<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
for the transition period from __________ to __________.
Commission File No.: 3-37791
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
CAMBREX CORPORATION SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the the plan and
the address of its principal executive office:
CAMBREX CORPORATION
ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NEW JERSEY 07073
<PAGE> 2
REQUIRED INFORMATION
(A) FINANCIAL STATEMENTS FOR THE PLAN
Independent auditors' report
Statement of Net Assets available for Plan Benefits with Fund
Information at December 31, 1997
Statement of Net Assets available for Plan Benefits with Fund
Information at December 31, 1996
Statement of Changes in Net Assets available for Plan Benefits with
Fund Information for the year ended December 31, 1997
Notes to financial statements
Schedule 1 - Schedule of Assets Held for Investment Purposes
Schedule 2 - Schedule of 5% Reportable Transactions
- 2 -
<PAGE> 3
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Administration Committee of the Plan has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
Cambrex Corporation Savings Plan
Date October 15, 1998 /s/ Douglas H. MacMillan
Douglas H. MacMillan
Vice President
(On behalf of the Registrant and
as the Registrant's Principal
Financial Officer)
<PAGE> 4
CAMBREX CORPORATION SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<PAGE> 5
CAMBREX CORPORATION SAVINGS PLAN
INDEX
Page
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits With Fund Information
as of December 31, 1997 and 1996 2
Statement of Changes in Net Assets Available for Plan Benefits
With Fund Information for the year ended December 31, 1997 3
Notes to Financial Statements 4-11
Supplemental Schedules:
Schedule 1 - Item 27(a) - Schedule of Assets Held for Investment Purposes 12
Schedule 2 - Item 27(d) - Schedule of 5% Reportable Transactions 13
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
September 17, 1998
To the Participants and Administrator
of the Cambrex Corporation Savings Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Cambrex Corporation Savings Plan (the "Plan") at December 31, 1997 and
1996, and the changes in net assets available for benefits for the year ended
December 31, 1997, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The Fund Information
in the statements of net assets available for benefits and the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for benefits of each fund. The
supplemental schedules and Fund Information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
By: /s/ PricewaterhouseCoopers LLP
<PAGE> 7
CAMBREX CORPORATION SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits with Fund Information
as of December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Investments at fair value:
Cambrex Employer Stock Fund $18,283,573 $13,941,703
Cambrex Employee Stock Fund 5,868,655 4,214,547
Fidelity Magellan Fund 6,813,948 5,652,238
Fidelity Growth and Income Portfolio 15,380,768 11,369,441
Fidelity Asset Manager 5,326,390 4,825,843
Fidelity Retirement Government Money Market Portfolio 4,003,890 3,756,914
Fidelity Short - Intermediate Government Portfolio 509,609 550,148
Fidelity Investment Grade Bond 304,717 --
Founders Growth Fund 659,725 --
Loans to Participants 1,095,314 1,259,992
Investments at contract value:
Travelers G.I.C -- 887,902
----------- -----------
Total investments 58,246,589 46,458,728
----------- -----------
Liabilities:
Employee excess contribution
9,448 3,550
----------- -----------
Net Assets Available for Plan Benefits $58,237,141 $46,455,178
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 8
CAMBREX CORPORATION SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1997
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------------------
Cambrex Cambrex Growth &
Employer Employee Travelers Magellan Income
Total Funds Stock Fund Stock Fund G.I.C. Fund Fund
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employee $ 3,164,799 $ -- $ 486,555 $ -- $ 677,525 $ 1,126,830
Rollovers 339,257 -- 34,166 -- 44,938 150,257
Employer 952,532 952,532 -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total contributions 4,456,588 952,532 520,721 -- 722,463 1,277,087
