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HERCULES INCORPORATED
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HERCULES EXPECTS 2ND QUARTER EARNINGS ABOVE CONSENSUS ANALYST ESTIMATES
JULY 10, 2003, WILMINGTON, DE ... Hercules Incorporated (NYSE: HPC) today
announced that it expects to report earnings for the second quarter ended June
30, 2003 in the range of $0.27 to $0.29 per fully diluted share. This compares
to a loss of $0.10 per fully diluted share for the same period in 2002 and a
loss of $0.14 per fully diluted share in the first quarter 2003.
Earnings from ongoing operations(1) for the second quarter of 2003 are expected
to be in the range of $0.21 to $0.23 per fully diluted share. This compares to
$0.20 per fully diluted share in the second quarter of 2002 and $0.13 per fully
diluted share in the first quarter of 2003. The First Call consensus estimate
for the Company's earnings from ongoing operations is $0.19 per fully diluted
share for the second quarter 2003. If market conditions hold, Hercules also
expects to exceed First Call's consensus estimate for the year 2003 of $0.72 per
fully diluted share.
Improved earnings in the second quarter were driven by higher sales, improved
operating profits, and lower taxes in the quarter.
Net sales in the second quarter 2003 are expected to increase approximately 8%
compared to net sales of $437 million for the same period last year. Net sales
growth was driven largely by the Euro's appreciation against the U.S. dollar and
also higher prices and higher volumes. Year-to-date net sales are up
approximately 9% compared to the same period in 2002.
"The people of Hercules continue to deliver excellent results in a difficult
environment," said Dr. William H. Joyce, Chairman and Chief Executive Officer.
"The Company is well on its way to achieving its stated target of annual
double-digit growth in earnings and operating profits from ongoing operations."
Dr. Joyce added, "With another quarter of solid performance, I am particularly
proud that we will have delivered seven consecutive quarters of productivity
improvements from ongoing operations. Hercules continues to improve results in
spite of higher energy and raw material costs, higher pension expenses and a
difficult pulp and paper marketplace."
(1) Ongoing operations is a non-GAAP financial measure. The ongoing operations
include Pulp and Paper, Aqualon, FiberVisions and Pinova. See Table 1.
# # #
(continued)
Hercules manufactures and markets chemical specialties globally for making a
variety of products for home, office and industrial markets. For more
information, visit the Hercules website at www.herc.com.
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This news release includes forward-looking statements, as defined in the Private
Securities Litigation Reform Act of 1995, reflecting management's current
analysis and expectations, based on what management believes to be reasonable
assumptions. Forward-looking statements may involve known and unknown risks,
uncertainties and other factors, which may cause the actual results to differ
materially from those projected, stated or implied, depending on such factors
as: ability to generate cash, ability to raise capital, ability to refinance,
the result of the pursuit of strategic alternatives, the outcome of the pending
proxy contest, ability to execute work process redesign and reduce costs,
business climate, business performance, economic and competitive uncertainties,
higher manufacturing costs, reduced level of customer orders, changes in
strategies, risks in developing new products and technologies, environmental and
safety regulations and clean-up costs, foreign exchange rates, the impact of
changes in the value of pension fund assets and liabilities, changes in
generally accepted accounting principles, adverse legal and regulatory
developments, including increases in the number or financial exposures of
claims, lawsuits, settlements or judgments, or the inability to eliminate or
reduce such financial exposures by collecting indemnity payments from insurers,
the impact of increased accruals and reserves for such exposures, and adverse
changes in economic and political climates around the world, including terrorist
activities and international hostilities. Accordingly, there can be no assurance
that the Company will meet future results, performance or achievements expressed
or implied by such forward-looking statements. As appropriate, additional
factors are contained in other reports filed by the Company with the Securities
and Exchange Commission. This paragraph is included to provide safe harbor for
forward-looking statements, which are not generally required to be publicly
revised as circumstances change, and which the Company does not intend to
update.
Media Contact: John S. Riley (302) 594-6025
Investor Contact: Allen A. Spizzo (302) 594-6491
TABLE 1
THREE MONTHS THREE MONTHS THREE MONTHS
RECONCILIATION TO ONGOING OPERATIONS ENDED ENDED ENDED
JUNE 30, 2003 JUNE 30, 2003 JUNE 30, 2002 MARCH 31, 2003
==================== ==================== ====================
DILUTED EPS DILUTED EPS DILUTED EPS
$0.27 - $0.29 ($0.10) ($0.14)
EXPECTED/REPORTED(2)
Discontinued operations (0.02) (0.09) --
Cumulative effect of change in accounting principle,
net of tax -- -- 0.26
Income (loss) before discontinued operations and
change in accounting principle $0.25 - $0.27 ($0.19) $0.12
Restructuring costs (0.01) 0.04 0.01
Asset impairments -- 0.04 --
Debt prepayment and write-off of debt issuance costs -- 0.25 --
Other gains and losses, net, related to divested
businesses 0.02 -- --
Other 0.01 0.02 --
Tax benefit attributable to donation of intellectual
property (0.06) -- --
ITEMS RELATED TO DISCONTINUED OPERATIONS
Interest Expense -- 0.02 --
Adjustment to statutory tax rate -- 0.02 --
ONGOING OPERATIONS(1) $0.21 - $0.23 $0.20 $0.13
(1) Ongoing operations is a non-GAAP financial measure. The ongoing operations
include Pulp and Paper, Aqualon, FiberVisions and Pinova.
(2) Expected applies to the three months ended June 30, 2003; Reported applies
to the three months ended June 30, 2002 and March 31, 2003, respectively.