Hercules post reasonable 1Q08 results despite the challenges

Hercules Incorporated reported:

• Net income for the quarter ended March 31, 2008 of $32.4 million, compared to $80.3 million for the first quarter of 2007.
• Net income from ongoing operations for the first quarter of 2008 was $38.9 million, an increase of 13% compared to $35.7 million in the first quarter of 2007.
  
• Net sales in the first quarter of 2008 of $558.3 million, an increase of 11% from the same period last year.
  
• Volume increased of 7% and pricing increase of 1%
• Rates of exchange contributed to a sales increase of 5% for the quarter.
• Regionally they saw net sales increases vs previous year in: North America 6%, Latin America 25%, Europe 15% (3% if the impact of the Euro is discounted), and Asia Pacific 15%.
• Profit from operations in the first quarter of 2008 was $67.4 million, a decrease of 4%.
• Cash flow for the quarter was $29.7 million ($25.8 million for the same period last year).

The net sales of the Paper Technologies and Ventures Group for the first quarter 2008 increased by 7% and profit from ongoing operations also increased 7%. Paper Technologies sales increased 2%, benefiting from favourable exchange rates but loosing ground with price decreases and an unfavorable product mix.

Hercules remained optimistic about revenue, earnings and cash flow in 2008, but recognised the impact that higher raw material, freight and energy costs will have on the business.