Net appreciation (depreciation) in
the fair value of investments 11,309,397 5,282,468 1,667,722 -- 1,017,482 2,835,347
Interest & dividends 1,972,777 19,166 6,214 5,256 444,812 691,768
Loan interest 89,994 1,087 14,328 -- 18,042 24,469
Loan issuances -- -- (93,766) -- (69,488) (99,877)
Loan repayments -- 11,821 95,876 -- 108,126 161,492
Forfeiture usage (13,167) (2,533) -- -- (361) (6,438)
Excess employee contributions (9,448) -- -- -- -- --
Interfund transfers -- (506,104) (75,383) (872,033) (441,281) 866,390
------------ ------------ ------------ ------------ ------------ ------------
TOTAL ADDITIONS 17,806,141 5,758,437 2,135,712 (866,777) 1,799,795 5,750,238
------------ ------------ ------------ ------------ ------------ ------------
DEDUCTIONS:
Participants' withdrawals (6,015,793) (1,416,390) (479,677) (21,125) (637,298) (1,736,681)
Administrative expenses (8,385) (177) (132) -- (589) (1,276)
------------ ------------ ------------ ------------ ------------ ------------
NET ADDITIONS (DEDUCTIONS) 11,781,963 4,341,870 1,655,903 (887,902) 1,161,908 4,012,281
Net assets available for plan
benefits at beginning of year 46,455,178 13,941,703 4,212,752 887,902 5,652,040 11,368,487
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at end of year $ 58,237,141 $ 18,283,573 $ 5,868,655 $ -- $ 6,813,948 $ 15,380,768
============ ============ ============ ============ ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 9
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------------------------------
Retirement Short - Investment
Asset Government Intermediate Grade Founders
Manager Money Government Bond Growth
Fund Market Fund Fund Fund Loans
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employee $ 411,954 $ 384,501 $ 41,185 $ 6,433 $ 29,816 $ --
Rollovers 66,361 42,062 1,473 -- -- --
Employer -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total contributions 478,315 426,563 42,658 6,433 29,816 --
Net appreciation (depreciation) in
the fair value of investments 566,546 (184) (996) 4,389 (63,377) --
Interest & dividends 467,215 208,708 32,339 7,342 89,957 --
Loan interest 10,342 20,303 878 313 232 --
Loan issuances (43,854) (130,573) (3,442) -- -- 441,000
Loan repayments 94,860 85,319 4,942 4,006 2,603 (569,045)
Forfeiture usage (3,835) -- -- -- -- --
Excess employee contributions -- -- -- -- -- --
Interfund transfers (237,151) 458,291 (75,510) 282,287 600,494 --
------------ ------------ ------------ ------------ ------------ ------------
TOTAL ADDITIONS 1,332,438 1,068,427 869 304,770 659,725 (128,045)
------------ ------------ ------------ ------------ ------------ ------------
DEDUCTIONS:
Participants' withdrawals (829,670) (817,097) (41,222) -- -- (36,633)
Administrative expenses (2,221) (3,751) (186) (53) -- --
------------ ------------ ------------ ------------ ------------ ------------
NET ADDITIONS (DEDUCTIONS) 500,547 247,579 (40,539) 304,717 659,725 (164,678)
Net assets available for plan
benefits at beginning of year 4,825,843 3,756,311 550,148 -- -- 1,259,992
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at end of year $ 5,326,390 $ 4,003,890 $ 509,609 $ 304,717 $ 659,725 $ 1,095,314
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Other
Activity
------------
<S> <C>
ADDITIONS:
Contributions:
Employee $ --
Rollovers --
Employer --
------------
Total contributions --
Net appreciation (depreciation) in
the fair value of investments --
Interest & dividends --
Loan interest --
Loan issuances --
Loan repayments --
Forfeiture usage --
Excess employee contributions (9,448)
Interfund transfers --
------------
TOTAL ADDITIONS (9,448)
------------
DEDUCTIONS:
Participants' withdrawals --
Administrative expenses --
------------
NET ADDITIONS (DEDUCTIONS) (9,448)
Net assets available for plan
benefits at beginning of year --
------------
Net assets available for plan
benefits at end of year $ (9,448)
============
</TABLE>
<PAGE> 10
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN:
The following brief description of the Cambrex Corporation Savings Plan
(the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for more complete
information.
