeland Chemicals, Inc. in March 1994. Prior to such time, he was Vice President
and General Manager of the Tretolite Division of Petrolite. Dr. Parlman has
extensive experience in market development and research and development.

Mr. Van Hulle was appointed President of CasChem, Inc. and Cosan Chemical
Corporation in December 1994. He joined CasChem in July 1994 as Executive Vice
President. For more than five years prior thereto he was General Manager of the
Fine Chemicals Group for General Chemical Corporation, and had extensive
experience with Air Products & Chemicals, Inc.

Mr. Glassell was appointed Vice President of Cambrex in November 1994. As
Managing Director of Cambrex Limited and President of Cambrex Limited, the newly
acquired Nobel/Profarmaco business, he is responsible for Cambrex's European
operations. After extensive management experience at Nobel/Profarmaco, he joined
Cambrex as a result of the Nobel/Profarmaco Acquisition. In 1989, he joined
Nobel as President and CEO for Nobel's Chemistry Business. From 1986 to 1989, he
worked for the agricultural division of Berol Europe Ltd.

Mr. Baldwin has been Chairman of the Board since July 1991, and a director
of the Company since it began business in December 1981. On January 26, 1995,
Mr. Baldwin announced his retirement, effective April 1, 1995, as Chief
Executive Officer of the Company, a position he also held since December 1981.
Mr. Baldwin retired as an employee of the Company effective April 30, 1995. He
is a member of the Environmental and Governance Committees of the Company's
Board of Directors, and he is a director of Church & Dwight Co., Inc. and
Congoleum Corporation.

- ---------------
(Dollars in thousands, except share data)

11
<PAGE> 13

PART II

ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a) Since November 15, 1990, the Company's Common Stock, $.10 par value,
has been traded on the American Stock Exchange (AMEX) under the symbol CBM. The
Common Stock previously had been quoted on the National Association of
Securities Dealers Automated Quotation (NASDAQ) National Market System. The
following table sets forth the closing high and low sales prices of the Common
Stock as reported on AMEX:

<TABLE>
<CAPTION>
HIGH LOW
--- ---
<S> <C> <C>
1995
First Quarter................................................... $31 $26 5/8
Second Quarter.................................................. 35 3/8 31 1/8
Third Quarter................................................... 43 1/4 34
Fourth Quarter.................................................. 42 1/2 36
</TABLE>

<TABLE>
<CAPTION>
HIGH LOW
--- ---
<S> <C> <C>
1994
First Quarter................................................... $24 1/4 $19 7/8
Second Quarter.................................................. 22 7/8 20 5/8
Third Quarter................................................... 27 1/8 20 5/8
Fourth Quarter.................................................. 26 7/8 23 5/8
</TABLE>

(b) As of March 15, 1996, the Company estimates that there were
approximately 1,419 beneficial holders of the outstanding Common Stock of the
Company.

- ---------------
(Dollars in thousands, except share data)

12
<PAGE> 14

ITEM 6 SELECTED FINANCIAL DATA.

The following selected consolidated financial data of the Company for each
of the years in the five year period ended December 31, 1995 are derived from
audited financial statements. The consolidated financial statements of the
Company as of December 31, 1995 and December 31, 1994 and for each of the years
in the three year period ended December 31, 1995 and the accountants' reports
thereon are included elsewhere in this annual report. The data presented below
should be read in conjunction with the financial statements of the Company and
the notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere herein.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------
1995 1994(1) 1993(2) 1992(3) 1991(4)
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER-SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME DATA:
Net revenues...................... $357,176 $241,634 $197,203 $179,452 $144,500
Gross profit...................... 99,780 57,881 51,778 46,036 26,326
Selling, general and
administrative................. 47,751 31,216 29,286 28,201 22,743
Research and development.......... 7,526 5,689 5,843 4,046 3,279
Operating profit (loss)........... 44,503 20,976 16,649 13,789 304
Interest expense, net............. 10,508 4,581 2,771 2,437 2,532
Other (income) expense, net....... 2,779 (497) 446 1,054 (2,280)
Income (loss) before taxes........ 31,216 16,892 13,412 10,298 52
Net income (loss)................. 19,670 11,126 8,641 6,230 31
EARNINGS PER SHARE DATA:
Earnings (loss) per common share
and common share equivalents:
Primary........................ $ 2.93 $ 1.96 $ 1.64 $ 1.27 $ 0.01
Fully diluted.................. $ 2.92 $ 1.95 $ 1.60 $ 1.23 $ 0.01
Weighted average shares
outstanding:
Primary........................ 6,702 5,674 5,282 4,888 4,704
Fully diluted.................. 6,736 5,699 5,484 5,242 4,738
DIVIDENDS PER COMMON SHARE.......... $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20
BALANCE SHEET DATA: (at end of
period)
Working capital................... $ 69,865 $ 19,925 $ 38,497 $ 35,852 $ 31,359
Total assets...................... 402,553 360,477 166,845 148,406 111,603
Long-term obligations............. 99,643 115,975 36,261 39,808 19,021
Total stockholders' equity........ 189,484 101,966 87,569 75,177 68,717
</TABLE>

- ---------------
(1) Includes the results of Seal Sands and Nobel/Profarmaco from their
respective dates of acquisition, January 31, 1994 and October 12, 1994,
through December 31, 1994.

(2) Includes the results of Viscosity Oil's fiber optic gel business from March
12, 1993, the date of acquisition, through December 31, 1993.

(3) Includes the results of Zeeland Chemicals, Inc. from March 31, 1992, the
date of acquisition, through December 31, 1992.

(4) Includes the results of Salsbury Chemicals, Inc. from July 1, 1991, the date
of acquisition, through December 31, 1991.

- ---------------
(Dollars in thousands, except share data)

13
<PAGE> 15

ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items
from the selected consolidated financial information as a percentage of net
revenues.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Net revenues................................................ 100.0% 100.0% 100.0%
Gross profit................................................ 27.9 24.0 26.3
Selling, general and administrative......................... 13.3 12.9 14.9
Research and development.................................... 2.1 2.4 3.0
Operating profit............................................ 12.5 8.7 8.4
Interest expense............................................ 2.9 1.9 1.4
Other (income) expense, net................................. 0.8 (0.2) 0.2
Net income.................................................. 5.5 4.6 4.4
</TABLE>

The Company's product mix has changed substantially over the periods
indicated, principally as a result of acquisitions. The following tables show
the gross revenues of the Company's five product categories, in dollars and as a
percentage of the Company's total gross revenues, and the gross profit by
product category for 1995.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1995 1994 1993
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
GROSS REVENUES
Pharmaceutical bulk actives........................ $ 96,827 $ 23,774 $ 9,818
Pharmaceutical intermediates....................... 69,097 48,861 42,151
Organic intermediates.............................. 77,792 64,472 56,261
Performance enhancers.............................. 69,973 59,210 49,379
Polymer systems.................................... 54,381 53,366 45,699
-------- -------- --------
Total gross revenues..................... $368,070 $249,683 $203,308
======== ======== ========
Total net revenues....................... $357,176 $241,634 $197,203
======== ======== ========
Total gross profit....................... $ 99,780 $ 57,881 $ 51,778
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
GROSS REVENUES DISTRIBUTION
Pharmaceutical bulk actives................................. 26.3% 9.5% 4.8%
Pharmaceutical intermediates................................ 18.8 19.6 20.7
Organic intermediates....................................... 21.1 25.8 27.7
Performance enhancers....................................... 19.0 23.7 24.3
Polymer systems............................................. 14.8 21.4 22.5
----- ----- -----
100.0% 100.0% 100.0%
===== ===== =====
</TABLE>

- ---------------
(Dollars in thousands, except share data)

14
<PAGE> 16

1995 GROSS SALES & GROSS PROFIT BY PRODUCT CATEGORY

<TABLE>
<CAPTION>
GROSS GROSS GROSS
SALES PROFIT $ PROFIT %
-------- -------- --------
<S> <C> <C> <C>
Pharmaceutical bulk actives........................... $ 96,827 $ 33,627 34.7%
Pharmaceutical intermediates.......................... 69,097 16,817 24.3
Organic intermediates................................. 77,792 16,098 20.7
Performance enhancers................................. 69,973 20,256 28.9
Polymer systems....................................... 54,381 12,982 23.9
-------- ------- ----
$368,070 $ 99,780 27.1%
======== ======= ====
</TABLE>

1995 COMPARED TO 1994

Gross sales in 1995 increased $118,387 (48%) over 1994. Increases occurred
in all phases of the business with key increases in pharmaceutical bulk actives
which added $73,053 and pharmaceutical intermediates $20,236.

PHARMACEUTICAL BULK ACTIVES of $96,827 were $73,053 above 1994.
Nobel/Profarmaco increased $72,869. The sales of Magnesium Salicyliate (the
active ingredient in backache formulas) accounted for the rest of the increase
$416.

Gastro-intestinal bulk actives were $31,928. This category is mainly
Sulfasalazine/Mesalamine, made in bulk in the U.S. and at Nobel, which are used
to treat ulcerative colitis.

Cardiovascular bulk actives were $20,229. The key products in this total
included Diltiazem Hcl, Isosorbide-5-mononitrate, Sotalol Hcl and Acebutolol
Hcl.

Endocrine bulk actives were $8,919 and included two key items -- Glipizide
and Clormadinone.

Central nervous system bulk actives were $8,903 and included Bromazepam and
Lorazepam among 20 products.

Anti-inflammatory bulk actives were $8,343 and include among 15 products,
Ketoprofen, Magensium Salicyliate (for backache formulas) and Pranoprofen.

Other bulk actives were $18,505 and included items for respiratory system,
diuretics, anti-infective, immunology and various other uses. All had higher
sales than 1994 due to the Nobel/Profarmaco acquisition.

PHARMACEUTICAL INTERMEDIATES of $69,097 were $20,236 above 1994 (41%).
Nobel/Profarmaco increased $17,270 and excluding the Nobel/Profarmaco increase:
Health decreased $1,661; Cosmetic decreased $2,967; X-Ray Media increased
$1,339; and Other Pharmaceutical Intermediates increased $6,255.

Health products of $20,003 increased $172 with Nobel increasing $1,833 and
all Other Business decreasing $1,661 due to two discontinued product lines
(Citrates $913 and Hydrogels $1,922) partially offset by higher Pyridine sales
of $939.

X-Ray Media products, which include 5 NIPA compounds of $18,372, increased
$13,038 with Nobel increasing $11,699 and all other businesses increasing
$1,339.

Cosmetic products of $6,411 decreased $2,967 from 1994 due to sale of the
Wickhen product line in 1994 ($2,700 in reduced sales).

Other Pharmaceutical Intermediates of $24,311 increased $9,993 with Nobel
increasing $3,738 and all the other businesses increasing $6,255. This increase
was due to sales of the two intermediates used in the formulation of
dextromethorphan, an over-the-counter cough suppressant ($4,951 increase), and
Mandelic Acid ($1,702 increase).

- ---------------
(Dollars in thousands, except share data)

15
<PAGE> 17

ORGANIC INTERMEDIATES of $77,792 were $13,320 above 1994 (21%). Nobel
increased $9,515 in this category. Excluding the effect of Nobel, crop
protection intermediates increased $3,104 and feed additives increased $701. The
pigment intermediates were all Nobel business.

Feed additives of $37,387 increased $632 due in part to improved pricing of
feed grade Vitamin B3. Sales of organo-arsenical feed additives, the largest
product in feed additives, remained at 1994 levels.

Crop protection intermediates of $30,454 increased $5,169 from 1994. The
increase was due to greater off-take of pyridine derivatives used in the
manufacture of herbicides. Pyridine which is the largest product in crop
protection was at the 1994 level.

Pigments intermediates of $9,951 increased $7,519 from 1994 due to the full
year effect of the Nobel acquisition. These intermediates are used in various
industrial products including inks, dyes and color additives.

PERFORMANCE ENHANCERS of $69,973 were $10,763 above 1994 (18%). Nobel
increased $4,579. Excluding the Nobel increase: photographic products decreased
$127 from 1994 levels; catalysts increased $965; specialty additives increased
$1,618; fuel/oil products increased $996; and polymer products increased $2,732.

Specialty additives of $18,241 increased $3,978 from 1994. This includes
Nobel's sales increase of $2,360. Other increases include castor oil based
products.

Catalysts products of $16,985 increased $3,128 from 1994. This increase
includes Nobel's added sales of $2,163 and increases in various other catalysts
of $965.

Polymer products of $15,722 increased $2,788 over 1994. The key increases
were products used as a crosslinking agent to improve the performance of
polycarbonate resins, as a dye receptor in acrylic fibers for textiles, and an
anti-oxidant used in plastics.

Photographic products of $10,166 decreased $127 from 1994 mainly due to
reduced sales of a polymer used in instant film, due to a customer continuing to
reduce inventory levels in 1995. (Refer to the 1994 Form 10-K).

Fuel/oil products of $8,859 increased $996 over 1994. Key increase was in
various alkenyl succinic anhydrides (ASA's) used in rust inhibitors, and fuel
and oil detergents.

POLYMER systems of $54,381 were $1,013 above 1994. Engineering plastics
increased $2,970 from 1994 and helped to offset reductions in coatings of $657
and telecommunications of $1,320. Biomedicals of $5,004 were at the same level
as 1994.

Telecommunications of $23,710 decreased $1,320 from 1994 due to reduced
encapsulant sales. This reduction was the result of good weather, and declining
applications, as domestic customers replace cable lines with fiber optics.

Coatings of $17,574 decreased $657 from 1994 due to reduced sales to paint
manufacturers.

Engineering plastics of $8,093 increased $2,970 from 1994. This increase
was due to the growing demand for a product used in high performance polysulfone
engineering plastics in electronic and industrial applications, such as computer
and television screens, and automobile parts.

Export sales from U.S. businesses increased to $50,608 from $44,135 in
1994. International sales, comprised of all sales from our acquired operations
in Europe, totaled $144,883 as compared with $34,803 in 1994.

Total gross profit of $99,780 increased by $41,899, or 72.4%, from 1994.
This was due to the increased sales and higher gross margin percentage which
increased to 27.9% from 24.0% in 1994. The gross margin increase was due to an
improved product mix of sales, reduced cost for major raw materials which
affected the 1994 margin, and price increases gained in 1995.

- ---------------
(Dollars in thousands, except share data)

16
<PAGE> 18

Selling, general and administrative expenses as a percentage of net
revenues was 13.4% in 1995, up from 12.9% in 1994. The 1995 expense of $47,751
was $16,535 (53.0%) above 1994. The increased operating expenses of acquisitions
made in 1994 accounted for most of the increase. Other increases included bonus
accruals of $1,400.

Periodically, the Company conducts a comprehensive review of its
environmental and litigation issues, prepares estimates of the range of
potential costs of each issue wherever possible, and adjusts the accruals for
environmental contingencies as circumstances warrant. There were no provisions
made in 1995 or 1994. A discussion of such matters is included in the footnotes
to the financial statements.

Research and development expenses were 2.1% of net revenues in 1995, and
represented a 0.3% decrease from 1994. Research and development spending
increased to $7,526 from $5,689 in 1994. The 1994 acquisitions accounted for all
of this increase.

The operating profit in 1995 increased 112% to $44,503 from $20,976 in
1994. The increased operating profits were due to the full year effect of 1994
acquisitions and to increased gross margins.

Net interest expense of $10,508 in 1995 reflected an increase of $5,927
from 1994. The increase was due to $138,000 in financing activities necessary
for the acquisitions of Seal Sands and Nobel/Profarmaco. Additionally, the
interest rate in 1995 was 7.7% compared to 6.2% in 1994.

Other expense in 1995 was $2,779 compared with other income of $497 in
1994. The difference included 1995 currency losses at Nobel and Profarmaco, as
well as the writedowns of the carrying value of equipment no longer in use.

The provision for income taxes for 1995 resulted in an effective rate of
37.0% versus 34.1% in 1994. The rate increased due to the mix of income between
international and domestic subsidiaries.

The Company's net income increased 76.8% to $19,670 compared with a net
income of $11,126 in 1994.

