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R.P. SCHERER REPORTS THIRD-QUARTER FINANCIAL RESULTS

 TROY, Mich., Jan. 26 /PRNewswire/ -- R.P. Scherer Corporation (NYSE: SHR) announced today improved sales and operating income for the third quarter compared with the same period a year ago.
 Sales and Backlog
 Sales were $98.0 million for the third fiscal quarter ended Dec. 31, 1992, representing a 15-percent increase over sales of the third quarter last year. Sales backlogs worldwide, translated at Dec. 31, 1992, foreign currency exchange rates, were $100.0 million as of Dec. 31, 1992, up 3 percent from a year ago. Measured on a comparable basis using the same exchange rates as last year, backlogs would have shown a 12-percent increase.
 The improved third-quarter revenue performance was led by the U.S. operations with a sales increase of 34 percent over the same period last year. In their local currencies, sales of European operations, with the exception of Germany, increased 17 percent over sales in last year's third quarter. The Company's German subsidiary, which is faced with a difficult economic and regulatory environment locally, posted only a 9-percent increase in sales over the third quarter last year.
 Operating Income
 The Company earned operating income of $21.0 million in the third fiscal quarter, representing an increase of 10 percent compared with operating income on a pro-forma basis for the same period last year. Unlike the first half of the current fiscal year which benefited from the impact of the weaker U.S. dollar, the third quarter was adversely impacted by the recent strengthening of the U.S. dollar. On a constant exchange rate basis, sales and operating income increased by 17 percent and 12 percent, respectively, in the third quarter and 16 percent and 18 percent, respectively, for the first nine months when compared to the same periods last year. Given the continued strength of the dollar, the Company does not expect to report a favorable impact from exchange rates in the fourth-quarter 1993 results. The Company's continued higher investment in research and development is partially responsible for this quarter's operating margin of 21.5 percent, which is lower than last year's third-quarter operating margin of 22.5 percent.
 The Company's ZYDIS technology continues its impressive growth, having more than doubled its revenues for the first nine months of Fiscal 1993, compared with a year ago.
 Net Income
 Income from continuing operations for the third quarter was $7.0 million, or $.29 per share, which represents an increase of 26 percent from pro-forma net earnings of $.23 per share for the same quarter last year. The pro-forma Dec. 31, 1991, results reflect adjustments for the impact of the repayment of debt and the redemption of the Company's 17 percent exchangeable preferred stock, both of which are related to the Company's October 1991 public stock offering. Further, the pro-forma results exclude the loss on discontinued operations and the one-time charge for the accounting change related to post-retirement benefits.
 In the third quarter of Fiscal 1993, the Company repurchased $42.5 million face value of its 14 percent Senior Subordinated Debentures, representing approximately 25 percent of the Debentures previously outstanding. The aggregate purchase cost was approximately $49.3 million, which was primarily funded with cash on-hand and, to a lesser extent, borrowings under the Company's bank credit facility. Related to this repurchase in the third quarter is an extraordinary loss of $8.4 million, or $.35 per share. This results in the Company recognizing a net loss of $(1.4) million, or $(.06) per share, for the quarter ended Dec. 31, 1992.
 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(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)
 Three Months
 Ended Dec. 31,
 ------------------
 Actual Pro-Forma Pct.
 SUMMARY FINANCIAL INFORMATION: 1992 1991 Chg.
