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FMC REPORTS SECOND QUARTER RESULTS

 CHICAGO, July 20 /PRNewswire/ -- FMC Corporation today reported second quarter 1993 income of $63 million before extraordinary items compared with $65 million in 1992. Sales were $979 million, down 8 percent from last year's quarter.
 Primary earnings per share for the quarter of $1.69 before extraordinary items compared with $1.75 per share in last year's quarter. Extraordinary charges of $5 million related to debt refinancing brought net income for the second quarter to $58 million, or $1.56 per share.
 Earnings of $102 million before interest and taxes compared with $117 million in 1992. Strong results at Performance Chemicals were offset by the expected decline in Precious Metals and continued difficult conditions in international markets, particularly for the machinery businesses. Net interest expense of $17 million fell 30 percent in the quarter, reflecting lower debt levels and lower interest rates.
 REVIEW OF OPERATIONS
 Industrial Chemicals sales of $256 million were essentially flat with last year, but profits were lower due primarily to difficult economic conditions -- particularly in Europe -- coupled with lower export prices for soda ash. Also, as previously reported, the reduction in phosphates for the home laundry detergent market continues to pressure margins. Volumes of lithium products to the aluminum and other basic industrial markets were lower than expected.
 Performance Chemicals sales of $264 million increased 6 percent, and profits again rose to record levels. Results benefited from strong performance at Process Additives, the flame retardant and water additives acquisition completed in early 1992. Sales of agricultural chemicals were higher, primarily due to strong market acceptance of several products -- Command, a crop protection herbicide, and Fury, a new pyrethroid, on cotton in the southeastern United States; and Dragnet termiticide in the specialty pest control market. Increased demand for fat substitutes used in food products offset lower pharmaceutical ingredient volumes in Europe.
 Precious Metals revenues and profits declined, as expected, due to lower gold production and higher costs. In May 1993, mining of mill grade ore ended at Paradise Peak. Gold production decreased in the quarter to 86 thousand ounces compared with 105 thousand in last year's quarter.
 Defense Systems sales of $235 million fell 16 percent in the quarter, but profits were equal with last year's quarter. Higher sales at the Naval Systems business offset the expected lower rate of deliveries of Bradley Fighting Vehicles and the completion of the M113 contract in 1992. Defense backlog stood at $1.3 billion at the end of the quarter, unchanged from the beginning of the year.
 Machinery and Equipment sales declined 15 percent to $204 million, and profits fell substantially. Lower profits at Food Machinery reflect difficult European market conditions in the food processing and agricultural machinery businesses. Energy and Transportation Equipment results compared unfavorably with strong results in last year's quarter.
 As previously announced, the company completed the acquisitions of Kongsberg Offshore a.s., the leader in North Sea subsea equipment and systems engineering, and SOFEC, Inc., a technological leader in the growing off-shore tanker mooring systems industry for oil and gas markets. These acquisitions will expand FMC's global presence and broaden its strong product line in the oilfield equipment and services markets.
 OTHER DEVELOPMENTS
 In May 1993, Moody's Investors Service raised the rating on FMC's senior debt to investment grade. This upgrade recognizes the diversity of FMC's operations, the capacity to generate cash, and the company's track record in reducing debt and strengthening its capital structure. FMC also recently announced the redemption of all its outstanding 20- year, zero coupon convertible debentures, totaling approximately $170 million. The company intends to refinance the debt at a lower cost.
 Rulings on two court cases involving FMC were issued in July. In FMC Corp. vs. Liberty Mutual, the jury's verdict supported a 1990 favorable judgment by the Supreme Court of California, which ruled environmental damages were covered by FMC's comprehensive general liability insurance policies. In FMC Corp. vs. Boesky, the court dismissed claims by FMC against an investment bank, Goldman, Sachs & Co., alleging that information leaked by Goldman officers to Ivan Boesky resulted in insider trading that increased the costs of FMC's 1986 stock recapitalization. FMC will appeal the Boesky case to the U.S. Court of Appeals.
 SIX MONTH RESULTS
 For the first six months of 1993, income before extraordinary items decreased 9 percent to $108 million. Sales of $1.9 billion were 6 percent lower than the 1992 period. Primary earnings per share from continuing operations were $2.93 compared with $3.24 per share last year.