1994 COMPARED TO 1993

Net revenues in 1994 increased $44,431 (23%) due to the Seal Sands
acquisition and the Nobel/Profarmaco acquisition, and to increased sales of
animal feed additives (in organic intermediates). The table below shows the
contribution of the acquisitions to the product categories and the changes in
the continuing business.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------
ACQUIRED BASE
BUSINESSES BUSINESS
1994 1994(1) 1994 1993
-------- ---------- -------- --------
<S> <C> <C> <C> <C>
Pharmaceutical bulk actives............... $ 23,774 $ 12,219 $ 11,555 $ 9,818
Pharmaceutical intermediates.............. 48,861 4,418 44,443 42,151
Organic intermediates..................... 64,472 2,720 61,752 56,261
Performance enhancers..................... 59,210 10,330 48,880 49,379
Polymer systems........................... 53,366 5,116 48,250 45,699
-------- ------- -------- --------
Gross revenues.................. $249,683 $ 34,803 $214,880 $203,308
======== ======= ======== ========
</TABLE>

- ---------------
(1) Includes Seal Sands, Nobel and Profarmaco acquisitions.

PHARMACEUTICAL BULK ACTIVES' revenues of $23,774 increased $13,956 (142%).
The increase included $11,874 from the Nobel/Profarmaco acquisition and from
increased sales from a generic drug for ulcerative colitis, which recovered from
depressed levels in 1993.

- ---------------
(Dollars in thousands, except share data)

17
<PAGE> 19

The Nobel/Profarmaco acquisition increased the pharmaceutical bulk actives
category and includes products for cardiovascular, gastro-intestinal, central
nervous system and other actives for the anti-infective, respiratory, endocrine,
anti-inflammatory, immunology, and other bulk actives markets.

Gastro-intestinal bulk actives increased $6,753 (93%) over 1993 to $14,033.
Profarmaco sales were $3,700, and the increase of $3,000 from the base business
was from the sales of a generic drug for ulcerative colitis.

PHARMACEUTICAL INTERMEDIATES' revenues of $48,861 increased $6,710 (16%)
over 1993. The increase included Nobel/Profarmaco sales of $4,360 and increases
in the other pharmaceutical intermediates, primarily intermediates used in cough
suppressants.

Sales of health intermediates represented $19,831, or 41%, of this
category's 1994 gross revenues and were $1,629 lower than 1993. The main
decrease of $1,800 in sales was due to the end of a contract to make citrates at
the Company's Zeeland, Michigan facility. Reduced shipments of Vitamin B3 due to
price competition and reduced sales of pyridine based products due to reduced
pricing and lower sales volume to a key customer, were offset by higher sales of
a starch modifier.

Sales of cosmetic intermediates represented $9,378, or 19%, of this
category's 1994 gross revenues and were $338 higher than 1993. In the fourth
quarter of 1994, the Wickhen line of cosmetic products was sold.

Sales of x-ray media represented $5,334, or 11%, of this category's 1994
gross revenues and were $1,286 above 1993. This increase is due to the
acquisition of Nobel in 1994.

Sales of other pharmaceutical intermediates represented $14,318, or 29%, of
this category's 1994 gross revenues and were $6,715 higher than 1993. The key
increase of existing business was due to growth in two intermediates for
dextromethorphan, an over-the-counter cough suppressant. Growth for one
intermediate, an established product, was supplemented by sales under a contract
for a second intermediate used in the synthesis of this material.

ORGANIC INTERMEDIATES' revenues of $64,472 increased $8,211 (15%). This
increase included $2,430 of new products from Nobel and $5,780 of increases from
the Company's existing feed additive business.

The sales of animal feed additives were $36,755, or 57%, of this category's
1994 revenues, up $6,171 from 1993. Sales of organo-arsenical feed additives
used to control disease and to enhance chicken growth and improve feed
performance, increased 25% over the prior year due to growth in poultry
production coupled with the customer's penetration of domestic and international
markets. All sales of this product are made to ALPHARMA under a long-term
contract. Sales of feed grade Vitamin B3 increased due to the installation of
new packaging facilities late in 1993 which allowed penetration of non-U.S.
markets. Shipments of Vitamin B3 intermediates to India and the Asia/Pacific
area also increased. While volume increased, the feed grade Vitamin B3 market
experienced lower prices due to competitive pricing, adversely affecting margins
on these products. Prices were increased in the fourth quarter 1994 and are
anticipated to increase in the first quarter 1995, although no assurances can be
given that such price increases will occur.

Sales of crop protection intermediates used in the manufacture of
herbicides and insecticides amounted to $25,285, or 39.2% of this category's
1994 gross revenues and remained at the 1993 sales level. Sales of pyridine, the
largest item in this group, were up 12% from 1993. The largest pyridine customer
is Zeneca, Inc. who uses it in herbicide manufacture. The Company produces
another major pyridine compound and is the exclusive supplier of this product to
Dow Elanco who uses it in production of a different herbicide. Sales of this
compound decreased 21% in 1994 due to the customer reducing inventory levels
after very high customer production in 1993. Sales of other pyridine derivatives
in this category increased $756 from 1993 due to competitive pressures.

Pigment intermediates represented $2,432, or 4%, of this category's 1994
revenues. These products are all produced by Nobel.

- ---------------
(Dollars in thousands, except share data)

18
<PAGE> 20

PERFORMANCE ENHANCERS' revenues of $59,210 increased $9,831 (20%). This
increase included $9,627 in sales from the Seal Sands acquisition.

Sales of specialty additives represented $14,263, or 24%, of this
category's 1994 revenues and were $492 lower than 1993. This was due to a
reduction in castor based products.

Sales of catalyst products represented $13,857, or 23%, of this category's
1994 revenues and were $1,670 higher than 1993. The increase is primarily
attributable to tin based catalysts used in various industrial applications.

Sales of polymer products represented $12,934, or 22%, of this category's
1994 revenues and were $8,812 higher than 1993. This increase includes $7,112 in
sales attributable to the Seal Sands acquisition. In existing operations,
increases occurred in an application for a product used as a dye receptor in
acrylic yarns.

Sales of photographic chemical products were $10,293, or 17%, of this
category's 1994 revenues, $1,234 lower than 1993. The decrease was in sales of a
polymer used in instant film, due to our customer reaching their desired
inventory levels.

Sales of products to the fuel/oil industries represented $7,863, or 13%, of
this category's 1994 revenues and were $1,075 higher than 1993.

POLYMER SYSTEMS' revenues of $53,368 increased $7,669 (17%). This increase
included $5,118 in sales from the Seal Sands acquisition of a product used in
the manufacture of high performance plastics and represented 34% of their 1994
sales.

Telecommunications products represented $25,030, or (47%), of this
category's sales, and was on the same level as 1993. Higher product sales to the
electronics industry was offset by lower sales of encapsulants.

Coatings products represented $18,231, or (34%), of this category's sales,
and was $1,650 higher than 1993. This increase was mainly due to a 14% growth in
castor based products used in coatings for the housing and automotive
industries.

Engineering plastics represented $5,123, or (10%), of this category's
sales, and included $5,100 in sales from our Seal Sands facility for a product
used in high performance plastics.

Biomedical products represented $4,984, or (9%), of this category's sales,
and was $993 higher than 1993, due to increased foreign market share.

Export sales increased by $6,839, or 18.3%, to $44,135. Exports were 17.7%
of gross revenues in 1994 versus 18.3% in 1993. International sales, comprised
of all sales from our acquired operations in Europe, totaled $34,803.

Total gross profit of $57,881 increased by $6,103, or 11.8%, from 1993. The
increased gross profit was principally due to the Nobel/Profarmaco and Seal
Sands acquisitions, and to sales increases in health and pharmaceuticals and
agricultural intermediates and additives. The gross profit as a percent of net
revenues declined from 26.3% in 1993 to 24.0% in 1994. Without the acquisition
of Nobel/Profarmaco, the gross profit percent would have been 23.0% in 1994.
Loss of margin was principally due to sales price decreases and raw material
price increases in the pyridine and related businesses, and higher manufacturing
costs due to weather related problems in the first quarter 1994.

Selling, general and administrative expenses as a percentage of net
revenues was 12.9% in 1994, down from 14.9% in 1993. The 1994 expense of $31,216
was $1,930 (6.6%) above 1993. The increased operating expenses of the new
acquisitions were mostly offset by reduced spending, including staff reductions,
reduced legal costs, and lower environmental provisions.

- ---------------
(Dollars in thousands, except share data)

19
<PAGE> 21

environmental contingencies as circumstances warrant. No additional
environmental provision was recorded in 1994. The 1993 provision was $1,029. A
discussion of such matters is included in the footnotes to the financial
statements. A settlement with insurance companies relating to coverage of
environmental remediation costs allowed us to recover $1,000 of legal expenses
spent in 1993 and 1994, pursuing this recovery.

Research and development expenses of $5,689 were 2.4% of net revenues in
1994, and represented a 2.6% decrease from 1993. Decreased spending at our
Harriman and Bayonne facilities were offset by increased spending to our other
domestic facilities and at our newly acquired sites in England, Sweden and
Italy. This was consistent with our strategic focus on the Health and
Pharmaceuticals and Fine Chemicals product categories.

The operating profit in 1994 increased 26.0% to $20,976 from $16,649 in
1993. The increased operating profits were due to the acquisition of
Nobel/Profarmaco; and to cost reductions in selling, general and administration,
and in research and development.

Net interest expense of $4,581 in 1994 reflected an increase of $1,810 from
1993. The increase was due to $138,000 in financing activities necessary for the
acquisitions of Seal Sands and Nobel/Profarmaco and higher interest rates.

Other income in 1994 was $497 compared with other expense of $446 in 1993.
The difference included 1994 currency gains at Profarmaco.

The provision for income taxes for 1994 resulted in an effective rate of
34.1% versus 35.6% in 1993.

The Company's net income increased 28.8% to $11,126 compared with a net
income of $8,641 in 1993.

1993 COMPARED TO 1992

Net revenues in 1993 increased $17,751 (10%) over 1992 as a result of
including a full year of sales by Zeeland Chemicals, Inc. ("Zeeland"), the
increased polymer business was due to the acquisition of a fiber optic gel
business, increased pharmaceutical intermediates, and increased performance
enhancers. The pharmaceutical bulk actives declined in 1993.

PHARMACEUTICAL BULK ACTIVES' revenues of $9,818 decreased $2,621 (21%) from
1992. This decrease was due to the unusually high 1992 sales caused by a
disruption in the supply chain that resulted in distributors building excessive
inventories. Sales were below normal levels in 1993 due to this inventory
correction. Partially offsetting this decline were increased sales of other bulk
actives involved with anti-inflammatories.

PHARMACEUTICAL INTERMEDIATES' revenues of $42,151 increased $4,564 (12%).
This was primarily attributable to increased health, x-ray media and an
intermediate used in cough suppressants.

Sales of health intermediates represented $21,460, or 51%, of this
category's 1993 gross revenues and were $2,582 higher than 1992. This category's
performance was affected by increases in the shipments of Vitamin B3 to the U.S.
market.

Sales of cosmetics intermediates represented $9,040, or 21%, of this
category's 1993 gross revenues and were $1,091 lower than 1992. Sales of castor
oil based personal care products totaled $8,500 in 1993 and were $1,100 lower
than the prior year.

Sales of x-ray media intermediates represented $4,048, or 10%, of this
category's 1993 gross revenues and were $1,554 higher than 1992 due to products
associated with the Zeeland acquisition and growth in x-ray contrast compounds
that are less toxic.

Sales of other active intermediates represented $7,603, or 18%, of this
category's 1993 gross revenues and were $1,419 higher than 1992. The increase
was due to expanded sales of an intermediate used in the formulation of
dextromethorphan, an over-the-counter cough suppressant.

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20
<PAGE> 22

ORGANIC INTERMEDIATES' revenues of $56,261 increased $687 (1%). This
increase was due to higher sales of organo-arsenical feed additives to the
poultry industry and to increased shipments of a pyridine compound to a major
herbicide producer. This category was negatively affected by the end of a
contract for a herbicide intermediate in the fourth quarter 1992, and a decrease
in export sales of pyridine derivatives.

The sales of feed additives amounted to $30,584, or 54%, of this category's
1993 gross revenues and were up 6% from 1992. Sales of organo-arsenical feed
additives increased 30% over the prior year due to a competitor stopping
production, increased dosages by poultry producers, and increased poultry
production in the U.S.

The sales of products used for crop protection amounted to $25,677, or 46%,
of this category's 1993 gross revenues and were down 4% from 1992. Sales of
pyridine, the largest item in this group, were at the same level as 1992. The
largest pyridine customer is Zeneca, Inc. who uses it in the manufacture of
herbicides. The Company produces another major pyridine compound and is the
exclusive supplier of this product to Dow Elanco who used it in production of a
herbicide. Sales of this compound increased substantially in 1993 due to Dow
resuming normal ordering patterns after reducing their inventories in 1992.
Sales of other pyridine derivatives in this category decreased from 1992 due to
high inventory positions in the Asia-Pacific region and reduced use of a wheat
fungicide in Europe.

PERFORMANCE ENHANCERS' revenues of $49,379 increased $7,797 (19%). This
increase was primarily due to photographic chemicals, catalysts and fuel/oil
performance products.

Sales of specialty additives represented $14,755, or 30%, of this
category's 1993 gross revenues and were $335 higher than the prior year. This
was primarily due to increased sales of various castor based products.

Sales of catalysts represented $12,187, or 25%, of this category's 1993
gross revenues and were $1,307 higher than 1992. The increase is primarily
attributable to a variety of products associated with the Zeeland acquisition.

Sales of photographic chemicals represented $11,527, or 23%, of this
category's 1993 gross revenues and were $4,331 higher than 1992. The increase is
due to a substantial increase in production of a photochemical used as a polymer
in instamatic film.

Sales of products to the fuel/oil industries represented $6,788, or 14%, of
this category's 1993 gross revenues and were $1,527 higher than 1992. This
increase was due to expanded sales of alkanes which are specialty parafins used
as calibrating agents for certain diesel fuels and alkenyl succinic anhydrides
(ASA's) used as lubricant additives.

Sales of polymer products represented $4,122, or 8%, of this category's
1993 gross revenues and were $297 higher than 1992 primarily due to increased
sales of a chemical used as a dye receptor in acrylic fibers for textiles and to
sales of a product used as a cross linker for strengthening plastics.

POLYMER SYSTEMS' revenues of $45,699 increased $8,002 (21%). This was due
to increases in fiber optic cable gels and encapsulants to the
telecommunications industry.

Sales of telecommunications products represented $28,126, or 55%, of this
category's 1993 gross revenues and were $10,252 higher than 1992 due to the
acquisition of a complimentary fiber optic gel business in March 1993 which
contributed $8,900 in increased revenues. The encapsulant sales were 8% above
1992 primarily due to penetration of international markets.

Sales of products to the coatings industry represented $16,581, or 36%, of
this category;s 1993 gross revenues and were $2,332 lower than the prior year
due to a tolling agreement for paint additives and corrosion inhibitors that
ended in May 1993.

Sales of biomedical products represented $3,991, or 9%, of this category's
1993 gross revenues and were at the same level of sales as 1992.

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(Dollars in thousands, except share data)

21
<PAGE> 23

Export and international sales decreased by $7,200, or 16.2%. Exports were
18.3% of gross revenues in 1993 versus 24.1% in 1992 due to lower export sales
caused by poor economic conditions in Europe and payment problems in the
Asia-Pacific region.

Total gross profit of $51,778 increased by $5,742, or 12.5%, from 1992. The
gross profit as a percent of net revenues improved from 25.7% in 1992 to 26.3%
in 1993. The increased gross profit was due to an improvement in sales mix and
the continued effort to improve manufacturing costs and production processes.

Selling, general and administrative expenses as a percentage of net
revenues was 14.9% in 1993, down from 15.7% in 1992. The 1993 expense of $29,286
was $1,085 (3.8%) above 1992, due to the full year effect of the Zeeland
acquisition and the costs of establishing a sales office in Hong Kong. Bonus
payments to employees declined by 40% to $1,700 in 1993 based on a formula using
year-to-year changes in net income and return on investment achieved.

Periodically, the Company conducts a comprehensive review of its
environmental and litigation issues, prepares estimates of the range of
potential costs of each issue wherever possible, and adjusts the accruals for
environmental contingencies as circumstances warrant. An environmental provision
of $1,029 was recorded in 1993 attributable to activity in a number of pending
environmental matters; $1,747 was recorded in 1992.

Research and development expenses of $5,843 were 3.0% of net revenues in
1993, and represented a 44.4% increase over 1992. The increase of $1,797 in 1993
was largely due to the commitment to develop new products and processes to
ensure future growth in profitability. This commitment will continue in the
future.

The operating profit in 1993 increased 20.7% to $16,649 from $13,789 in
1992. The increased operating profits were due to increased sales and gross
margin, partially offset by the increases in research and development spending.

Net interest expense of $2,771 in 1993 reflected an increase of $334 from
1992. The increase was due to higher borrowings in order to finance acquisition
activity and the capital program.

