First Trade Date for Hercules Incorporated
| Company Name | First Trade Date (yyyy-mm-dd) |
| Hercules Incorporated | 1929-07-11 |
| Company Name | Symbol |
| Hercules Incorporated | HPC |
| History and Business of Company (this information may include date of incorporation) | |
|
Hercules Incorporated ("Hercules" or the "Company") is a Delaware Corporation formed in 1912. The Company is a leading manufacturer and marketer of specialty chemicals and related services for a broad range of business, consumer and industrial applications. The Company is focused on maximizing cash flow and delivering shareholder value by concentrating on managed growth in its core businesses as well as ongoing improvements in its operations. Hercules operates on a global scale, with significant operations in North America, Europe, Asia and Latin America. Product sales occur in over 50 countries with significant revenue streams generated on four continents. The Company's principal products are chemicals used by the paper industry to increase paper and paperboard performance and enhance the manufacturing process; water-soluble polymers; polypropylene and polypropylene/polyethylene bicomponent fibers; and specialty resins. These products impart such qualities as durability, water-resistance and improved aesthetics for everyday consumer goods ranging from paper and packaging to toothpaste and diapers. The primary markets the Company serves include pulp and paper, paints and adhesives; construction materials; food, pharmaceutical and personal care; and industrial specialties, including oilfield, textiles and general industrial. While the Company's products are a relatively minor component of its end customers' total product cost, they frequently possess characteristics important to the functionality and aesthetics of the finished product or the efficient operation of the manufacturing process. Examples of the Company's products in consumer end-uses include strength additives for tissue and toweling, sizing agents for milk and juice cartons, fibers that comprise the inner and outer linings of disposable diapers and feminine hygiene products, thickeners in products such as toothpaste, shampoos and water-based paints, and water control additives for building products such as tile cements, grouts, stuccos, plasters and joint compounds. The Company also offers products and related services that improve and reduce the cost of the paper manufacturing processes, including water management programs that are designed to protect and maintain equipment and reduce operating costs. Although price is important to the Company's competitive strategy, the Company primarily competes based on the performance and quality of its products, combined with high quality service. The Company strives to continually improve its products by investing in technology. The Company has committed substantial resources to its research and development efforts, including expenditures, which totaled approximately $39 million in 2003. Such efforts enable the Company to consistently bring products to market which improve functional properties or which offer similar properties at a lower cost. Functional properties have become increasingly important, as customers have come to rely more on the Company to provide new solutions to improve their product offerings and processes. Additionally, the Company strives to make its products more cost-competitive by effectively managing production costs and advancing its application development with customers. The Company continually reviews its corporate strategy in order to compete most effectively in its evolving markets. From 1995 through 2000, the Company implemented internal and external initiatives to achieve growth. The Company divested a number of businesses that did not fit its strategy and acquired other businesses that complemented its strategy and product offerings. In 1998, the Company made five acquisitions. The largest of these was the purchase of BetzDearborn Inc., a global specialty company providing water and process treatment to a variety of commercial and industrial processes. Additionally, the Company acquired Houghton International's paper chemicals group; Citrus Colloids, a pectin manufacturer; Alliance Technical Products ("ATP"), a manufacturer of resins serving the water-based adhesives industry; and the 49% share of FiberVisions owned by its joint venture partner, making FiberVisions a wholly-owned subsidiary. Starting in 2000, the Company implemented a program designed to refocus its business by monetizing certain assets, thereby generating cash to reduce its debt, while concentrating on improving the efficiency, profitability and growth potential of the Company's core businesses. As part of this strategy, the Company actively sold non-core businesses. In June 2000, Aqualon sold its nitrocellulose operations, which it had decided to exit in December 1999 due to economic conditions brought on by a persistent worldwide over-supply. In September 2000, the Food Gums business, including Citrus Colloids, was sold to CP Kelco. In May 2001, the hydrocarbon resins business and select portions of the rosin resins business, including ATP, were sold to Eastman Chemical Company, the peroxy chemicals business was sold to GEO Specialty Chemicals Inc. and the Company's interest in a toner resin joint venture was sold to Sanam Corporation (collectively, the "Resins Divestitures"). The Company received in excess of $730 million in gross proceeds in consideration for these sales, which was used to reduce debt. In April 2002, the Company completed the sale of the BetzDearborn Water Treatment Business for $1.8 billion in cash, resulting in net after-tax proceeds of approximately $1.7 billion. The Company used the majority of the proceeds to prepay debt under its senior credit facility and ESOP credit facility (see Notes 6, 10 and 25 to Consolidated Financial Statements). In 2001, the Company's strategy was changed to include an aggressive and comprehensive cost reduction and work process redesign program to improve return on capital and cash flow, streamline organizational structure, improve work processes, consolidate manufacturing and non-manufacturing resources and better serve customers. By the end of 2002, the Company achieved approximately $160 million in annualized cost reductions. The Company has continued to implement additional initiatives in 2003 to further improve efficiency and productivity. As of December 31, 2003, 1,387 employees have left the Company pursuant to all initiatives instituted since 2001 and it is anticipated that the remaining identified employees will leave prior to June 30, 2004. Leveraging the BetzDearborn Water Treatment Business divestiture, the Company's strategy is now focused on continued productivity improvements in sales, earnings and capital employed; maximization of free cash flow through working capital improvements, reductions in interest; restructuring of the capital structure to reduce leverage and interest expense; and growth through product and services extensions, new products and bolt-on acquisitions. Pursuant to this strategy, on December 1, 2003, Hercules completed the acquisition of Jiangmen Quantum Hi-Tech Biochemical Engineering Co. Ltd. ("Quantum"). Quantum is a leading producer of carboxymethylcellulose (CMC) products in China. Located in Jiangmen City, Guangdong Province, the plant has current production capacity of 6,000 metric tons with room for expansion. Quantum's leading key markets include food, toothpaste, ceramics and paper, with annual sales of approximately $10 million. On February 12, 2004, the Company completed the sale of its minority ownership in CP Kelco ApS to a subsidiary of J. M. Huber Corporation for $27 million in cash. On March 1, 2004, the Company announced that the proposed acquisition of Meraklon S.p.A. will not occur as a result of difficulties encountered in obtaining regulatory approval. Over the long term, the Company is focused on increasing its competitive advantage through continuous productivity improvement, value-added innovation, leveraging strengths in key markets and improving growth and profitability through product and service extensions and bolt-on acquisitions. | |
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