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SCHERER REPORTS RECORD SALES AND EARNINGS FOR FISCAL 1993; FOURTH QUARTER NET UP 48 PERCENT

 TROY, Mich., May 14 /PRNewswire/ -- R.P. Scherer Corporation (NYSE: SHR) announced today record sales and earnings for the Fiscal Year 1993, ended March 31.
 FULL FISCAL YEAR RESULTS
 Sales and Backlog
 Consolidated sales for the year were $398.0 million, an increase of 18 percent over the previous year. Adjusted for foreign exchange rate differences between years, sales grew 16 percent. Backlog at March 31, 1993 was $110.2 million, comparable with the backlog at the same time last year.
 The growth in worldwide sales of its core softgel products was led by the Company's North American operations, with an increase on a year- to-year basis of 28 percent. European operations' sales gains were 15 percent, or 11 percent in constant exchange rates. The growth of the European segment slowed down in the second half of the fiscal year as a result of difficult economic conditions in some markets and the recent change in health care regulations in Germany.
 The Company's Zydis advanced drug delivery technology generated revenues of $4.7 million, an increase of 73 percent.
 Operating Income
 Operating income for Fiscal 1993 was $88.1 million, an increase of 16 percent over the proforma $76.3 million earned last year, or 14 percent in constant exchange rates. Operating margin before R&D expenses was 25.0 percent, comparable to the prior year. Research and development expenses, net of customer reimbursements, increased by 35 percent to $11.4 million. This increase reflects intensified investment in the development of the Company's advanced drug delivery systems.
 Net Income
 Income from continuing operations increased 32 percent to $29.1 million from the proforma $22.0 million a year ago, before the impact of adopting SFAS 109 ("Accounting for Income Taxes"). On an earnings per share basis, prior to giving effect to SFAS 109, the Company generated earnings of $1.20 per share, compared to $.92 year ago, on a proforma basis.
 In the third quarter of the fiscal year, the Company repurchased $42.5 million face value of its 14 percent Senior Subordinated Debentures which resulted in an extraordinary loss of $8.4 million, or $.35 per share. The adoption of SFAS 109 effective with the beginning of Fiscal 1993 resulted in a cumulative non-recurring increase in income from the accounting change of $1.0 million, or $.04 per share. After giving effect to these adjustments, the Company reported a full year net income of $20.9 million, or $.86 per share.
 FOURTH QUARTER
 Sales
 Sales for the fourth quarter of Fiscal 1993 were $99.0 million, representing an increase of 10 percent over the same period a year ago. In constant exchange rates, the sales increase was 15 percent, reflecting the recent strengthening of the U.S. dollar. The Company's U.S. operation experienced a sales increase of 29 percent during this period, while European operations' local currency sales grew at 8 percent. Using constant exchange rates and excluding results of the German operation, European sales grew 23 percent compared to a year ago. Sales of the Company's German affiliate, in local currency, were comparable to the prior year.
 Operating Earnings
 In the fourth quarter, the Company earned operating income of $20.0 million, unchanged from operating income of a year ago. If measured in constant exchange rates, operating income would have increased 4 percent. Fourth quarter operating income did not show an increase corresponding to the sales growth due to a number of factors. Change in the sales mix in the fourth quarter resulted in health and nutritional products increasing as a percentage of overall sales. These products typically carry lower gross margins than the pharmaceutical and other softgel segments. In addition, substantial vitamin raw material price increases had not yet been fully recognized in prices the Company charges to its customers. The Company expects that, in the coming periods, margins in this segment will more closely reflect their historical relationship to sales.
 The Company's German affiliate experienced a reduction in operating earnings of 24 percent compared to the same period a year ago, as a result of economic conditions and the recently introduced health care reform in that country. In reaction to this changed environment, the Company's German operation has taken a number of steps which, when fully implemented, will result in a return to historical profit levels in the second half of Fiscal 1994. Excluding the results of the German operation, the rest of the Company's European operations generated an increase in operating earnings, in local currencies, of 47 percent over a year ago.