Other expense in 1993 was $466 compared with other expense of $1,054 in
1992. The decrease was due to a 1992 provision of $553 for the write-off of a
receivable.

The provision for income taxes for 1993 resulted in an effective rate of
35.6% versus 39.5% in 1992. The rate decreased due to the realization of the
benefit of tax planning strategies.

The Company's net income increased 38.7% to $8,641 compared with a net
income of $6,230 in 1992.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flow from operations was $44,564 for December 31, 1995 compared
with $27,429 in 1994. The increase in cash flow is primarily due to increased
earnings and additional depreciation.

Capital expenditures were $46,398 in 1995, $20,825 in 1994, and $15,535 in
1993. The largest expenditures were for (1) a facility at the Salsbury site in
Charles City, Iowa, to increase production levels for several products and (2)
increased production capacity at Nobel Chemicals AB (now Nordic Synthesis AB) in
Sweden.

On September 21, 1994, the Company entered into a new $225,000 Loan
Agreement (the "Credit Agreement") with a syndicate of lenders (the "Banks") and
with NBD Bank, N.A., as Agent. The Credit Agreement provides for (i) a one-year
$50,000 bridge loan, due October 11, 1995; (ii) a $75,000 term loan, with
mandatory $1,000 quarterly payments until September 20, 1997 and mandatory
quarterly payments of $3,938 for each quarter thereafter until September 30,
2001; and (iii) a $100,000 revolving credit facility, due October 11, 1997. The
revolving credit facility will be extended for successive two-year periods
subsequent to October 11, 1997 unless either the Company or the Banks elect not
to so extend the facility.

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(Dollars in thousands, except share data)

22
<PAGE> 24

The Credit Agreement permits the Company to choose from various interest
rate options and to specify the portion of the borrowing to be covered by each
interest rate option. It also contains various restrictive covenants, which
require the Company to maintain a minimum consolidated net worth level, certain
financial ratios and deferred pledge of assets, as defined. The Company has
entered into interest rate swap agreements to reduce the impact of changes in
interest rates on its floating rate long-term obligations. As of December 31,
1995, the Company had outstanding four interest rate swap agreements, having a
total notional amount of $40,000. Those agreements effectively change the
Company's interest rate exposure from variable rate to fixed percentage.

On October 11, 1994, the Company borrowed $32,200 and L4,265 under the
Credit Agreement to repay all of its obligations under the Old Credit Agreement,
and the Old Credit Agreement was terminated. On October 12, 1994, the Company
borrowed $126,000 under the Credit Agreement, including all of the $50,000
bridge loan facility and all of the $75,000 seven-year term loan, to finance the
acquisition of Nobel/Profarmaco. On October 31, 1994, the Company borrowed
$4,150 under the Credit Agreement to retire a variable rate Industrial
Development Revenue Bond relating to its manufacturing facility in Zeeland,
Michigan.

On July 24, 1995, the Company raised $62,572 in a public offering, which
was used to pay down outstanding debt ($50,000 short-term bridge loan, $12,572
long-term).

The Company has undrawn borrowing capacity of approximately $66,798 under
the Credit Agreement as of December 31, 1995, which can be used for general
corporate purposes. Management is of the opinion that these amounts, together
with other available sources of capital, are adequate for meeting the Company's
financing and capital requirements.

During 1995, the Company paid cash dividends of $0.20 per share.

The Company buys materials and sells products in a variety of currencies in
various parts of the world. Its results, are, therefore, impacted by changes in
the relative value of currencies in which it deals. Prior to the acquisition of
Nobel/Profarmaco, this risk was not considered to be significant and the Company
had no program to mitigate foreign currency risk.

During 1995, the Company established a foreign currency risk management
policy. The Company used foreign currency forward exchange contracts to reduce
the effect of short-term foreign exchange rate movements on the Company's
operating results. The notional amount of these contracts is $38,940 which the
Company estimates to be approximately 70% of the foreign currency exposure
during the period covered resulting in a deferred currency gain of $671 at
December 31, 1995.

ENVIRONMENTAL

The Company maintains environmental and industrial safety and health
compliance programs at its plants, and believes that its manufacturing
operations are in general compliance with all applicable safety, health and
environmental laws.

Beginning in 1990, CasChem, Inc., one of the Company's subsidiaries, was
the subject of an investigation by the Environmental Protection Agency and the
Federal Bureau of Investigation concerning the handling, storage, and disposal
of hazardous wastes. During 1994, a settlement was reached wherein that
subsidiary pleaded guilty to the unpermitted storage of one drum of hazardous
waste and the payment of a $1,000 fine, which was paid in January 1995. As a
related liability had been previously established, the resolution of this matter
had no effect upon the results of operations in 1994 or 1995.

Through the activities of its predecessors and third parties in connection
with the handling and disposal of hazardous and other wastes, the Company may
become liable, irrespective of fault, for certain site remediation costs under
federal and state environmental statutes. Descriptions of such environmentally
related contingencies are presented in Note #20 to the financial statements and
incorporated herein by reference.

- ---------------
(Dollars in thousands, except share data)

23
<PAGE> 25

The resolution of such matters often spans several years and frequently
involves regulatory oversight and/or adjudication. Additionally, many
remediation requirements are not fixed and are likely to be affected by future
technological, site and regulatory developments. Consequently, the ultimate
extent of liabilities with respect to such matters as well as the timing of
related cash disbursements cannot be determined with certainty. However,
management is of the opinion that while the ultimate liability resulting from
these matters may have a material effect upon the results of operations in any
given year, they will not have a material adverse effect upon the Company's
liquidity nor its financial position.

IMPACT OF RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standard No. 119 "Disclosure about
Financial Instruments and Fair Value of Financial Instruments" requires
disclosure about amounts, nature and terms of derivative financial instruments
held or issued. As of December 31, 1995, the Company has entered into various
foreign currency forward exchange contracts in an effort to mitigate the
exposures inherent in operating businesses in various foreign currencies.
Description of the derivatives used and the associated fair values are presented
in Note 12 to the financial statements and incorporated herein by reference.

Statement of Financial Accounting Standard No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
requires that long-lived assets and certain identifiable intangibles to be held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company is required to adopt this standard in 1996. The Company
anticipates that the adoption of this standard will not have a material impact
on its results of operations.

Statement of Financial Accounting Standard No. 123 "Accounting for Stock
Based Compensation" establishes financial accounting and reporting standards for
stock-based employee compensation plans. The Company is currently evaluating the
impact of this pronouncement.

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The following consolidated financial statements and selected quarterly
financial data of the Company are filed under this item:

<TABLE>
<CAPTION>
PAGE NUMBER
(IN THIS REPORT)
----------------
<S> <C>
Report of Independent Accountants............................................. 25
Consolidated Balance Sheets as of December 31, 1995 and 1994.................. 26
Consolidated Income Statements for the Years Ended December 31, 1995, 1994
and 1993.................................................................... 27
Consolidated Statements of Stockholders' Equity for the Years Ended December
31, 1995, 1994 and 1993..................................................... 28
Consolidated Statements of Cash Flows for the Years Ended December 31, 1995,
1994 and 1993............................................................... 29
Notes to Consolidated Financial Statements.................................... 30
Consolidated Quarterly Financial Data (unaudited) for the Years Ended December
31, 1995 and 1994........................................................... 51
</TABLE>

The financial statements and schedules are filed pursuant to Item 14 of
this report.

- ---------------
(Dollars in thousands, except share data)

24
<PAGE> 26

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors
of Cambrex Corporation:

We have audited the accompanying consolidated balance sheets of Cambrex
Corporation and Subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity and cash flows and the
consolidated financial statement schedules for each of the three years in the
period ended December 31, 1995, as listed in Item 14(a) of this Form 10-K. These
consolidated financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Cambrex Corporation and Subsidiaries as of December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles. In addition, in our opinion, the consolidated
financial statement schedules referred to above, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly, in
all material respects, the information required to be included therein.

COOPERS & LYBRAND L.L.P.

Parsippany, New Jersey
January 19, 1996

25
<PAGE> 27

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................ $ 4,841 $ 9,087
Receivables:
Trade accounts, less allowance for doubtful accounts of $1,261 and
$1,288 at respective dates....................................... 52,342 47,742
Other............................................................. 5,995 5,112
-------- --------
58,337 52,854
Inventories.......................................................... 71,234 61,979
Deferred tax assets.................................................. 4,544 1,089
Other current assets................................................. 5,178 5,689
-------- --------
Total current assets......................................... 144,134 130,698
Property, plant and equipment, net..................................... 205,683 172,282
Intangible assets, net................................................. 51,665 56,991
Other assets........................................................... 1,071 506
-------- --------
Total assets................................................. $402,553 $360,477
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities............................. $ 62,444 $ 48,402
Income taxes payable................................................. 3,012 5,982
Short-term debt...................................................... 4,705 52,368
Current portion of long-term debt.................................... 4,108 4,021
-------- --------
Total current liabilities.................................... 74,269 110,773
Long-term debt......................................................... 99,643 115,975
Deferred tax liabilities............................................... 19,400 14,258
Other noncurrent liabilities........................................... 19,757 17,505
-------- --------
Total liabilities............................................ 213,069 258,511
Commitments and contingencies
Stockholders' equity:
Common Stock, $.10 par value; issued 8,195,831 and 6,078,781 shares
at respective dates............................................... 818 607
Additional paid-in capital........................................... 142,453 73,673
Retained earnings.................................................... 54,316 35,935
Additional minimum pension liability................................. (750)
Treasury stock, at cost; 715,447 and 756,806 shares at respective
dates............................................................. (9,160) (9,690)
Cumulative translation adjustment.................................... 1,807 1,441
-------- --------
Total stockholders' equity................................... 189,484 101,966
-------- --------
Total liabilities and stockholders' equity................... $402,553 $360,477
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

26
<PAGE> 28

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER-SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net revenues............................................... $357,176 $241,634 $197,203
Operating expenses:
Cost of goods sold.................................... 257,396 183,753 145,425
Selling, general and administrative................... 47,751 31,216 29,286
Research and development.............................. 7,526 5,689 5,843
-------- -------- --------
Total operating expenses......................... 312,673 220,658 180,554
-------- -------- --------
Operating profit........................................... 44,503 20,976 16,649
Other (income) expenses
Interest income....................................... (638) (95) (41)
Interest expense...................................... 11,146 4,676 2,812
Other -- net.......................................... 2,779 (497) 466
-------- -------- --------
Income before income taxes................................. 31,216 16,892 13,412
Provision for income taxes................................. 11,546 5,766 4,771
-------- -------- --------
Net income................................................. $ 19,670 $ 11,126 $ 8,641
======== ======== ========
Earnings per share of common stock and common stock
equivalents:
Primary............................................... $ 2.93 $ 1.96 $ 1.64
Fully diluted......................................... $ 2.92 $ 1.95 1.60
Weighted average shares outstanding:
Primary............................................... 6,702 5,674 5,282
Fully diluted......................................... 6,736 5,699 5,484
</TABLE>

See accompanying notes to consolidated financial statements.

27
<PAGE> 29

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
NONVOTING
COMMON STOCK COMMON ADDITIONAL
--------------------- STOCK MINIMUM CUMULATIVE TOTAL
SHARES PAR VALUE (PAR PAID-IN RETAINED PENSION TREASURY TRANSLATION STOCKHOLDERS'
ISSUED ($.10) $.10) CAPITAL EARNINGS LIABILITY STOCK ADJUSTMENT EQUITY
--------- --------- --------- -------- -------- ---------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December
31, 1992.......... 5,705,734 $ 571 $-- $ 67,714 $18,202 -- $(11,310) -- $ 75,177
Net income........ 8,641 8,641
Cash dividends at
$0.20 per
share........... (984 ) (984)
Exercise of stock
options......... 51,550 5 334 339
Conversion of
subordinated
notes........... 257,397 25 3,965 3,990
Additional minimum
pension
liability....... $ (1,030) (1,030)
Shares issued
under savings
plan............ 614 822 1,436
--
---------- ---- ------- ------- ------- ------- ------ --------
Balance at December
31, 1993.......... 6,014,681 601 -- 72,627 25,859 (1,030) (10,488) -- 87,569
Net income........ 11,126 11,126
Cash dividends at
$0.20 per
share........... (1,050 ) (1,050)
Exercise of stock
options......... 64,100 6 395 401
Reversal of
additional
minimum pension
liability....... 1,030 1,030
Shares issued
under savings
plan............ 651 798 1,449
Adjustment for
foreign currency
translation..... $ 1,441 1,441
--
---------- ---- ------- ------- ------- ------- ------ --------
Balance at December
31, 1994.......... 6,078,781 607 -- 73,673 35,935 -- (9,690) 1,441 101,966
Net income........ 19,670 19,670
Cash dividends at
$0.20 per
share........... (1,289 ) (1,289)
Exercise of stock
options......... 392,050 39 2,755 2,794
Tax benefit of
stock options
exercised....... 2,721 2,721
Shares issued in
public
offering........ 1,725,000 172 62,400 62,572
Additional minimum
pension
liability....... (750) (750)
Shares issued
under savings
plan............ 904 530 1,434
Adjustment for
foreign currency
translation..... 366 366
--
---------- ---- ------- ------- ------- ------- ------ --------
Balance at December
31, 1995.......... 8,195,831 $ 818 $-- $142,453 $54,316 $ (750) $ (9,160) $ 1,807 $ 189,484
========== ==== == ======= ======= ======= ======= ====== ========
</TABLE>

See accompanying notes to consolidated financial statements.

28
<PAGE> 30

CAMBREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1995 1994 1993
-------- --------- --------
<S> <C> <C> <C>
Cash flows from operations:
Net income.............................................. $ 19,670 $ 11,126 $ 8,641
Depreciation and amortization........................... 24,961 15,937 11,779
Provision for inventories............................... 3,052
Provision for environmental contingencies............... 1,029
Deferred income taxes................................... 751 3,183 1,112
Loss on disposal of property, plant and equipment....... 1,562
Changes in assets and liabilities:
Receivables.......................................... (4,296) (3,349) (228)
Inventories.......................................... (9,952) (1,212) (3,709)
Other current assets................................. (1,409) (44) (684)
Accounts payable and accrued liabilities............. 8,013 3,625 1,016
Income taxes payable................................. 958 (1,852) 57
Other noncurrent assets and liabilities.............. 1,254 15 (2,623)
-------- --------- --------
Net cash provided from operations.................... 44,564 27,429 16,390
-------- --------- --------
Cash flows from investing activities:
Capital expenditures.................................... (46,398) (20,825) (15,535)
Acquisition of businesses............................... (131,697) (5,886)
Other investing activities.............................. (2,038)
Proceeds from sale of product lines..................... 2,152
-------- --------- --------
Net cash (used in) investing activities.............. (48,436) (150,370) (21,421)
-------- --------- --------
Cash flows from financing activities:
Dividends............................................... (1,289) (1,050) (984)
Net (decrease) increase in short-term debt.............. (47,663) 50,784
Long-term debt activity (including current portion):
Borrowings........................................... 73,884 134,679 42,111
Repayments........................................... (90,257) (56,244) (38,274)
Proceeds from the issuance of common stock.............. 65,367 401 339
Proceeds from the sale of treasury stock................ 1,434 1,449 1,436
-------- --------- --------
Net cash provided from financing activities.......... 1,476 130,019 4,628
-------- --------- --------
Effect of exchange rate changes on cash................... (1,850) 1,848
-------- --------- --------
Net (decrease) increase in cash........................... (4,246) 8,926 (403)
Cash at beginning of year................................. 9,087 161 564
-------- --------- --------
Cash at end of year....................................... $ 4,841 $ 9,087 $ 161
======== ========= ========
Supplemental disclosure:
Interest paid........................................... $ 12,254 $ 4,996 $ 2,810
Income taxes paid....................................... $ 5,321 $ 4,854 $ 4,126
Noncash transactions:
Conversion of subordinated notes to common stock........ $ 3,990
Additional minimum pension liability charged to
(eliminated from) stockholders' equity............... $ 750 $ (3,030) $ 1,030
</TABLE>

See accompanying notes to consolidated financial statements.

29
<PAGE> 31

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

(1) THE COMPANY

Cambrex Corporation supplies a broad line of pharmaceutical related
products, specialty chemicals, fine chemicals and commodity chemical
intermediates to a diverse customer base for use in a wide variety of
applications.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

Cash Equivalents

Temporary cash investments with an original maturity of less than three
months are considered cash equivalents.

Financial Instruments

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash equivalents, trade
receivables,and foreign currency forward exchange contracts.

