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DURACELL REPORTS STRONG SECOND QUARTER GROWTH FROM OPERATIONS; PRE-TAX INCOME UP 11 PERCENT; HIGHER TAX BITE PARES NET INCOME ONE PERCENT

 BETHEL, Conn., Jan. 28 /PRNewswire/ -- Duracell International, Inc. (NYSE: DUR) today reported strong growth in alkaline battery volume, sales, operating income and earnings before taxes for its fiscal second quarter ended Dec. 26, 1992.
 Pre-tax income for the second quarter jumped 11 percent to $140 million on a 9 percent improvement in operating income and a 39 percent decline in interest expense stemming from debt reduction. The Company said it experienced a 1 percent drop in net income due to a 54 percent increase in taxes.
 The world's leading producer of high-performance alkaline batteries said net income in the quarter totaled $98 million, or $ .83 per share, versus net income of $99 million, or $.85 per share, in the prior-year quarter.
 Higher Sales Drove Operating Income Improvement
 Driving the improvement in operating income was a 6 percent rise in worldwide sales in the quarter due to double-digit alkaline volume growth in North America, Asia and Latin America. Absent the effects of foreign currency translation, mainly from Europe and Canada, worldwide sales were up 9 percent on a performance basis, the Company said.
 Although European volume increased an encouraging 3 percent, sales were flat due to currency translation. European operating income rose 6 percent in the quarter, primarily because of improved margins and cost reductions. European operating income was up 13 percent before the impact of currency translation.
 Results Exceeded Expectations
 "Our expectations were exceeded on several operating fronts in the second quarter," said C. Robert Kidder, chairman and CEO of Duracell. "For example, we experienced the strongest Christmas selling season in recent years which, in combination with new distribution, helped generate a 10 percent gain in North American volume."
 "In addition, improving European volume, sales and operating income demonstrate the fundamental strength of our European business despite economic uncertainty in that part of the world," Mr. Kidder went on to say. "We were also pleased to see strong volume growth continuing in our important Asian and Latin American markets along with improved margins," he added. Mr. Kidder noted that alkaline volume in Duracell's Other International Markets grew 18 percent in the quarter while sales increased 19 percent and operating income improved 21 percent.
 First Half Results Also Strong
 For the six months ended December 26, Duracell reported net income of $140 million, or $1.18 per share, versus net income of $100 million, or $ .87 per share, in the prior-year period. An extraordinary charge in the year-ago period of $39 million from the repurchase of subordinated debt reduced net income by $ .34 per share. Pre-tax income in the six months improved 15 percent while operating income rose 8 percent on 7 percent higher sales.
 Income before extraordinary items in this year's first half totaled $140 million, or $1.18 per share, versus $139 million, or $1.21 per share, in the prior year. Despite a small improvement in income before extraordinary items, earnings per share in the first half fell slightly because of a 3 percent increase in weighted average shares outstanding. Net income for the first half was reduced substantially because of a 74 percent increase in taxes, resulting from the Company's full utilization of its tax loss carryforwards, offset partially by a 44 percent reduction in interest expense.
 Encouraging Outlook
 "The outlook for the remainder of fiscal 1993 is encouraging," Mr. Kidder said. "In North America, sales will benefit from continued alkaline category growth. In Europe, we expect the upturn in operating results to continue in line with higher consumer offtake. We also look for profit growth to remain strong in Other International Markets in the second half," he added. "These factors should provide Duracell shareholders with solid earnings in fiscal 1993 and, along with strategic investments in marketing, technology and expansion, form the basis for even better results going forward."
 Duracell International Inc., headquartered in Bethel, Conn., is the world's leading manufacturer and marketer of high-performance alkaline batteries. Duracell's batteries are sold throughout the world, primarily under the DURACELL(r) trademark.
 DURACELL INTERNATIONAL INC.
 Statements of Consolidated Operations
 (Unaudited, units/$ in millions except per share amounts)
 Quarter Ended Six Months Ended
 12/26/92 12/28/91 Pct. 12/26/92 12/28/91 Pct.
 Change Change
 Alkaline unit
 volume 779.2 713.0 9 1,298.5 1,203.5 8
 Sales $ 622.3 $588.5 6 $1,052.8 $ 987.2 7
 Cost of sales 215.8 199.4 (8) 373.1 349.7 (7)
