Second Quarter Results
2003年8月5日 - 9:49PM
ＲＮＳを含む英国規制内ニュース （英語）
RNS Number:3441O
Hercules Inc
05 August 2003
Release on Receipt
03-18-S
HERCULES REPORTS SECOND QUARTER RESULTS
Wilmington, DE, August 5, 2003 . . . Hercules Incorporated (NYSE: HPC) today
reported net income for the quarter ended June 30, 2003 of $32 million, or $0.29
per diluted share. This compares to a loss of $11 million, or a loss of $0.10
per diluted share for the same period in 2002. The second quarter 2003 and 2002
results included after-tax earnings of $2 million and $10 million, or $0.02 and
$0.09 per diluted share, respectively, related to discontinued operations.
Earnings from ongoing operations(1) for the second quarter of 2003 were $0.23
per diluted share. This compares to earnings on the same basis of $0.20 per
diluted share in the second quarter of 2002 (please refer to Table 2 for
reconciliation of earnings from ongoing operations to GAAP) and $0.13 per
diluted share in the first quarter of 2003.
Net sales in the second quarter of 2003 were $472 million, an increase of 8%
from the same period last year and a 7% increase compared to the first quarter
of 2003. Compared with the second quarter of 2002, sales growth was driven
primarily by the Euro's appreciation against the U.S. dollar and higher volume
in Aqualon and FiberVisions.
Second quarter of 2003 net sales, as compared to the same period in 2002:
increased 23% in Europe; increased 6% in Asia Pacific; were flat in Latin
America; and declined 1% in North America.
Profit from operations in the second quarter of 2003 was $73 million compared to
$53 million for the same period in 2002. Profit from ongoing operations(1) in
the second quarter of 2003 was $74 million, a 10% improvement compared to $67
million in the second quarter of 2002.
"In this difficult operating environment the people of Hercules continue to
deliver solid performance," said Dr. William H. Joyce, Chairman and Chief
Executive Officer. "Our improved results were achieved in the face of higher
pension expenses, higher energy and raw material costs and a difficult pulp and
paper marketplace offset to some extent by the favorable strengthening of the
Euro. We remained focused on bringing value to our customers, increasing our
competitive advantage, improving productivity and delivering significant
financial improvement by upgrading operations, primarily through Work Process
Redesign."
Interest and debt expense and preferred securities distributions were $33
million in the second quarter of 2003, a decrease of $6 million compared to the
second quarter of 2002, due to lower outstanding debt balances resulting from
the application of proceeds from asset sales.
Capital spending in the second quarter of 2003 was $11 million. Cash outflows
for restructuring in the second quarter of 2003 were $5 million. The Company
also contributed $40 million to its U.S. pension plan in the second quarter of
2003.
Segment Results
In the Performance Products segment (Pulp and Paper, Aqualon), net sales in the
second quarter grew 8% while profit from operations improved 16% as compared to
the same quarter last year. Net sales were up 8% and profit from operations
increased 29% compared to the first quarter of 2003.
In the Pulp and Paper Division, net sales grew 4% compared to both the second
quarter of 2002 and the first quarter of 2003. Profit from operations increased
13% compared to the second quarter of 2002 and increased 29% compared to the
first quarter of 2003. North American and European paper customers reduced their
demand for product with a number of mills taking shutdowns to adjust for market
conditions. Profit from operations benefited from favorable rate of currency
exchange, growth in Asia and South America and Work Process improvements,
partially offset by unfavorable volume/mix, lower prices and higher pension, raw
material and energy costs. Profit from operations in the second quarter of 2003
also benefited from the absence of an asset impairment charge versus the same
period last year.
Aqualon's net sales increased 13% compared to the second quarter of 2002 and the
first quarter of 2003. Profit from operations improved 18% and 29% compared to
the second quarter of 2002 and the first quarter of 2003, respectively. The
weaker U.S. dollar, improved volume/mix, higher prices and lower costs resulted
in favorable comparisons to the second quarter of 2002.
In the Engineered Materials and Additives segment (FiberVisions, Pinova), net
sales in the second quarter increased 9% and 4% compared to the second quarter
of 2002 and the first quarter of 2003, respectively. Profit from operations
decreased $1 million compared to the second quarter of 2002 and was flat
compared with the first quarter of 2003.