GENERAL
The Plan is a defined contribution plan to provide all eligible
employees of Cambrex Corporation (the "Company") and its subsidiaries a
vehicle to accumulate savings. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan
was designed to enhance the existing retirement program for employees
of the Company. The assets of the Plan are maintained, and transactions
therein are executed, by Fidelity Management Trust Company (the
"Trustee").
ELIGIBILITY FOR PARTICIPATION
Each employee who was a participant in a previous plan shall continue
as a participant under the provisions of the Plan as of the Effective
Date. All other employees, unless covered under a collective bargaining
agreement which does not permit participation in the Plan or are
temporary or part-time employees scheduled to work less than 20 hours
per week, are eligible to participate in the Plan on the first of the
month following completion of thirty consecutive days of service.
CONTRIBUTIONS
A participant may elect to make, through payroll deduction,
contributions in whole percentages of at least 1%, and not more than
15%, of their compensation on a before-tax or after-tax basis.
Participant contributions may not exceed the smaller of 15% of the
participant's base compensation or $9,500 in 1997 and 1996. The Company
matches 100% of the employee's contribution based on the first 3% of
their compensation; 50% of the contribution based on the succeeding 3%;
and no match with respect to contributions in excess of 6%. All Company
matching is made in Company stock. The Company match between May 2,
1997 and July 11, 1997 was made from the forfeiture account. Treasury
shares were used for the other periods of 1997. During 1996, the
Company match was made in treasury shares. Active participants who are
covered by a collective bargaining agreement to which the Company is a
party are not entitled to matching employer contributions unless the
collective bargaining agreement specifically provides otherwise.
<PAGE> 11
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED:
VESTING
A participant's interest in the employee contributions to the Plan
shall always be fully and immediately vested. A participant's interest
in matching employer contributions shall be vested at a rate of twenty
percent (20%) for each year of service completed. If not already fully
vested under the preceding basis, a participant shall be 100% vested in
their matching employer contributions upon normal retirement date,
permanent disability, or death. At the time of termination, any
unvested employer contributions are applied to a forfeiture account
within the Plan. These forfeited Company contributions are accumulated
in a forfeiture account until a sufficient balance is available to
reduce subsequent Company contributions. Forfeitures for 1997 and 1996
were $150,438 and $86,574, respectively. Cumulative unused balances in
the forfeiture accounts amounted to $186,297 and $498,600 at December
31, 1997 and 1996 respectively.
WITHDRAWALS DURING EMPLOYMENT
A contributing participant may make withdrawals from the vested portion
of their after-tax account balance prior to their termination of
employment by filing a written request with the Plan Administration
Committee. Pre-tax contributions are available only as provided by IRS
regulation.
DISTRIBUTION OF BENEFITS OTHER THAN WITHDRAWALS
A participant, upon termination of employment for reasons other than
retirement, death or disability, shall receive all vested amounts in
their account balances in all investment funds in the form of a lump
sum payment, in quarterly installments for not less than five (5)
years, or an annuity contract. Provided the vested amount for
distribution is in excess of $5,000, such participant must elect to
receive a distribution of benefit prior to the first anniversary of
their severance date or at age 65.
DEATH, DISABILITY OR RETIREMENT
If a participant's termination of employment is due to death,
disability or retirement, all amounts credited to their account are
payable in one lump sum to them or their designated beneficiary.
<PAGE> 12
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED:
LOANS TO PARTICIPANTS
The Loan Fund consists of loans to participants which are subject to
certain restrictions. The amounts borrowed are transferred from the
Funds on a proportional basis. On a monthly basis, repayments of
principal and interest are transferred to the investment funds. The
interest rate on loans at December 31, 1997 and 1996 were 9.00% and
8.75%, respectively.
PLAN TERMINATION
Although the Company has not expressed any intention to do so, the
Company has the right under the Plan to temporarily or permanently
discontinue its employer contributions to the Plan or to terminate or
partially terminate the Plan at any time subject to the provisions set
forth by ERISA. In the event of, and upon, the Company's termination or
partial termination of the Plan or complete discontinuance of
contributions, the interest in the portion of each participant's
account balance attributable to employer contributions shall become
fully vested. Unless the Company's Board of Directors deems otherwise,
termination of the Plan shall not accelerate any such payments for the
benefit of the participants or their beneficiaries, but the assets
shall continue to be held for distribution and application in the
manner prescribed by the Board.
