Hercules Reports Third Quarter 2007 Results.(Financial report)

WILMINGTON, Del. -- Hercules Incorporated (NYSE:HPC) today reported net income for the quarter ended September 30, 2007 of $42.4 million, or $0.37 per diluted share, as compared to net income of $34.2 million, or $0.31 per diluted share, for the third quarter of 2006. Net income for the nine months ended September 30, 2007 was $150.4 million, or $1.31 per diluted share, as compared to a net loss of $3.4 million, or a loss of $0.03 per diluted share, for the same period in 2006.

Net income from ongoing operations(1) for the third quarter of 2007 was $53.4 million, or $0.46 per diluted share, an increase of 28% per diluted share as compared to net income from ongoing operations of $40.9 million, or $0.36 per diluted share, in the third quarter of 2006. Approximately $0.06 per share of the third quarter 2007 earnings are attributable to the sale of certain patents related to paper treatments to enhance printing.

Net income from ongoing operations(1) for the nine months ended September 30, 2007 was $134.9 million, or $1.17 per diluted share, an increase of 27% per diluted share versus the same period in 2006.

Cash flow from operations for the nine months ended September 30, 2007 was $247.5 million, an increase of $140.5 million as compared to the same period last year. The Company has now received $223.2 million of tax refunds during the year and expects to receive an additional $21.2 million in the first half of 2008. During the quarter, the Company purchased approximately 1.15 million shares of common stock for a cost of approximately $22.8 million, or $19.75 per share, pursuant to its previously announced $200 million share repurchase authorization.

Net sales in the third quarter of 2007 were $544.2 million, an increase of 6% from the same period last year. Volume and pricing increased by 4% and 1%, respectively. Rates of exchange also increased sales by 3%, while product mix was 2% unfavorable during the quarter. Net sales for the nine months ended September 30, 2007 were $1.596 billion, an increase of 8% as compared to the same period in 2006, excluding the impact of the FiberVisions transaction.

"We continue to demonstrate solid growth in revenues, earnings per share and cash flow," commented Craig A. Rogerson, President and Chief Executive Officer. "Our priority is to continue to invest in high return opportunities supporting our two global franchises. We also began returning excess cash flow…