Cambrex 8-K Cambrex Completes Sale of Two Non-strategic Human Health Facilities

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 27, 2006

CAMBREX CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation or organization)

1-10638	22-2476135
(Commission	(I.R.S. Employer
File Number)	Identification No.)

ONE MEADOWLANDS PLAZA, EAST RUTHERFORD, NEW JERSEY 07073
(Address of principal executive offices)

(201) 804-3000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2b under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

CAMBREX CORPORATION

FORM 8-K

CURRENT REPORT

OCTOBER 27, 2006

Item 2.01	Completion of Acquisition or Disposition of Assets
	On October 27, 2006 Cambrex Corporation and Subsidiaries (“Cambrex” or the “Company”) completed the sale of two non-strategic facilities within its Human Health segment to a holding company controlled by International Chemical Investors II S.A. (“ICIG”) of Luxembourg. The facilities, which are located in Cork, Ireland (“Cork”) and Landen, Belgium (“Landen”), manufacture small molecule active pharmaceutical ingredients and advanced intermediates. The Company received nominal consideration.
Item 2.06	Material Impairments
	Cambrex recorded a goodwill impairment charge of $2,092 during the third quarter of 2006 for Landen. This charge removed the remainder of the goodwill for Landen and resulted from lower cash flow projections to compute the implied fair value of goodwill as a result of current market conditions.
Item 8.01	Other Events.
	On October 30, 2006, the Company issued a press release announcing the completion of the sale of Cork and Landen. A copy of the press release is attached as exhibit 99.1.
Item 9.01	Financial Statements and Exhibits

(b)	Pro forma financial information.
	Unaudited Pro forma Consolidated Income Statements for the six months ended June 30, 2006 and 2005.
	Unaudited Pro forma Consolidated Income Statements for the years ended December 31, 2005, 2004 and 2003.
	Unaudited Pro forma Consolidated Balance Sheet as of June 30, 2006.
(c)	Exhibits.

99.1 Press release dated October 30, 2006.

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Basis of Presentation

     The following unaudited pro forma consolidated financial statements give effect to the divestiture of the Cork and Landen facilities to be accounted for as a discontinued operation in accordance with FAS 144. These unaudited pro forma consolidated financial statements have been prepared from, and should be read in conjunction with, the historical consolidated financial statements and notes thereto of Cambrex Corporation, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2006.

     The unaudited pro forma consolidated income statements give effect to the divestiture as if it had occurred on January 1, 2003. The unaudited pro forma balance sheet assumes the divestiture had occurred on June 30, 2006.

     The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred had the divestiture been consummated at the dates indicated, nor is it necessarily indicative of future operating results or financial position of the Company.

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Cambrex Corporation
Consolidated Income Statement — Pro forma
For the Six Months Ended June 30, 2006
(Unaudited)

	Cambrex			Pro forma			Other			Pro forma
	As Reported			Adjustments			Adjustments			Reported
	(1)			(3)
Gross sales		243,184			(19,805	)		—			223,379
Commissions & freight		1,173			(260	)		—			913
Net Sales		242,011			(19,545	)		—			222,466
Other revenue		2,145			44			—			2,189
Net revenue		244,156			(19,501	)		—			224,655
Cost of goods sold		156,463			(16,852	)		—			139,611
Gross profit		87,693			(2,649	)		—			85,044
Operating expenses:
Selling, general and administrative		57,305			(2,437	)		366	(4)		55,234
Research and development		11,493			(436	)		—			11,057
Total operating expenses		68,798			(2,873	)		366			66,291
Operating profit		18,895			224			(366	)		18,753
Other expenses:
Interest expense, net		9,648			(38	)		—			9,610
Other expense, net		116			—			—			116
Income from continuing operations before taxes		9,131			262			(366	)		9,027
											—
Income taxes		9,332			340			—			9,672
Loss before cumulative effect of a change in accounting principle		(201	)		(78	)		(366	)		(645	)
Weighted average shares outstanding (basic)		26,701									26,701
Loss before cumulative effect of a change in accting principle		(0.01	)								(0.02	)
Weighted average shares outstanding (diluted)		26,701									26,701
Loss before cumulative effect of a change in accounting principle		(0.01	)								(0.02	)

See accompanying notes to the unaudited pro forma consolidated financial statements.

