EXHIBIT 99.1
[CAMBREX LOGO]
Date: July 27, 2006
Contact: Luke M. Beshar Anne-Marie Hess
Executive Vice President & CFO Senior Director, Investor Relations
Phone: 201-804-3010 201-804-3062
Email: luke.beshar@cambrex.com annemarie.hess@cambrex.com
Release: Immediate
CAMBREX REPORTS SECOND QUARTER 2006 RESULTS
EAST RUTHERFORD, NJ - July 27, 2006 - Cambrex Corporation (NYSE: CBM)
reports second quarter 2006 results for the period ended June 30, 2006.
To better reflect ongoing operations for the periods presented, Adjusted
(non-GAAP) results are used throughout this press release and the accompanying
tables. The second quarter 2006 Adjusted financial results exclude costs related
to the evaluation of strategic alternatives ($0.05 Diluted Earnings per Share)
and a small amount of cost related to the Cutanogen acquisition. The second
quarter 2005 financial results exclude the benefit of a favorable Swedish tax
court decision ($0.13 Diluted Earnings per Share). In addition to the
aforementioned items, certain employee medical benefit expenses in 2005 and 2006
were reclassified from segment Cost of Sales and Operating Expense to Corporate
Administrative Expenses to better reflect actual costs incurred within the
operating segments and are included in the GAAP/Non-GAAP reconciliation tables.
A reconciliation of GAAP results to Adjusted (non-GAAP) results can be found in
the unaudited financial tables included in this press release.
Adjusted Diluted Earnings per Share were $0.09 in the second quarter 2006
compared with $0.14 in the second quarter 2005 primarily due to higher income
taxes partially offset by higher pre-tax income. Second quarter 2006 GAAP
Diluted Earnings per Share were $0.04 compared to $0.27 in the second quarter
2005.
Second quarter 2006 sales revenue increased 6.4% to $123.6 million from
$116.2 million in the second quarter 2005 due to strong performance in the Human
Health and Bioproducts segments. Foreign currency impact on consolidated sales
revenue was negligible in the quarter.
Second quarter 2006 Adjusted Gross Profit increased 3.5% to $42.1 million,
or 34.1% of sales, including an unfavorable impact of 0.6% for foreign currency,
from $40.7 million, or 35.0% of sales, in the second quarter 2005 primarily due
to higher sales volumes partially offset by lower Gross Profit in the Biopharma
segment. Second quarter 2006 GAAP Gross Profit was $42.8 million, or 34.6% of
sales, including an unfavorable impact of 0.6% for foreign currency, compared to
$40.3 million, or 34.7% of sales, in the second quarter 2005.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
1
[CAMBREX LOGO]
Second quarter 2006 Adjusted Operating Profit increased 5.7% to $9.6
million, or 7.8% of sales in the second quarter 2006, from $9.1 million, or 7.8%
of sales, in the second quarter 2005. Second quarter 2006 GAAP Operating Profit
was $8.2 million, or 6.6% of sales in the second quarter 2006, compared to $9.1
million, or 7.8% of sales, in the second quarter 2005.
Second quarter 2006 Adjusted Income before Taxes increased 12.2% to $7.2
million from $6.4 million in the second quarter 2005 due to lower Interest
Expense and higher Operating Profit. Second quarter 2006 GAAP Income before
Taxes was $5.8 million compared to $6.4 million in the second quarter 2005.
STRATEGIC ALTERNATIVES
On February 2, 2006, Cambrex announced that it had retained Bear Stearns
as investment bankers to assist the Board of Directors in identifying and
assessing strategic alternatives to increase shareholder value. Significant
progress was made on this initiative during the second quarter and continues to
be a top priority of the Cambrex Board of Directors and executive management
team. The Company will issue updates as decisions are reached on this matter.
BUSINESS SEGMENT RESULTS
BIOPRODUCTS
The Bioproducts segment includes products and services for research and
therapeutic applications. Bioproducts Sales in the second quarter 2006 increased
8.1% to $41.1 million from $38.0 million in the second quarter 2005 primarily
due to higher sales in most product categories partially offset by lower sales
of therapeutic cell culture media. Foreign currency had no impact on Bioproducts
Sales revenue in the quarter.
Second quarter 2006 Bioproducts Adjusted Gross Margin decreased slightly
to 51.1% from 51.4% in the second quarter 2005 due to higher production costs
and inventory discards partially offset by favorable sales volume and pricing.
Foreign currency favorably impacted Bioproducts gross margin by 0.6 percentage
points in the second quarter 2006. Second quarter 2006 Bioproducts GAAP Gross
Margin was 51.8% versus 50.9% in the second quarter 2005.
