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West Pharmaceutical Services, Inc. Announces Fourth Quarter and Full Year 2000 Results

LIONVILLE, Pa., Feb. 27 /PRNewswire/ -- West Pharmaceutical Services, Inc. (NYSE: WST) today reported financial results for the fourth quarter and year-ended December 31, 2000. The results are consistent with guidance provided by management on January 29, 2001.

Net income for 2000 was $1.6 million, or $0.11 per share, compared with net income of $38.7 million, or $2.59 per share, in 1999. Excluding fourth quarter restructuring charges and unusual tax benefits in both years, net income in 2000 was $15.5 million, or $1.08 per share, compared with $36.3 million, or $2.44 per share, in 1999. Net sales for 2000 were $430.1 million compared with $469.1 million in 1999. The strong U.S. dollar reduced reported sales and net income by $19.0 million and $0.19 per share, respectively.

Sales for the fourth quarter of 2000 were $102.5 million compared with $115.4 million in 1999. Excluding the previously announced net restructuring charge of $15.5 million, or $1.08 per share, net income in the fourth quarter of 2000 was $2.4 million, or $0.17 per share. This compares with net income for the fourth quarter of 1999 of $8.5 million, or $0.58 per share, excluding a restructuring charge and unusual tax benefits reported in that quarter. Reported net income was $10.2 million, or $0.69 per share, in the fourth quarter of 1999.

The Company continues to work with UBS Warburg to review strategic alternatives and identify opportunities for enhancing shareholder value. The Company does not intend to comment further on this review until it has reached some conclusion.

William G. Little, Chairman and Chief Executive Officer, commented, "As these results show, 2000 was the Company's most difficult year in recent history. An extraordinary combination of market factors contributed to our disappointing financial results. However, West continues to fund growth opportunities and develop new products and capabilities in all of its business segments. These activities bode well for 2001 and beyond. Based on forecasts from our customers, the quality of our backlog and initiatives we have undertaken to reduce costs, we firmly believe that the worst is behind us. Furthermore, based on our current visibility, we anticipate sequential earnings and sales increases this quarter."

West Pharmaceutical Services applies value-added technologies to the process of bringing new drug therapies and healthcare products to global markets. West's technologies include the design and manufacture of packaging components for pharmaceutical, healthcare and consumer products; research and development of drug delivery systems; contract laboratory services; clinical services; and other services that support the manufacturing, filling and packaging of pharmaceutical and healthcare products. For more information, visit the West Pharmaceutical Services website at http://www.westpharma.com.

Certain statements contained in this Press Release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate," "expect," "intend," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including but not limited to (1) sales demand, (2) the timing and success of customers' projects, (3) competitive pressures, (4) the strength or weakness of the U.S. dollar, (5) inflation and (6) the cost of raw materials. The Company does not intend to update these forward-looking statements.

For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the Securities and Exchange Commission.

                      WEST PHARMACEUTICAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands, except per share data)

                                                   Quarter Ended
                                       December 31, 2000    December 31, 1999

    Net sales                         $102,500    100%       $115,400   100%
    Cost of goods and services sold     80,100     78          79,600    69
    Gross profit                        22,400     22          35,800    31
    Selling, general and
     administrative expenses            16,800     16          22,000    19
    Restructuring charge                20,800     20             700    --
    Other (income), net                   (500)    --          (1,200)   (1)
    Operating profit (loss)            (14,700)   (14)         14,300    12
    Interest expense                     3,500      4           2,700     2
    Income (loss) before income taxes
     and minority interests            (18,200)   (18)         11,600    10
    Provision for income taxes          (4,700)    (5)          1,900     2
    Minority interests                      --     --             100    --
    Income (loss) from
     consolidated operations           (13,500)   (13)%         9,600     8%
    Equity in net income of
     affiliated companies                  400                    600
    Net income (loss)                 $(13,100)               $10,200
    Net income (loss) per share:
    Basic                               $(0.91)                 $0.69
    Assuming dilution                   $(0.91)                 $0.68
    Average common shares outstanding   14,318                 14,743
    Average shares outstanding
     assuming dilution                  14,318                 14,852

On October 1, 2000, the Company adopted EITF 00-10 "Accounting for Shipping and Handling Fees and Costs," resulting in freight costs that have been reimbursed by customers now being reported in both sales and costs of goods sold. The restatement was applied retroactively to January 1, 2000 and the restated net sales and costs of goods sold for the nine months ended September 30, 2000 both increased $2,700.

                      WEST PHARMACEUTICAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands, except per share data)

                                                Twelve Months Ended
                                     December 31, 2000     December 31, 1999

    Net sales                         $430,100    100%       $469,100   100%
    Cost of goods and services sold    326,700     76         324,800    69
    Gross profit                       103,400     24         144,300    31
    Selling, general and
     administrative expenses            67,700     16          77,900    17
    Restructuring charge                20,800      5             700    --
    Other (income), net                   (300)    --          (1,200)   --
    Operating profit (loss)             15,200      3          66,900    14
    Interest expense                    13,100      3          10,400     2
    Income (loss) before income taxes
     and minority interests              2,100     --          56,500    12
    Provision for income taxes           1,500     --          18,400     4
    Minority interests                     200     --             200    --
    Income (loss) from
     consolidated operations               400      0%         37,900     8%
    Equity in net income of
     affiliated companies                1,200                     80
    Net income (loss)                   $1,600                $38,700
    Net income (loss) per share:
    Basic                                $0.11                  $2.59
    Assuming dilution                    $0.11                  $2.57
    Average common shares outstanding   14,407                 14,914
    Average shares outstanding
     assuming dilution                  14,409                 15,048

On October 1, 2000, the Company adopted EITF 00-10 "Accounting for Shipping and Handling Fees and Costs," resulting in freight costs that have been reimbursed by customers now being reported in both sales and costs of goods sold. The restatement was applied retroactively to January 1, 2000 and the restated net sales and costs of goods sold for the nine months ended September 30, 2000 both increased $2,700.

                      WEST PHARMACEUTICAL SERVICES, INC.
                        OPERATING SEGMENT INFORMATION
                                (in thousands)

                                     Three Months Ended   Twelve Months Ended
                                        December 31,          December 31,

    Net Sales:                         2000       1999       2000      1999
    Device product development      $85,800    $97,100   $361,900  $384,000
    Contract services                15,900     17,900     66,700    83,800
    Drug delivery research              800        400      1,800     1,300
    Corporate and unallocated            --         --       (300)       --
    Consolidated Total             $102,500   $115,400   $430,100  $469,100


                                    Three Months Ended    Twelve Months Ended
                                       December 31,          December 31,

    Operating Profit (Loss):           2000       1999       2000      1999
    Device product development      $13,800    $25,100    $70,000   $93,400
    Contract services                (2,600)    (1,100)   (12,000)    4,300
    Drug delivery research           (1,700)    (2,500)    (9,000)   (7,700)
    Corporate and unallocated       (24,200)    (7,200)   (33,800)  (23,100)
    Consolidated Total             $(14,700)   $14,300    $15,200   $66,900

Corporate and unallocated segment results include the impact of restructuring charges of $20,800 and $700 recorded in the fourth quarter 2000 and 1999, respectively. SOURCE West Pharmaceutical Services, Inc.

CONTACT: Stephen M. Heumann, Vice President and Treasurer of West Pharmaceutical Services, Inc., 610-594-3346; or Investors - Robert P. Jones or Theresa Vogt, both of Morgen-Walke Associates, 212-850-5600, for West Pharmaceutical Services, Inc./