The Company places its cash equivalents with financial institutions and
limits the amount of credit exposure to any one financial institution.
Concentrations of credit risk with respect to trade receivables are limited due
to the large numbers of customers comprising the Company's customer base, and
their dispersion across different business and geographic areas. No customer
represents more than 10% of sales nor receivables.

Gains and losses on foreign currency forward exchange contracts of existing
assets or liabilities, or hedges of firm commitments are deferred and are
recognized in income as part of the related transactions.

Inventories

Inventories are stated at the lower of cost, determined on a first-in,
first-out basis, or market. Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated
depreciation. Plant and equipment are depreciated on a straight-line basis over
the estimated useful lives for each applicable asset group as follows:

<TABLE>
<S> <C>
Buildings and improvements................... 15 to 20 years
Machinery and equipment...................... 5 to 10 years
Furniture and fixtures....................... 3 to 5 years
</TABLE>

When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and any resulting gain
or loss is reflected in other (income) expense, net. Total interest capitalized
in connection with ongoing construction activities in 1995 and 1994 amounted to
$749 and $461, respectively.

30
<PAGE> 32

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Intangible Assets

Intangible assets are recorded at cost and amortized on a straight-line
basis as follows:

<TABLE>
<S> <C>
Patents......................... Amortized over the remaining
life of individual patents
(average 5 years)
Goodwill........................ 4 to 20 years
Product technology.............. 5 to 17 years
Non-compete agreements.......... 5 years
Trademarks and other............ 1 to 40 years
</TABLE>

At each balance sheet date, the Company evaluates the realizability of
intangibles based upon expectations of nondiscounted cash flows and operating
income for each subsidiary having material intangible balances.

Income Taxes

The provision for income taxes is based upon income recognized for
financial statement purposes and includes the effect of deferred taxes. These
deferrals are the result of transactions which are recognized in different
periods for financial and income tax reporting.

The Company and its eligible subsidiaries file a consolidated U.S. income
tax return. Certain subsidiaries which are consolidated for financial reporting
are not eligible to be included in the consolidated U.S. income tax return. U.S.
income taxes are provided on planned repatriation of a portion of foreign
earnings and applicable foreign tax credits. Cambrex also intends to
indefinitely reinvest the unremitted earnings of certain non-U.S. subsidiaries,
and as such separate provisions for income taxes have been determined for these
entities.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Foreign Currency

The functional currency of the Company's foreign subsidiaries is the
applicable local currency. The translation of the applicable foreign currencies
into U.S. dollars is performed for balance sheet accounts using current exchange
rates in effect at the balance sheet date and for revenue and expense accounts
and cash flows using average rates of exchange prevailing during the year.
Adjustments resulting from the translation of foreign currency financial
statements are accumulated in a separate component of stockholders' equity until
the entity is sold or substantially liquidated. Gains or losses resulting from
foreign currency transactions are included in the results of operations, except
for those relating to intercompany transactions of a long-term investment nature
which are accumulated in stockholders' equity.

31
<PAGE> 33

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Earnings Per Common Share

Earnings per share of common stock for 1995, 1994 and 1993 are computed on
the basis of the weighted average shares of common stock outstanding plus common
equivalent shares arising from the effect of dilutive stock options, using the
treasury stock method. Fully diluted earnings per share for 1993 also assumes
conversion of the outstanding convertible subordinated notes and the elimination
of the related interest expense, net of tax. Under the assumption that the July
24, 1995 public offering of 1,725,000 shares, the proceeds of which were used to
reduce the Company's outstanding debt, had occurred on January 1, 1995, the pro
forma earnings per share would have been $2.79.

(3) ACQUISITIONS AND DIVESTITURES

(a) On October 12, 1994, the Company completed the acquisition of the stock
of Nobel's Pharma Chemistry Business ("Nobel/Profarmaco") from Akzo Nobel for
approximately $130,000. The business consists of Nobel Chemicals AB (now Nordic
Synthesis AB) in Karlskoga, Sweden, Profarmaco Nobel S.r.1. in Milan, Italy and
sales companies in Germany, England and the United States. Nobel/Profarmaco
manufactures fine chemical intermediates and bulk active ingredients for
pharmaceutical products. The transaction was accounted for as a purchase and was
financed with the Company's credit agreement, and resulted in goodwill of
$46,757 which is being amortized on a straight line basis over 15 years.

On January 31, 1994, Cambrex purchased substantially all of the assets of
Hexcel Corporation's fine chemicals business located in Middlesbrough, England,
for approximately $7,400 and the assumption of certain current liabilities in
the amount of $2,100. The business, now known as Seal Sands Chemicals, Ltd.
("Seal Sands"), manufactures chemical intermediates used in the pharmaceutical,
photographic, water treatment, health care, and plastics industries. On May 27,
1994, the Company purchased the Topanol product line from Zeneca Limited to
complement the Seal Sands operation for $4,600. These transactions were
accounted for as purchases and were financed with the Company's credit
agreement, and resulted in goodwill of $1,881 for Seal Sands and $3,744 for
Topanol which are being amortized on a straight line basis over 10 years and 4
years, respectively.

(b) On March 12, 1993, the Company purchased substantially all of the
assets of Viscosity Oil's fiber optic gel business for $5,886. The transaction
was accounted for as a purchase and was financed with the Company's credit
agreement. No goodwill resulted from this transaction.

(c) Unaudited pro forma results as if the Nobel/Profarmaco and Seal Sands
acquisitions and the Topanol product line purchase had occurred at January 1 of
each of 1994 and 1993 are presented below. The pro forma financial information
is not necessarily indicative of results of operations that would have occurred
had the combinations been in effect at the beginning of the periods nor of
future results of operations of the combined companies.

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------------
1994 1993
-------- --------
<S> <C> <C>
Net revenues................................................... $328,538 $295,704
Net income..................................................... 13,990 7,469
Earnings per share
Primary...................................................... 2.47 1.41
Fully diluted................................................ 2.45 1.36
</TABLE>

32
<PAGE> 34

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(3) ACQUISITIONS AND DIVESTITURES -- (CONTINUED)

Assets acquired and liabilities assumed are as follows:

<TABLE>
<CAPTION>
1994
--------
<S> <C> <C>
Cash........................................................... $ 6,305
Receivables.................................................... 20,638
Inventories.................................................... 28,791
Deferred tax assets............................................ 3,449
Other current assets........................................... 3,574
Property, plant and equipment.................................. 78,267
Goodwill....................................................... 52,382
Accounts payable and accrued liabilities....................... (30,315)
Income taxes payable........................................... (4,551)
Deferred tax liabilities....................................... (8,274)
Other non-current liabilities.................................. (9,166)
--------
$141,100
========
</TABLE>

The pro forma information has not been adjusted for the effect of the fiber
optic gel business, acquired in March of 1993, as such amounts cannot be
reasonably separated from existing operations and are deemed to be immaterial.

(d) In 1994, the Company sold three small businesses: Wickhen cosmetic
esters, black and white photographic chemicals and the Hydrogels business for a
total of $2,152. No gain or loss resulted from the sales of these businesses.

(4) FUTURE IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standard No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
requires that long-lived assets and certain identifiable intangibles to be held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company is required to adopt this standard in 1996. The Company
anticipates that the adoption will not have a material impact on the result of
operations.

Statement of Financial Accounting Standard No. 123 "Accounting for Stock
Based Compensation" establishes financial accounting and reporting standards for
stock-based employee compensation plans. The Company is required to adopt this
standard in 1996. The Company is currently evaluating the impact of this
pronouncement.

33
<PAGE> 35

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(5) INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
------- -------
<S> <C> <C>
Finished goods................................................... $30,409 $31,473
Work in process.................................................. 19,093 14,029
Raw materials.................................................... 15,931 13,574
Supplies......................................................... 5,801 2,903
------- -------
Total.................................................. $71,234 $61,979
======= =======
</TABLE>

(6) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
-------- --------
<S> <C> <C>
Land........................................................... $ 7,956 $ 7,937
Buildings and improvements..................................... 50,127 42,261
Machinery and equipment........................................ 200,218 162,383
Furniture and fixtures......................................... 5,846 5,752
Construction in progress....................................... 29,283 23,509
-------- --------
Total................................................ 293,430 241,842
Accumulated depreciation....................................... (87,747) (69,560)
-------- --------
Net.................................................. $205,683 $172,282
======== ========
</TABLE>

Depreciation expense amounted to $19,493, $13,983 and $10,735 for the years
ended December 31, 1995, 1994 and 1993, respectively.

(7) INTANGIBLE ASSETS

Components of intangible assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
-------- --------
<S> <C> <C>
Goodwill....................................................... $ 54,947 $ 55,450
Other.......................................................... 14,457 13,626
-------- --------
Total................................................ 69,404 69,076
Accumulated amortization....................................... (17,739) (12,085)
-------- --------
Net.................................................. $ 51,665 $ 56,991
======== ========
</TABLE>

34
<PAGE> 36

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
------- -------
<S> <C> <C>
Accounts payable................................................. $29,901 $31,047
Salaries, wages and employee benefits payable.................... 17,661 8,113
Other accrued liabilities........................................ 14,882 9,242
------- -------
Total.................................................. $62,444 $48,402
======= =======
</TABLE>

(9) INCOME TAXES

Income before taxes consisted of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Domestic.............................................. $22,543 $15,571 $13,412
Foreign............................................... 8,673 1,321 --
------- ------- -------
Total....................................... $31,216 $16,892 $13,412
======= ======= =======
</TABLE>

The provision for income taxes consists of the following expenses
(benefits):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
Current:
Federal.............................................. $ 5,951 $ 3,142 $3,216
State................................................ 460 529 443
Foreign.............................................. 4,384 (1,088) --
------- ------- ------
10,795 2,583 3,659
------- ------- ------
Deferred:
Federal.............................................. 1,008 1,537 974
State................................................ (22) 328 138
Foreign.............................................. (235) 1,318 --
------- ------- ------
751 3,183 1,112
------- ------- ------
Total........................................ $11,546 $ 5,766 $4,771
======= ======= ======
</TABLE>

35
<PAGE> 37

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(9) INCOME TAXES -- (CONTINUED)
The significant components of the deferred tax expense (benefit) are
presented in the schedule below. The components of the deferred tax expense
(benefit) were computed in accordance with the provisions of SFAS 109.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Depreciation..................................................... $1,477 $2,558 $2,047
Environmental reserves........................................... 156 (290) (453)
Self insurance................................................... (338) (83) (79)
Inventory capitalization......................................... (468) 153 (123)
Alternative minimum tax credits.................................. 625 538 (727)
Intangibles...................................................... (828) -- 111
Other............................................................ 127 307 336
------ ------ ------
$ 751 $3,183 $1,112
====== ====== ======
</TABLE>

The provision for income taxes differs from the statutory Federal income
tax rate of 35% for 1995 and 34% for 1994 and 1993 as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1995 1994 1993
------- ------ ------
<S> <C> <C> <C>
Income tax at Federal statutory rate............................ $10,926 $5,743 $4,560
State and local taxes (benefits), net of Federal income tax
benefits...................................................... 285 566 383
Difference between Federal statutory rate and statutory rates on
foreign income................................................ 656 (350)
Other........................................................... (321) (193) (172)
------- ------ ------
Provision for income taxes...................................... $11,546 $5,766 $4,771
======= ====== ======
</TABLE>

36
<PAGE> 38

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(9) INCOME TAXES -- (CONTINUED)
The components of deferred tax assets and liabilities as of December 31,
1995 and 1994 relate to temporary differences and carryforwards as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
------- -------
<S> <C> <C>
Deferred tax assets:
Acquisition reserves........................................... $ 2,274 $ --
Inventory...................................................... 1,784 1,103
Prepaid pension expense........................................ (547) (495)
Other.......................................................... 1,033 481
------- -------
Total net current deferred tax assets.................. $ 4,544 $ 1,089
======= =======
Deferred tax liabilities:
Depreciation................................................... $24,085 $19,715
Environmental expenses......................................... (3,054) (3,510)
Loss carryforwards............................................. (1,051) (3,329)
Alternative minimum tax credits................................ (921) (1,546)
Research and development credits............................... (12) (560)
Intangibles.................................................... (707) 122
Other.......................................................... 9 1,037
------- -------
Net non-current deferred tax liabilities.................... 18,349 11,929
Valuation allowances........................................... 1,051 2,329
------- -------
Total net deferred tax liabilities..................... $19,400 $14,258
======= =======
</TABLE>

Under the tax laws of various countries in which the Company operates, net
operating losses (NOLs) may be carried forward, subject to statutory
limitations, to reduce taxable income in future years. The tax effect of such
NOLs aggregated approximately $1,051 and $3,329 at December 31, 1995 and 1994,
the majority of which are available on an indefinite carryforward basis.
However, valuation reserves have been established to reflect uncertainties
associated with the realizability of such future benefits. Alternative minimum
tax credits totaling $921 are available to offset future Federal income taxes on
an indefinite carryforward basis.

Presently, the Company's Federal income tax returns for the years 1988
through 1993 are under audit. Management believes that the resolution of those
audits will not have a significant effect upon results of operations in any
future year.

(10) SHORT-TERM DEBT

On September 21, 1994, the Company entered into a new Loan Agreement (the
"Credit Agreement"). The Credit Agreement provided for a bridge loan in the
aggregate principal amount of $50,000 due October 11, 1995. On July 24, 1995,
the full $50,000 was paid out of proceeds from a secondary stock offering by
Cambrex. See Long-term Debt (Note #11a) regarding details of the Credit
Agreement.

On October 12, 1994, Cambrex acquired Profarmaco S.r.1. which had
pre-existing lines of credit in Italy with six local banks (the "Facility"). The
Facility is short-term and provides three types of financing with the following
limits: Overdraft Protection of $3,000 (Lire 5 billion), Export Financing of
$5,000 (Lire 8.5 billion) and Advances on Uncleared Deposits of $5,000 (Lire 7.5
billion). Advances on Uncleared Deposits (Ricevute Bancarie) bears no interest.

37
<PAGE> 39

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(10) SHORT-TERM DEBT -- (CONTINUED)
Short-term debt at December 31, 1995 and 1994 consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
------- --------
<S> <C> <C>
One year term loan................................................ $ -- $ 50,000
Export financing facility......................................... 3,645 2,368
Overdraft protection.............................................. 1,060 --
------ -------
Total................................................... $ 4,705 $ 52,368
====== =======
</TABLE>

(11) LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1994
--------- ---------
<S> <C> <C>
Bank credit facilities(a)...................................... $ 102,500 $ 118,648
Capitalized leases............................................. 25 57
Notes payable(b)............................................... 1,226 1,291
-------- --------
Subtotal............................................. 103,751 119,996
Less: current portion(c)....................................... 4,108 4,021
-------- --------
Total................................................ $ 99,643 $ 115,975
======== ========
</TABLE>

(a) On September 21, 1994, the Company entered into a new Loan Agreement
(the "Credit Agreement") with NBD Bank, N.A., United Jersey Bank, National
Westminster 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. The
Credit Agreement replaced the existing Revolving Credit and Term Loan Agreement
(the "Old Credit Agreement") with NBD Bank, N.A., United Jersey Bank, and
National Westminster Bank NJ. In addition to the one year loan of $50,000 (see
Short-term Debt Note #10), the Credit Agreement provides for a seven year term
loan in the aggregate principal amount of $75,000 (payable $1,000 per quarter
for twelve quarters and $3,938 for the remaining quarters beginning December
1994), and a revolving credit facility in the aggregate principal amount of
$100,000 due October 11, 1997 (evergreen renewal; automatic two year extensions
if non-renewal notice not given).

The Credit Agreement permits the Company to choose between various interest
rate options and to specify the portion of the borrowing to be covered by each
interest rate option. Under the Revolving Credit Agreement, 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 the Company. The seven year term loan
has the same interest rate 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 facility. The 1995 and 1994 average interest rates were 7.7%
and 6.2%, respectively.

The Credit Agreement contains various restrictive covenants, which require
the Company to maintain a minimum consolidated net worth level, certain
financial ratios and deferred pledge of assets, as defined. If these covenants
are not met, the loan is collateralized by the assets of the Company's domestic
subsidiaries and 66% of the outstanding capital stock of each of the foreign
subsidiaries.

38
<PAGE> 40

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(11) LONG-TERM DEBT -- (CONTINUED)
On October 11, 1994, the Company borrowed $32,200 and L4,265 from the new
Credit Agreement to satisfy the Old Credit Agreement. On October 12, 1994, the
Company borrowed $126,000 from the new Credit Agreement (of which $50,000 is
Short-term Debt) to purchase the stock of Nobel/Profarmaco.