Second quarter 2006 Bioproducts Adjusted Operating Profit Margin increased
to 19.0% from 16.1% in the second quarter 2005 primarily due to lower Research
and Development (R&D) expenses
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
2
[CAMBREX LOGO]
resulting from the completion of certain projects and subsequent product
launches and lower bonus expenses. Foreign currency favorably impacted
Bioproducts operating profit margin by 0.6 percentage points in the second
quarter 2006. Second quarter 2006 Bioproducts GAAP Operating Profit Margin was
19.9% versus 15.3% in the second quarter 2005.
BIOPHARMA
The Biopharma segment consists of the Company's contract biopharmaceutical
process development and manufacturing business. Biopharma Sales in the second
quarter 2006 decreased to $10.0 million from $11.7 million in the second quarter
2005 due to lower suite and material reimbursement revenue partially offset by
higher process development revenues.
Second quarter 2006 Biopharma Adjusted Gross Margin decreased to -18.8%
from -3.8% in the second quarter 2005 due to lower sales volume and mix. Second
quarter 2006 Biopharma GAAP Gross Margin was -16.3% versus -5.2% in the second
quarter 2005.
The second quarter 2006 Biopharma Adjusted Operating Loss was $4.2 million
versus $3.1 million in the second quarter 2005 primarily due to lower gross
profit. Second quarter 2006 Biopharma GAAP Operating Loss was $3.9 million
versus $3.3 million in the second quarter 2005. Foreign currency did not impact
the Biopharma segment financial results in the quarter.
HUMAN HEALTH
The Human Health segment consists of small molecule active pharmaceutical
ingredients (APIs), advanced intermediates and other products derived from
organic chemistry. Human Health Sales in the second quarter 2006 increased 9.0%
to $72.5 million from $66.5 million in the second quarter 2005. Higher net sales
volumes were partially offset by lower pricing. Foreign currency impact to Human
Health Sales revenue was negligible in the quarter. Higher sales resulted from
strong demand for a recently approved API used to treat Parkinson's disease, an
intermediate for a central nervous system (CNS) API, and certain cardiovascular
APIs, partially offset by lower demand for a CNS and gastrointestinal API,
nicotine polacrilex and a new cardiovascular API for which the client is
awaiting regulatory approval.
Second quarter 2006 Human Health Adjusted Gross Margin decreased to 31.7%
from 32.5% in the second quarter 2005 primarily due to an unfavorable impact of
foreign currency of 1.4 percentage points and lower pricing. Second quarter 2006
Human Health GAAP Gross Margin was 31.9% versus 32.4% in the second quarter
2005.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
3
[CAMBREX LOGO]
Second quarter 2006 Human Health Adjusted Operating Profit Margin
increased to 17.7% from 16.3% in the second quarter 2005 primarily due to lower
sales and marketing expenses partially offset by lower gross margins and an
unfavorable impact of foreign currency of 1.4 percentage points. Second quarter
2006 Human Health GAAP Operating Profit Margin was 18.0% versus 16.1% in the
second quarter 2005.
SECOND QUARTER 2006 ADJUSTED CONSOLIDATED OPERATING, INTEREST AND TAX EXPENSES
Second quarter 2006 Adjusted Operating Expenses increased $0.9 million to
$32.5 million, or 26.3% of sales, from $31.6 million, or 27.2% of sales, in the
second quarter 2005 primarily due to higher legal fees and bonus expense
partially offset by lower sales and marketing and R&D expense. Second quarter
2006 GAAP Operating Expenses were $34.6 million, or 28.0% of sales, versus $31.2
million, or 26.9% of sales, in the second quarter 2005.
Sales and Marketing Expense in the second quarter 2006 decreased to $8.0
million, or 6.5% of sales, from $8.8 million, or 7.5% of sales in the second
quarter 2005, primarily due to lower spending in Human Health resulting from a
one-time charge recorded in 2005 related to a U.S. sales office and lower bonus
and commission expenses in Bioproducts.
Research and Development Expense for the second quarter 2006 decreased to
$5.5 million, or 4.5% of sales compared to $5.9 million, or 5.1% of sales, in
the second quarter 2005 due to the completion of certain R&D projects for
products that have been launched at the end of 2005 and in 2006 in the
Bioproducts segment.
Adjusted Administrative Expense in the second quarter 2006 increased to
$18.6 million, or 15.0% of sales, from $16.3 million, or 14.1% of sales, in the
second quarter 2005 due to higher legal fees and bonus expense. Second quarter
2006 GAAP Administrative Expense was $20.6 million, or 16.6% of sales, versus
$15.9 million, or 13.7% of sales, in the second quarter 2005.
Net Interest Expense in the second quarter 2006 decreased to $2.3 million
from $2.8 million in the second quarter 2005 due to lower borrowings partially
offset with higher interest rates. The average interest rate in the second
quarter 2006 was 5.8% versus 5.4% in the same period last year.
