Hercules results for 3Q07 - paper chemicals relatively flat

Hercules Incorporated (NYSE: HPC) reported net income for 3Q07 of $42.4 million, or $0.37 per diluted share, as compared to net income of $34.2 million, or $0.31 per diluted share, for the third quarter of 2006. Net income for the nine months ended September 30, 2007 was $150.4 million, or $1.31 per diluted share, as compared to a net loss of $3.4 million, or a loss of $0.03 per diluted share, for the same period in 2006. The details are available on the Hercules web site.

With regard to their paper activities:

• Paper Technologies and Ventures Group (PT&V):
  Sales 3Q07: Increased from £274.6 mio to $287.6 mio (+4.6%)
  Sales 9 months 07: Increased from $795.2 mio to $858.7 mio (+8%)
  Operating Profit 3Q07: Increased from $25.8 mio to $34.6 mio (+34%; 12% of sales)
  

• Paper alone (excluding Ventures):
  Sales 3Q07: Increased from £217.6 mio to $226.0 mio (+3.8%)
  Sales 9 months 07: Increased from $624.4 mio to $674.8 mio (+8%)
  

• Pricing was flat compared to the previous year. Price increases were achieved in North America, while pricing was lower in both Europe and Asia.

• Volume growth was achieved in the Americas and in Europe, whereas Asia was lower.

• PVT raw material cost increases were $3.0 million.
  

• Severance, restructuring and other costs in the third quarter of 2007 were $1.2 million as compared to $1.5 million in the same period of 2006.
  

• SG&A costs were higher than the previous year.

• Approximately $0.06 per share of the third quarter 2007 earnings are attributable to the sale of certain patents related to paper treatments to enhance printing.

The outlook - Hercules expects Paper Technologies' margins to be maintained with sales of new products and growth in emerging markets offsetting raw material increases. They also expect pricing initiatives to take effect in the fourth quarter and early in 2008.