Second quarter of 2003 net sales in FiberVisions increased 20% compared to the
second quarter of 2002 and increased 3% compared to the first quarter of 2003.
Profit from operations increased $2 million compared to the second quarter of
2002 and increased $1 million compared to the first quarter of 2003. Profits in
the second quarter of 2003 compared to the same quarter last year were higher
due to higher selling prices and favorable rate of currency exchange partially
offset by higher polymer costs.
Pinova's second quarter net sales declined 15% compared to the second quarter of
2002 and increased 5% compared to the first quarter of 2003. Profit from
operations was down $3 million compared to the second quarter of 2002 and was
down $1 million compared to the first quarter of 2003. Lower profits in the
second quarter were driven by lower volumes and higher costs.
Second Quarter Conference Call
The Company will hold a teleconference for shareholders and analysts on August
5th beginning at 9 AM EST. To participate in the conference call, dial
973-582-2710, 10 to 15 minutes prior to the call.
# # #
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.
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, 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
HERCULES INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
(Dollars in Millions, except per share data)
(Unaudited)
Table 1 THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
As Reported 2003 2002 2003 2002
Net sales $472 $437 $913 $839
Cost of sales 295 267 576 510
Selling, general and administrative expenses 91 84 181 172
Research and development 9 11 19 21
Intangible asset amortization(2) 2 3 4 5
Other operating expense, net 2 19 1 24
Profit from operations 73 53 132 107
Interest and debt expense 19 25 38 61
Preferred security distributions of subsidiary trusts 14 14 29 29
Other expense, net 6 45 10 49
Income (loss) before income taxes and equity income 34 (31) 55 (32)
Provision (benefit) for income taxes 5 (9) 13 (7)
Income (loss) before equity income 29 (22) 42 (25)
Equity in income of affiliated companies 1 1 1 1
Net income (loss) from continuing operations before discontinued
operations and cumulative effect of changes in accounting principle 30 (21) 43 (24)
Discontinued operations 2 10 2 (199)
Net income (loss) before cumulative effect of changes in accounting 32 (11) 45 (223)
principle
Cumulative effect of changes in accounting principle, net of tax - - (28) (368)
Net income (loss) $ 32 ($ 11) $ 17 ($591)
Basic and diluted earnings (loss) per share:
Continuing operations 0.27 (0.19) 0.39 (0.22)
Discontinued operations 0.02 0.09 0.02 (1.83)
Cumulative effect of changes in accounting principle - - (0.26) (3.37)
Net income (loss) 0.29 (0.10) 0.15 (5.42)
Weighted average # of basic shares (millions) 110.5 109.0 110.0 109.0
Weighted average # of diluted shares (millions) 110.7 109.0 110.2 109.0
Income (loss) before income taxes and equity income 34 (31) 55 (32)
Interest, debt expense and preferred security distributions 33 39 67 90
EBIT 67 8 122 58
Depreciation and amortization(2) 23 23 46 45
EBITDA(3) 90 31 168 103
(Unaudited)
Segment Data Reported
(Dollars in Millions) THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
2003 2002 2003 2002
Net Sales From Continuing Operations By Industry Segment
Performance Products $384 $356 $740 $683
Engineered Materials and Additives 88 81 173 156
Total $472 $437 $913 $839
Profit From Continuing Operations By Industry Segment
Performance Products $ 72 $ 62 $128 $120
Engineered Materials and Additives 2 3 4 6
Corporate Items (1) (12) - (19)
Total $ 73 $ 53 $132 $107
EBITDA(3) 90 31 168 103
(Unaudited)
Table 2
Reconciliation to
Ongoing Operations
June 30, 2003 THREE MONTHS THREE MONTHS
ENDED JUNE 30, 2003 ENDED JUNE 30, 2002
(Dollars in Millions, Net Basic & Profit Net Basic & Profit