 After extraordinary charges in 1993 and 1992 related to debt refinancing and a $184 million charge in 1992 for adopting the new accounting rule, Financial Accounting Standards No. 106 (Postretirement Benefits Other than Pensions), net income for the first half of 1993 was $103 million, or $2.80 per share compared with a net loss for the first half of 1992 of $74 million, or $2.02 per share.
 Earnings of $179 million before interest and taxes decreased 16 percent compared with the first half of 1992. Higher sales at Performance Chemicals were more than offset by the expected declines in Defense Systems and Precious Metals. First-half results also reflect lower demand for most industrial chemical products and weaker worldwide market conditions in several machinery and equipment businesses. Net interest expense declined 24 percent to $33 million due to lower debt levels and favorable interest rates.
 OUTLOOK
 According to Robert N. Burt, chairman, president and chief executive officer: "While we are never pleased with lower results, our businesses performed in line with or better than the economic and industry conditions in the second quarter. Given the 'here today, gone tomorrow' nature of the U.S. economic recovery, extremely difficult economic conditions in Europe, and expected declines in our Defense and Precious Metals businesses, we expect second-half earnings to continue to be unfavorable compared with 1992."
 "We are pleased, however, with the progress of our growth efforts in the quarter," Burt noted. "Our flame retardant and water additives business, acquired in 1992, was a solid contributor. We completed two acquisitions in the energy equipment business. And we made significant progress toward completing our joint venture with Harsco's BMY Combat Systems Division. We expect to finalize that partnership in the third quarter."
 FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited and in millions, except per share amounts)
 Three months Six Months
 Periods ended June 30, 1993 1992 1993 1992
 Sales $ 979.3 $1,061.1 $1,881.0 $1,995.0
 Other revenue 12.8 14.8 16.6 19.1
 Total revenue 992.1 1,075.9 1,897.6 2,014.1
 Operating costs 894.5 963.7 1,723.5 1,809.4(B)
 Other (income) and
 expense, net (3.9) (5.2) (5.1) (9.0)
 Total costs and expense 890.6 958.5 1,718.4 1,800.4
 Income from continuing
 operations before
 interest and taxes 101.5 117.4 179.2 213.7
 Interest expense (net) 16.7 23.7 32.6 43.2
 Income from continuing
 operation 84.8 93.7 146.6 170.5
 Provision for income taxes 22.2 29.1 38.6 51.4
 Income before extraordinary
 item and cumulative effect
 of change in accounting
 principle 62.6 64.6 108.0 119.1(B)
 Extraordinary item related
 to debt refinancing, net
 of taxes 4.7 -- 4.7 9.2
 Cumulative effect of change
 in accounting principle,
 net of taxes -- -- -- 183.7(3)
 Net income (loss) $ 57.9 $ 64.6 $ 103.3 $(73.8)
 Earnings per common share:
 Primary:
 Income before extraordinary
 item and cumulative effect
 of change in accounting
 principle $ 1.69 $ 1.75 $ 2.93 $3.24
 Extraordinary item (0.13) -- (0.13) (0.25)
 Cumulative effect of change
 in accounting principle -- -- -- (5.01)
 Net income (loss) $ 1.56 $ 1.75 $ 2.80 $(2.02)
 Fully diluted:
 Income before extraordinary
 item and cumulative effect
 of change in accounting
 principle $ 1.62 $ 1.67 $ 2.81 $3.09
 Extraordinary item (0.12) -- (0.12) (A)
 Cumulative effect of change in
 accounting principle -- -- -- (A)
 Net income $ 1.50 $ 1.67 $ 2.69 (A)
 Average number of shares
 used in earnings per
 share computations:
 Primary 36.9 36.8 36.9 36.7
 Fully diluted 39.8 39.7 39.8 39.7
 (A) Per share amounts are antidilutive.
 (B) Restated to reflect a net-of-tax increase in postretirement expense of $.8 million and $1.0 million for the three and six months ended June 30, 1992, respectively.
 (C) Reflects the cumulative effective of change in accounting for postretirement benefits, effective January 1, 1992.
 FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
 SUMMARIES OF SALES BY INDUSTRY SEGMENT
 (Unaudited and in millions)
 THREE MONTHS SIX MONTHS
 ENDED JUNE 30 ENDED JUNE 30
 1993 1992 1993 1992
 Industrial Chemicals $ 256.2 $ 254.9 $ 492.7 $503.1
 Performance Chemicals 264.0 248.6 469.9 435.4
 Precious Metals 32.9 42.4 72.6 87.4
 Defense Systems 235.0 278.5 468.0 546.7
 Machinery and Equipment 203.8 239.5 393.3 426.9
 Eliminations (12.6) (2.8) (15.5) (4.5)
 $ 979.3 $1,061.1 $1,881.0 $1,995.0
 -0- 7/20/93 R
 /CONTACT: Pat Brozowski, 312-861-6104 (media); or Lisa Azzarello, 312-861-6921 (investors), both of FMC/
 (FMC)


CO: FMC Corporation ST: Illinois IN: CHM SU: ERN

MG -- NY082 -- 3895 07/21/93 11:22 EDT
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Publication:PR Newswire
Date:Jul 21, 1993
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