<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, 1998
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 the issuer of the securities held pursuant to 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, 1998
Statement of Net Assets available for Plan Benefits with Fund
Information at December 31, 1997
Statement of Changes in Net Assets Available for Plan Benefits with
Fund Information for the year ended December 31, 1998
Notes to financial statements
Schedule 1 - Schedule of Assets Held for Investment Purposes
Schedule 2 - Schedule of 5% Reportable Transactions
<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 20, 1999 /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, 1998 AND 1997
<PAGE> 5
CAMBREX CORPORATION SAVINGS PLAN
INDEX
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits With Fund Information
as of December 31, 1998 and 1997 2
Statement of Changes in Net Assets Available for Plan Benefits
With Fund Information for the year ended December 31, 1998 3
Notes to Financial Statements 4-9
Supplemental Schedules:
Schedule 1 - Item 27(a) - Schedule of Assets Held for Investment Purposes 10
Schedule 2 - Item 27(d) - Schedule of 5% Reportable Transactions 11
</TABLE>
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
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, 1998 and
1997, and the changes in net assets available for benefits for the year ended
December 31, 1998, 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 conducted 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. 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. These supplemental
schedules and fund information are the responsibility of the Plan's management.
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.
PricewaterhouseCoopers LLP
September 17, 1999
<PAGE> 7
CAMBREX CORPORATION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR
PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Investments at fair value
Cambrex Employer Stock Fund $19,065,706 $18,283,573
Cambrex Employee Stock Fund 6,212,440 5,868,655
Fidelity Magellan Fund 11,032,129 6,813,948
Fidelity Growth and Income Portfolio 19,718,142 15,380,768
Fidelity Asset Manager 6,573,943 5,326,390
Fidelity Retirement Government Money Market Portfolio 8,312,120 4,003,890
Fidelity Short - Intermediate Government Portfolio 509,609 942,726
Fidelity Investment Grade Bond 1,259,084 304,717
Founders Growth Fund 2,649,018 659,725
Spartan US Equity Index 5,239,177 --
Loans to Participants 1,367,076 1,095,314
----------- -----------
Total investments 82,371,561 58,246,589
----------- -----------
Liabilities
Employee excess contribution
-- 9,448
----------- -----------
Net Assets Available for Plan Benefits $82,371,561 $58,237,141
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 8
CAMBREX CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
------------------------------------------------------
CAMBREX CAMBREX GROWTH
TOTAL EMPLOYER EMPLOYEE MAGELLAN AND INCOME
FUNDS STOCK FUND STOCK FUND FUND FUND
<S> <C> <C> <C> <C> <C>
Additions:
Contributions
Employee $ 3,922,266 $ -- $ 635,830 $ 781,196 $ 1,253,371
Rollovers 771,774 -- 136,482 213,458 220,488
Employer 1,677,922 1,677,922 -- -- --
------------ ------------ ------------ ------------ ------------
Total contributions 6,371,962 1,677,922 772,312 994,654 1,473,859
Net appreciation (depreciation)
in the fair value of
investments 6,883,328 888,396 317,309 2,069,763 3,237,729
Interest and dividends 3,373,869 84,905 28,736 473,211 1,051,613
Loan interest 97,427 70 14,352 16,455 24,867
Loan repayments -- 3,873 79,279 69,137 128,398
Transfers in from other Plan 13,606,902 -- -- 1,678,449 1,141,347
------------ ------------ ------------ ------------ ------------
Total additions 30,333,488 2,655,166 1,211,988 5,301,669 7,057,813
Deductions:
Participants' withdrawals (6,183,947) (1,617,307) (413,858) (647,314) (1,409,377)
Loan issuances -- -- (111,807) (93,761) (138,720)
Administrative expenses (15,121) (450) (159) (1,196) (2,039)
------------ ------------ ------------ ------------ ------------
Total deductions (6,199,068) (1,617,757) (525,824) (742,271) (1,550,136)
Net increase prior to
interfund transfers 24,134,420 1,037,409 686,164 4,559,398 5,507,677
Interfund transfers -- (255,276) (342,379) (341,217) (1,170,303)
------------ ------------ ------------ ------------ ------------
Net increase (decrease) 24,134,420 782,133 343,785 4,218,181 4,337,374
Net assets available for plan
benefits at beginning of year 58,237,141 18,283,573 5,868,655 6,813,948 15,380,768
------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at end of year $ 82,371,561 $ 19,065,706 $ 6,212,440 $ 11,032,129 $ 19,718,142
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
------------------------------------------------------------------------------------------
RETIREMENT SHORT- INVESTMENT
ASSET GOVERNMENT INTERMEDIATE GRADE SPARTAN US
MANAGER MONEY GOVERNMENT BOND EQUITY
FUND MARKET FUND FUND INDEX
<S> <C> <C> <C> <C> <C>
Additions:
Contributions
Employee $ 361,454 $ 454,601 $ 56,801 $ 45,608 $ 121,568
Rollovers 60,055 1,583 2,895 2,152 50,015
Employer -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total contributions 421,509 456,184 59,696 47,760 171,583
Net appreciation (depreciation)
