Cambrex Corporation. (NYSE:CBM) Q4 2018 Earnings Conference Call Transcript

Feb 13, 2019 • 08:30 am ET

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Cambrex Corporation. (NYSE:CBM) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, good day and welcome to the Cambrex Fourth Quarter and Full Year 2018 Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Greg Sargen, Chief Financial Officer. Please go ahead, sir.

Executive
Gregory P. Sargen

Thank you, David, and good morning, everyone. Welcome to Cambrex's fourth quarter and full year 2018 earnings conference call. Today's discussion will contain forward-looking statements regarding expected operational and financial performance, and these statements may occur during our prepared remarks or during the question-and-answer session.

These statements are based on Cambrex's current expectations and involve risks and uncertainties that could cause actual outcomes and results to materially differ from those included in the forward-looking statements. For further information regarding such risks and uncertainties, please refer to the risk factors and forward-looking statements portions of our 2018 Form 10-K and the earnings release, both of which were issued earlier this morning.

During this call, we will be referring several time to changes in revenue, all of which are made on a constant currency basis. Also during this conference call, to provide greater transparency regarding Cambrex's operating performance, we refer to certain non-GAAP financial measures that are reconciled to the most directly comparable GAAP financial measure in a table at the end of our earnings press release issued this morning and available on our website at cambrex.com. A replay of this call will be available shortly after we end today through next Wednesday, February 20th, and will also be available on the Investors section of our website.

Before I turn the call over to Steve Klosk, our President and CEO for a business review, I want to explain a few items related to our financial reporting, that will be discussed on today's call and future calls. The first item I would like to discuss is our segment reporting. As you know, we acquired Halo Pharmaceuticals in September of this year, adding a new segment called Finished Dosage Form or FDF to our core Active Pharmaceutical Ingredient or API segment. We reported results for these two segments with a separate breakout of corporate operating expenses for the third and fourth quarters of 2018.

On January 2nd, 2019, we closed on the acquisition of Avista Pharma Solutions, which focuses on early stage development and testing services for both APIs and finished dosage forms. As a result of this acquisition, we are adding a third reportable segment called Early Stage Development Testing or ESDT. And as such, we'll have three reportable segments for 2019. In addition to adding a segment as a result of acquiring Avista, we are renaming the segments to better match popular vernacular within the market sectors in which we compete.

The finished dosage form segment will now be referred to as drug product and it will continue to consist of the former Halo businesses that we acquired in September. The API segment will now be called drug substance. To avoid confusion, we will use only the new