Cambrex Corp. Reports Operating Results (10-Q)
Cambrex Corp. has a market cap of $124.6 million; its shares were traded at around $4.25 with a P/E ratio of 11.8 and P/S ratio of 0.6. CBM is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Gross sales in the first quarter 2010 of $56,155 were $3,845 or 6.4% below the first quarter 2009. Excluding a 4.4% favorable impact of foreign exchange, reflecting a weaker U.S. dollar compared to first quarter 2009, sales decreased 10.8%. The decrease is primarily due to the timing of orders for two active pharmaceutical ingredients (“APIs”) manufactured under long-term supply agreements, a customer supply chain disruption for an API manufactured under a long-term supply agreement, and a feed additive for which a contract expired. This feed additive contributed $1,811 in sales in the first quarter 2009. Lower pricing of certain generic APIs and a product utilizing the Company s drug delivery technology, for which the Company renegotiated a three year agreement at lower price levels in late 2009, also contributed to the decrease. Partially offsetting these decreases were higher volumes of controlled substances and custom development revenues.
Net interest expense was $1,198 in the first quarter 2010 compared to $1,157 in the first quarter 2009. The average interest rate on debt was 3.6% in the first quarter 2010 versus 4.1% in the first quarter 2009.
Net income in the first quarter 2010 was $1,683, or $0.06 per diluted share, versus $4,738, or $0.16, per diluted share in the same period a year ago.
Cash and cash equivalents decreased $10,789 in the first three months of 2010. During the first three months of 2010, cash used in operations was $1,625 versus $1,615 in the same period a year ago. Cash used in operations in the first three months of 2010 compared to the first three months of 2009 was unfavorably impacted by lower cash collections of accounts receivable due to higher sales at the end of first quarter 2010 compared to first quarter 2009 and lower net income, mostly offset by cash payments required in the first quarter 2009 related to change-in-control and restructuring payments.
Cash flows in the first three months of 2010 related to capital expenditures were $2,716 compared to $1,002 in 2009. The majority of the funds in 2010 and 2009 were used for capital improvements to existing facilities.
Cash flows provided by financing activities in the first three months of 2010 was $3,259 compared to $3,162 in the same period a year ago. Cash inflows in 2010 and 2009 related to net borrowings used for domestic operations and capital expenditures.
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