in the fair value of
investments (296,997) -- 1,578 9,540 489,772
Interest and dividends 1,174,754 313,364 36,501 40,579 31,513
Loan interest 8,418 23,072 1,372 1,847 4,282
Loan repayments 50,938 101,470 4,422 9,566 18,168
Transfers in from other Plan 442,991 3,492,520 138,073 765,392 4,501,280
------------ ------------ ------------ ------------ ------------
Total additions 1,801,613 4,386,610 241,642 874,684 5,216,598
Deductions:
Participants' withdrawals (346,274) (1,125,803) (67,785) (97,829) (276,928)
Loan issuances (47,336) (89,802) (4,239) (935) (6,286)
Administrative expenses (3,496) (7,230) (393) (79) (75)
------------ ------------ ------------ ------------ ------------
Total deductions (397,106) (1,222,835) (72,417) (98,843) (283,289)
Net increase prior to
interfund transfers 1,404,507 3,163,775 169,225 775,841 4,933,309
Interfund transfers (156,954) 1,144,455 263,892 178,526 305,868
------------ ------------ ------------ ------------ ------------
Net increase (decrease) 1,247,553 4,308,230 433,117 954,367 5,239,177
Net assets available for plan
benefits at beginning of year 5,326,390 4,003,890 509,609 304,717 --
------------ ------------ ------------ ------------ ------------
Net assets available for plan
benefits at end of year $ 6,573,943 $ 8,312,120 $ 942,726 $ 1,259,084 $ 5,239,177
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------
FOUNDERS
GROWTH OTHER
FUND LOANS ACTIVITY
<S> <C> <C> <C>
Additions:
Contributions
Employee $ 211,837 $ -- $ --
Rollovers 84,646 -- --
Employer -- -- --
------------ ------------ ------------
Total contributions 296,483 -- --
Net appreciation (depreciation)
in the fair value of
investments 166,238 -- --
Interest and dividends 138,693 -- --
Loan interest 2,692 -- --
Loan repayments 10,732 (475,983) --
Transfers in from other Plan 1,070,286 376,564 --
------------ ------------ ------------
Total additions 1,685,124 (99,419) --
Deductions:
Participants' withdrawals (55,601) (135,319) 9,448
Loan issuances (13,614) 506,500 --
Administrative expenses (4) -- --
------------ ------------ ------------
Total deductions (69,219) 371,181 9,448
Net increase prior to
interfund transfers 1,615,905 271,762 9,448
Interfund transfers 373,388 -- --
------------ ------------ ------------
Net increase (decrease) 1,989,293 271,762 9,448
Net assets available for plan
benefits at beginning of year 659,725 1,095,314 (9,448)
------------ ------------ ------------
Net assets available for plan
benefits at end of year $ 2,649,018 $ 1,367,076 $ --
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 9
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
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").
On September 30, 1997, the Company acquired BioWhittaker. All of the
assets of the BioWhittaker Savings Plan were transferred into the Plan
on August 1, 1998. Related activity prior to the date of transfer is
not included in the accompanying financial statements. These transfers
totaled approximately $13.6 million and are included in "Transfers in
from other Plan" on the 1998 Statement of Changes in Net Assets.
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.
Effective August 1, 1998, participants in the Biowhittaker Savings Plan
were added to the Plan as participants.
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 $10,000 in 1998 and $9,500 in 1997.
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. 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.
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 1998
4
<PAGE> 10
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
and 1997 were $133,159 and $150,438, respectively. Cumulative unused
balances in the forfeiture accounts amounted to $181,986 and $186,297
at December 31, 1998 and 1997 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
Internal Revenue Service ("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 vested amounts credited to their account
are payable in one lump sum to them or their designated beneficiary.
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.
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 (the "Board")
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.
5
<PAGE> 11
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
PLAN EXPENSES
Expenses of the Plan consist of fees charged by the Trustee and
miscellaneous administrative costs. As of January 1, 1998, the Plan is
responsible for loan administrative charges. All other administrative
expenses incurred by the Plan are paid by the Company.
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
("IRC") 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, 1998 and 1997, respectively, Plan
investments are allocated as follows: 31% and 42% of the investments
are in the Cambrex Corporation Employer and Employee Common Stock Fund,
24% and 27% in the Growth and Income Fund, 8% and 9% in the Asset
Manager Fund, 14% and 12% in the Magellan Fund, 10% and 7% in the
Retirement Government Money Market Fund, 1% and 1% in the Short -
Intermediate Government Fund, 2% and 1% in the Investment Grade Bond
Fund, 3% and 1% in the Founders Growth Fund, and 6%in the Spartan US
Equity Index. In the event of non-performance by the Trustee, the asset
value of the Plan could be substantially impaired.
