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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, 1999
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
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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, 1999
Statement of Net Assets available for Plan Benefits with Fund
Information at December 31, 1998
Statement of Changes in Net Assets Available for Plan Benefits with
Fund Information for the year ended December 31, 1999
Notes to financial statements
Schedule 1 - Schedule of Assets Held for Investment Purposes
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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 November 27, 2000 /s/ Douglas H. MacMillan
------------------------
Douglas H. MacMillan
Vice President
(On behalf of the Registrant
and as the Registrant's
Principal Financial Officer)
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CAMBREX CORPORATION SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
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CAMBREX CORPORATION SAVINGS PLAN
INDEX
DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits as of December 31,
1999 and 1998 2
Statement of Changes in Net Assets Available for Plan Benefits for the
year ended December 31, 1999 3
Notes to Financial Statements 4-8
Supplemental Schedule:
Schedule 1 - Schedule of Assets Held for Investment Purposes at December 31, 1999 9
</TABLE>
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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, 1999 and
1998, and the changes in net assets available for benefits for the year ended
December 31, 1999, in conformity with accounting principals generally accepted
in the United States. 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 audit standards generally accepted in the United
States, 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 schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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 supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
September 13, 2000
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CAMBREX CORPORATION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Investments at Fair Value
Non-participant Directed
Cambrex Employer Stock Fund $26,492,624 $19,065,706
Participant Directed
Cambrex Employee Stock Fund 8,310,103 6,212,440
Mutual Funds 59,993,680 55,726,339
Loans to Participants 1,281,260 1,367,076
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Net Assets Available for Plan Benefits $96,077,667 $82,371,561
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
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CAMBREX CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1999
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<TABLE>
<CAPTION>
NON-PARTICIPANT PARTICIPANT
DIRECTED DIRECTED
---------------- ------------
CAMBREX
EMPLOYER
STOCK FUND VARIOUS FUNDS TOTAL FUNDS
<S> <C> <C> <C>
Additions:
Contributions
Employee $ -- $ 4,318,628 $ 4,318,628
Rollovers -- 544,791 544,791
Employer 1,996,471 -- 1,996,471
------------ ------------ ------------
Total contributions 1,996,471 4,863,419 6,859,890
Net appreciation in the fair value of
investments 7,623,300 6,269,511 13,892,811
Interest and dividends 87,557 4,247,855 4,335,412
------------ ------------ ------------
Total additions 9,707,328 15,380,785 25,088,113
Deductions:
Participants' withdrawals (2,279,852) (9,078,816) (11,358,668)
Administrative expenses (558) (22,781) (23,339)
------------ ------------ ------------
Total deductions (2,280,410) (9,101,597) (11,382,007)
------------ ------------ ------------
Net increase 7,426,918 6,279,188 13,706,106
Net assets available for plan benefits at
beginning of year 19,065,706 63,305,855 82,371,561
------------ ------------ ------------
Net assets available for plan benefits at
end of year $ 26,492,624 $ 69,585,043 96,077,667
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
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CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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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.
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 1999. 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 1999 and 1998
were $ 151,079 and $133,159, respectively. Cumulative unused balances
in the forfeiture accounts amounted to $287,663 and $181,986 at
December 31, 1999 and 1998 respectively.
4
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CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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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.
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.
5
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CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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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, 1999 and 1998, respectively, Plan
investments are allocated as follows: 37% and 31% of the investments
are in the Cambrex Corporation Employer and Employee Common Stock Fund,
20% and 24% in the Growth and Income Fund, 7% and 8% in the Asset
Manager Fund, 15% and 14% in the Magellan Fund, 9% and 10% in the
Retirement Government Money Market Fund, , 1% and 1% in the Short -
Intermediate Government Fund, 1% and 2% in the Investment Grade Bond
Fund, 4% and 3% in the Founders Growth Fund, 6% 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, 1999, the concentration in the Cambrex Corporation
Common Stock Fund was $34.8 million or 37% of the Plan. A significant
portion ($8.3 million or 9%) of the Plan's assets were invested at the
direction of the Plan participants in the Cambrex Corporation Stock
Fund. The balance of the fund ($26 million or 27%) is attributable to
employer matching contributions made solely in Cambrex 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.
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
6
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CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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statement of net assets available for plan benefits and the statement
of changes in net assets available for plan benefits.
3. INVESTMENTS
The following presents investments that represent 5% or more of the
Plan's net assets as of December 31, 1999 and 1998.
<TABLE>
<CAPTION>
INVESTMENT 1999 1998
<S> <C> <C>
Cambrex Employer Stock Fund $ 26,492,624 * $ 19,065,706 *
Cambrex Employee Stock Fund 8,310,103 6,212,440
Fidelity Magellan Fund 14,609,595 11,032,129
Fidelity Growth & Income Portfolio 18,943,579 19,718,142
Fidelity Assets Manager 6,194,459 6,573,943
Fidelity Retirement Government Money 8,304,606 8,312,120
Market Portfolio
Spartan US Equity Index 6,095,712 5,239,177
</TABLE>
* Non-participant directed
During 1999, the Plan's participant directed investments (including
gains and losses on investments bought and sold, as well as held during
the year) appreciated in value by $6,269,511 as follows:
<TABLE>
<S> <C>
Cambrex Employee Stock Fund $ 2,552,280
Mutual Funds 3,717,231
-----------
TOTAL $ 6,269,511
===========
</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 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.
7
<PAGE> 13
CAMBREX CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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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.
8
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CAMBREX CORPORATION SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES TRANSACTIONS
AT DECEMBER 31, 1999
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<TABLE>
<CAPTION>
DESCRIPTION OF ASSETS/INVESTMENTS UNITS COST FAIR VALUE
<S> <C> <C> <C>
Cambrex Employer and Employee Stock Fund 496,277 $13,632,347 $34,802,727
Founders Growth Fund 157,211 3,274,790 3,752,636
Fidelity Magellan Fund 106,928 10,907,822 14,609,595
Fidelity Investment Grade Bond 181,739 1,316,659 1,252,182
Fidelity Growth & Income Portfolio 401,687 13,158,593 18,943,579
Fidelity Asset Manager 337,022 5,587,577 6,194,459
Fidelity Retirement Government Money
Market Portfolio 8,304,606 8,304,606 8,304,606
Spartan US Equity Index 117,023 4,813,872 6,095,712
Fidelity Short - Intermediate Government
Portfolio 92,713 871,582 840,911
Participant Loans (rates ranging from 6.5% to 10%) 1,281,260
----------- -----------
$61,867,848 $96,077,667
=========== ===========
</TABLE>
9
