DELAWARE | 22-2476135 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer o | Accelerated filer x | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page No.
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Part I
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Financial Information
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Item 1.
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Financial Statements.
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3
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4
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5
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6
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7 - 18
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Item 2.
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19- 22
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Item 3.
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23
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Item 4.
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23
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Part II
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Other Information
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Item 1.
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24
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Item 1A.
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24
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Item 6.
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24
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25
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Item 1.
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Financial Statements
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March 31,
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December 31,
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|||||||
2012
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2011
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|||||||
(unaudited)
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ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | 20,777 | $ | 31,921 | ||||
Trade receivables, net
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39,216 | 36,510 | ||||||
Inventories, net
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67,325 | 62,095 | ||||||
Prepaid expenses and other current assets
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5,348 | 6,083 | ||||||
Total current assets
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132,666 | 136,609 | ||||||
Property, plant and equipment, net
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140,825 | 139,628 | ||||||
Goodwill
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37,680 | 36,731 | ||||||
Intangible assets, net
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4,334 | 4,261 | ||||||
Investment in partially-owned affiliates
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15,563 | 15,090 | ||||||
Other non-current assets
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3,264 | 3,425 | ||||||
Total assets
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$ | 334,332 | $ | 335,744 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities:
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Accounts payable
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$ | 21,635 | $ | 21,200 | ||||
Accrued expenses and other current liabilities
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37,312 | 37,933 | ||||||
Total current liabilities
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58,947 | 59,133 | ||||||
Long-term debt
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84,000 | 98,000 | ||||||
Deferred income tax
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16,588 | 16,243 | ||||||
Accrued pension benefits
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51,358 | 52,089 | ||||||
Other non-current liabilities
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9,909 | 9,938 | ||||||
Total liabilities
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220,802 | 235,403 | ||||||
Stockholders' equity:
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||||||||
Common stock, $.10 par value; authorized 100,000,000, issued 31,452,888 and 31,441,138 shares at respective dates
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3,145 | 3,143 | ||||||
Additional paid-in capital
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101,818 | 101,646 | ||||||
Retained earnings
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49,998 | 42,960 | ||||||
Treasury stock, at cost, 1,836,809 and 1,866,258 shares at respective dates
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(15,571 | ) | (15,821 | ) | ||||
Accumulated other comprehensive loss
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(25,860 | ) | (31,587 | ) | ||||
Total stockholders' equity
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113,530 | 100,341 | ||||||
Total liabilities and stockholders' equity
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$ | 334,332 | $ | 335,744 |
Three months ended
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March 31,
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2012
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2011
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Gross sales
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$ | 70,559 | $ | 61,654 | ||||
Commissions, allowances and rebates
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535 | 291 | ||||||
Net sales
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70,024 | 61,363 | ||||||
Other
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204 | (778 | ) | |||||
Net revenues
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70,228 | 60,585 | ||||||
Cost of goods sold
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47,800 | 43,130 | ||||||
Gross profit
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22,428 | 17,455 | ||||||
Operating expenses:
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Selling, general and administrative expenses
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9,960 | 9,088 | ||||||
Research and development expenses
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2,358 | 3,060 | ||||||
Total operating expenses
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12,318 | 12,148 | ||||||
Operating profit
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10,110 | 5,307 | ||||||
Other expenses/(income):
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Interest expense, net
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651 | 573 | ||||||
Other expenses/(income), net
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8 | (3 | ) | |||||
Equity in losses of partially-owned affiliates
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208 | 364 | ||||||
Income before income taxes
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9,243 | 4,373 | ||||||
Provision for income taxes
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2,205 | 1,518 | ||||||
Income from continuing operations
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7,038 | 2,855 | ||||||
Loss from discontinued operations, net of tax
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- | (146 | ) | |||||
Net income
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$ | 7,038 | $ | 2,709 | ||||
Basic earnings/(loss) per share of common stock:
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Income from continuing operations
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$ | 0.24 | $ | 0.10 | ||||
Loss from discontinued operations, net of tax
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$ | - | $ | (0.01 | ) | |||
Net income
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$ | 0.24 | $ | 0.09 | ||||
Diluted earnings/(loss) per share of common stock:
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Income from continuing operations
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$ | 0.24 | $ | 0.10 | ||||
Loss from discontinued operations, net of tax
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$ | - | $ | (0.01 | ) | |||
Net income
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$ | 0.24 | $ | 0.09 | ||||
Weighted average shares outstanding:
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Basic
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29,602 | 29,448 | ||||||
Effect of dilutive stock based compensation
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284 | 70 | ||||||
Diluted
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29,886 | 29,518 |
Three months ended
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March 31,
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2012
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2011
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Net income
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$ | 7,038 | $ | 2,709 | ||||
Other comprehensive income:
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Foreign currency translation adjustments
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5,973 | 11,374 | ||||||
Foreign currency forward contracts, net of tax of $73 and $32 at respective dates
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(165 | ) | (66 | ) | ||||
Interest rate swap agreements
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(380 | ) | - | |||||
Pension plan amortization to net income of net actuarial loss and prior service cost, net of tax of $13 and $7 at respective dates
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299 | 274 | ||||||
Comprehensive income
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$ | 12,765 | $ | 14,291 |
Three months ended