2. SIGNIFICANT ACCOUNTING POLICIES:
The financial statements of the Plan have been prepared on the accrual
basis of accounting.
NET APPRECIATION (DEPRECIATION)
The Plan presents in the "Statement of Changes in Net Assets" the net
appreciation (depreciation) in the fair value of its investments, which
consists of the realized gains or losses recognized from the
disposition of investments and the unrealized appreciation
(depreciation) on those investments.
PLAN EXPENSES
Expenses of the Plan consist of fees charged by the Trustee and
miscellaneous administrative costs. As of January 1, 1997, the Plan is
responsible for loan administrative charges. All other administrative
expenses incurred by the Plan are paid by the Company.
<PAGE> 13
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
CONTRIBUTIONS
Contributions to the Plan are recognized when authorized by the Plan
sponsor.
FEDERAL INCOME TAXES
The Internal Revenue Service issued its latest determination letter on
December 5, 1994, which stated that the Plan and its underlying trust
qualify under the applicable provisions of the Internal Revenue Code
and, therefore, are exempt from Federal income taxes. Although the Plan
has been amended since receiving the determination letter, the Plan
administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal
Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
CONCENTRATIONS OF CREDIT RISK
The Plan's investments are self-directed by the participants in a Trust
managed by the Trustee with the exception of the Cambrex Employer and
Employee Stock Fund, which is both participant and non-participant
directed. As of December 31, 1997 and 1996, respectively, Plan
investments are allocated as follows: 42% and 40% of the investments
are in the Cambrex Corporation Employer and Employee Common Stock Fund,
27% and 25% in the Growth and Income Fund, 9% and 11% in the Asset
Manager Fund, 12% and 13% in the Magellan Fund, 7% and 8% in the
Retirement Government Money Market Fund, 0% and 2% in the Travelers
Life Insurance Guaranteed Investment Contracts, 1% and 1% in the Short
- Intermediate Government Fund, 1% and 0% in the Investment Grade Bond
Fund and 1% and 0% in the Founders Growth Fund. In the event of
non-performance by the Trustee, the asset value of the Plan could be
substantially impaired.
As of December 31, 1996, a portion of the Plan's assets were invested
in Guaranteed Investment Contracts ("GICs"). The GIC was frozen on
December 31, 1992 and was fully liquidated during 1997. The risk
associated with GICs and their realizable value is dependent upon the
financial stability of the issuing entity and its ability to fulfill
the terms of the contracts. In the event of non-performance, the
related asset value of the contracts could be substantially impaired.
<PAGE> 14
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
As of December 31, 1997, the concentration in the Cambrex Corporation
Common Stock Fund was $24.2 million or 42% of the Plan. A significant
portion ($5.9 million or 10%) of the Plan's assets were invested at the
direction of the Plan participants in the Cambrex Corporation Common
Stock Fund. The balance of the fund ($18.3 million or 32%) is
attributable to employer matching contributions made solely in Company
stock. This fund bears the risk associated with a single stock
investment.
Funds offered within the Plan are diversified, allowing employees to
self-direct participation on a broad range of Funds being offered.
Employer matching contributions are made directly into the Cambrex
Corporation Common Stock fund and cannot be transferred by participants
until reaching age 55, as provided under Plan provisions.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make significant
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could
differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in funds which can
invest in a combination of stocks, bonds, fixed income securities,
mutual funds, and other investment securities. Investment securities
are exposed to various risks, such as interest rate, market and credit.
Due to the level of risk associated with certain investment securities
and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account
balances and the amounts reported in the statement of net assets
available for plan benefits and the statement of changes in net assets
available for plan benefits.
