EAST RUTHERFORD, N.J., Aug. 1, 2014 /PRNewswire/ -- Cambrex Corporation (NYSE: CBM) reports results for the second quarter ended June 30, 2014.
Highlights
- Second quarter sales increased 59% to $98.0 million from $61.6 million in the same period last year.
- Second quarter EBITDA increased 86% to $21.2 million compared to $11.4 million in the same period last year (see table at the end of this release).
- Full year 2014 sales guidance increased, excluding the impact of foreign currency, to between 13% and 16% over 2013, and full year EBITDA guidance increased to between $74 and $78 million (see Financial Expectations below).
- Remaining 49% of Zenara Pharma ("Zenara") purchased by the Company for $2.7 million.
"I am extremely pleased with our strong second quarter and first half financial results and look forward to an even stronger second half of the year," commented Steven M. Klosk, President and Chief Executive Officer of Cambrex. "Our recent and ongoing investments in both capital improvements and personnel have allowed us to significantly increase our volumes. We are focused on maintaining a high level of customer service and plant efficiency while we continue to expand capacity and improve our capabilities. During the first half of the year, we also made significant progress in strengthening relationships with certain key customers, winning strategic supplier status with a large pharmaceutical customer and putting Cambrex in a position to win future projects with another.
"We are also pleased to have purchased the remaining shares in Zenara Pharma during the second quarter. While it will take some time, we believe Zenara's capabilities will complement our strong position in the API market."
Basis of Reporting
The Company has provided a reconciliation of GAAP amounts to adjusted (i.e. Non-GAAP) amounts at the end of this press release. Management believes that the adjusted amounts provide useful information to investors due to the magnitude and nature of certain expenses recorded in the GAAP amounts.
Second Quarter 2014 Operating Results Continuing Operations
Sales were $98.0 million for the quarter, compared to $61.6 million in the same period last year, representing a 59.0% increase, including the favorable impact of foreign exchange of 1.0%. The Company recorded sales increases in all of its product categories, with strong growth in certain branded APIs, controlled substances and generic APIs. Pricing was lower by approximately 1.8% compared to the second quarter last year.
Gross margins increased to 34.1% from 31.2% compared to the same period last year. This increase was primarily due to favorable product mix partially offset by lower pricing and higher production costs.
Selling, general and administrative expenses were $14.6 million compared to $10.6 million in the same period last year. The increase was mainly due to higher personnel expenses as well as higher spending on costs related to the transaction to purchase the remaining shares in Zenara and expenses related to due diligence on various acquisition opportunities.
Research and development expenses were $3.6 million compared to $2.8 million in the same period last year.
Operating profit increased to $15.2 million from $5.9 million in the same period last year. The increase in operating profit was primarily the result of higher gross profit partially offset by higher operating expenses. EBITDA was $21.2 million compared to $11.4 million in the same period last year.
Net interest expense was flat at $0.5 million for both the second quarters of 2014 and 2013.
Equity in losses of partially-owned affiliates, primarily representing Zenara's results, was $4.3 million compared to $0.7 million in the same period last year. The second quarter of 2014 included a loss of $4.1 million related to the purchase of the remaining 49% of Zenara.
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