 Gross profit 406.5 389.1 4 679.7 637.5 7
 Gross margin 65.3pct. 66.1pct. (.8pp) 64.6pct. 64.6pct. --
 Selling, general
 & administrative expenses:
 Advertising and
 promotion 138.4 133.1 (4) 226.2 213.7 (6)
 Other 109.4 110.6 1 216.3 204.1 (6)
 Total SG&A 247.8 243.7 (2) 442.5 417.8 (6)
 Operating income 158.7 145.4 9 237.2 219.7 8
 Operating margin 25.5pct. 24.7pct. .8pp 22.5pct. 22.3pct. .2pp
 Interest expense 12.5 20.4 39 26.5 47.0 44
 Other income
 (expense) (6.6) 1.0 -- (10.2) 1.1 --
 Income before
 extraordinary
 items and income
 tax 139.6 126.0 11 200.5 173.8 15
 Effective tax
 rate 29.6pct. 21.3pct. (8.3pp) 30.0pct. 19.9pct. (10.1pp)
 Provision for
 income taxes 41.3 26.9 (54) 60.1 34.6 (74)
 Income before
 extraordinary
 items 98.3 99.1 (1) 140.4 139.2 1
 Extraordinary items -- -- -- -- (39.0) --
 Net income $ 98.3 $ 99.1 (1) $140.4 $100.2 40
 Per share amounts:
 Income before
 extraordinary
 items $ .83 $ .85 $1.18 $1.21
 Extraordinary items - - - (.34)
 Net income $ .83 $ .85 $1.18 $.87
 Weighted average
 shares and share
 equivalents
 outstanding 118.8 117.2 1 118.6 115.2 3
 Geographic Segments
 Alkaline Unit Volume:
 North America 386.9 350.9 10 646.0 601.6 7
 Europe 242.5 234.9 3 381.6 374.4 2
 Other International
 Markets 149.8 127.2 18 270.9 227.3 19
 779.2 713.0 9 1,298.5 1,203.3 8
 Sales:
 North America $324.4 $302.2 7 $ 555.9 $ 528.2 5
 Europe 226.8 226.3 -- 369.5 353.4 5
 Other International
 Markets 71.1 60.0 19 127.4 105.6 21
 $622.3 $588.5 6 $1,052.8 $ 987.2 7
 Operating income:
 North America $105.6 $ 96.4 10 $ 171.3 $ 159.8 7
 Europe 59.8 56.5 6 84.2 77.6 9
 Other International
 Markets 12.0 9.9 21 18.6 15.0 24
 177.4 162.8 9 274.1 252.4 9
 Corporate/Research
 & Development (18.7) (17.4) (7) (36.9) (32.7) (13)
 $158.7 $145.4 9 $237.2 $219.7 8
 DURACELL INTERNATIONAL INC.
 Consolidated Balance Sheets
 (Unaudited, units/$ in millions except per share amounts)
 12/26/92 6/30/92
 Assets:
 Current assets:
 Cash and cash equivalents $ 20.3 $ 7.9
 Accounts receivable, less
 allowance of $18.2 and $21.7 453.3 270.5
 Inventories 152.6 222.0
 Prepaid and other current assets 42.1 27.7
 Total current assets 668.3 528.1
 Property, plant and equipment,
 net of accumulated depreciation
 of $147.3 and $130.8 320.8 330.9
 Intangibles, net of accumulated
 amortization of $204.1 and $195.7 1,206.9 1,288.0
 Other assets 13.9 9.6
 Total assets $2,209.9 $2,156.6
 Liabilities and equity:
 Current liabilities:
 Accounts payable $ 84.9 $ 92.5
 Short-term borrowings and
 current portion of long-term debt 40.2 37.6
 Accrued liabilities 247.9 182.2
 Total current liabilities 373.0 312.3
 Long-term debt 569.7 696.5
 Deferred income taxes 80.0 77.9
 Other non-current liabilities 56.0 61.9
 Total liabilities 1,078.7 1,148.6
 Equity:
 Common stock and capital surplus 1,016.4 992.0
 Retained earnings (accumulated
 deficit) 115.8 (6.5)
 Accumulated translation adjustment (1.0) 22.5
 Total equity 1,131.2 1,008.0
 Total liabilities and equity $2,209.9 $2,156.6
 Book value per share $ 9.90 $ 8.98
 Shares of common stock outstanding 114.3 112.3
 Total debt to capital ratio 35.0 pct. 42.1 pct.
 DURACELL INTERNATIONAL INC.
 Statements of Consolidated Cash Flows
 (unaudited, in millions)
 Six Months Ended
 12/26/92 12/28/91
 Operating activities:
 Income before extraordinary items $140.4 $139.2
 Adjustments to reconcile income
 before extraordinary items to
 cash provided by operating activities:
 Depreciation 20.0 17.6
 Amortization 24.2 24.1
 Provision for deferred taxes 23.9 4.9
 Other noncash items 5.2 (1.0)
 (Increase) decrease in:
 Accounts receivable (200.4) (177.9)
 Inventories 61.5 26.5
 Other working capital 65.3 62.3
 Cash provided by operating activities 140.1 95.7
 Investing activities:
 Purchase of property, plant
 and equipment (20.5) (25.1)
 Proceeds from sales of assets
 and other 4.1 4.1
 Cash used by investing activities (16.4) (21.0)
 Financing activities:
 Issuance of common stock 8.8 140.3
 Issuance (repayment) of revolving
 credit borrowings, net (70.7) 160.3
 Issuance (repayment) of commercial
 paper, net (42.4) 16.6
 Dividends paid (18.1) --
 Repurchase of subordinated debt -- (370.2)
 Premium on purchase of subordinated
 debt -- (32.0)
 Net change in other borrowings
 and other 7.3 13.3
 Cash used by financing activities (115.1) (71.7)
 Effect of exchange rate changes
 on cash 3.8 1.7
 Increase in cash and cash equivalents 12.4 4.7
 Cash and cash equivalents, beginning
 of period 7.9 5.5
 Cash and cash equivalents, end
 of period $ 20.3 $ 10.2
 Cash paid during the period for:
 Interest $ 25.1 $ 48.9
 Taxes $ 16.6 $ 9.0
 -0- 1/28/93
 /CONTACT: Walter B. Rogers, investor relations of Duracell, 203-796-4364/
 (DUR)


CO: Duracell International, Inc. ST: Connecticut IN: HOU SU: ERN

TM -- NY008 -- 0007 01/28/93 07:33 EST
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