<PAGE> 15
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. INVESTMENT IN FIDELITY INVESTMENTS:
The assets of the Plan are invested by the participants in several
funds held by Fidelity Investments. The funds currently available to
participants are: Fidelity Growth & Income Portfolio, Fidelity Asset
Manager, Fidelity Retirement Government Money Market Portfolio,
Fidelity Magellan Fund, Fidelity Short - Intermediate Government
Portfolio, Fidelity Investment Grade Bond, Founders Growth Fund and the
Cambrex Employer and Employee Stock Fund. Fidelity Growth & Income
Portfolio seeks long term growth and a reasonable level of current
income by investing in companies which offer growth potential while
paying current dividends. Fidelity Asset Manager seeks high total
return and reduced risk over the long term by allocating its assets
among stocks, bonds, and short-term fixed income instruments. Fidelity
Retirement Government Money Market Portfolio seeks as high a level of
current income as is consistent with the preservation of capital and
liquidity by investing in obligations issued or guaranteed by the U.S.
government, its agencies or instrumentality's. Fidelity Magellan Fund
is a large, diversified portfolio of common stocks and convertible
securities seeking long-term growth of capital. Fidelity Institutional
Short - Intermediate Government Portfolio seeks to provide a high level
of current income in a manner consistent with preserving principal by
exclusively investing in obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Fidelity Investment
Grade Bond Fund is an income fund, seeking a high rate of current
income consistent with reasonable risk. Founders Growth Fund seeks to
increase the value of your investment over the long term through
capital growth by investing in common stocks of well-established, high
quality growth companies, both domestic and abroad.
The following table presents the cost and fair value of investments
representing 5% or more of the total assets of the Plan as of December
31, 1997:
<TABLE>
<CAPTION>
NUMBER
OF SHARES INVESTMENT COST FAIR VALUE
- -------------- ---------------------------------------- ----------------- -----------------
<S> <C> <C> <C>
508,650 Cambrex Employer & Employee $10,243,269 $24,152,228
Stock Fund
71,522 Fidelity Magellan Fund 5,702,208 6,813,948
403,695 Fidelity Growth & Income Portfolio 10,765,152 15,380,768
290,267 Fidelity Asset Manager 4,534,637 5,326,390
4,003,890 Fidelity Retirement Government 4,003,890 4,003,890
Money Market Portfolio
</TABLE>
<PAGE> 16
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. INVESTMENT IN FIDELITY INVESTMENTS, CONTINUED:
The number of participants in each fund as of December 31, 1997 and
1996 were:
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Fidelity Growth & Income Portfolio 578 578
Fidelity Asset Manager 346 376
Fidelity Retirement Government Money Market Portfolio 249 286
Fidelity Magellan Fund 453 458
Fidelity Short - Intermediate Government Portfolio 76 72
Cambrex Employer & Employee Stock Fund 731 743
Travelers' GIC Fund - 141
Fidelity Investment Grade Bond 14 -
Founders Growth Fund 65 -
</TABLE>
Calculations of the portion of the total funds to be allocated to the
Plan have been made by the Trustee. The assets held by each fund are
described in the prospectus of the fund which are available to the Plan
participants. Each fund offers different investment opportunities from
assets consisting of cash and short-term investments, corporate bonds,
common stocks, preferred stocks, and government securities. The Plan's
investments are stated at fair value except for its investment contract
which is valued at contract value (Note 4). Securities traded on a
national securities exchange are valued at the last reported sales
price of the day. Securities traded on the over-the-counter market are
valued at the last reported bid price. Purchase and sale of securities
are reflected on a trade date basis with the gain or loss recognized on
the sale of securities being based on the average cost. Dividend income
is recorded on the ex-dividend date. Interest income is recorded as
earned on an accrual basis. Each fund has its own investment managers
who exercise discretionary authority concerning investment vehicles
within the fund.
The net investment gain includes interest and dividend income, net
gains or losses realized upon disposition of investments at fair value,
and net unrealized appreciation or depreciation of investments.
Investment income and gains and losses have been allocated daily by the
Trustee in proportion to the market values of the respective plans,
adjusted for contributions and distributions.