The Adjusted effective tax rate in the second quarter 2006 increased to
66.6% of pre-tax income versus 41.5% in the second quarter 2005 due to the
geographic mix of income and losses in the quarter. The GAAP effective tax rate
in the second quarter 2006 is 83.1% of pre-tax income versus -10.4% in the
second quarter 2005.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
4
[CAMBREX LOGO]
Capital expenditures and depreciation for the second quarter 2006 were
$9.1 million and $8.3 million, respectively, compared to $9.0 million and $9.3
million in the second quarter 2005, respectively.
GUIDANCE
The Company is providing full year 2006 guidance for sales growth to be
within the range of 4% to 8% and Adjusted (non-GAAP) Net Earnings to be in the
range of $0.75 to $0.95 per Fully Diluted Shares. The full year 2006 earnings
guidance excludes the costs associated with the previously announced pre-payment
of a portion of the Company's long-term debt ($0.20 per diluted share), costs
related to the recent acquisition of Cutanogen ($0.15 per diluted share) and
costs related to the evaluation of strategic alternatives to enhance shareholder
value.
For the year 2006, guidance for capital expenditures, depreciation and
amortization for continuing operations is currently expected to be approximately
$45 million, $36 million, and $2.0 million, respectively. The Company expects
the full year 2006 effective tax rate, consistent with the earnings guidance
above, to be approximately 40 - 45%. The full year and quarterly effective tax
rates will continue to be highly sensitive to the geographic mix of income or
losses.
The financial information contained in this press release is unaudited,
subject to revision and should not be considered final until the second quarter
2006 Form 10-Q is filed with the U.S. Securities and Exchange Commission.
CAMBREX DECLARES QUARTERLY DIVIDEND
The Cambrex Board of Directors declared the Company's regular quarterly
cash dividend on its common stock of $0.03 per share for its shareholders of
record as of August 4, 2006. The dividend is payable on August 18, 2006.
CONFERENCE CALL AND WEBCAST
The Conference Call to discuss second quarter 2006 earnings will begin at
8:30 a.m. Eastern Time on Friday, July 28, 2006 and last approximately 45
minutes. Those wishing to participate should call 1-888-634-4003 for domestic
and +1-706-634-6653 for international. Please use the pass code 1951509 and call
approximately 10 minutes prior to start time. A webcast is available from the
Investor Relations section on the Cambrex website located at www.cambrex.com and
can be accessed for approximately a month following the call. A telephone replay
of the conference call will be available through Friday, August 4, 2006 by
calling 1-800-642-1687 for domestic and +1-706-645-9291 for international.
Please use the pass code 1951509 to access the replay.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
5
[CAMBREX LOGO]
FORWARD LOOKING STATEMENTS
This news release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under The
Securities Exchange Act of 1934, including, without limitation, statements
regarding expected performance, especially expectations with respect to sales,
research and development expenditures, earnings per share, capital expenditures,
acquisitions, divestitures, collaborations, or other expansion opportunities.
These statements may be identified by the fact that words such as "expects",
"anticipates", "intends", "estimates", "believes" or similar expressions are
used in connection with any discussion of future financial and operating
performance. The forward-looking statements contained herein are based on
current plans and expectations and involve risks and uncertainties that could
cause actual outcomes and results to differ materially from current expectations
including but not limited to, global economic trends, pharmaceutical outsourcing
trends, competitive pricing or product developments, government legislation
and/or regulations (particularly environmental issues), tax rate, interest rate,
technology, manufacturing and legal issues, changes in foreign exchange rates,
performance of minority investments, uncollectible receivables, loss on
disposition of assets, cancellation or delays in renewal of contracts, and lack
of suitable raw materials or packaging materials, the possibility that the value
of the acquisition of PermaDerm(TM) cultured skin may not be realized or that
our plans to obtain a Humanitarian Device Exemption, completion of clinical
trials and commercialization of PermaDerm cultured skin in the United States may
not be successful, the Company may not receive regulatory approval for its
products, and the outcome of the evaluation of strategic alternatives.
For further details and a discussion of these and other risks and
uncertainties, investors are cautioned to review the Cambrex 2005 Annual Report
on Form 10-K, including the Forward-Looking Statement section therein, and other
filings with the Securities and Exchange Commission. The Company undertakes no
obligation to publicly update any forward-looking statement, whether as a result
of new information, future events or otherwise.
