Hercules publish 2Q07 results - Paper Technologies helped by exchange rates, modest price increases ....

Hercules has reported its second quarter results. The results for the whole company showed the net sales for the first six months of the year at USD 1.051 billion, an increase of 10% over the same period last year (when the FiberVisions transaction was excluded). For the second quarter, volume was up by 7% and pricing only increased by 1%. Some highlights:

• USD 221.7 mio was received in expected federal and state tax refunds (USD 23.2 is due in July)
• USD 124 million was paid in may in connection with the Vertac litigation
• Paper Technologies & Ventures, 'Continued to deliver solid performance.' Sales increased by 8% and profit from operations increased 58% (compered to same period in 2006).
• Paper Technologies sales increased by 9% due to 10% increased volumes. Prices increased by only 1%. There was a 3% exchange rate gain (weak dollar) which partially offset by a 5% unfavourable product mix change. Price increases were mainly achieved in North America with modest increases in Asia. Volumes were up 3%, including the Mead Westvaco rosin size alliance.
• Increases in profitability were from the price increases (modest!), favourable exchange rates and lower S&GA costs (the latter are lower year-on-year primarily because of high patent costs in 2006).

The figures for Paper Technologies were:

• Sales 2Q07: USD 227.6 mio (vs 208.6 in 2006)
• Sales 1H07: USD 448.9 mio (vs 406.7 in 2006)
• 'Profit from Operations' 2Q07: USD 26.2 mio (vs 16.6 in 2006)
• 'Profit from Operations' 1H07: USD 54.2 mio (vs 31.2 in 2006)