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IMCERA REPORTS EARNINGS PER SHARE FROM CONTINUING OPERATIONS OF $1.65 FOR FISCAL 1993, BEFORE RESTRUCTURING CHARGES

    NORTHBROOK, Ill., Aug. 10 /PRNewswire/ -- IMCERA Group Inc. (NYSE: IMA) today reported earnings from continuing operations, before restructuring charges, of $128.4 million, or $1.65 per share, for the year ended June 30, 1993, including a net, non-cash charge of $3.8 million after taxes, or 5 cents per share, associated with new accounting standards detailed below.  This compares with last year's earnings from continuing operations of $128.8 million, also $1.65 per share.
    The net loss for the year was $200.4 million, or $2.60 per share, compared with net earnings last year of $127.5 million, or $1.63 per share.  The net loss included: (1) after-tax restructuring charges in the fourth quarter of $242.2 million, or $3.13 per share, (2) a non-cash cumulative charge of $80.6 million, or $1.04 per share, from adoption, retroactive to July 1, 1992, of new accounting standards for income taxes and certain post-retirement and post-employment benefits and, (3) after-tax charges related to discontinued operations of $6.0 million, or 8 cents per share, principally from litigation costs, compared to last year's charges of $1.3 million, or 2 cents per share.
    Net sales for 1993 were $1,796.3 million, compared with $1,702.9 million a year earlier, an increase of 5 percent.
    "As previously announced, our corporate restructuring program was designed to enhance and sustain future earnings," said C. Ray Holman, president and chief executive officer of IMCERA.  "About 85 percent of the charge was associated with Pitman-Moore and actions taken as a result of its poor performance.  The remainder related to Mallinckrodt Specialty Chemicals.  Restructuring actions related to the charge are in process and will be completed within two years.
    "The major components of the charge," Holman said, "are discontinuance of development of Pitman-Moore's Grolene brand of porcine somatotropin, including manufacturing and support facilities; closure and consolidation of manufacturing plants and other distribution and support facilities; redefinition and reorganization of research and development, commercial and administrative functions; exit of certain chemical and animal health businesses; and severance costs related to a substantial work-force reduction."
    Commenting on operating results before the restructuring charge, Holman said, "Mallinckrodt Medical's performance in 1993 was excellent with sales increasing 26 percent to $783.1 million and operating earnings rising 36 percent to $174.4 million, after absorbing $3.5 million in additional charges related to changes in accounting for employee benefits.  This was a very balanced year as all segments of the business, especially radiology, contributed in major ways.
    "Mallinckrodt Specialty Chemicals' operating earnings, plus its equity in the flavors joint venture, decreased $4.8 million to $56.5 million from $61.3 million last year," Holman said.  "Sales also were below those reported for 1992.  Year-to-year performance comparisons were influenced by additional 1993 expenses of $3.0 million from accounting changes for employee benefits, and in 1992's second half, the formation of a flavors joint venture and the divestiture of businesses. After adjusting for these events, 1993 ongoing operating earnings improved 5 percent on a corresponding sales increase of 7 percent.
    "Strong analgesics sales accounted for the improved performance," Holman noted, "while recessionary conditions resulted in delayed catalyst and performance chemical sales that detracted from the overall improvement.  As expected, the flavors joint venture earnings continued significant positive momentum.
    "Pitman-Moore's earnings declined to $40.3 million from $69.0 million on a sales decrease of 4 percent," Holman said,  "mainly due to higher manufacturing costs, delayed restart of certain plant operations, lower North American sales volumes, and European recessionary conditions.  Continued price pressures and lower volumes in feed ingredients and $1.6 million in expenses from accounting changes for employee benefits were also negatives."
    IMCERA's net sales for the fourth quarter were $498.4 million, compared with $467.9 million last year, an increase of 7 percent. Earnings from continuing operations before restructuring charges were $42.3 million, down slightly from last year's $42.8 million.
    Operating earnings were $72.2 million, up slightly from a year ago, including a $2.2 million charge in 1993 associated with accounting changes for employee benefits.  Mallinckrodt Medical's operating earnings were $49.1 million, a $12.3 million increase over last year. That improvement was largely offset by a $10.1 million decrease in Pitman-Moore's operating earnings to $12.0 million.
    A Fortune 250 company with fiscal 1993 net sales of about $1.8 billion, IMCERA provides human and animal health care products and specialty chemicals through its three international, technology- based businesses--Mallinckrodt Medical of St. Louis; Mallinckrodt Specialty Chemicals of Chesterfield, Missouri; and Pitman-Moore of Mundelein, Illinois.
                           IMCERA GROUP INC.