 In the fourth quarter, the Company succeeded in containing selling and administrative expenses to only 15 percent of sales, compared to 17 percent in the same period a year ago. At the same time, the investment in R&D increased by 40 percent, to $2.9 million.
 Net Income
 Net income for the quarter was $7.4 million, or $.31 per share, which represents an increase of 48 percent over net earnings of $.21 per share for the same quarter last year.
 R.P. Scherer Corporation, an international developer and manufacturer of drug delivery systems, is the world's largest producer of soft gelatin capsules ("softgels"). The Company is currently developing and commercializing advanced drug delivery systems, including SCHERERSOL(R), ZYDIS(R) and PULSINCAP(TM) technologies. The Company's proprietary drug delivery systems improve the efficacy of drugs by regulating the dosage, rate of absorption and place of release. The Company operates a global network of 15 facilities in 11 countries.
 R.P. SCHERER CORPORATION AND SUBSIDIARY
 Summary of Financial Results
 (In Thousands, Except Per Share Data)
 Fiscal Year
 Ended March 31,
 --------------------
 Actual Pro-Forma Percent
 1993 1992 Chg
 --------------------
 SUMMARY FINANCIAL INFORMATION:
 ------------------------------
 Net Sales $398,011 $337,786 18
 ======== ========
 Operating Income $88,097 $76,323 16
 ======== ========
 Operating Margin exclusive of Research
 and Development Expenses 25.0 25.1
 ======== ========
 Net Income from Continuing Operations $28,960 $22,003
 ======== ========
 Net Income per Common Share
 from Continuing Operations $1.20 $0.92 30
 ======== ========
 Actual Actual
 SUMMARY INCOME STATEMENT DATA: 1993 1992
 ------------------------------ -------- --------
 Net Sales $398,011 $337,786
 Cost of Sales 242,108 201,991
 Selling and Administrative Expenses 56,413 50,305
 Stock Compensation Expense and Other --- 13,060
 Research and Development Expenses 11,393 8,453
 -------- --------
 Operating Income 88,097 63,977
 Interest Expense 25,436 35,348
 Interest Earned and Other (3,630) (3,390)
 -------- --------
 Income from Continuing Operations before
 Income Taxes, Minority Interests,
 Extraordinary Loss and Accounting
 Changes 66,291 32,019
 Income Taxes 24,056 22,269
 Minority Interests 13,275 10,974
 -------- --------
 Income (Loss) from Continuing Operations
 before Extraordinary Loss and
 Accounting Changes 28,960 (1,224)
 Loss from Discontinued Operation (647) (16,538)
 Extraordinary Loss on Early Retirement of
 Debt (8,392) (2,067)
 Cumulative Effect of Accounting Changes 974 (4,917)
 -------- --------
 Net Income (Loss) 20,895 (24,746)
 Preferred Stock Dividends --- 6,372
 Net Income (Loss) Attributable
 to Common Shares $20,895 ($31,118)
 ======== ========
 Per Common Share:
 Income (Loss) Before Other Items $1.20 ($0.50)
 Loss from Discontinued Operation (0.03) (1.09)
 Extraordinary Loss (0.35) (0.14)
 Accounting Changes 0.04 (0.32)
 ======== ========
 Net Income (Loss) per Common Share $0.86 ($2.05)
 ======== ========
 Average Number of Common Shares 24,223 15,203
 R.P. SCHERER CORPORATION AND SUBSIDIARY
 Summary of Financial Results
 (In Thousands, Except Per Share Data)
 Three Months
 Ended March 31,
 -------------------
 Percent
 1993 1992 Chg
 -------------------
 SUMMARY FINANCIAL INFORMATION:
 ------------------------------
 Net Sales $99,021 $90,223 10
 ======== ========
 Operating Income $19,962 $19,994
 ======== ========
 Operating Margin exclusive of Research
 and Development Expenses 23.1 24.4
 ======== ========
 Net Income $7,410 $5,126
 ======== ========
 Net Income per Common Share $0.31 $0.21 48
 ======== ========
 SUMMARY INCOME STATEMENT DATA: 1993 1992
 ------------------------------ ------- --------
 Net Sales $99,021 $90,223
 Cost of Sales 61,011 51,898
 Selling and Administrative Expenses 15,179 15,562
 Stock Compensation Expense and Other --- 715
 Research and Development Expenses 2,869 2,054
 ------- --------
 Operating Income 19,962 19,994
 Interest Expense 5,732 7,044
 Interest Earned and Other (987) (831)
 -------- --------
 Income from Continuing Operations before
 Income Taxes and Minority Interests 15,217 13,781
 Income Taxes 4,743 5,231
 Minority Interests 3,064 3,424
 -------- --------
 Net Income Attributable to Common Shares $7,410 $5,126
 ======== ========
 Per Common Share:
 Net Income $0.31 $0.21
 ======== ========
 Average Number of Common Shares 24,275 24,103
 -0- 5/14/93
 /CONTACT: Ms. Nicole Williams, Executive VP & CFO, R.P. Scherer Corporation, 313-649-0900/
 (SHR)


CO: R.P. Scherer Corporation ST: Michigan IN: MTC SU: ERN

JG -- DE013 -- 8544 05/14/93 10:07 EDT
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Date:May 14, 1993
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