On July 24, 1995, the Company raised $62,572 in a public offering which was
used to pay down outstanding short-term debt of $50,000 and outstanding
long-term debt of $12,572.

(b) As part of the October 12, 1994 acquisition of Nobel/Profarmaco, the
Company assumed a government loan made to Profarmaco S.r.1. to finance
technological innovations. The loan of $1,291, bearing interest at 9.21%, is
amortized over ten annual payments starting July 26, 1995 and ending July 26,
2004.

<TABLE>
<S> <C>
1996.............................................. $ 4,108
1997.............................................. 39,551
1998.............................................. 15,862
1999.............................................. 15,872
2000.............................................. 15,884
Thereafter........................................ 12,474
--------
Total........................................ $ 103,751
========
</TABLE>

(12) DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments to reduce exposures to
market risks resulting from fluctuations in interest rates and foreign exchange.
The Company does not enter into financial instruments for trading or speculative
purposes.

Interest Rate Swap Agreements

The following table illustrates the notional amounts outstanding, maturity
dates, and the weighted average receive and pay rates of interest rate swap
agreements. (Notional amounts provide an indication of the extent of the
Company's involvement in such agreements but do not represent its exposure to
market risk).

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995
-----------------------------------------
WEIGHTED AVG.
RATE
NOTIONAL MATURITY ---------------
AMOUNTS DATE RECEIVE PAY
-------- -------- ------- ---
<S> <C> <C> <C> <C>
Interest rate swaps.............................. $ 30,000 1998 6.1% 6.0%
Interest rate swaps.............................. $ 10,000 1999 5.6% 6.0%
</TABLE>

Interest expense under these agreements, and the respective debt
instruments that they hedge, are recorded at the net effective interest rate of
the hedged transactions. The Company is exposed to credit loss in the event of
nonperformance by the other parties to the interest rate swap agreements.
However, the Company does not anticipate nonperformance by the counterparties.

Forward Exchange Contracts

The Company's policy is to enter into forward exchange contracts to hedge
foreign currency transactions on a continuing basis. This hedging minimizes the
impact of short-term foreign exchange rate movements on the Company's operating
results. The Company's foreign exchange contracts do not subject the Company's
results of operations to risk due to exchange rate movements because gains and
losses on these contracts

39
<PAGE> 41

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(12) DERIVATIVE FINANCIAL INSTRUMENTS -- (CONTINUED)
generally offset gains and losses on the transactions being hedged. As a matter
of policy, the Company does not hedge to protect the translated results of
foreign operations. The forward exchange contracts have varying maturities with
none exceeding twelve months. The Company makes net settlements for foreign
contracts at maturity, based upon negotiated rates at inception of the
contracts.

<TABLE>
<CAPTION>
1995
-----------------------------
UNREALIZED
NOTIONAL ----------------
AMOUNTS GAINS LOSSES
-------- ----- ------
<S> <C> <C> <C>
Forward exchange contracts................................. $ 38,940 $ 750 $ 79
</TABLE>

(13) STOCKHOLDERS' EQUITY

The Company has two classes of common shares designated Common Stock and
Nonvoting Common Stock. Authorized shares of Common Stock were 20,000,000 at
December 31, 1995 and 1994. Authorized shares of Nonvoting Common Stock were
730,746 at December 31, 1995 and 1994.

At December 31, 1995, authorized shares of Common Stock were reserved for
issuance as follows:

<TABLE>
<S> <C>
Stock option plans................................. 625,950
Cambrex savings plan............................... 41,037
-------
Total shares............................. 666,987
=======
</TABLE>

On July 24, 1995, the Company completed a public offering of 1,725,000
shares of newly issued common stock at a price of $38.75 per share. The total
proceeds to the Company, net of underwriting discounts, commissions, and other
related fees, amounted to $62,572. Proceeds were used to reduce outstanding debt
existing under the Company's bank Credit Agreement.

Nonvoting Common Stock has equal rights with Common Stock, with the
exception of voting power. Nonvoting Common Stock is convertible, share for
share, into Common Stock, subject to any legal requirements applicable to
holders restricting the extent to which they may own voting stock. In 1991, all
113,182 outstanding shares were converted.

In 1990, Cambrex purchased 1,000,000 shares of its Common Stock as part of
a previously announced stock buy back program. These shares were purchased in
the open market at an average purchase price of $12.12 per share. All of the
acquired shares are held as Common Stock in treasury, less shares issued to the
Cambrex Savings Plan. The Company held 715,447 and 756,806 shares of treasury
stock at December 31, 1995 and 1994, respectively.

In 1987, the Company authorized 5,000,000 shares of Series Preferred Stock,
par value $0.10, issuable in series and with rights, powers and preferences as
may be fixed by the Board of Directors. At December 31, 1995 and 1994, there was
no preferred stock outstanding.

(14) STOCK OPTIONS

On October 24, 1983, the Company's stockholders approved the 1983 Incentive
Stock Option Plan ("1983 Plan"), which provides for the grant of options
intended to qualify as incentive stock options to management and other key
employees of Cambrex. On September 1, 1987 the Company's stockholders approved
the 1987 Stock Option Plan ("1987 Plan"), which provides for the granting to key
employees both non-qualified stock options and incentive stock options. On May
7, 1990, the Company's stockholders approved the 1989 Senior Executive Stock
Option Plan ("1989 Plan"), which provides for the grant of options intended to
qualify as additional incentives to the Company's Senior Executive Officers. On
May 1, 1992, the Company's stockholders approved the 1992 Stock Option Plan
("1992 Plan"), which provides for the granting

40
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CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(14) STOCK OPTIONS -- (CONTINUED)
to key employees both non-qualified stock options and incentive stock options.
On April 28, 1994, the Company's stockholders approved the 1993 Senior Executive
Stock Option Plan ("1993 Plan"), which provides for the grant of options
intended to qualify as additional incentives to the Company's Senior Executive
Officers. On April 28, 1994, the Company's stockholders also approved the 1994
Stock Option Plan ("1994 Plan"), which provides for the granting to key
employees both non-qualified and incentive stock options. The 1994 Plan also
provides for the granting of non-qualified stock options to non-employee
directors. Subject to stockholder approval on April 25, 1996, the Company will
establish the 1996 Performance Stock Option Plan ("1996 Plan"), which will
provide for the granting of options intended to qualify as additional incentives
to management and other key employees of Cambrex. The 1996 Plan will also
provide for the granting of non-qualified stock options to non-employee
directors.

As of December 31, 1995, 690,050 options had been exercised. Shares of
Common Stock subject to outstanding options under the Plans were as follows:

<TABLE>
<CAPTION>
AUTHORIZED SUBJECT TO
FOR ISSUANCE OUTSTANDING OPTIONS
------------ -------------------
<S> <C> <C>
1983 Plan.............................................. 216,000 5,550
1987 Plan.............................................. 200,000 7,400
1989 Plan.............................................. 400,000 140,000
1992 Plan.............................................. 100,000 92,850
1993 Plan.............................................. 300,000 300,000
1994 Plan.............................................. 100,000 75,750
--------- -------
Total shares................................. 1,316,000 621,550
========= =======
</TABLE>

Information regarding the Company's stock option plans is summarized below:

<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF OPTION PRICE SHARES
SHARES PER SHARE $ EXERCISABLE
--------- --------------- ------------
<S> <C> <C> <C>
Outstanding at December 31, 1992..................... 694,500 4.750 - 18.125 547,833
Granted............................................ 14,000 17.875 - 19.375
Exercised.......................................... (51,550) 4.750 - 14.000
---------
Outstanding at December 31, 1993..................... 656,950 4.750 - 19.375 523,617
Granted............................................ 382,000 19.875 - 24.250
Exercised.......................................... (64,100) 4.750 - 19.875
Cancelled.......................................... (500) 7.375
---------
Outstanding at December 31, 1994..................... 974,350 4.750 - 24.250 658,850
Granted............................................ 40,250 26.875 - 41.125
Exercised.......................................... (392,050) 4.750 - 22.375
Cancelled.......................................... (1,000) 22.375
---------
Outstanding at December 31, 1995..................... 621,550 4.750 - 41.125 596,550
=========
</TABLE>

(15) RETIREMENT PLANS

On December 31, 1994, the Company merged The Cambrex Salaried Pension Plan
(the "Cambrex Plan") with The CasChem Hourly Pension Plan (the "CasChem Plan").
Thus, as of December 31, 1994, the Company maintains two U.S. defined-benefit
pension plans which cover substantially all eligible employees: (1) the Nepera
Hourly Pension Plan (the "Nepera Plan") which covers the union employees at the

41
<PAGE> 43

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(15) RETIREMENT PLANS -- (CONTINUED)
Harriman, New York plant, and (2) The Cambrex Pension Plan (the "Cambrex Plan")
which covers all other eligible employees.

Benefits for the salaried and certain hourly employees are based on salary
and years of service, while those for employees covered by a collective
bargained agreement are based on negotiated benefits and years of service. The
Company's policy is to fund pension costs currently to the extent deductible for
income tax purposes. Pension plan assets consist primarily of equity and fixed
income securities.

The expense for both 1995 and 1994 are based on a twelve month period and
on valuations of the plans as of January 1. However, the reconciliation of
funded status is determined as of the September 30 measurement date.

In accordance with the requirements of Statement of Financial Accounting
Standard No. 87 "Employers' Accounting for Pensions" (SFAS 87), the overfunded
and underfunded U.S. plans are presented separately. The funded status of these
plans as of September 30, 1995 and 1994 is as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- ------------------
OVERFUNDED UNDERFUNDED OVERFUNDED
---------- ----------- ------------------
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits................................... $(13,714) $(3,884) $(14,096)
Non-vested benefits............................... (1,263) (270) (1,271)
-------- ------- --------
Accumulated benefit obligation.................... (14,977) (4,154) (15,367)
Additional benefits based on estimated future
salary levels.................................. (1,214) -- (939)
-------- ------- --------
Projected benefit obligation for service rendered
through December 31, 1995 and 1994................ (16,191) (4,154) (16,306)
Plan assets at fair market value.................... 16,159 3,842 18,224
-------- ------- --------
(PBO in excess of Plan assets)/
Plan assets in excess of PBO...................... (32) (312) 1,918
Unrecognized net transition (asset)................. (199) (300)
Unrecognized prior service cost..................... 219 (448) (270)
Other -- unrecognized net loss on past experience... 648 1,198 184
Additional minimum liability........................ -- (750) --
-------- ------- --------
Prepaid (accrued) pension cost as of September 30,
1995 and 1994..................................... 636 (312) 1,532
4th quarter contributions........................... 370 103 --
-------- ------- --------
Prepaid (accrued) pension cost as of December 31,
1995 and 1994..................................... $ 1,006 $ (209) $ 1,532
======== ======= ========
</TABLE>

Assumptions used to develop the U.S. 1995 and 1994 net periodic pension
expense and the September 30, 1995 and 1994 actuarial present value of projected
benefit obligations:

<TABLE>
<CAPTION>
JANUARY 1, 1995 JANUARY 1, 1994
-------------------------- ---------------
OVERFUNDED UNDERFUNDED OVERFUNDED
---------- ----------- ---------------
<S> <C> <C> <C>
PENSION EXPENSE
Weighted-average discount rate........................ 8.5% 8.5% 7.5%
Expected long-term rate of return on assets........... 8.5% 8.5% 8.5%
Rate of increase in future compensation levels
(non-collective bargained employees)................ 5.0% N/A 5.0%
</TABLE>

42
<PAGE> 44

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(15) RETIREMENT PLANS -- (CONTINUED)

<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------------- ------------------
OVERFUNDED UNDERFUNDED OVERFUNDED
---------- ----------- ------------------
<S> <C> <C> <C>
ACTUARIAL PRESENT VALUE OF PROJECTED BENEFIT
OBLIGATIONS
Weighted-average discount rate...................... 7.5% 7.5% 8.5%
Expected long-term rate of return on assets......... 8.5% 8.5% 8.5%
Rate of increase in future compensation levels (non-
collective bargained employees)................... 5.0% N/A 5.0%
</TABLE>

Certain foreign subsidiaries of the Company maintain pension plans for
their employees which conform to the common practice in their respective
countries.

The funded status of the Company's international pension plans as of
December 31, 1995 and 1994 is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
UNDERFUNDED UNDERFUNDED
----------------- -----------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits.......................................... $(5,670) $(3,879)
------- -------
Accumulated benefit obligation........................... (5,670) (3,879)
Additional benefits based on estimated future salary
levels................................................ (506) (1,179)
------- -------
Projected benefit obligation for service rendered through
December 31, 1995 and 1994............................... (6,176) (5,058)
Plan assets at fair market value........................... 1,138 848
------- -------
Funded status.............................................. (5,038) (4,210)
Unrecognized net transition (asset)........................ (428) (420)
Unrecognized prior service cost............................ 57
Other unrecognized net (gain) on past experience........... (761) (776)
------- -------
Accrued pension liability.................................. $(6,170) $(5,406)
======= =======
</TABLE>

Assumptions used to develop the 1995 and 1994 actuarial present value of
projected benefit obligations for the Company's foreign pension plans:

<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
ACTUARIAL PRESENT VALUE OF PROJECTED BENEFIT OBLIGATIONS
Weighted-average discount rate............................... 9.0% to 9.5% 9.0% to 9.5%
Expected long-term rate of return on assets.................. 10.0% 10.0%
Rate of increase in future compensation levels............... 5.0% to 7.0% 5.0% to 7.0%
</TABLE>

43
<PAGE> 45

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(15) RETIREMENT PLANS -- (CONTINUED)
The Company's net pension costs included in operating results amounted to
$1,209, $1,157 and $713 in 1995, 1994 and 1993, respectively, and were comprised
of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Service cost.......................................... $ 1,106 $ 1,242 $ 843
Interest cost on projected benefit obligation......... 1,898 1,757 1,299
Return on plan assets................................. (2,887) 370 (2,131)
Amortization of excess plan net assets at adoption of
SFAS 87............................................. (137) (101) (93)
Amortization of unrecognized prior service cost....... (40)
Amortization of unrecognized net (gain) loss.......... (9)
Other items -- deferred investment gain (loss)........ 1,278 (2,111) 795
------- ------- -------
Net pension cost............................ $ 1,209 $ 1,157 $ 713
======= ======= =======
</TABLE>

Included in the net periodic pension cost is the amortization of prior
service cost over a period of twelve to nineteen years and the amortization of
the SFAS 87 transition obligation over a period of ten to seventeen years. The
pension expense for foreign pension plans of $575 and $512 is included in the
1995 and 1994 net periodic pension expense, respectively.

Cambrex makes available to all employees a savings plan as permitted under
Sections 401(k) and 401(a) of the Internal Revenue Code. Employee contributions
are matched in part by Cambrex. The cost of this plan amounted to $1,452,
$1,449, and $1,436 in 1995, 1994 and 1993, respectively.

In addition to the above plans, Cambrex also established a Supplemental
Executive Retirement Plan in 1994. The net periodic pension cost for 1995 and
1994 amounted to $104 and $104, respectively.

(16) OTHER POSTRETIREMENT BENEFITS

Cambrex provides postretirement health and life insurance benefits
("postretirement benefits") to all eligible retired employees. Employees who
retire at or after age 55 with ten years of service are eligible to participate
in the postretirement benefit plans. The Company's responsibility for such
premiums for each plan participant is based upon years of service subject to an
annual maximum of one thousand dollars. Such plans are self-insured and are not
funded.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standard No. 106 "Employers' Accounting for Postretirement Benefits
Other than Pensions" (SFAS 106). SFAS 106 requires such benefits to be accounted
for on an accrual basis. Previously, such costs were expensed as claims were
incurred. In connection with the adoption of SFAS 106, the Company has elected
to amortize the transition obligation of $1,853 over twenty years. The net
effect upon 1995 and 1994 pretax operating results, including the amortization
of the transition obligation, resulted in a cost of $306 and $312, respectively.
The Company has reviewed its health care benefit plans for retirees and does not
anticipate significant increases in the annual expense related to SFAS 106.