                         QUARTER ENDED JUNE 30
               ($ in millions except per share amounts)
                                     1993                  1992
    Sales                       $  498.4           $  467.9 (e)
    Earnings (loss) from
      continuing operations     $ (199.9)(a)(b)(g) $   42.8 (d)(e)(f)(g)
    Discontinued operations         (3.1)(h)             .9 (h)
    Net earnings (loss)           (203.0)              43.7
    Preferred stock dividends        (.1)               (.1)
    Amount available
     for common shareholders    $ (203.1)          $   43.6
    Earnings (loss) per common share
     Continuing operations         $(2.59)            $  .55
     Discontinued operations         (.04)               .01
     Net earnings (loss)           $(2.63)            $  .56
    Average number of
      common shares outstanding    77,097,000          77,138,000
                          YEAR ENDED JUNE 30
               ($ in millions except per share amounts)
                                       1993               1992
    Sales                     $1,796.3             $1,702.9 (e)
    Earnings (loss) from
      continuing operations     (113.8)(a)(b)(c)(g)   128.8 (d)(e)(f)(g)
    Discontinued operations       (6.0)(h)             (1.3)(h)
    Cumulative effects of
     accounting changes          (80.6)(b)
    Net earnings (loss)         (200.4)               127.5
    Preferred stock dividends      (.4)                 (.4)
    Amount available
     for common shareholders  $ (200.8)            $  127.1
    Earnings (loss) per common share
     Continuing operations       $(1.48)              $ 1.65
     Discontinued operations       (.08)                (.02)
     Accounting changes           (1.04)
     Net earnings (loss)         $(2.60)              $ 1.63
    Average number of
     common shares outstanding    77,409,000          77,801,000
             (See accompanying notes to financial results)
                           IMCERA GROUP INC.
                   CONSOLIDATED SALES AND OPERATIONS
               ($ in millions except per share amounts)
                               Quarter Ended           Year Ended
                                  June 30                June 30
                             1993         1992     1993          1992
    Sales
     Mallinckrodt Medical $ 224.3     $ 181.2   $  783.1     $  620.3
     Mallinckrodt
      Specialty Chemicals   109.4       107.2 (e)  395.3       440.9 (e)
     Pitman-Moore           164.7       179.5      618.1        641.8
     Intersegment sales                              (.2)         (.1)
     Total                $ 498.4     $ 467.9   $1,796.3     $1,702.9
    Operating earnings (loss)
     Mallinckrodt Medical $  49.1 (b) $  36.8   $  174.4 (b) $  127.8
     Mallinckrodt
      Specialty Chemicals   (32.3)(a)(b) 22.3 (e)   (5.4)(a)(b) 59.7 (e)
     Pitman-Moore          (270.8)(a)(b) 22.1 (d) (242.5)(a)(b) 69.0 (d)
     Corporate               (7.9)(b)   (10.1)     (35.5)(b)(c) (30.5)
     Eliminations                                                 (.5)
    Total                  (261.9)       71.1     (109.0)       225.5
    Equity in pretax earnings
     of joint venture         4.6          .1 (e)   10.6         1.6 (e)
    Interest and other non-
     operating income, net     .5         4.5 (f)    2.6        15.3 (f)
    Interest charges         (9.8)       (9.3)     (37.3)       (39.6)
    Earnings (loss) from
    continuing operations
    before income taxes    (266.6)       66.4     (133.1)       202.8
    Income tax
     provision (benefit)    (66.7)(g)    23.6 (g)  (19.3)(g)     74.0(g)
    Earnings (loss) from
     continuing operations (199.9)       42.8     (113.8)       128.8
    Discontinued operations  (3.1)(h)      .9 (h)   (6.0)(h)    (1.3)(h)
    Cumulative effects
     of accounting changes                         (80.6)(b)
    Net earnings (loss)    (203.0)       43.7     (200.4)       127.5
    Preferred stock
     dividends                (.1)        (.1)       (.4)         (.4)
    Amount available for
     common shareholders  $(203.1)    $  43.6   $ (200.8)    $  127.1
    Earnings (loss)
     per common share
     Continuing operations (2.59)    $  .55    $(1.48)       $ 1.65
     Discontinued operations(.04)       .01      (.08)         (.02)
     Accounting changes                         (1.04)
     Net earnings (loss)  $(2.63)    $  .56    $(2.60)       $ 1.63
    Average number of common
     shares outstanding  77,097,000   77,138,00077,409,000    77,801,000
             (See accompanying notes to financial results)
                      NOTES TO FINANCIAL RESULTS
    (a) Results for the fourth quarter of 1993 included restructuring charges aggregating $334.1 million, $242.2 million after taxes, or $3.13 a share.  Pretax charges included in Pitman-Moore and Mallinckrodt Specialty Chemicals operating earnings were $282.8 million and $51.3 million, respectively.
    (b)  In the fourth quarter of 1993 IMCERA adopted Statements of Financial Accounting Standards (FAS) No. 106, "Employer's Accounting for Postretirement Benefits Other Than Pensions"; No. 109, "Accounting for Income Taxes"; and No 112, "Employer's Accounting for Postemployment Benefits," all retroactive to July 1, 1992.
