WILMINGTON, DE, April 21, 2008 . . . Hercules Incorporated (NYSE: HPC) today reported net income for the quarter ended March 31, 2008 of $32.4 million, or $0.29 per diluted share, as compared to $80.3 million, or $0.70 per diluted share, for the first quarter of 2007.⁽¹⁾ The first quarter of 2007 included approximately $0.41 per diluted share from the resolution of IRS audit items for the years 1993-2003.

Net income from ongoing operations(2) for the first quarter of 2008 was $38.9 million, or $0.35 per diluted share, an increase of 13% per diluted share compared to $35.7 million, or $0.31 per diluted share, in the first quarter of 2007. Please refer to Table 2 for a reconciliation of net income from ongoing operations to reported net income.

Net sales in the first quarter of 2008 were $558.3 million, an increase of 11% from the same period last year. Volume and pricing increased by 7% and 1%, respectively. Rates of exchange increased sales by 5% during the quarter, while mix was 2% unfavorable.

Net sales in the first quarter of 2008 increased in all major regions of the world versus the prior year. Sales increased 6% in North America, 25% in Latin America, 15% in Europe (3% excluding the impact of the Euro), and 15% in Asia Pacific.

Reported profit from operations in the first quarter of 2008 was $67.4 million, a decrease of 4% compared with $70.2 million for the same period in 2007.⁽¹⁾ Profit from ongoing operations in the first quarter of 2008 was $74.6 million, an increase of 3% compared with $72.2 million in the first quarter of 2007.

Cash flow from operations for the quarter ended March 31, 2008 was $29.7 million as compared to $25.8 million for the same period last year.

"The first quarter results continue to demonstrate both the strength of our global businesses and of our Company," said Craig A. Rogerson, President and Chief Executive Officer. "We delivered another quarter of strong sales growth, solid earnings and cash flow against the backdrop of a challenging U.S. economy and elevated and escalating raw material costs."

Interest and debt expense was $16.7 million in the first quarter of 2008, down $0.5 million or 3% compared with the first quarter of 2007, reflecting lower outstanding debt balances and improved debt mix, partially offset by losses on cross currency interest rate swaps.

Total debt was $807.6 million at March 31, 2008, an increase of $11.6 million from year-end 2007. Cash and cash equivalents were $99.1 million at March 31, 2008, as compared to $116.5 million at year-end 2007.

Capital spending was $22.1 million in the first quarter as compared to $24.2 million in the same period last year. Cash outflows for severance, restructuring and other exit costs were $6.1 million in the quarter.

The Company purchased 1.3 million shares of common stock at a cost of $23.3 million during the first quarter of this year. The Company has now purchased 4.1 million shares for $77.7 million under its $200 million authorization.

Segment Results – Ongoing Basis⁽²⁾

In the Aqualon Group, net sales increased 17% while profit from ongoing operations was flat in the first quarter as compared with the first quarter of 2007. All business units had increased sales in the first quarter as compared to the prior year. In the aggregate, the sales increase was driven by 14% higher volume, including 2% from the 2007 specialty surfactants acquisition, 1% higher prices and 5% favorable rates of exchange, partially offset by 3% unfavorable product mix.

Coatings and construction sales increased 19% in the first quarter of 2008 as compared to the same period of last year, due to 15% higher volume, 1% increased pricing and 7% favorable rates of exchange, partially offset by 4% negative mix. Sales into the coatings markets were up 19% in the first quarter of 2008 as compared to the same period of last year. Strong volume growth in China, the Middle East, South America and Eastern Europe, offset a soft North American market. Construction market sales increased 19% as compared to the first quarter of last year. Strong growth was achieved in Asia, the Middle East and Eastern Europe, whereas other regions were lower. Pricing improvements were achieved in both the coatings and construction markets.

Regulated industry sales increased 14% in the first quarter of 2008 as compared to the same period of last year, primarily due to 5% higher volume, 3% improved product mix, 2% increased pricing and 4% favorable rates of exchange. Sales were higher in all segments. Sales increased in the pharmaceutical, personal care and food markets by 29%, 14% and 6%, respectively, as compared to the first quarter of last year. Growth was achieved in all major regions of the world.

Energy and specialties sales increased 15% in the first quarter of 2008 as compared to the same period of last year. The increase was due to 19% higher volumes, 1% higher prices, and 3% favorable rates of exchange, partially offset by 8% unfavorable product mix. Energy sales increased 12% and specialties increased 18%, as compared to the prior year. Sales of both energy and specialty businesses grew in most major regions of the world. Price increases were achieved across all product families.

