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PENWEST REPORTS RECORD SALES, LOWER EARNINGS

 BELLEVUE, Wash., June 16 /PRNewswire/ -- PENWEST (NASDAQ: PENW) reported record sales for the third quarter and nine months ended May 31, but said the effects of a flood at its Cedar Rapids plant brought earnings down from the comparable quarter last year.
 Tod R. Hamachek, president and chief executive officer, said earnings for the quarter were $1.4 million, or 20 cents per share, down from $1.6 million, or 22 cents per share, in the third quarter of 1992. He said an April flood of the Cedar Rapids River, adjacent to the company's Penford Products plant, shut down production for four days. The event claimed $425,000, or 4 cents per share, of net earnings.
 Sales for the quarter were a record $34.5 million, up from $31.7 million, and sales for the nine months were $99.8 million, compared with $92.5 million, also a record.
 Earnings for the nine months were $4.9 million, or 69 cents per share, compared with earnings (before cumulative accounting changes) of $5.6 million, or 75 cents per share, in the corresponding period a year ago. After the accounting changes, for post-retirement health benefits and income taxes, net earnings in the prior-year period were $1.2 million, or 16 cents per share.
 "The core business, especially, is showing continuing strength," Hamachek said. "A 33-percent increase in production capacity is coming on line this month, and the current demand for specialty starches is well in excess of prior capacity. Market conditions are generally positive and should support further volume growth in the months ahead."
 PENWEST develops, manufactures and markets specialty carbohydrate and synthetic polymer chemicals for papermaking. The company also produces and markets specialty food ingredients, agricultural nutrition supplements and pharmaceutical excipient products, the non-active ingredients in tablets and capsules.
 PENWEST FINANCIAL HIGHLIGHTS
 (Unaudited, dollars in thousands, except per-share data)
 Three Months Nine Months
 Ended May 31: 1993 1992 1993 1992
 Sales $ 34,501 $ 31,652 $ 99,835 $ 92,525
 Net income 1,385 1,644 4,904 5,570(A)
 Weighted average common
 shares outstanding 7,098,687 7,489,820 7,149,937 7,467,027
 Earnings per share $ 0.20 $ 0.22 $ 0.69 $ 0.75(A)
 NOTE (A): Before cumulative accounting changes
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited, dollars in thousands, except per-share data)
 Three Months Nine Months
 Ended May 31: 1993 1992 1993 1992
 Sales $ 34,501 $ 31,652 $ 99,835 $ 92,525
 Cost of sales 25,216 23,489 72,393 67,247
 Gross margin 9,285 8,163 27,442 25,278
 Operating expenses 6,964 5,836 19,565 17,707
 Income from operations 2,321 2,327 7,877 7,571
 Investment income 247 510 814 1,573
 Interest expense (582) (721) (1,697) (1,758)
 Income before taxes 1,986 2,116 6,994 7,386
 Income taxes 601 472 2,090 1,816
 Cumulative accounting changes --- --- --- (4,387)
 Net income $ 1,385 $ 1,644 $ 4,904 $ 1,183
 Weighted average shares
 and equivalents 7,098,687 7,489,820 7,149,937 7,467,027
 Earnings per share before cumulative
 accounting changes $ 0.20 $ 0.22 $ 0.69 $ 0.75
 Cumulative accounting changes --- --- --- (0.59)
 Earnings per share $ 0.20 $ 0.22 $ 0.69 $ 0.16
 BALANCE SHEET DATA
 (Unaudited, dollars in thousands)
 May 31, 1993 May 31, 1992
 Investments $ 16,735 $ 20,102
 Long-term debt 50,205 31,085
 Shareholders' equity 62,717 60,132
 Current assets 46,493 47,214
 Current liabilities 17,427 17,135
 Total assets $ 154,564 $ 128,437
 -0- 6/16/93
 /CONTACT: Jeffrey T. Cook of PENWEST, 206-462-6000; or Robley W. Sundmacher of CCI, 206-728-1778, for PENWEST/
 (PENW)


CO: PENWEST ST: Washington IN: CHM SU: ERN

JH-SW -- SE003 -- 2510 06/16/93 09:47 EDT
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Publication:PR Newswire
Date:Jun 16, 1993
Words:631
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