44
<PAGE> 46

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(16) OTHER POSTRETIREMENT BENEFITS -- (CONTINUED)
The periodic postretirement benefit cost includes the following components:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------
1995 1994
------- -------
<S> <C> <C>
Service cost of benefits earned.................................. $ 57 $ 68
Interest cost on accumulated postretirement benefit obligation... 159 151
Amortization of transition obligation............................ 90 93
------- -------
Total periodic postretirement benefit cost..................... $ 306 $ 312
======= =======
</TABLE>

Accumulated postretirement benefit obligation:

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Retirees......................................................... $ 808 $ 957
Fully eligible plan participants................................. 654 283
Other active plan participants................................... 623 631
------- -------
Total obligation................................................. 2,085 1,871
Unrecognized net loss............................................ 131 248
Unrecognized transition obligation............................... (1,575) (1,669)
------- -------
Accrued postretirement benefit cost recognized in the balance
sheet.......................................................... $ 641 $ 450
======= =======
</TABLE>

The discount rate used to determine the accumulated postretirement benefit
obligation was 7.5% and 8.5% in 1995 and 1994, respectively. The assumed health
care cost trend rate used to determine the accumulated postretirement benefit
obligation was initially 16%, declining ratably to 6.5% in 2002 and thereafter.
A one-percentage-point increase in the assumed health care cost trend rate would
have no effect upon the accumulated postretirement benefit obligation.

The cost of all health and life insurance benefits is recognized as
incurred and was approximately $3,825, $3,994 and $3,797 in 1995, 1994 and 1993,
respectively. The cost of providing these benefits for the 190, 199 and 181
retirees in 1995, 1994 and 1993, respectively, is not separable from the cost of
providing benefits for the 695, 732, and 791 active U.S. employees.

(17) OTHER INCOME AND EXPENSE

Other expense in 1995 was $2,779 including $1,400 in currency losses at
Nobel and Profarmaco, and $865 for the write-off of equipment used for a
specific product, which is no longer manufactured.

Other income in 1994 was $497 including $380 in currency gains at
Profarmaco. There were no individually significant components in other income in
1993.

(18) FOREIGN OPERATIONS AND EXPORT SALES

In 1994, the Company acquired Nobel Chemicals AB in Karlskoga, Sweden,
Profarmaco Nobel S.r.1. in Milan, Italy and Seal Sands Chemicals, Ltd. in
Middlesbrough, England. These companies operate as subsidiaries of Cambrex Ltd.,
England, which was organized in 1987.

45
<PAGE> 47

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(18) FOREIGN OPERATIONS AND EXPORT SALES -- (CONTINUED)
Summarized data for the Company's operations for 1995 and 1994 are as
follows:

<TABLE>
<CAPTION>
DOMESTIC EUROPEAN TOTAL
-------- -------- --------
<S> <C> <C> <C>
1995
Gross revenues..................................... $223,187 $144,883 $368,070
Operating profit................................... 19,763 24,740 44,503
Net income......................................... 17,324 2,346 19,670
Identifiable assets................................ 176,839 225,714 402,553
1994
Gross revenues..................................... $214,880 $ 34,803 $249,683
Operating profit................................... 17,334 3,642 20,976
Net income......................................... 10,514 612 11,126
Identifiable assets................................ 167,725 192,752 360,477
</TABLE>

Export sales, included in domestic gross revenues, in 1995, 1994 and 1993
amounted to $50,608, $44,135 and $37,296, respectively. No country, in any of
the given years, represents more than 10% of these export revenues.

(19) COMMITMENTS

The Company currently has no significant capital lease obligations.

The Company has operating leases expiring on various dates through the year
2012. The leases are primarily for office and laboratory equipment and vehicles.
At December 31, 1995, future minimum commitments under operating lease
arrangements were as follows:

<TABLE>
<S> <C>
Year ended December 31:
1996............................................. $ 1,933
1997............................................. 1,500
1998............................................. 1,203
1999............................................. 624
2000 and thereafter.............................. 11,579
-------
Net commitments.................................... $16,839
=======
</TABLE>

Total operating lease expense was $2,284, $1,958 and $872 for the years
ended December 31, 1995, 1994 and 1993, respectively.

The Company had two letters of credit outstanding aggregating $702 as of
December 31, 1995. These letters of credit were issued in connection with
various administrative or environmental activities.

(20) CONTINGENCIES

Contingencies exist for certain subsidiaries of Cambrex because of legal
and administrative proceedings arising out of the normal course of business.
Such contingencies include environmental proceedings directly and indirectly
against the subsidiaries as well as matters internally identified. The
resolution of such matters often spans several years and frequently involves
regulatory oversight and/or adjudication. Additionally, many remediation
requirements are not fixed and are likely to be affected by future
technological, site, and regulatory developments. Consequently, the ultimate
extent of liabilities with respect to such matters as well as the timing of cash
disbursements cannot be determined with certainty. However, management is of the

46
<PAGE> 48

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(20) CONTINGENCIES -- (CONTINUED)
opinion that while the ultimate liability resulting from these matters may have
a material effect upon the results of operations in any given year, they will
not have a material adverse effect upon the Company's liquidity nor its
financial position.

The following table exclusively addresses matters wherein the related
liabilities are considered estimable. It summarizes the estimated range of the
Company's share of costs associated with such matters, the related accruals, and
the activity associated with those accruals. The changes in the estimated ranges
between the current and prior year reflect revisions to estimates, the addition
of matters that were quantified for the first time during the current year, and
the satisfaction of others. The related accruals represent management's
assessment of the aggregate liability associated with estimable matters.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1994
------- -------
<S> <C> <C>
Estimated range of the Company's share of costs associated with
estimable matters:
Minimum..................................................... $ 8,697 $ 9,542
======= =======
Maximum..................................................... $19,528 $18,032
======= =======
Accrual and related activity:
Balance, beginning of year..................................... $10,211 $ 9,058
Additions:
Accruals established in connection with acquisition
activity.................................................. 200 1,510
Deductions for expenditures.................................... (1,011) (357)
------- -------
Balance, end of year........................................... $ 9,400 $10,211
======= =======
Classification of year end accrual:
Current........................................................ $ 700 $ 2,610
Non-current.................................................... 8,700 7,601
------- -------
$ 9,400 $10,211
======= =======
</TABLE>

During 1993, income statement charges for additions to the accrual for
environmental contingencies aggregated $1,029.

Significant matters wherein the related liability or range of liability is
estimable, are summarized as follows:

a) Nepera, Inc. (Nepera) was named in 1987 as a Potentially Responsible
Party (PRP) along with certain prior owners of the Maybrook Site in
Hamptonburgh, New York by the United States Environmental Protection Agency
(EPA) in connection with the disposition, under appropriate permits, of
wastewater at that site prior to Cambrex's acquisition of Nepera in 1986. The
Hamptonburgh site is on the EPA's National Priorities List for remedial work and
clean-up. However, to date the EPA has entrusted the management of the
remediation effort to the New York State Department of Environmental
Conservation (DEC). Although the periods of ownership of the site and the extent
of its use for wastewater disposal are well established, the PRP's have not been
able to agree upon an allocation method for future remediation costs. However, a
prior owner has participated with Nepera in the performance of the activities
described in the following paragraphs.

During 1992, Nepera prepared a draft Remedial Investigation/Feasibility
Study (RI/FS) report which enumerated several remediation alternatives and
submitted the Remedial Investigation portion to the DEC for review.
Consequently, although this RI/FS had not been approved by the DEC, Nepera
utilized it to revise

47
<PAGE> 49

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(20) CONTINGENCIES -- (CONTINUED)
the estimated liability for this matter previously included in the accrual for
environmental contingencies. This estimate considered the probability of cost
sharing with prior owners of the site.

During 1993, the DEC requested the performance of additional site
investigation prior to reviewing the Feasibility Study portion of the report.
Nepera prepared a plan for such additional site investigation and submitted it
for review.

During 1994, the DEC requested the performance of additional site
investigation beyond the 1993 proposed plan and requested the Feasibility Study
portion of the report. Nepera updated the RI/FS, prepared a revised plan for
additional site investigation, submitted them for review and utilized them to
update the estimated liability for this matter. Additionally, a DEC
administrative law judge issued a decision ordering one of the former owners to
remediate the site. However, that former owner is appealing the decision.

During 1995, the draft RI/FS was finalized and filed with the DEC. While
similar to the 1994 draft, this final RI/FS delineated eight remediation
alternatives which Nepera utilized to update the estimated liability for this
matter. Settlement discussions with one former owner continued.

b) Nepera was named in 1987 as a responsible party along with certain prior
owners of Nepera's Harriman, New York production facility by the DEC in
connection with contamination at that site. Nepera believes that any remediation
to be conducted at that site is primarily related to contamination attributable
to material handling and disposal practices, including drum burial at the site,
which occurred prior to Cambrex's acquisition of Nepera in 1986. A prior owner
has participated with Nepera in the performance of the activities described in
the following paragraphs. Over the past several years, Nepera, with the
agreement of the DEC, has been performing an interim remedial measure involving
the pumping and treatment of groundwater to mitigate the possibility of
contamination progressing beyond the site boundaries.

During 1992, Nepera prepared a draft RI/FS report which enumerated several
remediation alternatives and submitted the Remedial Investigation portion to the
DEC for review. Consequently, although this RI/FS had not been approved by the
DEC, Nepera utilized it to develop a range of estimated liabilities for this
matter and considered such estimates when determining the accrual for
environmental contingencies. That estimate considered the probability of cost
sharing with prior owners of the site.

During 1993, Nepera had not received commentary from the DEC concerning the
Remedial Investigation portion of the report.

During 1994, the DEC requested the Feasibility Study portion of the report.
Nepera updated the RI/FS and submitted it for review.

c) Cosan, Inc. (Cosan) entered into an Administrative Consent Order in 1985
with the New Jersey Department of Environmental Protection (NJDEP) under New
Jersey's Industrial Site Recovery Act (ISRA) in order to consummate the sale of
the controlling interest in Cosan to the Company. Through that action, Cosan
became required to determine whether its facility located in Carlstadt, New
Jersey was contaminated by hazardous materials and, if appropriate, effect a
cleanup.

During 1992, based upon the results of an evaluation of the site, Cosan
proposed the installation of a groundwater recovery system to remove
contaminates from the soil. Presently, Cosan is awaiting the NJDEP's approval of
that proposal.

48
<PAGE> 50

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(20) CONTINGENCIES -- (CONTINUED)
d) In 1992, Cambrex acquired substantially all of the assets of the fine
chemicals business of Hexcel Fine Chemicals, now known as Zeeland Chemicals,
Inc. In connection with that transaction, an accrual of $3,300 was established
for environmental conditions existing as of the date of the acquisition.

e) Nepera was named in the early 1980's as a PRP along with approximately
130 other companies by the EPA in connection with the SCP Corporation (SCP) site
in Carlstadt, New Jersey. The site is on the EPA's National Priorities List for
remedial work and cleanup. SCP disposed of process wastewater and minor amounts
of other material for Nepera during the 1970's.

The EPA has directed an Interim Remedial Measure for this site consisting
of the construction of slurry walls and a pump and treat facility. Presently, a
proportionate allocation of responsibility has not been established. However,
Nepera's responsibility may be relatively large in relation to other parties.
Nepera is contesting the proposed basis for the allocation of responsibility for
this site, and believes it has grounds to, and will, oppose any efforts to
charge it with excessive responsibility.

During 1994, the cost of capping the site was estimated by the PRP group to
range from $5,000 to $8,000. Although such a remediation alternative has not
been approved by the EPA, Nepera has assumed it to be the minimum effort which
will be required at the site. Consequently, Nepera utilized such information to
develop a range of estimated liabilities for this matter and considered such
estimates when determining the accrual for environmental contingencies.

Additionally, during 1994, Nepera reached a settlement agreement with
certain insurers who agreed to pay a certain portion of future expenditures
associated with the site and incurred by Nepera. A receivable has not been
recorded in connection with this agreement as the payments are not realizable
until Nepera's liability has been determined and funds actually expended.

During 1995, the PRP group commenced a Focused Feasilibity Study (FFS) of
soil contamination of a portion of the site as requested by the EPA. Except for
the commencement of the FFS, which is in progress, no other significant
developments occurred with respect to this matter.

f) Cosan was named in 1991 as a defendant in a suit filed by the owners of
a manufacturing site in Clifton, New Jersey that had been owned and operated by
Cosan from 1968 to 1979. The plaintiffs alleged Cosan contributed to the
contamination at the site and seek to compel Cosan to contribute toward present
and future costs of remediation of the site under ISRA. However, the source of
all contamination at the site has not been definitively identified. Sampling
conducted at an adjacent site revealed extensive contamination with the same
substances found on the plaintiff's site and, in some instances, higher
concentrations.

To date, the parties cannot agree upon a remediation plan for the site and
related costs, nor has any remediation plan been submitted to the NJDEP for
review. Presently, settlement negotiations with the plaintiffs are ongoing and
the matter is moving toward a trial date.

g) As more fully described in Note #3, Cambrex acquired Akzo Nobel's Pharma
Chemistry Business. In connection with that transaction, an accrual of $1,510
was established for environmental conditions existing as of the date of the
acquisition.

h) CasChem, Inc. (CasChem) was subject to an investigation commenced in
1990 by agents of the EPA and the Federal Bureau of Investigation pursuant to a
search warrant indicating an interest in the handling, storage, and disposal of
hazardous wastes.

During 1994, a settlement was reached wherein CasChem pleaded guilty to the
unpermitted storage of one drum of hazardous waste and the payment of a $1,000
fine. That amount was paid during January 1995.

49
<PAGE> 51

CAMBREX CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(20) CONTINGENCIES -- (CONTINUED)
i) In addition to the matters identified above, Cambrex's subsidiaries are
party to a number of other proceedings. Management is of the opinion that the
ultimate liability resulting from those proceedings will not have a material
adverse effect upon Cambrex's results of operations nor its financial position.
------------------

During 1994, Nepera arrived at an agreement partially described in "e"
above with certain insurers whereby $2,450 was made available through a trust
arrangement for remediation and administrative expenditures in connection with a
number of relatively small sites. During 1994, approximately $1,050 was
designated to be expended by the trust for past expenditures. The remaining
balance, approximately $1,400, will be available for future expenditures and has
been considered in the determination of the accrual for environmental
contingencies at December 31, 1995.

50
<PAGE> 52

CAMBREX CORPORATION

SELECTED QUARTERLY FINANCIAL DATA
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
1995 QUARTER QUARTER QUARTER QUARTER YEAR
- -------------------------------------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net revenues.......................... $93,389 $88,215 $87,385 $88,187 $357,176
Gross profit.......................... 24,485 25,081 25,048 25,166 99,780
Net income............................ 4,394 5,107 5,006 5,163 19,670
Earnings per share:(1)
Primary............................. $ 0.76 $ 0.87 $ 0.68 $ 0.66 $ 2.93
Fully diluted....................... $ 0.75 $ 0.87 $ 0.68 $ 0.66 $ 2.92
Average shares:
Primary............................. 5,792 5,863 7,344 7,800 6,702
Fully diluted....................... 5,839 5,865 7,345 7,816 6,736
1994
- ----
Net revenues.......................... $51,047 $58,224 $57,608 $74,755 $241,634
Gross profit.......................... 11,403 14,593 13,265 18,620 57,881
Net income............................ 2,128 3,380 2,440 3,178 11,126
Earnings per share:(1)
Primary............................. $ 0.38 $ 0.60 $ 0.43 $ 0.55 $ 1.96
Fully diluted....................... $ 0.38 $ 0.60 $ 0.43 $ 0.55 $ 1.95
Average shares:
Primary............................. 5,638 5,648 5,679 5,729 5,674
Fully diluted....................... 5,638 5,648 5,711 5,733 5,699
</TABLE>

- ---------------
(1) Earnings per share calculations for each of the quarters are based on the
weighted average number of shares outstanding for each period, as such, the
sum of the quarters may not necessarily equal the earnings per share amount
for the year.

51
<PAGE> 53

PART III

ITEM 9 ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

ITEM 11 EXECUTIVE COMPENSATION.

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information called for by Part III is hereby incorporated by reference
to the information set forth under the captions "Principal Stockholders," "Board
of Directors," "Election of Directors," and "Executive Compensation" in the
registrant's definitive proxy statement for the 1996 Annual Meeting of
Stockholders, which meeting involves the election of directors, which definitive
proxy statement is being filed with the Securities and Exchange Commission
pursuant to Regulation 14A.

In addition, information concerning the registrant's executive officers has
been included in Part I above under the caption "Executive Officers of the
Registrant."

PART IV

ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) 1. The following consolidated financial statements of the Company are
filed as part of this report:

<TABLE>
<CAPTION>
PAGE NUMBER
(IN THIS REPORT)
----------------
<S> <C>
Report of Independent Accountants.............................................. 25
Consolidated Balance Sheets as of December 31, 1995 and 1994................... 26
Consolidated Income Statements for the Years Ended December 31, 1995, 1994 and
1993......................................................................... 27
Consolidated Statements of Stockholders' Equity for the Years Ended December
31, 1995, 1994 and 1993...................................................... 28
Consolidated Statements of Cash Flows for the Years Ended December 31, 1995,
1994 and 1993................................................................ 29
Notes to Consolidated Financial Statements..................................... 30
Consolidated Quarterly Financial Data (unaudited) for the Years Ended December
31, 1995 and 1994............................................................ 51
</TABLE>

(a) 2.(i) The following schedule to the consolidated financial statements
of the Company as filed herein and the Report of Independent Certified Public
Accountants on Schedules are filed as part of this report.