ABOUT CAMBREX
Cambrex is a global, diversified life sciences company dedicated to
providing products and services to accelerate and improve the discovery and
commercialization of human therapeutics. The Company employs approximately 2,000
worldwide. For more information, please visit http://www.cambrex.com.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
6
[CAMBREX LOGO]
CAMBREX CORPORATION
Adjusted Statement of Profit and Loss - Non-GAAP*
For the Quarters Ended June 30, 2006 and 2005
(in thousands)
2006 2005
----------------- -----------------
% of % of
Amount Sales Amount Sales
----------------- -----------------
Gross Sales $ 123,577 100.0% $ 116,171 100.0%
Commissions and Allowances 274 0.2% 1,676 1.4%
--------- ---------
Net Sales 123,303 99.8% 114,495 98.6%
Other Revenues 1,065 0.8% 2,251 1.9%
--------- ---------
Net Revenue 124,368 100.6% 116,746 100.5%
Cost of Sales 82,252 66.5% 76,056 65.5%
--------- ---------
Gross Profit 42,116 34.1% 40,690 35.0%
Operating Expenses
Sales and Marketing Expense 8,008 6.5% 8,747 7.5%
Research and Development Expense 5,439 4.4% 5,865 5.0%
Administrative Expense 18,598 15.0% 16,339 14.1%
Amortization 486 0.4% 668 0.6%
--------- ---------
Total Operating Expenses 32,531 26.3% 31,619 27.2%
--------- ---------
Operating Profit 9,585 7.8% 9,071 7.8%
Other Expenses
Interest - Other 2,295 1.8% 2,751 2.4%
Other Expense, net 94 0.1% (93) -0.1%
--------- ---------
Total Other Expenses 2,389 1.9% 2,658 2.3%
--------- ---------
Income Before Taxes 7,196 5.9% 6,413 5.5%
Income Tax Provision 4,791 3.9% 2,662 2.3%
--------- ---------
Net Income $ 2,405 2.0% $ 3,751 3.2%
========= =========
Basic Earnings per Share
Net Income $ 0.09 $ 0.14
Diluted Earnings per Share
Net Income $ 0.09 $ 0.14
Weighted Average Shares Outstanding
Basic 26,741 26,402
Diluted 26,791 26,510
* Refer to the GAAP to Adjusted (Non-GAAP) Reconciliation.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
7
[CAMBREX LOGO]
CAMBREX CORPORATION
Statement of Profit and Loss - GAAP
For the Quarters Ended June 30, 2006 and 2005
(in thousands)
2006 2005
------------------- -------------------
% of % of
Amount Sales Amount Sales
------------------- -------------------
Gross Sales $ 123,577 100.0% $ 116,171 100.0%
Commissions and Allowances 274 0.2% 1,676 1.4%
---------- -----------
Net Sales 123,303 99.8% 114,495 98.6%
Other Revenues 1,065 0.8% 2,251 1.9%
---------- -----------
Net Revenue 124,368 100.6% 116,746 100.5%
Cost of Sales 81,595 66.0% 76,476 65.8%
---------- -----------
Gross Profit 42,773 34.6% 40,270 34.7%
Operating Expenses
Sales and Marketing Expense 7,993 6.5% 8,757 7.5%
Research and Development Expense 5,505 4.5% 5,881 5.1%
Administrative Expense 20,633 16.6% 15,893 13.7%
Amortization 486 0.4% 668 0.6%
---------- -----------
Total Operating Expenses 34,617 28.0% 31,199 26.9%
---------- -----------
Operating Profit 8,156 6.6% 9,071 7.8%
Other Expenses
Interest - Other 2,295 1.8% 2,751 2.4%
Other Expense, net 94 0.1% (93) -0.1%
---------- -----------
Total Other Expenses 2,389 1.9% 2,658 2.3%
---------- -----------
Income Before Taxes 5,767 4.7% 6,413 5.5%
Income Tax Provision/(Benefit) 4,791 3.9% (667) -0.6%
---------- -----------
Net Income $ 976 0.8% $ 7,080 6.1%
========== ===========
Basic Earnings per Share
Net Income $ 0.04 $ 0.27
Diluted Earnings per Share
Net Income $ 0.04 $ 0.27
Weighted Average Shares Outstanding
Basic 26,741 26,402
Diluted 26,791 26,510
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
8
[CAMBREX LOGO]
CAMBREX CORPORATION
Adjusted Statement of Profit and Loss - Non-GAAP*
For the Six Months Ended June 30, 2006 and 2005
(in thousands)
2006 2005
------------------- -------------------
% of % of
Amount Sales Amount Sales
------------------- -------------------
Gross Sales $ 243,184 100.0% $ 226,633 100.0%
Commissions and Allowances 1,173 0.5% 2,665 1.2%
---------- -----------
Net Sales 242,011 99.5% 223,968 98.8%
Other Revenues 2,145 0.9% 4,711 2.1%
---------- -----------
Net Revenue 244,156 100.4% 228,679 100.9%
Cost of Sales 156,463 64.3% 144,313 63.7%
---------- -----------
Gross Profit 87,693 36.1% 84,366 37.2%
Operating Expenses
