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 WILMINGTON, Del., April 21 /PRNewswire/ -- At the company's annual meeting, Thomas L. Gossage, Hercules Incorporated's (NYSE: HPC) chairman, president, and chief executive officer, today told shareholders that the company's 1993 first-quarter net income before the effect of accounting changes was $44 million, compared with $37 million in the year ago quarter.
 On a per-share basis, earnings before accounting changes were $1.01 a share, an increase of 28 percent from the 1992 first-quarter net income of $.79 a share.
 For first-quarter 1993, Hercules reported sales of $672 million, compared with $744 million a year ago. The decline is principally the result of decreased Aerospace sales and the venturing of the flavors business.
 Despite the decline in sales, operating results, before restructuring charges of $25 million, were slightly ahead of a year ago. The $25 million charge is for restructurings and asset disposals or asset writeoffs in the Materials segment. Also during the quarter, the company realized several nonrecurring pretax gains resulting from litigation settlements that totaled $28 million.
 In commenting on the company's first-quarter performance, Gossage said, "Our gross profit margin improved from 26.2 percent a year ago to 28.9 percent in the 1993 first quarter, bringing us closer to our minimum target of 30 percent. A number of our businesses made improvements from a year ago; most notably, water-soluble polymers and food gums. However, some of our businesses have experienced softness in Europe due to the lackluster economic performance in that world region. Additionally, during the quarter, we successfully completed the third static test firing of the solid rocket motor upgrade (SRMU) for the U.S. Air Force Titan IV space launch vehicle. Further test firings, which will complete the SRMU qualification, will be conducted later this year."
 Gossage added, "Following approval from the Department of Defense and the U.S. Air Force to proceed, Martin Marietta, on April 20, signed a supplemental agreement with Hercules on the Titan IV SRMU subcontract and authorized Hercules to proceed with three major contract changes. These changes allow Hercules: to complete the development/qualification phase before building flight hardware; to stretch out the production program through 1997 consistent with payload schedules; and to convert the remaining development/qualification and production phases to a single fixed price incentive contract. These are very important modifications to the SRMU subcontract, and this is a very significant step in our Titan IV restructuring effort. Recovery of our development cost and resolution of other outstanding claims are being worked on at all levels among the interested parties. Hercules hopes the resolution, which is expected soon, will complete the implementation of this year's Defense Appropriations Act."
 Gossage noted, "Based on the results of the first quarter, we believe that 1993 will be another year of improvement. We expect that shareholders will see steady progress throughout 1993 as we continue to move closer to our financial goals."
 The company's previously announced adoption of three new accounting standards resulted in a non-cash charge to net income of $238 million, or $5.48 a share. These accounting standards, issued by the Financial Accounting Standards Board (FASB), relate to retiree health care and life insurance benefits (FASB Statement No. 106), disability benefits and workers' compensation for former and inactive employees (FASB Statement No. 112), and income taxes (FASB Statement No. 109). Adoption of these accounting standards, which are primarily related to health care, has no effect on the company's cash flow.
 Moreover, changes made in Hercules' benefits plans will more than offset the adverse earnings implications of the new standards.
 As a result of these accounting changes, the company reported a net loss of $194 million, or $4.47 a share, in the first quarter of 1993.
 Also at the annual meeting, Gossage indicated that management will be recommending to its board of directors a quarterly dividend of $.56 per share, which represents no change in the dividend.
 Hercules Incorporated is a diversified, worldwide manufacturer of chemicals and related products and solid fuel systems. The company has approximately 80 production facilities located throughout the world, including 30 major plants in the United States.
 Consolidated Statement of Income
 (Unaudited; dollars in thousands, except per share)
 First Quarter 1993 1992
 Net sales $671,985 $744,026
 Cost of sales 478,048 549,395
 Selling, general & administrative expenses 93,048 93,539
 Research & development 16,535 17,555
 Other operating expenses, net 35,939 9,919
 Profit from operations 48,415 73,618
 Interest & debt expense 9,616 11,984
 Other income (expense), net 27,452 (7,874)
 Income before taxes on income, equity
 earnings, and effect of changes
 in accounting principles 66,251 53,760
 Provision for taxes on income 24,844 18,255
 Income before equity earnings and effect of
 changes in accounting principles 41,407 35,505
 Equity in net income of affiliated companies 2,470 1,391
 Income before effect of
 changes in accounting principles 43,877 36,896
 Effect of changes in accounting principles (238,218)(A) ---
 Net income (loss) (194,341) 36,896
 Earnings (loss) per share:
 Before effect of changes in
 accounting principles $1.01 $.79
 Effect of changes in accounting principles (5.48)(A) ---
 Earnings (loss) per share (4.47) .79
 Primary weighted average number
 of shares (millions) 43.5 47.2
 NOTE: Depreciation ($000's) 41,703 42,226
 (A) Represents the after-tax effect of the adoption of SFAS Nos. 106, 109 and 112 of $187,860, $37,958 and $12,400, respectively.
 Segment Data
 (Dollars in millions)
 Three months ended March 31 1993 1992
 Net sales by industry segment:
 Chemical specialties $196 $213
 Food & functional chemicals 201 210
 Aerospace 156 197
 Materials 114 121
 Other 5 3
 Total 672 744
 Profit from operations by industry segment:
 Chemical specialties $29 $31
 Food & functional chemicals 29 27
 Aerospace 15 14
 Materials (22)(B) 4
 Other (3) (2)
 Total 48 74
 (B) Includes a $25 charge for business restructuring.
 -0- 4/21/93
 /CONTACT: R.B. Hessler of Hercules, 302-594-6920/

CO: Hercules Incorporated ST: Delaware IN: ARO SU: ERN

MJ-CC -- PH028 -- 8840 04/21/93 14:33 EDT
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Date:Apr 21, 1993

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