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Cambrex Corporation
Consolidated Income Statement — Pro forma
For the Six Months Ended June 30, 2005
(Unaudited)

	Cambrex		Pro forma			Other			Pro forma
	As Reported		Adjustments			Adjustments			Reported
	(1)		(3)
Gross sales		226,633		(20,663	)		—			205,970
Commissions & freight		2,665		(371	)		—			2,294
Net Sales		223,968		(20,292	)		—			203,676
Other revenue		4,711		(218	)		—			4,493
Net revenue		228,679		(20,510	)		—			208,169
Cost of goods sold		145,147		(19,515	)		—			125,632
Gross profit		83,532		(995	)		—			82,537
Operating expenses:
Selling, general and administrative		51,815		(2,552	)		357	(4)		49,620
Research and development		11,739		(451	)		—			11,288
Total operating expenses		63,554		(3,003	)		357			60,908
Operating profit		19,978		2,008			(357	)		21,629
Other expenses:
Interest expense, net		5,481		(19	)		—			5,462
Other expense, net		97		2			—			99
Income from continuing operations before taxes		14,400		2,025			(357	)		16,068
										—
Income taxes		3,230		335			—			3,565
Income before cumulative effect of a change in accounting principle		11,170		1,690			(357	)		12,503
Weighted average shares outstanding (basic)		26,373								26,373
Income before cumulative effect of a change in accting principle		0.42								0.47
Weighted average shares outstanding (diluted)		26,549								26,549
Income before cumulative effect of a change in accounting principle		0.42								0.47

See accompanying notes to the unaudited pro forma consolidated financial statements.

4

Cambrex Corporation
Consolidated Income Statement — Pro forma
For the Year Ended December 31, 2005
(Unaudited)

	Cambrex			Pro forma			Other			Pro forma
	As Reported			Adjustments			Adjustments			Reported
	(2)			(3)
Gross sales		451,986			(37,225	)		—			414,761
Commissions & freight		3,437			(787	)		—			2,650
Net Sales		448,549			(36,438	)		—			412,111
Other revenue		6,548			(189	)		—			6,359
Net revenue		455,097			(36,627	)		—			418,470
Cost of goods sold		293,760			(35,705	)		—			258,055
Gross profit		161,337			(922	)		—			160,415
Operating expenses:
Selling, general and administrative		107,610			(5,066	)		714	(4)		103,258
Research and development		22,331			(861	)		—			21,470
Asset impairments		107,177			(24,794	)		—			82,383
Total operating expenses		237,118			(30,721	)		714			207,111
Operating profit		(75,781	)		29,799			(714	)		(46,696	)
Other expenses:
Interest expense, net		10,815			(14	)		—			10,801
Other expense, net		40			3			—			43
Loss before taxes		(86,636	)		29,810			(714	)		(57,540	)
Income taxes		23,822			2,591			—			26,413
Net loss		(110,458	)		27,219			(714	)		(83,953	)
Weighted average shares outstanding (basic)		26,456									26,456
Net loss		(4.18	)								(3.17	)
Weighted average shares outstanding (diluted)		26,456									26,456
Net loss		(4.18	)								(3.17	)

See accompanying notes to the unaudited pro forma consolidated financial statements.

5

Cambrex Corporation
Consolidated Income Statement — Pro forma
For the Year Ended December 31, 2004
(Unaudited)

	Cambrex			Pro forma			Other			Pro forma
	As Reported			Adjustments			Adjustments			Reported
	(2)			(3)
Gross sales		439,115			(43,209	)		—			395,906
Commissions & freight		2,258			(701	)		—			1,557
Net Sales		436,857			(42,508	)		—			394,349
Other revenue		6,800			(21	)		—			6,779
Net revenue		443,657			(42,529	)		—			401,128
Cost of goods sold		272,917			(35,694	)		—			237,223
Gross profit		170,740			(6,835	)		—			163,905
Operating expenses:
Selling, general and administrative		102,769			(5,634	)		640	(4)		97,775
Research and development		19,659			(900	)		—			18,759
Asset impairments		48,720			—			—			48,720
Total operating expenses		171,148			(6,534	)		640			165,254
Operating profit		(408	)		(301	)		(640	)		(1,349	)
Other expenses:
Interest expense, net		10,950			(277	)		—			10,673
Other expense, net		73			39			—			112
Loss from continuing operations before taxes		(11,431	)		(63	)		(640	)		(12,134	)
Income taxes		14,461			152			—			14,613
Loss from continuing operations		(25,892	)		(215	)		(640	)		(26,747	)
Weighted average shares outstanding (basic)		26,094									26,094
Loss from continuing operations		(0.99	)								(1.03	)
Weighted average shares outstanding (diluted)		26,094									26,094
Loss from continuing operations		(0.99	)								(1.03	)

See accompanying notes to the unaudited pro forma consolidated financial statements.