Sales and Marketing Expense 17,165 7.1% 16,746 7.4%
Research and Development Expense 9,956 4.1% 11,707 5.2%
Administrative Expense 36,809 15.1% 34,728 15.3%
Amortization 974 0.4% 1,207 0.5%
---------- -----------
Total Operating Expenses 64,904 26.7% 64,388 28.4%
---------- -----------
Operating Profit 22,789 9.4% 19,978 8.8%
Other Expenses
Interest - Other 4,376 1.8% 5,481 2.4%
Other Expense, net 116 0.0% 97 0.0%
---------- -----------
Total Other Expenses 4,492 1.8% 5,578 2.4%
---------- -----------
Income Before Taxes 18,297 7.6% 14,400 6.4%
Income Tax Provision 9,332 3.9% 6,559 2.9%
---------- -----------
Net Income $ 8,965 3.7% $ 7,841 3.5%
========== ===========
Basic Earnings per Share
Net Income $ 0.34 $ 0.30
Diluted Earnings per Share
Net Income $ 0.33 $ 0.30
Weighted Average Shares Outstanding
Basic 26,701 26,373
Diluted 26,791 26,549
* Refer to the GAAP to Adjusted (Non-GAAP) Reconciliation.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
9
[CAMBREX LOGO]
CAMBREX CORPORATION
Statement of Profit and Loss - GAAP
For the Six Months Ended June 30, 2006 and 2005
(in thousands)
2006 2005
------------------- -------------------
% of % of
Amount Sales Amount Sales
------------------- -------------------
Gross Sales $ 243,184 100.0% $ 226,633 100.0%
Commissions and Allowances 1,173 0.5% 2,665 1.2%
---------- -----------
Net Sales 242,011 99.5% 223,968 98.8%
Other Revenues 2,145 0.9% 4,711 2.1%
---------- -----------
Net Revenue 244,156 100.4% 228,679 100.9%
Cost of Sales 156,463 64.3% 145,147 64.0%
---------- -----------
Gross Profit 87,693 36.1% 83,532 36.9%
Operating Expenses
Sales and Marketing Expense 17,165 7.1% 16,765 7.4%
Research and Development Expense 11,493 4.7% 11,739 5.2%
Administrative Expense 39,166 16.1% 33,843 15.0%
Amortization 974 0.4% 1,207 0.5%
---------- -----------
Total Operating Expenses 68,798 28.3% 63,554 28.1%
---------- -----------
Operating Profit 18,895 7.8% 19,978 8.8%
Other Expenses
Interest - Other 9,648 4.0% 5,481 2.4%
Other Expense, net 116 0.0% 97 0.0%
---------- -----------
Total Other Expenses 9,764 4.0% 5,578 2.4%
---------- -----------
Income Before Taxes 9,131 3.8% 14,400 6.4%
Income Tax Provision 9,332 3.9% 3,230 1.5%
---------- -----------
(Loss)/Earnings before Cumulative Effect of a
Change in Accounting Principle $ (201) -0.1% $ 11,170 4.9%
Cumulative Effect of a Change in
Accounting Principle (228) -0.1% -- 0.0%
---------- -----------
Net (Loss)/Income $ (429) -0.2% $ 11,170 4.9%
========== ===========
Basic Earnings per Share
(Loss)/Earnings before Cumulative Effect of a
Change in Accounting Principle $ (0.01) $ 0.42
Cumulative Effect of a Change in
Accounting Principle $ (0.01) $ --
---------- -----------
Net (Loss)/Income $ (0.02) $ 0.42
Diluted Earnings per Share
(Loss)/Earnings before Cumulative Effect of a
Change in Accounting Principle $ (0.01) $ 0.42
Cumulative Effect of a Change in
Accounting Principle $ (0.01) $ --
---------- -----------
Net (Loss)/Income $ (0.02) $ 0.42
Weighted Average Shares Outstanding
Basic 26,701 26,373
Diluted 26,701 26,549
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
10
[CAMBREX LOGO]
CAMBREX CORPORATION
Gross Sales, Gross Profit & Operating Profit by Segment
For the Quarters Ended June 30, 2006 and 2005
(in thousands)
Second Quarter 2006
-----------------------------------------------------------------
Gross Gross Adjusted Gross Adjusted GP%-
Sales Profit GP% Profit - Non-GAAP* Non-GAAP*
----------- ---------- ----- ------------------ -------------
Bioproducts $ 41,073 $ 21,261 51.8% $ 20,985 51.1%
Biopharma 10,010 (1,631) -16.3% (1,878) -18.8%
Human Health 72,494 23,143 31.9% 23,009 31.7%
Corporate -- -- --
----------- ---------- ------------------
Total $ 123,577 $ 42,773 34.6% $ 42,116 34.1%
=========== ========== ==================
Second Quarter 2006
---------------------------------------------------------------------
Operating OP% Adjusted Operating Adjusted OP%-
Profit/(loss) - GAAP GAAP Profit/(loss) - Non-GAAP* Non-GAAP*
-------------------- ----- ------------------------- -------------
Bioproducts $ 8,166 19.9% $ 7,819 19.0%
Biopharma (3,898) -38.9% (4,169) -41.6%
Human Health 13,016 18.0% 12,814 17.7%