     Fiscal 1993 operating earnings included incremental charges for FAS 106 and 112 of $8.5 million, $5.4 million after taxes, or $.07 a share.
     Incremental pretax charges were as follows:
     Mallinckrodt Medical              $   3.5
     Mallinckrodt Specialty Chemicals      3.0
     Pitman-Moore                          1.6
     Corporate                              .4
                                             --------
                                       $   8.5
    The unfavorable effects of FAS 106 and 112 were partially offset by the favorable after-tax impact of FAS 109 of $1.6 million, or $.02 a share.
    Fourth quarter earnings from continuing operations included net incremental pretax charges of $2.2 million, $1.2 million after taxes, or $.02 a share, for FAS 106, 109 and 112.
    The Company will restate previously reported operating results for the first three quarters of 1993 to reflect the effects of adoption of these standards when it issues its 1993 year-end financial statements in August.
    (c) Corporate expense for 1993 included $5.5 million, $3.4 million after taxes, or $.04 a share, from executive resignations resulting from the performance of Pitman-Moore.
    (d) Pitman-Moore's fourth quarter 1992 results included pretax charges totaling $12.8 million, $7.9 million after taxes, or $.10 a share, for restructuring costs which were virtually offset by adjustments made to certain excess accruals established at the time Pitman-Moore acquired Coopers Animal Health in July 1989.  Costs associated with technical manufacturing control problems at Pitman- Moore's Kansas City, Kansas, manufacturing facility negatively impacted fiscal 1992 pretax results by $4.8 million, $3.0 million after taxes, or $.04 a share.
    (e) Effective February 1, 1992, the Fries & Fries, Inc. unit of Mallinckrodt Specialty Chemicals Company and Hercules Incorporated's flavors businesses were combined to form a 50/50 joint venture partnership.  Results subsequent to the formation of the joint venture were recorded on a pretax equity basis.  Related income taxes were included in IMCERA's consolidated income tax provision.  Fiscal 1992 fourth quarter results included pretax charges totaling $3.8 million, $2.4 million after taxes, or $.03 a share, for combining the two businesses.
    Additionally, certain non-strategic businesses were divested in fiscal 1992.  Given these changes and the 1993 restructuring charges described in Note (a), operating results for Mallinckrodt Specialty Chemicals have been restated below to an ongoing basis to better characterize performance.
                                Quarter Ended        Year Ended
                                   June 30             June 30
                                1993      1992      1993      1992
     Net sales:
       Ongoing operations     $ 109.4 $ 106.8    $ 395.3  $ 367.9
       Divested operations
        and Flavors business               .4                73.0
     Total                    $ 109.4 $ 107.2    $ 395.3  $ 440.9
     Operating earnings:
       Ongoing operations (1) $  19.0 $  22.1    $  45.9  $  46.5
       Restructuring charge     (51.3)             (51.3)
       Divested operations
        and Flavors business               .2                13.2
      Total                   $ (32.3)$  22.3    $  (5.4) $  59.7
     (1) 1993 amounts included the incremental effects of accounting changes for FAS 106 and 112 totaling $.8 million and $3.0 million for the fourth quarter and year, respectively.
    (f) Results for 1992 included pretax gains totaling $10.7 million, $6.7 million after taxes, or $.08 a share from sales of investments, of which $3.7 million pretax, $2.3 million after taxes, or $.03 a share, was recorded in the fourth quarter.
    (g) The effective tax rate for 1993 continuing operations before the net tax benefits for restructuring and FAS 109 impacts was 36.8 percent compared to last year's rate of 36.5 percent.
    (h) Net charges for discontinued operations for 1993 were primarily for litigation costs.  Net charges for 1992 were primarily from the effects of the disposal of the balance of IMCERA's investment in IMC Fertilizer Group, Inc.
                           IMCERA GROUP INC.
                               NET SALES
                            ($ in millions)
                                Quarter Ended           Year Ended
                                   June 30                June 30
                              1993         1992      1993         1992
    Mallinckrodt Medical
     Radiology & Cardiology$  105.4    $   87.3   $  381.4    $  293.7
     Nuclear Medicine          48.5        45.2      182.3       160.4
     Anesthesiology
      & Critical Care          70.4        48.7      219.4       166.2
     Total                     224.3       181.2      783.1       620.3
    Mallinckrodt Specialty Chemicals (a)
     Ongoing operations
      Pharmaceutical
       Specialties             57.6        53.1      212.0       183.0
      Catalyst, Performance
       & Lab Chemicals         51.8        53.7      183.3       184.9
    Total                     109.4       106.8      395.3       367.9
      Divested operations
       and Flavors business                  .4                   73.0
    Total                     109.4       107.2      395.3       440.9
     Pitman-Moore
      Animal Productivity      16.3        20.0       48.6        58.2
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