Third Quarter 2018 Highlights
Completed the acquisition of Halo Pharma (“Halo”), a leading finished dosage form Contract Development and Manufacturing Organization (“CDMO”) specializing in product development and commercial manufacturing, for $425 million in total cash consideration.
Net revenue decreased 7% under current U.S. GAAP, ASC 606 – Revenue from Contracts with Customers (“ASC 606”). Under ASC 605, the previous revenue recognition standard, Net revenue decreased 9% compared to the same quarter last year.
Under ASC 606, Diluted EPS from continuing operations was $0.79 per share compared to $0.52 per share in the same quarter last year. 2018 performance reflects a lower tax rate resulting from tax reform in the United States and New Jersey. Under ASC 605, Diluted EPS from continuing operations would have been $0.94 per share.
Under ASC 606, EBITDA decreased to $15.8 million from $33.7 million in the same quarter last year. Adjusted EBITDA, which excludes the impact of adopting ASC 606, Halo’s results and acquisition and integration costs, was $28.1 million (see table at the end of this press release).
Net debt was $227.9 million at the end of the quarter, an increase of $399.2 million during the quarter primarily driven by the acquisition of Halo Pharma and partially offset by cash flows from operations during the quarter.
The Company now expects full year 2018 Adjusted Net revenue, which excludes the impact of foreign currency and the adoption of ASC 606, to be between -1% and -3% compared to 2017 and Adjusted EBITDA to be between $153 and $159 million, excluding the impact of the Halo acquisition (see Financial Expectations – Continuing Operations section below for related explanations and additional financial guidance).
“We’re very pleased to have closed the Halo acquisition this quarter, which diversifies our business into the large, growing market for outsourced finished dosage form contract development and manufacturing. Halo’s capabilities complement Cambrex’s existing global API manufacturing expertise and Halo expands our customer base and broadens our small molecule funnel. Integration is well underway and we are confident that this business will allow us to better meet the needs of our global network of customers and create future growth synergies,” commented Steven M. Klosk, President and Chief Executive Officer of Cambrex.
“Market conditions in the Innovator sector remain strong and the addition of a new late stage project during the third quarter brings our total to 18 such products. A key component of our long term growth strategy is to steadily increase the number of late stage products in our portfolio. We believe that Cambrex is increasingly well positioned to execute against this strategy.”
Cambrex - News Release