<PAGE> 17
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. INVESTMENT IN TRAVELERS FIXED INCOME G.I.C.:
The investment in The Travelers' Guaranteed Investment Contract is
valued at the contract rate plus accrued interest. As of December 31,
1992, the Company discontinued to offer the Travelers Fixed Income
G.I.C. as an investment alternative. As part of the discontinuance
provisions of the contract, a minimum of 20% per year is to be
transferred out of the Travelers G.I.C. and is available for investment
into the funds based upon the employees current election options. The
first transfer was made on March 1, 1993. The final liquidation
transfer was made in March, 1997.
The contract is included in the financial statements at contract value
because it is fully benefit responsive. The fair value of the
investment contract at December 31, 1996 approximated the contract
value. The average yield on these investments was 4.38% for the year
ended December 31, 1996. The crediting interest rate was 4.30% as of
December 31, 1996.
5. RELATED PARTY TRANSACTIONS:
The Cambrex Employer and Employee Stock Fund invests solely in Cambrex
Corporation common stock and maintains 3-4% liquidity. Employee
contributions are used to buy units in the fund. The employer matching
contribution is made in stock issued by Cambrex at the average of the
high & low trading price on the day of contribution. All other
transactions of Cambrex Corporation common shares were traded on the
AMEX. Withdrawal from the Cambrex Stock Fund for transfer to another
investment fund is restricted to the employee contributions, dividends,
and appreciation thereon. These Plan transactions are permitted under
the Plan provisions and are specifically exempt from any ERISA "Party
in Interest" regulations. Each participant can exercise voting rights
attributable to the shares allocated to their account. The Cambrex
Corporation common shares are currently traded on the NYSE.
6. SUBSEQUENT EVENT:
In July, 1998, a new fund, the Spartan U.S. Equity Index Fund, was
added to the investment options available to the participants.
On June 25, 1998, there was a 2 for 1 stock split of the Cambrex
Corporation stock.
<PAGE> 18
CAMBREX CORPORATION SAVINGS PLAN
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION OF ASSETS/INVESTMENTS UNITS COST FAIR VALUE
- ------------------------------------------------------ --------- ----------- -----------
<S> <C> <C> <C>
Founders Growth 38,179 $ 726,687 $ 659,725
Cambrex Employer and Employee Stock Fund 508,650 10,243,269 24,152,228
Fidelity Magellan Fund 71,522 5,702,208 6,813,948
Investment Grade Bond 41,857 300,542 304,717
Fidelity Growth & Income Portfolio 403,695 10,765,152 15,380,768
Fidelity Asset Manager 290,267 4,534,637 5,326,390
Fidelity Retirement Government Money Market Portfolio 4,003,890 4,003,890 4,003,890
Short - Intermediate Government Portfolio 54,099 514,248 509,609
Participant Loans (at various interest rates) 1,095,314
----------- -----------
$36,790,633 $58,246,589
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 19
CAMBREX CORPORATION SAVINGS PLAN
Item 27(d) - Schedule of 5% Reportable Transactions
December 31, 1997
<TABLE>
<CAPTION>
TOTAL TOTAL REALIZED
DESCRIPTION OF ASSETS/INVESTMENTS PURCHASES SALES GAIN/(LOSS)
- ----------------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Cambrex Employer and Employee Stock Fund $2,599,602 $3,551,882 $2,196,786
Fidelity Magellan Fund 1,905,631 1,761,692 260,486
Fidelity Growth & Income Portfolio 5,358,795 4,183,380 749,853
Fidelity Asset Manager 1,536,900 1,603,085 269,523
Fidelity Retirement Government Money Market Portfolio 4,048,625 3,801,649 --
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 20
CAMBREX CORPORATION
PART III - NARRATIVE
The due date for the Cambrex Corporation Savings Plan Annual Report on Form 11-K
coincides with the due date for the Cambrex Corporation's Annual Report on Form
10-K. Therefore, additional time is required to prepare complete and accurate
financial statements for the savings plan, to conduct the related audit, and to
prepare Form 11-K.
