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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549 - 1004
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
DATE OF REPORT (Date of earliest event reported) December 5, 1995
MacDermid, Incorporated
(Exact name of registrant as specified in its charter)
Connecticut
(State or other jurisdiction of incorporation or organization)
Commission File Number: 0-2413
06-0435750
(I.R.S. Employer Identification Number)
245 Freight Street, Waterbury, Connecticut 06702
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 575-5700
None
(Former name or former address, if changed since last report.)
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ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS:
7 (b) Pro Forma Financial Information, Reflecting the Acquisition of the
Electronics & Printing Division of Hercules Incorporated.
I. Unaudited Pro Forma Condensed Combined Statement of Income for
the year ended March 31, 1995.
II. Unaudited Pro Forma Condensed Combined Statement of Income for
the nine months ended December 31, 1995.
III. Notes to Unaudited Pro Forma Condensed Combined Financial
Statements and associated Adjustments for Acquisition.
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PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
FOR THE YEAR ENDED MARCH 31, 1995
(Amount in Thousands Except Share and Per Share Amounts)
<CAPTION>
MacDermid, Electronics & Pro Forma Pro Forma
Incorporated Printing Div. Adjustments Combined
------------ ------------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales $182,100 $66,080 - $248,180
-------- ------- ------ --------
Costs & Selling, Technical
and Administrative
Expenses 161,963 52,676 ($1,907)(A)(B) 212,732
Interest Expense 2,029 251 5,956 (A)(D) 8,236
Other Expense - net (39) - 4,102 (C) 4,063
-------- ------- ------ --------
163,953 52,927 8,151 225,031
-------- ------- ------ --------
Earnings Before Income
Taxes 18,147 13,153 (8,151) 23,149
Income Taxes 7,005 5,251 (3,321)(E) 8,935
-------- ------- ------ --------
Net Earnings 11,142 7,902 (4,830) 14,214
Preferred Dividends - - (1,800)(F) (1,800)
-------- ------- ------ --------
Net Earnings -
Available for Common
Shareholders $ 11,142 $ 7,902 ($6,630) $12,414
======== ======= ====== =======
Average Common Shares
Outstanding:
Primary 3,141,855
=========
Fully Diluted 3,179,832
=========
Net Earnings Per Common Share:
Primary $3.95
=====
Fully Diluted $3.90
=====
Cash Dividends Per Common Share $0.60
=====
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<TABLE>
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
(Amount in Thousands Except Share and Per Share Amounts)
<CAPTION>
MacDermid, Electronics & Pro Forma Pro Forma
Incorporated Printing Div. Adjustments Combined
------------ ------------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales $154,323 $53,708 - $208,031
-------- ------- ------ --------
Costs & Selling, Technical
and Administrative
Expenses 134,841 40,492 ($419)(A)(B) 174,914
Interest Expense 1,806 49 3,874 (A)(D) 5,729
Other Expense - net 2,647 - 3,077 (C) 5,724
-------- ------- ------ --------
139,294 40,541 6,532 186,367
-------- ------- ------ --------
Earnings Before Income
Taxes 15,029 13,167 (6,532) 21,664
Income Taxes 6,011 5,267 (2,613)(E) 8,665
-------- ------- ------ --------
Net Earnings 9,018 7,900 (3,919) 12,999
Preferred Dividends - - (1,431)(F) (1,431)
-------- ------- ------ --------
Net Earnings -
Available for Common
Shareholders $ 9,018 $ 7,900 ($5,350) $ 11,568
======== ======= ====== ========
Average Common Shares
Outstanding:
Primary 2,918,759
=========
Fully Diluted 2,932,875
=========
Net Earnings Per Common Share:
Primary $3.96
=====
Fully Diluted $3.94
=====
Cash Dividends Per Common Share $0.45
=====
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited pro forma condensed combined financial statements ("Pro
Formas") are presented herewith for illustrative purposes only, giving
effect to the acquisition, as described and therefore would not
necessarily be indicative of the operating results and financial
position that might have been achieved had the combination occurred
as of an earlier date, nor are they necessarily indicative of operating
results and financial position which may occur in future periods.