Corporate (9,128) (6,879)
-------------------- ------------------------
Total $ 8,156 6.6% $ 9,585 7.8%
==================== ========================
Second Quarter 2005
-----------------------------------------------------------------
Gross Gross Adjusted Gross Adjusted GP%-
Sales Profit GP% Profit - Non-GAAP* Non-GAAP*
----------- ---------- ----- ------------------ -------------
Bioproducts $ 37,990 $ 19,336 50.9% $ 19,512 51.4%
Biopharma 11,655 (606) -5.2% (443) -3.8%
Human Health 66,526 21,540 32.4% 21,621 32.5%
Corporate -- --
----------- ---------- ------------------
Total $ 116,171 $ 40,270 34.7% $ 40,690 35.0%
=========== ========== ==================
Second Quarter 2005
---------------------------------------------------------------------
Operating OP% Adjusted Operating Adjusted OP%-
Profit/(loss) - GAAP GAAP Profit/(loss) - Non-GAAP* Non-GAAP*
-------------------- ----- ------------------------- -------------
Bioproducts $ 5,829 15.3% $ 6,109 16.1%
Biopharma (3,265) -28.0% (3,086) -26.5%
Human Health 10,721 16.1% 10,846 16.3%
Corporate (4,214) (4,798)
-------------------- -------------------------
Total $ 9,071 7.8% $ 9,071 7.8%
==================== =========================
Gross Sales Comparison
--------------------------------------------------
2Q06 2Q05
Gross Gross Change Change
Sales Sales $ %
----------- ---------- --------- ------
Bioproducts $ 41,073 $ 37,990 $ 3,083 8.1%
Biopharma 10,010 11,655 (1,645) -14.1%
Human Health 72,494 66,526 5,968 9.0%
----------- ---------- ---------
Total $ 123,577 $ 116,171 $ 7,406 6.4%
=========== ========== =========
* Refer to the GAAP to Adjusted (Non-GAAP) Reconciliation.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
11
[CAMBREX LOGO]
CAMBREX CORPORATION
Gross Sales, Gross Profit & Operating Profit by Segment
For the Six Months Ended June 30, 2006 and 2005
(in thousands)
Six Months 2006
-----------------------------------------------------------
Gross Gross Adjusted Gross Adjusted GP%-
Sales Profit GP% Profit-Non-GAAP* Non-GAAP*
-------- -------- ----- ---------------- -------------
Bioproducts $ 82,414 $ 44,128 53.5% $ 44,128 53.5%
Biopharma 23,814 (618) -2.6% (618) -2.6%
Human Health 136,956 44,183 32.3% 44,183 32.3%
Corporate -- -- --
-------- -------- --------
Total $243,184 $ 87,693 36.1% $ 87,693 36.1%
======== ======== ========
Six Months 2006
----------------------------------------------------------------------
Operating OP% Adjusted Operating Adjusted OP%-
Profit/(loss) - GAAP GAAP Profit/(loss) - Non-GAAP* Non-GAAP*
-------------------- ------ ------------------------- -------------
Bioproducts $ 15,034 18.2% $ 16,571 20.1%
Biopharma (5,360) -22.5% (5,360) -22.5%
Human Health 24,609 18.0% 24,609 18.0%
Corporate (15,388) (13,031)
-------- ---------
Total $ 18,895 7.8% $ 22,789 9.4%
======== =========
Six Months 2005
------------------------------------------------------------
Gross Gross Adjusted Gross Adjusted GP%-
Sales Profit GP% Profit-Non-GAAP* Non-GAAP*
-------- -------- ----- ---------------- -------------
Bioproducts $ 77,909 $ 41,471 53.2% $ 41,818 53.7%
Biopharma 19,362 (2,663) -13.8% (2,339) -12.1%
Human Health 29,362 44,724 34.6% 44,887 34.7%
Corporate -- -- --
-------- -------- -----------
Total $226,633 $ 83,532 36.9% $ 84,366 37.2%
======== ======== ===========
Six Months 2005
----------------------------------------------------------------------
Operating OP% Adjusted Operating Adjusted OP%-
Profit/(loss) - GAAP GAAP Profit/(loss) - Non-GAAP* Non-GAAP*
-------------------- ----- ------------------------- -------------
Bioproducts $ 15,475 19.9% $ 16,033 20.6%
Biopharma (8,177) -42.2% (7,818) -40.4%
Human Health 23,030 17.8% 23,271 18.0%
Corporate (10,350) (11,508)
-------- ---------
Total $ 19,978 8.8% $ 19,978 8.8%
======== =========
GROSS SALES COMPARISON
-----------------------------------------
2006 2005
Gross Gross Change Change
Sales Sales $ %
--------- ---------- -------- ------
Bioproducts $ 82,414 $ 77,909 $ 4,505 5.8%
Biopharma 23,814 19,362 4,452 23.0%
Human Health 136,956 129,362 7,594 5.9%
--------- ---------- --------
Total $ 243,184 $ 226,633 $ 16,551 7.3%
