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R.P. SCHERER REPORTS FIRST QUARTER FINANCIAL RESULTS

 TROY, Mich., July 27 /PRNewswire/ -- R.P. Scherer Corporation (NYSE: SHR) reported today first quarter earnings per share of $.36, compared to $.35 for the same period a year ago. The Company said that, due to the continuing sluggishness of the German pharmaceutical market, it experienced only moderate first quarter growth in sales and earnings in comparison with the same period a year ago.
 Sales and Backlog
 Sales were $108.5 million for the first fiscal quarter ended June 30, 1993, representing a 5 percent increase over sales of the first quarter last year. At constant exchange rates, the sales increase would have been 9 percent.


Sales backlogs worldwide were $102.4 million as of June 30, 1993, 13 percent below (4 percent below in constant dollars) the $118.2 million from a year ago, primarily due to the situation in Germany.
 The first quarter sales reflect the continued strength of the U.S. operations; however, sales of European operations were mixed. Germany, which represented 38 percent of consolidated sales in the first quarter last year, experienced a 15 percent decrease in sales from last year's first quarter. All the other Scherer subsidiaries reported increased revenues.
 Operating Income
 The Company earned operating income of $23.3 million in the first fiscal quarter, representing a decrease of 12 percent, (11 percent in constant dollars) compared with the operating income for the same period of last year. The operating margin at 21.5 percent of sales, although better than 20.2 percent recorded in the quarter ended March 31, 1993, was still less than the 25.5 percent for the quarter ended June 30, 1992.
 The first quarter decrease in consolidated operating income reflects a $3.7 million decrease in the German subsidiary's operating earnings which is only partially offset by a combined 7 percent operating income increase in all other operations. This modest operating income gain reflects a higher proportion of health and nutritional sales this quarter than in the first quarter last year.
 Operating income also reflects a 31 percent increase in R&D expense, which is the result of ongoing expenditures associated with the development of the Company's advanced drug delivery technologies. In contrast, selling and administrative expenses remained flat with expense levels of the first quarter last year, representing currently only 13 percent of sales.
 First quarter results for Zydis and Pulsincap were ahead of plan, with Zydis revenues during this period increasing substantially from a year ago.
 Net Income and Earnings per Share
 Net income for the first quarter was $8.6 million and reflects reduced interest expense and a lower tax rate compared with the same period a year ago. Earnings per share of $.36 represent 3 percent improvement compared with the $.35 in reported earnings per share a year ago (before accounting change). The decline in income of the German subsidiary had the effect of lowering the earnings per share by approximately $.04, while the stronger dollar reduced EPS by $.01.
 R.P. Scherer Corporation, a leading 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(TM), 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 18 facilities in 11 countries.
 R.P. SCHERER CORPORATION AND SUBSIDIARY
 Summary of Financial Results
 (In Thousands, Except Per Share Data)
 Three Months
 Ended June 30,
 Percent
 1993 1992 Change
 -------------------
 SUMMARY FINANCIAL INFORMATION:
 Net Sales $108,454 $103,353 5
 -------- --------
 Operating Income $23,268 $26,391 (12)
 -------- --------
 Operating Margin exclusive of Research
 and Development Expenses 24.3 27.8
 -------- --------
 Net Income before Accounting Change $8,596 $8,388 3
 -------- --------
 Net Income per Share before Accounting $0.36 $0.35
 Change -------- --------
 SUMMARY INCOME STATEMENT DATA: 1993 1992
 Net Sales $108,454 $103,353
 Cost of Sales 67,746 60,273
 Selling and Administrative Expenses 14,332 14,313
 Research and Development Expenses 3,108 2,376
 -------- --------
 Operating Income 23,268 26,391
 Interest Expense 5,700 6,732
 Interest Earned and Other (590) (991)
 -------- --------
 Income from Operations before Income
 Taxes, Minority Interests and
 Accounting Change 18,158 20,650
 Income Taxes 6,448 7,974
 Minority Interests 3,114 4,288
 -------- --------
 Income from Operations before
 Accounting Change 8,596 8,388
 Cumulative Effect of Accounting Change --- 974
 -------- --------
 Net Income $8,596 $9,362
 -------- --------
 Per Common Share:
 Income Before Other Items $0.36 $0.35
 Accounting Change --- 0.04
 -------- --------
 Net Income $0.36 $0.39
 -------- --------
 Average Number of Common Shares 24,175 24,138
 -0- 7/27/93
 /CONTACT: Nicole Williams, executive vice president and CFO, R.P. Scherer, 313-649-0900/
 (SHR)


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

KE -- DE022 -- 6498 07/27/93 18:14 EDT
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Date:Jul 27, 1993
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