- Sales increased 9% (15% excluding foreign exchange) and EBITDA increased 63% vs. prior year quarter -
- Sales and profit guidance increased significantly for the full year 2015 -
- Conference call at 8:00 a.m. ET on July 30, 2015 -
EAST RUTHERFORD, N.J., July 30, 2015 (GLOBE NEWSWIRE) -- Cambrex Corporation (NYSE:CBM) reports results for the second quarter ended June 30, 2015.
Highlights
- Sales increased 9% compared to the second quarter of 2014, and increased 15% excluding foreign exchange impact.
- EBITDA increased 63% to $34.6 million compared to the second quarter of last year.
- GAAP diluted EPS from continuing operations was $0.60 versus $0.63 in the second quarter last year and Adjusted diluted EPS was $0.63 compared to $0.35 in the same quarter last year.
- Net cash was $2.6 million compared to debt, net of cash, of $14.5 million at December 31, 2014.
- The Company increased guidance for full year 2015 sales, excluding foreign exchange, to increase between 20% and 24% compared to 2014. Adjusted EBITDA expectations were increased to $117 - $123 million, a 43% to 50% increase over 2014. Adjusted diluted EPS from continuing operations is now expected to be $1.97 - $2.09 per share, a 48% to 57% increase over 2014 (see Financial Expectations section below).
“We continued our strong positive momentum in the second quarter and we are positioned to achieve even better results in the second half of 2015. Profit margins were very strong in the second quarter and while a few shipments moved from the second quarter to the third quarter, we are very pleased with our overall results,” commented Steven M. Klosk, President and Chief Executive Officer of Cambrex. “We continue to see strong demand for certain larger products within our Innovator product category and now expect full year sales of Controlled Substances to increase in the high single digit percentage range compared to our previous expectations for flat sales. Although the timing of shipments resulted in flat currency adjusted revenues for generic APIs, orders are on track to support our mid to high single digit percentage growth expectations in that category. These trends, along with our visibility into the rest of the year, continue to give us a high level of confidence for the remainder of 2015 and provide the basis for our increased financial guidance.
“The expansion project at our Charles City, Iowa facility remains on schedule and should bring significant additional capacity on line towards the end of the first quarter of 2016. We are also making additional facility upgrades and capacity expansions at our Swedish and Italian sites to meet anticipated demand for 2016 and beyond.”
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. Cambrex 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 2015 Operating Results – Continuing Operations
Sales were $106.4 million, compared to $98.0 million in the same period last year, representing a 9% increase. Foreign exchange unfavorably impacted reported sales growth by 6%. The sales increase primarily reflects higher volumes of certain branded active pharmaceutical ingredients (APIs) and to a lesser extent, higher pricing on certain products.
Gross margins increased to 43% from 34% compared to the same period last year. This increase was primarily due to higher plant utilization, higher pricing on certain products and the favorable impact of foreign exchange.
Selling, general and administrative expenses were $14.1 million compared to $14.6 million in the same period last year. The decrease was mainly due to a favorable impact from foreign exchange and lower due diligence costs, partially offset by higher costs related to the implementation of a new ERP system, sales and marketing expenses, recruiting, and pension expense.
Operating profit increased to $29.2 million from $15.2 million in the same period last year. The increase in operating profit was primarily the result of higher gross profit and lower operating expenses. EBITDA was $34.6 million compared to $21.2 million in the same period last year.
The current period effective tax rate was 33% resulting in a provision for income taxes of $9.5 million compared to a benefit of $9.4 million in the same period last year. The tax provision for the same period last year included a benefit related to the reversal of a deferred tax valuation allowance and the impact of a loss on the acquisition of Zenara shares. Excluding these items, the effective tax rate was flat compared to the same period last year.
Income from continuing operations was $19.5 million or $0.60 per share compared to $19.8 million or $0.63 per share in the same period last year. Last year’s second quarter results included a loss related to the purchase of the remaining stake in Zenara and the tax benefit described above. Adjusted income from continuing operations was $20.5 million or $0.63 per share, compared to $11.0 million or $0.35 per share, respectively, in the same period last year (see table at the end of this release).
Capital expenditures and depreciation were $14.5 million and $5.2 million, respectively, compared to $6.0 million and $5.9 million, respectively, in the same period last year.
Financial Expectations – Continuing Operations
The following table shows the Company’s current expectations for its full year 2015 financial performance versus its expectations from the previous quarter:
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