========= ========== ========
* Refer to the GAAP to Adjusted (Non-GAAP) Reconciliation.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
12
[CAMBREX LOGO]
CAMBREX CORPORATION
GAAP to Adjusted (Non-GAAP) Reconciliation - Net Income
For the Quarters and Six Months Ended June 30, 2006 and 2005
Second Quarter 2006 Second Quarter 2005
------------------------ -------------------------
Net Income Diluted EPS Net Income Diluted EPS
---------- ----------- ----------- -----------
Net Income - GAAP $ 976 $ 0.04 $ 7,080 $ 0.27
Evaluation of strategic alternatives (Admin. Expense) 1,337 0.05 -- --
Cutanogen related costs (recorded in R&D Expense) 92 0.00 -- --
Benefit from Swedish Tax Item (Tax Provision) -- -- (3,329) (0.13)
--------- ------- --------- -------
Adjusted Net Income - Non-GAAP $ 2,405 $ 0.09 $ 3,751 $ 0.14
========= ======= ========= =======
Six Months 2006 Six Months 2005
--------------------------- -------------------------
Net
(Loss)/Income Diluted EPS Net Income Diluted EPS
------------- ----------- ----------- -----------
(Loss)/Earnings before Cumulative Effect of a
change in Accounting Principle $ (201) $ (0.01) $ 11,170 $ 0.42
Evaluation of strategic alternatives (Admin. Expense) 2,357 0.09 -- --
Cutanogen milestone and related costs (R&D Expense) 1,537 0.06 -- --
Senior note prepayment expenses (Interest Expense) 5,272 0.20 -- --
Benefit from Swedish Tax Item (Tax Provision) -- -- (3,329) (0.13)
-------- ------- --------- -------
Adjusted Net Income (Non-GAAP) $ 8,965 $ 0.33 $ 7,841 $ 0.30
======== ======= ========= =======
Note: The cumulative effect of a change in accounting principle reflects the
implementation of FAS 123(R). Under FAS 123(R), the Company is now required to
measure stock appreciation rights (SAR's) at fair market value.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
13
[CAMBREX LOGO]
CAMBREX CORPORATION
GAAPto Adjusted (Non-GAAP) Reconciliation - Operating Profit by Segment
For the Quarters and Six Months Ended June 30, 2006 and 2005
Second Quarter 2006
-------------------------------------------------------------------
Bioproducts Biopharma Human Health Corporate Total
-------------------------------------------------------------------
Operating Profit - As Reported $ 8,166 $ (3,898) $ 13,016 $ (9,128) $ 8,156
Evaluation of strategic alternatives -- -- -- 1,337 1,337
Cutanogen related costs 92 -- -- -- 92
Change in allocation methodology (439) (271) (202) 912 --
----------- --------- ------------ --------- -------
Adjusted Operating Profit - Non-GAAP $ 7,819 $ (4,169) $ 12,814 $ (6,879) $ 9,585
=========== ========= ============ ========= =======
Second Quarter 2005
-------------------------------------------------------------------
Bioproducts Biopharma Human Health Corporate Total
-------------------------------------------------------------------
Operating Profit - As Reported $ 5,829 $ (3,265) $ 10,721 $ (4,214) $ 9,071
Change in allocation methodology 280 179 125 (584) --
----------- --------- ------------ --------- -------
Adjusted Operating Profit - Non-GAAP $ 6,109 $ (3,086) $ 10,846 $ (4,798) $ 9,071
=========== ========= ============ ========= =======
Six Months 2006
-------------------------------------------------------------------
Bioproducts Biopharma Human Health Corporate Total
-------------------------------------------------------------------
Operating Profit - As Reported $ 15,034 $ (5,360) $ 24,609 $ (15,388) $18,895
Evaluation of strategic alternatives -- -- -- 2,357 2,357
Cutanogen milestone and related costs 1,537 -- -- -- 1,537
----------- --------- ------------ --------- -------
Adjusted Operating Profit - Non-GAAP $ 16,571 $ (5,360) $ 24,609 $ (13,031) $22,789
=========== ========= ============ ========= =======
Six Months 2005
-------------------------------------------------------------------
Bioproducts Biopharma Human Health Corporate Total
-------------------------------------------------------------------
Operating Profit - As Reported $ 15,475 $ (8,177) $ 23,030 $ (10,350) $19,978
Change in allocation methodology 558 359 241 (1,158) --
----------- --------- ------------ --------- -------