On December 5, 1995, the Corporation completed the purchase of all
of the assets and certain of the liabilities of the Electronics and
Printing Division of Hercules Incorporated ("EPD") for a purchase
price of $130 million paid at closing and a further $15 million is
contingently payable in fiscal year 2004 in the event that the
consolidated cumulative earnings before interest, taxes on earnings,
depreciation and amortization exceed $250 million for the first four
full fiscal years, following December 5, 1995. The acquisition
included EPD's specialty chemical imaging business, which had annual
sales of $70 million, and it's manufacturing and research facilities.
The acquisition will be accounted for as a purchase in accordance
with the purchase method. The accompanying Pro Formas reflect the
acquisition as if it had occurred on April 1, 1994, the beginning of
the periods presented. There is no balance sheet presented with the
Pro Formas since a consolidated balance sheet which reflects the
acquisition as of December 31, 1995, has previously been reported
with the Corporation's report on Form 10-Q filed on February 14, 1995.
The actual results of EPD's business has been consolidated with the
Corporation's operations since the date of acquisition. The balance
sheet filed with the report on Form 10-Q dated February 14, 1995
includes a preliminary allocation of the purchase price subject to
adjustments after a final evaluation is completed. Any such
adjustments are not expected to be material.
OUTLOOK: ISSUES AND RISKS
This report and other Corporation reports and statements describe many
of the factors affecting the Corporation's future business prospects.
Investors should be aware of factors which could havea negative impact
on those prospects. These include political, economic or other
conditions such as currency exchange rates, inflation rates,
recessionary or expansive trends, taxes and regulations and laws
affecting the business; competitive products, advertising, promotional
and pricing activity; the degree of acceptance of new product
introductions in the marketplace; and the difficulty of forecasting
sales at certain times in certain markets.
TRANSACTIONS BETWEEN MACDERMID, INCORPORATED AND THE ELECTRONICS AND
PRINTING DIVISION OF HERCULES INCORPORATED
MacDermid, Incorporated has acted as a distributor of certain of EPD's
products overseas over the prior years. The volumes and amounts are
not material and, therefore, are not considered in the pro forma
adjustments.
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PRO FORMA INCOME STATEMENT ADJUSTMENTS
FOR THE YEAR ENDED MARCH 31, 1995
AND
THE NINE MONTHS ENDED DECEMBER 31, 1995
The unaudited pro forma income statements assume the EPD purchase as of
April 1, 1994. The adjustments are as follows:
March 31, December 31,
1995 1995
--------- ------------
(A) Cost of Sales 18 369
Direct Expenses (2,155) (1,410)
Interest Expense (251) (49)
To eliminate allocated Corporate overheads which, net of foreseeable
costs that must be replaced, will not be occurring after acquisition.
(B) Cost of Sales 88 516
Direct Expenses 142 106
To record additional depreciation based on allocation of the
purchase price to write up of property plant and equipment over
estimated useful lives of the respective assets on the straight-
line basis. Also, for the period ended December 31, 1995, the
need arises for recognition of higher cost of sales of $450 for
amortization of additional equipment on the balance sheet and
consigned to customers since the previous period end.
(C) Other Expense 4,102 3,077
To record amortization of intangibles allocated from the purchase
price over 25 years for goodwill and 11 years for patents,
trademarks and technology.
(D) Interest Expense 6,207 3,923
To record additional interest expense at the present interest rate
of 6.63% for the long-term debt and 6.39% on the credit facility
borrowing. The long-term debt repayment schedule and the assumed
average borrowings under the credit facility were applied as if
the borriwings began on April 1, 1994.
(E) Provision for Income Taxes 3,321 2,613
To provide for federal and state income taxes on the above
adjustments and adjust at the Corporation's prevailing effective
tax rate arising from the combination of the operating results in
each of the periods.
(F) Preferred Dividend 1,800 1,431
To reflect payment of the 6% dividend in kind on the redeemable
preferred stock Series A balance as of the end of the fiscal
year, issued to Hercules Incorporated as part of the purchase
price on the acquisition.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MacDermid, Incorporated
(Registrant)
By: John L. Cordani
John L. Cordani
Corporate Secretary
Date: February 20, 1996
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