 -------- --------
 Net Sales $ 97,966 $ 85,015 15
 ======== ========
 Operating Income $ 21,029 $ 19,114 10
 ======== ========
 Net Income from Continuing Operations $ 7,037 $ 5,427
 ======== ========
 Net Income per Common Share
 from Continuing Operations $ 0.29 $ 0.23 26
 ======== ========
 ACTUAL INCOME STATEMENT DATA:
 Net Sales $ 97,966 $ 85,015
 Cost of Sales 60,423 51,105
 Selling and Administrative Expenses 13,664 12,380
 Stock Compensation Expense and Other - 12,345
 Research and Development Expenses 2,850 2,416
 -------- -------
 Operating Income 21,029 6,769
 Interest Expense 6,099 7,875
 Interest Earned and Other (402) (1,100)
 -------- --------
 Income (loss) from Continuing Operations
 Before Income Taxes, Minority Interests,
 and Extraordinary Loss 15,332 (6)
 Income Taxes 5,837 6,083
 Minority Interests 2,458 1,865
 -------- --------
 Income (Loss) from Continuing Operations
 Before Extraordinary Loss 7,037 (7,954)
 Extraordinary Loss on Early
 Retirement of Debt 8,392 2,067
 -------- --------
 Net Loss (1,355) (10,021)
 Preferred Stock Dividends - 1,600
 -------- --------
 Net Loss Attributable
 to Common Shares $ (1,355) $(11,621)
 ======== ========
 Per Common Share:
 Income (Loss) Before Other Items $ 0.29 $ (0.48)
 Extraordinary Loss (0.35) (0.10)
 -------- --------
 Net Loss per Common Share $ (0.06) $ (0.58)
 ======== ========
 Average Number of Common Shares 24,277 19,899
 R.P. SCHERER CORPORATION AND SUBSIDIARY
 Summary of Financial Results
 (In Thousands, Except Per Share Data)
 Nine Months
 Ended Dec. 31,
 ------------------
 Actual Pro-Forma Pct.
 SUMMARY FINANCIAL INFORMATION: 1992 1991 Chg.
 -------- -------- ----
 Net Sales $298,990 $247,563 21
 ======== ========
 Operating Income $ 68,541 $ 56,328 22
 ======== ========
 Net Income from Continuing Operations $ 21,431 $ 16,877
 ======== ========
 Net Income per Common Share
 from Continuing Operations $ 0.89 $ 0.70 27
 ======== ========
 ACTUAL INCOME STATEMENT DATA:
 Net Sales $298,990 $247,563
 Cost of Sales 180,746 150,093
 Selling and Administrative Expenses 41,179 34,743
 Stock Compensation Expense and Other - 12,345
 Research and Development Expenses 8,524 6,399
 -------- --------
 Operating Income 68,541 43,983
 Interest Expense 21,789 30,180
 Interest Earned and Other (2,643) (2,559)
 -------- --------
 Income from Continuing Operations Before
 Income Taxes, Minority Interests, Accounting
 Change, and Extraordinary Loss 49,395 16,362
 Income Taxes 20,450 17,038
 Minority Interests 7,514 5,674
 -------- --------
 Income (Loss) from Continuing Operations
 before Accounting Change and
 Extraordinary Loss 21,431 (6,350)
 Loss from Discontinued Operation 647 16,538
 -------- --------
 Income (Loss) Before Accounting Change
 and Extraordinary Loss 20,784 (22,888)
 Cumulative Effect of Accounting Change
 for Other Postretirement Benefits
 (SFAS No. 106) - 4,917
 -------- --------
 Income (Loss) Before Extraordinary Loss 20,784 (27,805)
 Extraordinary Loss on Early
 Retirement of Debt 8,392 2,067
 -------- --------
 Net Income (Loss) 12,392 (29,872)
 Preferred Stock Dividends - 6,372
 -------- --------
 Net Income (Loss) Attributable
 to Common Shares $ 12,392 $(36,244)
 ======== ========
 Per Common Share:
 Income (Loss) Before Other Items $ 0.89 $ (1.01)
 Loss from Discontinued Operation (0.03) (1.32)
 Accounting Change (SFAS No. 106) - (0.39)
 Extraordinary Loss (0.35) (0.16)
 -------- --------
 Net Income (Loss) per Common Share $ 0.51 $ (2.88)
 ======== ========
 Average Number of Common Shares 24,197 12,571
 -0- 1/26/93
 /CONTACT: 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 -- DE025 -- 9295 01/26/93 16:57 EST
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