As of December 31, 1998, the concentration in the Cambrex Corporation
Common Stock Fund was $25.2 million or 31% of the Plan. A significant
portion ($6.2 million or 7.5%) 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 ($19 million or 23.5%) is
attributable to employer matching contributions made solely in Company
stock. On June 1, 1998, there was a 2 for 1 stock split of the Cambrex
Corporation 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.
6
<PAGE> 12
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
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.
3. 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 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.
Fidelity Spartan US Equity Index Fund was added to the Plan as an
investment option in July 1998, and is a growth and income fund,
seeking investment results that try to duplicate the composite and
total return of the S&P 500.
The Cambrex Employer and Employee Stock Fund was establish to allow
employees to invest in Cambrex stock and to invest the employer match.
It invests in Cambrex stock with a small portion in short-term liquid
investments.
7
<PAGE> 13
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
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, 1998:
<TABLE>
<CAPTION>
NUMBER
OF SHARES INVESTMENT COST FAIR VALUE
<S> <C> <C> <C>
Cambrex Employer & Employee
512,430 Stock Fund $ 12,021,003 $ 25,278,146
91,310 Fidelity Magellan Fund $ 8,183,421 $ 11,032,129
430,151 Fidelity Growth & Income Portfolio $ 12,889,680 $ 19,718,142
378,030 Fidelity Asset Manager $ 6,210,954 $ 6,573,943
Fidelity Retirement Government
8,312,121 Money Market Portfolio $ 8,312,121 $ 8,312,120
119,181 Spartan US Equity Index $ 4,733,505 $ 5,239,177
</TABLE>
The number of participants in each fund as of December 31, 1998 and
1997 were:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Fidelity Growth & Income Portfolio 774 578
Fidelity Asset Manager 446 346
Fidelity Retirement Government Money Market Portfolio 519 249
Fidelity Magellan Fund 1,113 453
Fidelity Short - Intermediate Government Portfolio 124 76
Cambrex Employer & Employee Stock Fund 1,110 731
Fidelity Investment Grade Bond 168 14
Founders Growth Fund 295 65
Spartan US Equity Index 323 --
</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. 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
8
<PAGE> 14
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
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.
4. RELATED PARTY TRANSACTIONS
The Cambrex Employer and Employee Stock Fund invests primarily in
Cambrex Corporation common stock and maintains approximately 3-4% of
its assets in cash and temporary liquid investments. Employee
contributions are used to buy units in the fund. The employer matching
contribution is made in shares of Cambrex Corporation common stock
purchased by the Trustee on the open market or 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 New York Stock Exchange ("NYSE"). 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.
9
<PAGE> 15
CAMBREX CORPORATION SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
DESCRIPTION OF ASSETS/INVESTMENTS UNITS COST FAIR VALUE
<S> <C> <C> <C>
Founders Growth 129,790 $ 2,542,644 $ 2,649,018
Cambrex Employer and Employee Stock Fund 512,430 12,021,003 25,278,146
Fidelity Magellan Fund 91,310 8,183,421 11,032,129
Investment Grade Bond 170,377 1,250,365 1,259,084
Fidelity Growth & Income Portfolio 430,151 12,889,680 19,718,142
Fidelity Asset Manager 378,030 6,210,954 6,573,943
Fidelity Retirement Government Money Market Portfolio 8,312,121 8,312,121 8,312,120
Spartan US Equity Index 119,181 473,505 5,239,177
Short - Intermediate Government Portfolio 99,759 945,040 942,726
Participant Loans (rates ranging from 6.5% to 10%) 1,367,076
----------- -----------
$52,828,733 $82,371,561
=========== ===========
</TABLE>
10
<PAGE> 16
CAMBREX CORPORATION SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF 5% REPORTABLE TRANSACTIONS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PURCHASE SELLING EXPENSES REALIZED NO. OF NO. OF
DESCRIPTION OF ASSETS/INVESTMENTS PRICE PRICE (1) COST GAIN/(LOSS) PURCHASES SALES
<S> <C> <C> <C> <C> <C> <C> <C>
Cambrex Employer and Employee Stock Fund $ 3,715,727 $ 3,797,246 $ 1,937,993 $ 1,859,253 210 145
Fidelity Magellan Fund 5,782,073 3,633,655 3,300,859 332,796 178 116
Fidelity Growth and Income Portfolio 6,577,808 5,478,164 4,453,279 1,024,885 205 148
Fidelity Asset Manager 2,552,802 1,008,251 876,485 131,766 146 100
Fidelity Retirement Gov Money Mkt Portfolio 10,006,779 5,698,548 5,698,548 -- 166 129
Spartan US Equity Index 5,271,211 521,804 537,706 (15,902) 69 28
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1) No expenses are incurred with individual transactions
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