Profit from ongoing operations was flat, primarily as a result of the higher volume and the associated contribution margin, increased selling prices, lower pension expenses and favorable rates of exchange, offset by higher raw material, transportation and utility costs and planned and unplanned shutdowns. Margins were adversely impacted as price increases did not fully offset higher raw material, freight and utility costs, and by the previously announced incident at our methylcellulose ("MC") joint venture in China and a planned maintenance shutdown at our Doel, Belgium MC plant.

"Aqualon's strong top line growth reflects our global scale and presence as well as continued growth in fast growing markets including China, the Middle East and Latin America," said Mr. Rogerson. "Aqualon's global diversity enabled us to offset weaker demand in some of our North American markets."

In the Paper Technologies and Ventures Group, net sales in the first quarter increased 7% and profit from ongoing operations increased 7% compared with the same quarter in 2007.

Paper Technologies sales increased 2% due to 6% favorable rates of exchange, partially offset by 1% lower prices, and 3% unfavorable product mix. Volume in the aggregate was flat. Sales in fast growing markets were up 16% compared to the prior year. Modest price increases were achieved in North America while pricing was lower in both Europe and Asia. Sales of new products continued to drive growth in overall sales and profitability.

Ventures sales increased 23% primarily due to 7% higher volume, 7% higher prices, 4% improved product mix, and 5% favorable rates of exchange. Sales increased in all Ventures business units. Significant growth was achieved in both building products and synthetic lubricants. Pricing was favorable in most Venture businesses.

The increase in profit from ongoing operations reflects favorable rates of exchange, higher volume and improved selling prices in Ventures, and lower pension costs, partially offset by higher raw material and utility costs, and increased SG&A costs.

"The Venture businesses continue to deliver improved results, while many of our global Paper Technology markets are growing more modestly," commented Mr. Rogerson. "Sales of higher margin new products continue to support margins overall."

Outlook

"We remain optimistic about revenue, earnings and cash flow growth in 2008," said Mr. Rogerson. "We expect significant raw material, freight and utility cost headwinds, but expect announced and additional price increases to partially offset these costs. Despite these challenges, we expect profitability to improve through higher utilization of our recent capacity expansions and the impact of our new product introductions. We continue to pursue acquisition opportunities to expand our product offerings and accelerate value creation for our shareholders."

First Quarter Conference Call and Webcast

The Company will discuss first quarter 2008 results tomorrow, April 22nd, at 8:00 a.m. EDST.

Teleconference: (973) 935-8511 – Ask for Conference ID # 42401160.  Please call 10 to 15 minutes prior to the call.

Webcast: Listen-only mode via Internet broadcast from www.herc.com under Shareholder Information.

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Hercules manufactures and markets chemical specialties globally for making a variety of products for home, office and industrial markets. For more information, visit the Hercules website at www.herc.com.

This news release includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, reflecting management's current analysis and expectations, based on what management believes to be reasonable assumptions. The words or phrases "will likely result," "should," "are expected to," "will continue," "is anticipated," "expect," "estimate," "project" or similar expressions are among those which identify forward-looking statements. Forward-looking statements may involve known and unknown risks, uncertainties and other factors, which may cause the actual results to differ materially from those projected, stated or implied, depending on such factors as: ability to generate cash, changes resulting from ongoing reviews of tax liabilities, ability to raise capital, ability to refinance, ability to execute productivity improvements and reduce costs, the success of outsourcing initiatives, ability to identify, execute and integrate acquisitions, ability to execute divestitures, ability to increase prices, business climate, business performance, changes in tax laws or regulations and related liabilities, changes in tax rates, economic and competitive uncertainties, higher raw material, manufacturing, freight and utility costs, reduced level of customer orders, changes in strategies, risks in developing new products and technologies, risks in developing new market opportunities or expanding capacity, environmental and safety regulations and clean-up costs, the impact of adverse events relating to the operation of the Company's facilities and to the transportation and storage of hazardous materials (including equipment malfunction, explosions, fires, spills, and the effects of severe weather conditions), foreign exchange rates, asset dispositions, the impact of changes in the value of pension fund assets and liabilities, changes in generally accepted accounting principles, adverse legal and regulatory developments, including increases in the number or financial exposures of claims, lawsuits, settlements or judgments, the financial capacity of settling insurers, the impact of increased accruals and reserves for such exposures, the outcome of litigation and appeals, and adverse changes in economic and political climates around the world, including terrorist activities, international hostilities and potential natural disasters. Accordingly, there can be no assurance that the Company will meet future results, performance or achievement, expressed or implied by such forward-looking statements, or continue the stock repurchase program or the payment of dividends. As appropriate, additional factors are contained in reports filed by the Company with the Securities and Exchange Commission. This paragraph is included to provide safe harbor for forward-looking statements, which are not generally required to be publicly revised as circumstances change, and which the Company does not intend to update.