<TABLE>
<CAPTION>
PAGE NUMBER
(IN THIS REPORT)
----------------
<S> <C>
Independent Accountants' Report (included in the accountants' reports on the
registrant's consolidated financial statements).............................. 25
Schedule II -- Valuation and Qualifying Accounts............................... 53
</TABLE>

All other schedules are omitted because they are not applicable or not
required or because the required information is included in the consolidated
financial statements of the Company or the notes thereto.

(a) 3. The exhibits filed in this report are listed in the Exhibit Index on
page 55.

The registrant agrees, upon request of the Securities and Exchange
Commission, to file as an exhibit each instrument defining the rights of holders
of long-term debt of the registrant and its consolidated subsidiaries which has
not been filed for the reason that the total amount of securities authorized
thereunder does not exceed 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis.

(b) Reports on Form 8-K

The registrant filed no reports on Form 8-K during the last quarter of the
year ended December 31, 1995.

52
<PAGE> 54

SCHEDULE II

CAMBREX CORPORATION

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
COLUMN C ADDITIONS
COLUMN B ----------------------- COLUMN E
-------- CHARGED --------
COLUMN A BALANCE TO COST CHARGED TO COLUMN D BALANCE
- -------------------------------------- BEGINNING AND OTHER ---------- END OF
CLASSIFICATION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS YEAR
- -------------------------------------- -------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1995:
Doubtful trade receivables and
returns and allowances........... $1,288 $ 547 $ -- $ 574 $1,261
Inventory and obsolescence losses... 5,578 3,052 -- 266 8,364
Year Ended December 31, 1994:
Doubtful trade receivables and
returns and allowances........... 355 280 822(1) 169 1,288
Inventory and obsolescence losses... 1,517 280 4,184(1) 403 5,578
Year Ended December 31, 1993:
Doubtful trade receivables and
returns and allowances........... 607 120 -- 372 355
Doubtful other receivables.......... 553 -- -- 553 --
Inventory and obsolescence losses... 2,579 103 -- 1,165 1,517
</TABLE>

- ---------------
(1) Reserve of Nobel/Profarmaco and Seal Sands, acquired during 1994.

53
<PAGE> 55

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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/ CYRIL C. BALDWIN, JR.

------------------------------------
Cyril C. Baldwin, Jr.
Chairman of the Board of Directors

Date: March 22, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------ ---------------
<S> <C> <C>
/s/ CYRIL C. BALDWIN, JR. Chairman of the Board of March 22, 1996
- ---------------------------------------- Directors
Cyril C. Baldwin, Jr.
/s/ PETER TRACEY Executive Vice March 22, 1996
- ---------------------------------------- President-Finance, Principal
Peter Tracey Financial Officer and
Principal Accounting Officer
/s/ ROSINA B.DIXON, M.D.* Director March 22, 1996
- ----------------------------------------
Rosina B. Dixon, M.D.
/s/ FRANCIS X. DWYER* Director March 22, 1996
- ----------------------------------------
Francis X. Dwyer
/s/ GEORGE J. W. GOODMAN* Director March 22, 1996
- ----------------------------------------
George J. W. Goodman
/s/ KATHRYN RUDIE HARRIGAN, PHD* Director March 22, 1996
- ----------------------------------------
Kathryn Rudie Harrigan, PhD
/s/ LEON J. HENDRIX, JR.* Director March 22, 1996
- ----------------------------------------
Leon J. Hendrix, Jr.
/s/ ILAN KAUFTHAL* Director March 22, 1996
- ----------------------------------------
Ilan Kaufthal
/s/ ROBERT LEBUHN* Director March 22, 1996
- ----------------------------------------
Robert LeBuhn
/s/ JAMES A. MACK* Director March 22, 1996
- ----------------------------------------
James A. Mack
/s/ DEAN P. PHYPERS* Director March 22, 1996
- ----------------------------------------
Dean P. Phypers
*By /s/ CYRIL C. BALDWIN, JR.
------------------------------------
Cyril C. Baldwin, Jr.
Attorney-in-Fact
</TABLE>

54
<PAGE> 56

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------------------
<S> <C> <C>
3.1 -- Restated Certificate of Incorporation of registrant (A) -- Exhibit 3(a).
3.2 -- By Laws of registrant. (E) -- Exhibit 4.2.
4.1 -- Form of Certificate for shares of Common Stock of registrant. (A) -- Exhibit
4(a).
4.2 -- Article Fourth of the Restated Certificate of Incorporation. (A) -- Exhibit
4(b).
4.3 -- Loan Agreement dated September 21, 1994 by and among the registrant, 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. (K).
10.1 -- Purchase Agreement dated July 11, 1986, as amended, between the registrant and
ASAG, Inc. (A) -- Exhibit 10(r).
10.2 -- Asset Purchase Agreement dated as of June 5, 1989 between Whittaker
Corporation and the registrant. (C) -- Exhibit 10(a).
10.3 -- Asset Purchase Agreement dated as of July 1, 1991 between Solvay Animal
Health, Inc. and the registrant. (F).
10.4 -- Asset Purchase Agreement dated as of March 31, 1992 between Hexcel Corporation
and the registrant. (H).
10.5 -- Stock Purchase Agreement dated as of September 15, 1994 between Akzo Nobel AB,
Akzo Nobel NV and the registrant, for the purchase of Nobel Chemicals AB. (K).
10.6 -- Stock Purchase Agreement dated as of September 15, 1994 between Akzo Nobel AB,
Akzo Nobel and the registrant, for the purchase of Profarmaco Nobel, S.r.1.
(K).
10.10 -- 1983 Incentive Stock Option Plan, as amended. (B).
10.11 -- 1987 Long-term Incentive Plan. (A) -- Exhibit (g).
10.12 -- 1987 Stock Option Plan. (B).
10.13 -- 1989 Senior Executive Stock Option Plan. (J).
10.14 -- 1992 Stock Option Plan. (J).
10.15 -- 1993 Senior Executive Stock Option Plan. (J).
10.16 -- 1994 Stock Option Plan. (J).
10.20 -- Form of Employment Agreement between the registrant and its executive officers
named in the Revised Schedule of Parties thereto. (D) -- Exhibit 10.A.
10.21 -- Revised Schedule of Parties to Employment Agreement (exhibit 10.20 hereto).
(M).
10.22 -- Cambrex Corporation Savings Plan. (I).
10.23 -- Cambrex Corporation Supplemental Retirement Plan. (L).
10.24 -- Deferred Compensation Plan of Cambrex Corporation. (L).
10.25 -- Amendment to Deferred Compensation Plan of Cambrex Corporation (Exhibit 10.24
hereto). (M).
10.26 -- Cambrex Earnings Improvement Plan. (L).
10.27 -- Consulting Agreement dated December 15, 1994 between the registrant and Arthur
I. Mendolia. (L).
10.28 -- Consulting Agreement dated December 15, 1995 between the registrant and Cyril
C. Baldwin, Jr. (L).
- ---------------
See legend on following page.
</TABLE>

55
<PAGE> 57

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------------------------
<S> <C> <C>
10.29 -- Consulting Agreement between the registrant and James A. Mack. (L).
10.30 -- Additional Retirement Payment Agreement dated December 15, 1994 between the
registrant and Arthur I. Mendolia. (L).
10.31 -- Additional Retirement Payment Agreement dated December 15, 1994 between the
registrant and Cyril C. Baldwin, Jr. (L).
10.32 -- Additional Retirement Payment Agreement between the registrant and James A.
Mack. (L).
10.40 -- Registration Rights Agreement dated as of June 6, 1985 between the registrant
and the purchasers of its Class D Convertible Preferred stock and 9%
Convertible Subordinated Notes due 1997. (A) -- Exhibit 10(m).
10.41 -- Administrative Consent Order dated September 16, 1985 of the New Jersey
Department of Environmental Protection to Cosan Chemical Corporation.
(A) -- Exhibit 10(q).
10.50 -- Manufacturing Agreement dated as of July 1, 1991 between the registrant and
A.L. Laboratories, Inc. (G).
11 -- Statement re computation of earnings per share. (M).
21 -- Subsidiaries of registrant. (M).
23 -- Consent of Coopers & Lybrand L.L.P. to the incorporation by reference of its
report herein in Registration Statement Nos. 33-21374, 33-37791, 33-81780 and
33-81782 on Form S-8 of the registrant. (M).
24 -- Powers of Attorney to sign this report. (M).
</TABLE>

- ---------------

(A) Incorporated by reference to the indicated Exhibit to registrant's
Registration Statement on Form S-1 (Registration No. 33-16419).

(B) Incorporated by reference to registrant's Registration Statement on Form
S-8 (Registration No. 33-21374) and Amendment No. 1.

(D) Incorporated by reference to the indicated Exhibit to registrant's Annual
Report on Form 10-K for 1989.

(E) Incorporated by reference to the indicated Exhibit to registrant's
Registration Statement on Form S-8 (Registration No. 33-37791).

(F) Incorporated by reference to registrant's Current Report on Form 8-K dated
July 1, 1991.

(G) Incorporated by reference to the registrant's Annual Report on Form 10-K for
1991.

(H) Incorporated by reference to the registrant's Current Report on Form 8-K
dated April 10, 1992 and Amendment No. 1 to its Current Report.

(I) Incorporated by reference to registrant's Registration Statement on Form
S-8 (Registration No. 33-81780) dated July 20, 1994.

(J) Incorporated by reference to registrant's Registration Statement on Form
S-8 (Registration No. 33-81782) dated July 20, 1994.

(K) Incorporated by reference to registrant's Current Report on Form 8-K dated
October 26, 1994.

(L) Incorporated by reference to the registrant's Annual Report on Form 10-K
for 1994.

(M) Filed herewith.

<PAGE> 1

EXHIBIT 10.21

CAMBREX CORPORATION

REVISED SCHEDULE OF PARTIES

<TABLE>
<CAPTION>
DATE OF
NAME TITLE AGREEMENT
- ---------------------- --------------------------------- ---------
<S> <C> <C>
James A. Mack President and Chief 02/01/90
Executive Officer
Peter Tracey Executive Vice President 11/05/90
and Chief Financial Officer
Albert L. Eilender Executive Vice President 02/15/89
Burton M. Rein Senior Vice President 05/31/91
Steven M. Klosk Vice President of Administration 10/21/92
Peter E. Thauer Vice President, General 08/28/89
Counsel and Secretary
Salvatore J. Guccione Vice President of 12/14/95
Corporate Development
</TABLE>

<PAGE> 1
EXHIBIT 10.25

DEFERRED COMPENSATION PLAN
OF CAMBREX CORPORATION
(AS AMENDED AND RESTATED AS OF DECEMBER 1, 1995)

1. Eligibility

Each officer or other key employee (a "Key Employee") who
participates in the annual management incentive compensation plan maintained by
Cambrex Corporation (the "Corporation") shall be eligible to participate in the
Deferred Compensation Plan of Cambrex Corporation (the "Plan"), provided that,
notwithstanding any other provision of the Plan to the contrary, the Vice
President of Administration may impose such terms, conditions or limitations on
the participation of any Key Employee or any class of Key Employees that he
deems necessary or appropriate for the proper administration of the Plan. The
Vice President of Administration shall provide a copy of the Plan to each Key
Employee together with a form of letter which may be used by the Key Employee to
notify the Corporation of his election to participate in the Plan.

2. Participation

a. Bonus Deferral Election. On or before December 31st of any
calendar year, a Key Employee may elect to defer receipt of all or any part of
any annual bonus payable in United States currency for services performed during
such year which, but for such election, is expected to be paid to him in the
next following calendar year.

b. Salary Deferral Election. On or before December 31st of any
calendar year, a Key Employee may elect to defer receipt of all or any part of
that portion of his annual base salary payable in United States currency in the
following calendar year which exceeds the sum of (i) the Social Security wage
base with respect to old age, survivor and disability income taxes in effect for
such following calendar year and (ii) $10,000. Notwithstanding the foregoing, a
Key Employee who (x) receives an annual base salary in United States currency in
excess of the sum of (i) and (ii) above and (v) is not subject to withholding
for old age survivor and disability employment taxes under U.S. law may elect

<PAGE> 2

- 2 -

to defer receipt of all or a portion of his annual base salary for the following
calendar year which is payable in United States currency.

c. Stock Option Deferral Election. With the approval of the
Vice President of Administration, a Key Employee may elect, on or before
December 31st of any calendar year, to defer receipt of all or a portion of the
Corporation's common stock ("Common Stock") which would otherwise be issued upon
exercise in the following calendar year of a stock option under a Corporate
stock option plan, provided that in each case such election must be made (i)
within 30 days of the effective date of this subsection, or (ii) more than six
months prior to the date on which the Common Stock is to be issued.

d. Form and Duration of Deferral Election. An election to
defer bonus, salary or Common Stock issued upon an option exercise shall be made
by written notice filed on a designated form with the Vice President of
Administration. The minimum dollar amount that each Key Employee may defer under
the Plan for each year shall be (i) with respect to annual bonuses, Ten Thousand
Dollars ($10,000); (ii) with respect to base salary, Ten Thousand Dollars
($10,000); and (iii) with respect Common Stock, One Hundred Thousand Dollars
($100,000) at closing market price on the date of deferral, provided that in
each case the Vice President of Administration may determine a greater or lesser
minimum deferral amount. Except with respect to elections to defer receipt of
Common Stock, any such election shall continue in effect with respect to cash
compensation payable for subsequent calendar years unless and until the Key
Employee revokes or modifies such election by written notice on a designated
form filed with the Vice President of Administration. Any such revocation or
modification of a deferral election shall become effective only with respect to
compensation payable in the calendar year following receipt of such revocation
or modification by the Vice President of Administration.

e. Renewal. A Key Employee who has revoked an election to
participate in the Plan may file a new election to defer compensation payable in
the calendar year following the year in which such election is filed.

<PAGE> 3

- 3 -

3. Key Employee's Account

a. Establishment of Account. The Corporation shall maintain a
separate memorandum account (the "Account") for each Key Employee who has
elected to participate in the Plan, and shall make additions to and subtractions
from such Account as provided in this Section 3.

b. Additions to Account. Compensation allocated to a Key
Employee's Account pursuant to this Section 3 shall be credited to such Account
as of the date such compensation would otherwise have been paid to the Key
Employee. A Key Employee electing to defer the receipt of Common Stock pursuant
to Section 2(c), will be deemed to have invested in a stock unit fund (the
"Stock Unit Fund") and such Key Employee's Account will be credited, as of the
date of exercise of the stock option, with a hypothetical number of units
("Stock Units") equal to the number of shares of Common Stock which would
otherwise have been issued upon exercise of the stock option if such deferral
election had not been made.

c. Designation of Phantom Investment Funds. The Benefits
Administration Committee shall select one or more mutual funds or other
investment vehicles in addition to the Stock Unit Fund, (the "Phantom Funds")
which shall be used to determine the hypothetical investment experience of each
Key Employee's Account under the Plan; provided, however, that unless the
Benefits Administration Committee otherwise determines the Phantom Funds shall
be the investment funds available to employees as investment options from time
to time under the Company's qualified savings plan (the "Savings Plan").

d. Investment Election. Each Key Employee shall from time to
time designate on a form approved by the Vice President of Administration the
Phantom Fund or Funds that shall determine the investment experience with
respect to such Key Employee's Account; provided, however, that the Vice
President of Administration may require that the

<PAGE> 4

- 4 -

Key Employee's Account be credited or debited as though such Account were
invested in the same Phantom Funds, and in the same percentages, as such Key
Employee's account balance is invested from time to time under the Savings Plan.
The Vice President of Administration may, in his discretion, (i) establish
minimum amounts (in terms of dollar amounts or a percentage of a Key Employee's
Account), which may be allocated to any Phantom Fund, (ii) preclude any Key
Employee who is an executive officer of the Company from designating any Phantom
Fund which invests primarily in securities issued by the Company, (iii)
establish rules regarding the time at which any such election (or any change in
such election permitted under Section 3(e) shall become effective, (iv) permit
different designations with respect to a Key Employee's existing Account balance
and amounts to be credited to such Account under Section 3.2 after the date the
election form is filed with the Vice President of Administration, and (v)
establish rules regarding elections to transfer from the Stock Unit Fund. If a
Key Employee fails to make a valid election with respect to any portion of his
Account (or if any such election ceases to be effective for any reason), such
Key Employee shall be deemed to have elected to have his entire Account deemed
invested in the Phantom Fund which the Vice President of Administration
determines generally to have the least risk of loss of principal.

e. Change in Designation of Phantom Fund. Effective as of the
first business day of the calendar quarter commencing more than ten (10)
business days after the proper form is filed with the Vice President of
Administration (or such other time as the Vice President of Administration shall
permit), a Key Employee may change the Phantom Funds designated with respect to
all or any portion of his Account. Any such change shall comply with all rules
applicable with respect to any initial designation of such Phantom Funds.
Notwithstanding the foregoing, unless otherwise approved by the Vice President
of Administration, a Key Employee will be permitted only four (4) transfers from
his or her Stock Unit Fund to another Phantom Fund in any calendar year, and the
minimum value of such transfer shall be One Hundred Thousand Dollars ($100,000).