Adjusted Operating Profit - Non-GAAP $ 16,033 $ (7,818) $ 23,271 $ (11,508) $19,978
=========== ========= ============ ========= =======
Note: The change in allocation methodology reflects certain medical benefit
expenses in second quarter 2006 Non-GAAP, six months 2006 GAAP and 2005 Non-GAAP
results that were reclassified from operating segments to Corporate
Administrative Expense to better reflect costs reported in the operating
segments.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
14
\
[CAMBREX LOGO]
CAMBREX CORPORATION
GAAP to Adjusted (Non-GAAP) Reconciliation - Operating Expenses
For the Quarters and Six Months Ended June 30, 2006 and 2005
Second Quarter
-----------------------
2006 2005
---------- ----------
Operating Expenses - GAAP $ 34,617 $ 31,199
Evaluation of strategic alternatives (1,337) --
Cutanogen related costs (92) --
Change in allocation methodology (657) 420
---------- ----------
Adjusted Operating Expenses - Non-GAAP $ 32,531 $ 31,619
========== ==========
Six Months
------------------------
2006 2005
---------- -----------
Operating Expenses - GAAP $ 68,798 $ 63,554
Evaluation of strategic alternatives (2,357) --
Cutanogen milestone and related costs (1,537) --
Change in allocation methodology -- 834
---------- ----------
Adjusted Operating Expenses - Non-GAAP $ 64,904 $ 64,388
========== ==========
Note: The change in allocation methodology reflects certain medical benefit
expenses in second quarter 2006 Non-GAAP, six months 2006 GAAP and 2005 Non-GAAP
results that were reclassified from operating segments to Corporate
Administrative Expense to better reflect costs reported in the operating
segments.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
15
[CAMBREX LOGO]
CAMBREX CORPORATION
GAAP to Adjusted (Non-GAAP) Reconciliation - Administrative Expense
For the Quarters and Six Months Ended June 30, 2006 and 2005
Second Quarter
-----------------------
2006 2005
--------- ----------
Administrative Expense - GAAP $ 20,633 $ 15,893
Evaluation of strategic alternatives (1,337) --
Change in allocation methodology (698) 446
--------- ----------
Adjusted Administrative Expense - Non-GAAP $ 18,598 $ 16,339
========= ==========
Six Months
-----------------------
2006 2005
--------- ----------
Administrative Expense - GAAP $ 39,166 $ 33,843
Evaluation of strategic alternatives (2,357) --
Change in allocation methodology -- 885
--------- ----------
Adjusted Administrative Expense - Non-GAAP $ 36,809 $ 34,728
========= ==========
Note: The change in allocation methodology reflects certain medical benefit
expenses in second quarter 2006 Non-GAAP, six months 2006 GAAP and 2005 Non-GAAP
results that were reclassified from operating segments to Corporate
Administrative Expense to better reflect costs reported in the operating
segments.
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
16
[CAMBREX LOGO]
CAMBREX CORPORATION
Consolidated Balance Sheet
As of June 30, 2006 and December 31, 2005
(in thousands)
June 30, December 31,
2006 2005
--------- -----------
Assets
Cash and Cash Equivalents $ 30,283 $ 45,932
Trade Receivables, net 74,314 74,425
Inventories, net 110,452 93,617
Other Current Assets 15,746 15,552
--------- -----------
Total Current Assets 230,795 229,526
Property, Plant and Equipment, Net 240,052 229,410
Goodwill and Other Intangibles 149,763 147,551
Other Non-Current Assets 5,469 5,985
--------- -----------
Total Assets $ 626,079 $ 612,472
========= ===========
Liabilities and Stockholders' Equity
Trade Accounts Payable $ 37,790 $ 38,813
Accrued Expenses and Other Current Liabilities 49,567 51,819
Short-term Debt and Current Portion of Long-term Debt 1,782 1,514
--------- -----------
Total Current Liabilities 89,139 92,146
Long-term Debt 186,020 186,819
Deferred Tax Liabilities 29,160 28,543
Other Non-Current Liabilities 63,537 61,713
--------- -----------
Total Liabilities $ 367,856 $ 369,221
Stockholders' Equity $ 258,223 $ 243,251
--------- -----------
Total Liabilities and Stockholders' Equity $ 626,079 $ 612,472
========= ===========
###
Cambrex Corporation | One Meadowlands Plaza | East Rutherford, NJ 07073
Phone 201.804.3000 | Fax 201.804.9852 | www.cambrex.com
17