6

Cambrex Corporation
Consolidated Income Statement — Pro forma
For the Period Ended December 31, 2003
(Unaudited)

	Cambrex		Pro forma			Other			Pro forma
	As Reported		Adjustments			Adjustments			Reported
	(2)		(3)
Gross sales		405,591		(38,700	)		—			366,891
Commissions & freight		3,780		(732	)		—			3,048
Net Sales		401,811		(37,968	)		—			363,843
Other revenue		8,833		56			—			8,889
Net revenue		410,644		(37,912	)		—			372,732
Cost of goods sold		248,238		(30,848	)		—			217,390
Gross profit		162,406		(7,064	)		—			155,342
Operating expenses:
Selling, general and administrative		95,117		(3,755	)		643	(4)		92,005
Research and development		17,123		(876	)		—			16,247
Legal settlement		11,342		—			—			11,342
Total operating expenses		123,582		(4,631	)		643			119,594
Operating profit		38,824		(2,433	)		(643	)		35,748
Other expenses:
Interest expense, net		11,840		(197	)		—			11,643
Other expense, net		139		(27	)		—			112
Income from continuing operations before taxes		26,845		(2,209	)		(643	)		23,993
Income taxes		26,600		(571	)		—			26,029
Income/(loss) from continuing operations		245		(1,638	)		(643	)		(2,036	)
Weighted average shares outstanding (basic)		25,775								25,775
Income/(loss) from continuing operations		0.01								(0.08	)
Weighted average shares outstanding (diluted)		26,174								26,174
Income/(loss) from continuing operations		0.01								(0.08	)

See accompanying notes to the unaudited pro forma consolidated financial statements.

7

Cambrex Corporation
Consolidated Balance Sheet — Pro forma
As of June 30, 2006
(Unaudited)

	Cambrex			Pro forma			Other			Pro forma
	As Reported			Adjustments			Adjustments			June 30, 2006
	(1)			(3)
Current assets
Cash and cash equivalents		30,283			(2,631	)		1,995	(5)		29,647
Trade receivables, net		74,314			(5,493	)		—			68,821
Inventories, net		110,452			(15,565	)		—			94,887
Other current assets		15,746			(607	)		—			15,139
Total current assets		230,795			(24,296	)		1,995			208,494
Property, plant and equipment, net		240,052			(28,604	)		—			211,448
Goodwill		98,963			(2,090	)		—			96,873
Other intangibles, net		50,800			—			—			50,800
Other assets		5,469			—			—			5,469
Total assets		626,079			(54,990	)		1,995			573,084
Current liabilities
Trade accounts payable		37,790			(4,594	)		711	(6)		33,907
Accrued liabilities		49,567			(4,875	)		800	(7)		45,492
Short-term debt and current portion of long-term debt		1,782			—			—			1,782
Total current liabilities		89,139			(9,469	)		1,511			81,181
Long-term debt		186,020			—			—			186,020
Deferred tax liabilities		29,160			(1,205	)		—			27,955
Other liabilities		63,537			(6,800	)		1,368	(6)		58,105
Total liabilities		367,856			(17,474	)		2,879			353,261
Common stock		2,920			—			—			2,920
Paid in capital		220,738			—			—			220,738
Retained earnings		60,137			—			(39,142	)(8)		20,995
Treasury stock		(20,943	)		—			—			(20,943	)
Accumulated other comprehensive income		(4,629	)		742	(9)		—			(3,887	)
Stockholders’ equity		258,223			742			(39,142	)		219,823
Total liabilities and stockholders’ equity		626,079			(16,732	)		(36,263	)		573,084

See accompanying notes to the unaudited pro forma consolidated financial statements.

8

Cambrex Corporation
Notes to Pro forma Consolidated Financial Statements
(Unaudited)

(1) Reflects financial position and results of Cambrex as filed in the Company’s Form 10-Q filed on August 8, 2006 for the period ended June 30, 2006.

(2) Reflects results of Cambrex as filed in the Company’s Form 10-K filed on May 26, 2006 for the years ended December 31, 2005, 2004 and 2003.

(3) Reflects the results of Cork and Landen included in the financial statements of Cambrex (“Cambrex As Reported” columns) for all periods presented in this Form 8-K.

(4) Reflects corporate allocations originally charged to Cork and Landen that would remain an expense of Cambrex upon divestiture.

(5) Reflects the portion of Cork and Landen’s cash that was excluded from the sale.

(6) Reflects a legal liability retained by Cambrex.

(7) Estimated transaction costs.

(8) Reflects the loss on the sale of Cork and Landen had the transaction occurred on June 30, 2006.

(9) Reflects the Cumulative Translation Adjustment recorded on Cork and Landen’s books that will be realized (-$2,114) and Cork’s additional minimum pension liability transferred to ICIG ($2,856).

9

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CAMBREX CORPORATION
By	/s/ Luke M. Beshar
	Luke M. Beshar
	Executive Vice President and
	Chief Financial Officer
	(On behalf of the Registrant and
	as the Registrant’s Principal
	Financial Officer)

Dated: November 2, 2006

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