<PAGE> 5

- 5 -

f. Crediting of Phantom Investment Experience. (i) As of the
last day of each calendar quarter (or such other time as the Vice President of
Administration shall establish from time to time), each Key Employee's Account
shall be credited or debited, as the case may be, with an amount equal to the
net investment gain or loss which such Key Employee would have realized had he
actually invested in each Phantom Fund an amount equal to the portion of his
Account designated as deemed invested in such Phantom Fund during that calendar
quarter (or such other period as may have been established by the Vice President
of Administration).

(ii) Whenever a dividend is declared with respect to the
Common Stock, a Key Employee's Account shall also be credited as of the
payment date with a number of additional Stock Units computed as
follows: (x) the number of Stock Units in the Key Employee's Account
multiplied by any dividend payable in cash or property other than
Common Stock declared by the Corporation on a share of Common Stock,
divided by the closing market price of the Common Stock on the related
dividend record date and/or (y) the number of Stock Units in the Key
Employee's Account multiplied by any stock dividend declared by the
Corporation on a share of Common Stock, provided that the Vice
President of Administration may determine another method of crediting
dividends to a Key Employee's Account.

(iii) In the event of any change in the Common Stock by reason
of any merger, consolidation, reorganization, recapitalization, stock
split, combination or exchange of shares, or any other similar change
affecting the Common Stock, other than a stock dividend as provided
above, the number of Stock Units credited to a Key Employee's Account
shall be appropriately adjusted in such manner as determined by the
Vice President of Administration.

g. Valuation of Stock Units on Transfer. In the event a Key
Employee elects to transfer all or a portion of his or her Stock Unit Fund to
another Phantom Fund as provided in Section 3(e), the amount transferred shall
be determined by multiplying the

<PAGE> 6

- 6 -

number of Stock Units subject to the election by the fair market value of the
Common Stock as determined in accordance with procedures established by the Vice
President of Administration reduced by any expenses directly related to the
transfer.

h. No Actual Investment. Notwithstanding anything else in this
Section 3 to the contrary, no amount standing to the credit of any Key
Employee's Account shall be set aside or invested in any actual fund on behalf
of such Key Employee; provided, however, that, nothing in this Section 3(h)
shall be deemed to preclude the company form making investments for its own
account in any Phantom Funds (whether directly or through a grantor trust) to
assist it in meeting its obligations to the Key Employees hereunder.

4. Distribution from Account

a. Distribution Election. Each Key Employee shall file with
the Vice President of Administration a written election (a "Distribution
Election") with respect to the timing and manner of distribution of the
aggregate cash amount, if any, as well as any Stock Units credited to his
Account at any time. A Key Employee may elect to receive a distribution from his
Account in one lump-sum payment, or in such number of annual installments (not
to exceed ten) as the Key Employee may designate. Subject to such limitations as
the Vice President of Administration shall impose, a Key Employee may also elect
to receive all or a portion of the aggregate amount credited to his Account as
of the first day of any calendar year while he is an employee. If a distribution
election is not made or if such election does not apply to the entire balance in
such Account, the balance in the Key Employee's Account shall be distributed in
a single lump-sum payment as soon as administratively possible after the first
business day of the calendar year immediately following the year of separation
from employment. In the case of any distribution being made in annual
installments, each installment after the first installment shall be paid as soon
as administratively possible after the first business day of each calendar year

<PAGE> 7

- 7 -

following the year in which such first installment is paid until the entire
amount subject such installment Distribution Election shall have been paid.

b. Amendment of Distribution Election. A Key Employee may, at
any time during active employment, elect to change the time at which
distributions from his Account will commence; provided, however, that unless the
Vice President of Administration shall otherwise determine, no such election
shall be effective unless at least one full calendar year elapses between (i)
the date as of which such election is filed and (ii) (A) the date as of which a
distribution would otherwise have commenced and (B) the date as which such
distribution will commence under such election. If a Key Employee receives any
distribution from his Account while still eligible to make deferrals hereunder,
the Vice President of Administration may suspend the Key Employee's right to
defer additional amounts Account during such calendar year in accordance with
Section 2.

c. Amount of Installment Payments. Where the Key Employee
receives the balance of his Account in annual installments, the amount of each
installment shall be approximately equal to the product of (i) the cash balance
and/or the number of Stock Units credited to such Account on the date of such
payment and (ii) a fraction, the numerator of which is one (1) and the
denominator of which is the total number of installments remaining to be paid at
that time, provided that if the Key Employee elects to receive installments of
Stock Units, and the value of the Stock Units remaining at the time of
distribution of any installment is One Hundred Thousand Dollars ($100,000) or
less, the entire balance of Stock Units remaining shall be distributed as such
installment.

d. Form of Distribution. Distribution of any amount credited
to a Key Employee's Account on a cash basis shall be made in cash. Distributions
of Stock Units in such Key Employee's Account shall be made in whole shares of
Common Stock; fractional shares shall be paid in an amount equal to the number
of fractional shares multiplied by the fair market value of the Common Stock as
determined in accordance with procedures

<PAGE> 8

- 8 -

established by the Vice President of Administration reduced by the amount of any
expense directly related to such distribution.

e. Change of Control. Notwithstanding the foregoing, upon a
Change of Control (as defined below), a Key Employee's Account shall immediately
be distributed to a Key Employee in a lump sum distribution within ten (10) days
following the occurrence of such Change of Control (as defined below) unless all
the Trustees then serving unanimously determine that such acceleration of
distributions should not occur. A "Change of Control" for purposes of this Plan
shall mean:
(i) the acquisition (other than from the Corporation) by any
person, entity or "group" (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")
but excluding for this purpose the Corporation or its subsidiaries or
any employee benefit plan of the Corporation or its subsidiaries which
acquires beneficial ownership of voting securities of the Corporation)
of "beneficial ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of Twenty Percent (20%) of more of the then
outstanding shares of common stock or the combined voting power of the
Corporation's then outstanding voting securities entitled to vote
generally in the election of directors; or

(ii) individuals who, as of the date hereof, constitute the
Board (as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided that
any person becoming a member of the Board subsequent to the date hereof
whose election or nomination for election by the Corporation's
stockholders (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors
of the Corporation, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) was approved by a vote of at
least a majority of the directors then comprising

<PAGE> 9

- 9 -

the Incumbent Board shall be, for purposes of this provision, considered a
member of the Incumbent Board; or

(iii) approval by the stockholders of the Corporation of
either a reorganization, or merger, or consolidation, with respect to
which persons who were the shareholders of the Corporation immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than fifty percent (50%) of the
combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated entity's then
outstanding voting securities, or a liquidation or dissolution of the
Corporation, or the sale of all or substantially all of the assets of
the Corporation; or

(iv) any other event or series of events which,
notwithstanding any of the foregoing provisions of this Section 4(e) to
the contrary, is determined by a majority of the Incumbent Board to
constitute a Change of Control for the purposes of this Plan.

5. Distribution on Death

If a Key Employee shall die before payment of all amounts
credited to the Key Employee's Account has been completed, the total unpaid
balance then credited to such Key Employee's Account shall be paid to the Key
Employee's designated beneficiaries or estate in a single lump-sum payment as of
the first business day of the first calendar month commencing after the date of
the Key Employee's death or as soon, thereafter, or administratively possible.

6. Designation of a Beneficiary

A Key Employee may designate a beneficiary or beneficiaries
(which may be an entity other than a natural person) to receive any payments to
be made upon the Key Employee's death pursuant to Section 5 hereof. At any time,
and from time to time, any

<PAGE> 10

- 10 -

such designation may be changed or canceled by the Key Employee without the
consent of any beneficiary. Any such designation, change or cancellation must be
made by written notice filed with the Vice President of Administration. If a Key
Employee designates more than one beneficiary, any payments to such
beneficiaries made pursuant to Section 5 shall be made in equal shares unless
the Key Employee has designated otherwise, in which case the payments shall be
made in the shares designated by the Key Employee. If no beneficiary has been
named by a Key Employee, payment shall be made to the Key Employee's spouse or,
if the Key Employee has no spouse at the time of his death, to the Key
Employee's estate.

7. Amendment and Termination.

The Benefits Administration Committee may, at any time, amend
or terminate the Plan; provided no such amendment or termination shall impair
the rights of a Key Employee with respect to amounts then credited to his
Account under the Plan.

8. Miscellaneous

a. Unfunded Plan. The Corporation shall not be obligated to
fund its liabilities under the Plan, the Account established for each Key
Employee electing deferment shall not constitute trusts, and a Key Employee
shall have no claim against the corporation or its assets other than as an
unsecured general creditor. Without limiting the generality of the foregoing,
the Key Employee's claim at any time shall be for the amount credited to such
Key Employee's Account at such time. Notwithstanding the foregoing, the
Corporation may establish a grantor trust or purchase securities to assist it in
meeting its obligations hereunder; provided, however, that in no event shall any
Key Employee have any interest in such trust or property other than as an
unsecured general creditor.

<PAGE> 11

- 11 -

b. Non-alienation. The right of a Key Employee to receive a
distribution of the value of such Key Employee's Account payable pursuant to the
Plan shall not be subject to assignment or alienation.

c. No Right to Continued Employment. Nothing in this Plan
shall be construed to give any Key Employee the right to continue in the employ
of the Corporation or any of its subsidiaries.

d. Legal Fees. In the event that any Key Employee (or the
beneficiary or legal representative of such Key Employee) shall make demand for
payment of benefits due under the terms of the plan and prevail as to any
material aspect of such claim, the Corporation shall pay all of the Key
Employee's expenses in conjunction with pursuing such claim (including, without
limitation, legal fees) and interest on the amount due from the date
of such demand in an amount equal to the greater of (i) the amount of earnings
credited to the Key Employee's Account hereunder or (ii) 10% per annum
compounded semi-annually.

<PAGE> 1

EXHIBIT 11

CAMBREX CORPORATION AND SUBSIDIARIES

COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER-SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1995 1994 1993 1992 1991(1)
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Income applicable to common shares:
Primary earnings...................... $ 19,670 $ 11,126 $ 8,641 $ 6,230 $ 31
Add:
Interest reduction attributable to
assumed conversion of convertible
subordinated notes (Net of taxes)
Notes issued June 11, 1985.......... -- -- 71 136 --
Notes issued October 3, 1985........ -- -- 43 81 --
------- ------- ------ ------ ------
Fully diluted earnings (loss).... $ 19,670 11,126 $ 8,755 $ 6,447 $ 31
======= ======= ====== ====== ======
Weighted average number of common shares
and common share equivalents outstanding
during the year:
Common stock.......................... 6,360 5,250 4,961 4,753 4,655
Nonvoting Common stock................ -- -- -- -- --
Stock options......................... 342 424 321 135 49
------- ------- ------ ------ ------
Shares outstanding -- primary......... 6,702 5,674 5,282 4,888 4,704
Notes issued June 11, 1985............... -- -- 122 198 --
Notes issued October 3, 1985............. -- -- 73 120 --
Additional stock options................. 34 25 7 36 34
------- ------- ------ ------ ------
Shares outstanding -- fully diluted... 6,736 5,699 5,484 5,242 4,738
======= ======= ====== ====== ======
Fully diluted earnings (loss) per
common share(2)..................... $ 2.92 $ 1.95 $ 1.60 $ 1.23 $ 0.01
======= ======= ====== ====== ======
</TABLE>

- ---------------
(1) The convertible subordinated notes and the related interest, net of income
taxes, had an anti-dilutive effect on earnings per share for the year ended
December 31, 1991 and are, therefore, excluded from the computation.

(2) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.

<PAGE> 1

EXHIBIT 21

CAMBREX CORPORATION

SUBSIDIARIES OF REGISTRANT

<TABLE>
<CAPTION>
SUBSIDIARY INCORPORATED IN:
--------------------------------------------------------------- ----------------
<S> <C>
CasChem, Inc. ................................................. Delaware
Cosan Chemical Corp. .......................................... New Jersey
Nepera, Inc. .................................................. New York
The Humphrey Chemical Co., Inc. ............................... Delaware
Salsbury Chemicals, Inc. ...................................... Iowa
Zeeland Chemicals, Inc. ....................................... Michigan
Seal Sands Chemicals Limited................................... England
Profarmaco Nobel S.r.1. ....................................... Italy
Nordic Synthesis AB............................................ Sweden
</TABLE>

<PAGE> 1

EXHIBIT 23

CAMBREX CORPORATION

ACCOUNTANTS' CONSENT

Cambrex Corporation:

We consent to the incorporation by reference in the registration statement
of Cambrex Corporation on Form S-8 (File Nos. 33-21374, 33-37791, 33-81780 and
33-81782) of our report dated January 19, 1996, on our audits of the
consolidated financial statements and financial statement schedules of Cambrex
Corporation as of December 31, 1995 and 1994, and for each of the three years in
the period ended December 31, 1995, which report is included in this Annual
Report on Form 10-K.

COOPERS & LYBRAND L.L.P.

Parsippany, New Jersey
March 22, 1996

<PAGE> 1
Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each officer and director of Cambrex
Corporation, a Delaware corporation, whose signature appears below constitutes
and appoints Cyril C. Baldwin, Jr., James A. Mack, and Peter Tracey, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all Annual Reports on Form 10-K which
said Cambrex Corporation may be required to file pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 and any and all amendments thereto and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitutes may lawfully do or cause to be done by virtue
hereof.

IN WITNESS WHEREOF each of the undersigned has executed this instrument as
of the 25th day of January 1996.

<TABLE>
<S> <C>
/s/ CYRIL C. BALDWIN, JR. /s/ JAMES A. MACK
- ------------------------------------ ------------------------------------
Cyril C. Baldwin, Jr. James A. Mack
Chairman of the Board of Directors President, Chief Executive Officer
Director
/s/ PETER TRACEY /s/ LEON J. HENDRIX, JR.
- ------------------------------------ ------------------------------------
Peter Tracey Leon J. Hendrix, Jr.
Executive Vice President-Finance Director
and Chief Financial Officer
/s/ ROSINA B. DIXON, M.D. /s/ ILAN KAUFTHAL
- ------------------------------------ ------------------------------------
Rosina B. Dixon, M.D. Ilan Kaufthal
Director Director
/s/ FRANCIS X. DWYER /s/ ROBERT LEBUHN
- ------------------------------------ ------------------------------------
Francis X. Dwyer Robert LeBuhn
Director Director
/s/ GEORGE J.W. GOODMAN /s/ DEAN P. PHYPERS
- ------------------------------------ ------------------------------------
George J.W. Goodman Dean P. Phypers
Director Director
/s/ KATHRYN RUDIE HARRIGAN, PHD
- ------------------------------------
Kathryn Rudie Harrigan, PhD
Director
</TABLE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 4,841
<SECURITIES> 0
<RECEIVABLES> 53,603
<ALLOWANCES> 1,261
<INVENTORY> 71,234
<CURRENT-ASSETS> 144,134
<PP&E> 293,430
<DEPRECIATION> 87,747
<TOTAL-ASSETS> 402,553
<CURRENT-LIABILITIES> 74,269
<BONDS> 99,643
818
0
<COMMON> 0
<OTHER-SE> 188,666
<TOTAL-LIABILITY-AND-EQUITY> 402,553
<SALES> 357,176
<TOTAL-REVENUES> 357,176
<CGS> 257,396
<TOTAL-COSTS> 257,396
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,146
<INCOME-PRETAX> 31,216
<INCOME-TAX> 11,546
<INCOME-CONTINUING> 19,670
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,670
<EPS-PRIMARY> 2.93
<EPS-DILUTED> 2.92

</TABLE>