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March 31,
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2012
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2011
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Cash flows from operating activities:
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Net income
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$ | 7,038 | $ | 2,709 | ||||
Adjustments to reconcile net income to cash flows:
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Depreciation and amortization
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5,486 | 5,725 | ||||||
Increase in inventory reserve
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1,219 | 44 | ||||||
Stock based compensation included in net income
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357 | 325 | ||||||
Deferred income tax provision
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(95 | ) | (404 | ) | ||||
Equity in losses of partially-owned affiliates
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208 | 364 | ||||||
Other
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252 | 74 | ||||||
Changes in assets and liabilities:
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Trade receivables
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(1,991 | ) | 1,926 | |||||
Inventories
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(4,886 | ) | (3,339 | ) | ||||
Prepaid expenses and other current assets
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625 | 287 | ||||||
Accounts payable and other current liabilities
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(1,000 | ) | 76 | |||||
Other non-current assets and liabilities
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(1,367 | ) | (3,941 | ) | ||||
Discontinued operations:
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Net cash used in discontinued operations
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(1,080 | ) | (75 | ) | ||||
Net cash provided by operating activities
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4,766 | 3,771 | ||||||
Cash flows from investing activities:
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Capital expenditures
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(2,616 | ) | (1,690 | ) | ||||
Net cash used in investing activities
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(2,616 | ) | (1,690 | ) | ||||
Cash flows from financing activities:
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Long-term debt activity (including current portion):
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Borrowings
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- | 4,900 | ||||||
Repayments
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(14,000 | ) | (2,900 | ) | ||||
Other financing activities
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64 | (329 | ) | |||||
Net cash (used in)/provided by financing activities
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(13,936 | ) | 1,671 | |||||
Effect of exchange rate changes on cash and cash equivalents
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642 | 1,976 | ||||||
Net (decrease)/increase in cash and cash equivalents
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(11,144 | ) | 5,728 | |||||
Cash and cash equivalents at beginning of period
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31,921 | 29,614 | ||||||
Cash and cash equivalents at end of period
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$ | 20,777 | $ | 35,342 |
(1)
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Basis of Presentation
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(2)
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Impact of Recently Issued Accounting Pronouncements
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(3)
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Net Inventories
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March 31,
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December 31,
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2012
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2011
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Finished goods
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$ | 23,405 | $ | 26,885 | ||||
Work in process
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27,025 | 19,190 | ||||||
Raw materials
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11,951 | 11,261 | ||||||
Supplies
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4,944 | 4,759 | ||||||
Total
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$ | 67,325 | $ | 62,095 |
(4)
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Goodwill and Intangible Assets
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Balance as of December 31, 2011
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$ | 36,731 | ||
Translation effect
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949 | |||
Balance as of March 31, 2012
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$ | 37,680 |
As of March 31, 2012
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Amortization
Period
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Gross
Carrying
Amount
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Accumulated
Amortization
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Net Carrying
Amount
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Technology-based intangibles
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20 years
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$ | 4,060 | $ | (406 | ) | $ | 3,654 | |||||
Customer-related intangibles
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10 - 15 years
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788 | (108 | ) | 680 | ||||||||
$ | 4,848 | $ | (514 | ) | $ | 4,334 |
(4)
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Goodwill and Intangible Assets (continued)
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As of December 31, 2011
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Amortization
Period
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Gross
Carrying
Amount
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Accumulated
Amortization
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Net Carrying
Amount
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Technology-based intangibles
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20 years
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$ | 3,933 | $ | (344 | ) | $ | 3,589 | |||||
Customer-related intangibles
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10 - 15 years
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763 | (91 | ) | 672 | ||||||||
$ | 4,696 | $ | (435 | ) | $ | 4,261 |
(5)
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Investment in Partially-Owned Affiliates
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(6)
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Income Taxes
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(6)
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Income Taxes (continued)
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(7)
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Derivatives and Hedging Activities
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(7)
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Derivatives and Hedging Activities (continued)
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(8)
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Fair Value Measurements
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(8)
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Fair Value Measurements (continued)
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(9)
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Stock Based Compensation
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Options
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Number of
Shares
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Weighted
Average
Exercise Price
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Outstanding at December 31, 2011
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2,289,873 | $ | 6.67 | |||||
Exercised
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(13,750 | ) | $ | 4.84 | ||||
Forfeited or expired
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(16,850 | ) | $ | 10.08 | ||||
Outstanding at March 31, 2012
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2,259,273 | $ | 6.65 | |||||
Exercisable at March 31, 2012
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1,122,273 | $ | 7.94 |
(9)
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Stock Based Compensation (continued)
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Nonvested Stock Options
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Nonvested Restricted Stock
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Number of
Shares
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Weighted-
Average
Grant-Date
Fair Value
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Number of
Shares
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Weighted-
Average
Grant-Date
Fair Value
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Nonvested at December 31, 2011
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1,167,751 | $ | 2.89 | 58,899 | $ | 5.54 | ||||||||||
Vested during period
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(25,001 | ) | $ | 2.69 | (29,449 | ) | $ | 5.54 | ||||||||
Forfeited
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(5,750 | ) | $ | 2.96 | - | $ | - | |||||||||
Nonvested at March 31, 2012
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1,137,000 | $ | 2.89 | 29,450 | $ | 5.54 |
(10)
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Retirement Plans
