Adhesives Magazine

HERCULES REPORTS SECOND QUARTER 2004 RESULTS

September 20, 2004
Hercules Inc. recently reported net income for the quarter ended June 20, 2004 of $4 million, or $0.04 per diluted share, compared to net income of $34 million, or $0.32 per diluted share, for the same period of 2003. As previously announced, the second quarter 2004 net income includes a non-cash after-tax charge of approximately $9 million for the write-off of unamortized dept issuance costs associated with refinancing the company's bank credit facility and the 9.42% trust preferred junior subordinated interest debentures. Other after-tax charges in the quarter included $5 million for debt repurchase, $3 million for severance, $4 million associated with divested businesses and $2 million for expenses related to the litigation against the Company's insurance carriers. Earnings from ongoing operations for the second quarter of 2004, utilizing a 36% income tax rate for ongoing operations, were $28 million, or $0.26 per diluted share. This compares to earnings on the same basis of $26 million, or $0.24 per diluted share, in the second quarter of 2003. Net sales in the second quarter were $510 million, an increase of 7% from the same period last year. Compared with the second quarter of 2003, the sales increase was driven by 10% higher volumes and 3% improved rates of exchange, offset in part by 5% unfavorable mix and 1% lower prices. Second quarter 2004 net sales, as compared to the same period in 2003, increased 11% in Europe (4% excluding the stronger Euro) and 28% in Asia Pacific, and decreased 9% in Latin America. North America was flat. Reported profit from operations in the second quarter of 2004 was $65 million, compared with $76 million for the same period in 2003. Profit from ongoing operations in the second quarter of 2004 was $76 million, compared with $77 million in the second quarter of 2003.