Income Diluted From Income Diluted From
except per share) (Loss) EPS Operations EBITDA (Loss)( EPS Operations EBITDA
From Table 1 $32 $0.29 $73 $90 ($11) ($0.10) $53 $31
Discontinued operations (2) (0.02) - - (10) (0.09) - -
Income (loss) before 30 0.27 73 90 (21) (0.19) 53 31
discontinued operations
Restructuring costs(4) (1) (0.01) (1) (1) 4 0.04 6 6
Asset Impairments(4) - - - - 4 0.04 6 6
Debt Prepayment and Write-Off
of Debt Issuance Costs(4) - - - - 28 0.25 - 43
Other gains and losses, net,
related to divested
businesses(4) 2 0.02 3 3 - - - -
Other(4) 1 0.01 (1) 1 2 0.02 3 3
Subtotal $ 2 $0.02 $ 1 $ 3 $38 $0.35 $15 $58
Items related to discontinued
operations(1) (4)
Interest Expense - - - - $ 3 $0.02 - -
Distribution Agreement - - - - - - (1) (1)
Subtotal - - - - $ 3 $0.02 ($ 1) ($ 1)
Tax benefit attributable to
donation of intellectual
property (7) (0.06) - - - - - -
Adjustment to statutory tax - - - - 2 0.02 - -
rate
Ongoing Operations(1) $25 $0.23 $74 $93 $22 $0.20 $67 $88
(Unaudited)
Table 3
Reconciliation to
Ongoing Operations
June 30, 2003 SIX MONTHS SIX MONTHS
ENDED JUNE 30, 2003 ENDED JUNE 30, 2002
(Dollars in Millions, Net Basic & Profit Net Basic & Profit
Income Diluted From Income Diluted From
except per share) (Loss) EPS Operations EBITDA (Loss)( EPS Operations
EBITDA
From Table 1 $17 $0.15 $132 $168 ($591) ($5.42) $107 $103
Discontinued operations (2) (0.02) - - 199 1.83 - -
Cumulative effect of changes
in accounting principle, net
of tax 28 0.26 - - 368 3.37 - -
Income (loss) before
discontinued operations and
changes in accounting
principle 43 0.39 132 168 (24) (0.22) 107 103
Restructuring costs(4) - - 1 1 6 0.06 9 9
Asset Impairments(4) - - - - 4 0.04 6 6
Debt Prepayment and Write-Off
of Debt Issuance Costs(4) - - - - 28 0.25 - 43
Other gains and losses, net,
related to divested
businesses(4) 2 0.02 3 3 (2) (0.02) (2) (2)
Other(4) 1 0.01 (4) - 3 0.03 4 4
Subtotal $ 3 $0.03 - $ 4 $ 39 $0.36 $ 17 $ 60
Items related to discontinued
operations(1) (4)
Interest Expense - - - - $ 17 $0.15 - -
Distribution Agreement - - - - (3) (0.03) (5) (5)
Corporate Costs - - - - (3) (0.03) (4) (4)
Subtotal - - - - $ 11 $0.09 ($ 9) ($ 9)
Tax benefit attributable to
donation of intellectual
property (7) (0.06) - - - - - -
Adjustment to statutory tax - - - - 5 0.05 - -
rate
Ongoing Operations(1) $ 39 $0.36 $132 $172 $ 31 $0.28 $115 $154
(1) Ongoing operations and EBITDA are non-GAAP financial measures. The
ongoing operations include Pulp and Paper, Aqualon, FiberVisions and Pinova.
Unaudited profit from ongoing operations and EBITDA (see Note 3) exclude
restructuring and other costs and includes the effects of the General Electric
Specialty Materials "GESM" distribution agreement, which became effective on
April 29, 2002.
As a result of the BetzDearborn Water Treatment Business divestiture and
corresponding debt repayment, Hercules will no longer incur costs related to
ESOP expense and certain corporate costs for personnel who supported the Water
Treatment Business. Had these costs not existed in the three and six months
ended June 30, 2002, profit and EBITDA from ongoing operations would have been
higher by $1 million and $4 million, respectively.
Includes an adjustment to interest expense in the three and six months
ended June 30, 2002 to reflect paydown of debt with proceeds from the
BetzDearborn Water Treatment Business divestiture.
(2) Net of amortization of debt issuance costs.
(3) Calculated as income from continuing operations before taxes plus
interest expense, preferred security distributions, depreciation and
amortization, net of amortization of debt issuance costs.
(4) After tax, using a 36% effective tax rate for 2003 and a 35% statutory
tax rate for 2002.
This information is provided by RNS
The company news service from the London Stock Exchange
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