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Three months ended
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March 31,
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2012
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2011
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Components of net periodic benefit cost
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Interest cost
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$ | 821 | $ | 865 | ||||
Expected return on plan assets
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(918 | ) | (914 | ) | ||||
Amortization of prior service costs
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15 | 109 | ||||||
Recognized actuarial loss
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216 | 115 | ||||||
Net periodic benefit cost
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$ | 134 | $ | 175 |
(10)
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Retirement Plans (continued)
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Three months ended
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March 31,
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2012
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2011
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Components of net periodic benefit cost
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Service cost
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$ | 165 | $ | 160 | ||||
Interest cost
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200 | 237 | ||||||
Recognized actuarial loss
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50 | 28 | ||||||
Amortization of prior service credit
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(2 | ) | (2 | ) | ||||
Net periodic benefit cost
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$ | 413 | $ | 423 |
(11)
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Contingencies
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(11)
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Contingencies (continued)
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(11)
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Contingencies (continued)
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(11)
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Contingencies (continued)
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·
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Sales increased 14.4% on a reported basis compared to the first quarter of 2011. Sales, excluding currency impact, increased 16.7%.
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·
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Gross margins increased on a reported basis to 31.8% from 28.3% in the first quarter of 2011. Gross margin, excluding currency impact, increased to 30.7% in the first quarter of 2012.
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·
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Debt, net of cash, decreased $2,856 during the first quarter of 2012.
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·
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The Company entered into a $60,000 interest rate swap agreement.
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Three months ended March 31,
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2012
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2011
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Europe
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$ | 37,541 | $ | 35,560 | ||||
North America
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29,948 | 20,604 | ||||||
Asia
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1,818 | 3,618 | ||||||
Other
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1,252 | 1,872 | ||||||
Total gross sales
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$ | 70,559 | $ | 61,654 |
Item 4.
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Item 1.
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Item 1A.
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Item 6.
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Executive Cash Incentive Plan
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2012 Equity Incentive Plan for Non-Employee Directors
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Section 302 Certification Statement of the Chief Executive Officer.
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Section 302 Certification Statement of the Chief Financial Officer.
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Section 906 Certification Statements of the Chief Executive Officer and Chief Financial Officer.
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Exhibit 101.INS***
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XBRL Instance Document
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Exhibit 101.SCH***
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XBRL Taxonomy Extension Schema
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Exhibit 101.CAL***
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XBRL Taxonomy Extension Calculation Linkbase
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Exhibit 101.LAB***
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XBRL Taxonomy Extension Label Linkbase
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Exhibit 101.PRE***
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XBRL Taxonomy Extension Presentation Linkbase
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*
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Filed herein
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**
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Furnished herewith
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***
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Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise not subject to liability.
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CAMBREX CORPORATION
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By
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/s/Gregory P. Sargen
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Gregory P. Sargen
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Executive Vice President and
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Chief Financial Officer
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(On behalf of the Registrant and as the
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Registrant's Principal Financial Officer)
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1.
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DEFINED TERMS
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2.
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PURPOSE
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3.
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ADMINISTRATION
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4.
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LIMITS ON AWARDS UNDER THE PLAN
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5.
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ELIGIBILITY AND PARTICIPATION
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6.
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RULES APPLICABLE TO AWARDS
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(a)
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All Awards
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(b)
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Stock Options and SARs
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7.
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EFFECT OF CERTAIN TRANSACTIONS
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8.
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LEGAL CONDITIONS ON DELIVERY OF STOCK
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9.
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AMENDMENT AND TERMINATION
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10.
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OTHER COMPENSATION ARRANGEMENTS
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11.
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MISCELLANEOUS
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12.
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ESTABLISHMENT OF SUB-PLANS
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13.
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GOVERNING LAW
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1.
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I have reviewed this quarterly report on Form 10-Q of Cambrex Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/Steven M. Klosk
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Steven M. Klosk
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Cambrex Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f)) for the registrant and have:
|
|
a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/Gregory P. Sargen
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||
Gregory P. Sargen
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Executive Vice President and
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Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/Steven M. Klosk
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Steven M. Klosk
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President and Chief Executive Officer
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/s/Gregory P. Sargen
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Gregory P. Sargen
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Executive Vice President and Chief Financial Officer
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