2/6/2012 7:23 PM ET
(RTTNews) - Life sciences company Cambrex Corporation (CBM: News ) Monday reported a drop in fourth-quarter profit, reflecting weaker margins.
For the fourth quarter, Cambrex's net income dropped to $0.7 million or $0.02 per share from $4.6 million or $0.16 per share in the year-ago quarter.
Results for the quarter include a net loss from discontinued operations of $2.3 million compared with a loss of $0.6 million last year.
Income from continuing operations for the quarter was $3.0 million or $0.10 per share compared to $5.2 million or $0.18 per share in the fourth quarter of 2010. Two Street analysts expected earnings of $0.12 per share for the quarter.
Gross sales for the quarter grew 5.7 percent to $67.1 million from $63.5 million in the year-ago quarter, Excluding the impact of foreign currency, sales increased 5.8 percent. The growth was attributed primarily to increased demand for an Active Pharmaceutical Ingredient or API manufactured under a long-term supply agreement, a recently approved innovator product, higher sales of generic APIs, and higher volumes of controlled substances and products utilizing the company's drug delivery technology.
Net revenues for the quarter were $67.5 million versus $64.9 million last year.
Gross margins for the quarter decreased to 29.4 percent from 32.0 percent last year, a result of lower pricing and unfavorable product mix partially offset by plant efficiencies gained from higher production volumes. Last year, margins benefited from insurance proceeds related to a business interruption claim and fees related to the cancellation of a supply contract.
Total operating expenses for the quarter increased to 20.7 percent of sales from 18.8 percent of sales last year.
Full year sales increased by 12.4 percent to $254.5 million, increased 7.6 percent excluding the impact of foreign currency.
Steven Klosk, president and chief executive officer, said," We generated cash flow during 2011 that allowed the Company to reduce net debt by just over $20 million which, combined with our new $250 million revolving credit facility, provides us ample capacity to invest strategically in the business. We continue to focus on developing new products as the key to our organic growth going forward."
For 2012, the East Rutherford, New Jersey-based company expects sales to increase 2 to 6 percent, excluding the impact of foreign currency, and EBITDA is expected to be $47 to $53 million.
The guidance does not reflect Zenara, which is accounted for using the equity method. Cambrex's income statement reflects 51 percent of Zenara's net results as Equity in Losses of Partially-Owned Affiliate. For 2012, the company expects Zenara to have revenues in the mid single digit millions and a small EBITDA profit.
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