UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549-1004
Form 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 1996.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
Commission file number 0-2413
MACDERMID, INCORPORATED
(Exact name of Registrant as specified in its Charter)
Connecticut 06-0435750
(State of incorporation) (I.R.S. Employer I.D. No.)
245 Freight Street, Waterbury, Connecticut 06702-0671
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code (203) 575-5700
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Title of Class - Common Stock Without Par Value
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ( )
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to the filing requirements for the past 90 days. Yes (X) No ( )
The aggregate market value of the voting stock held by nonaffiliates of
the Registrant as of May 31, 1996 (based on the closing price on such date
as reported on Nasdaq Stock Market) was $113,722,000.
The number of shares of Registrant's Common Stock outstanding as of May
31, 1996 was 2,791,530 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 1996 Annual Report to Shareholders are
incorporated by reference into Parts I and II hereof and filed as Exhibit
13 to this Report. The Proxy Statement mailed on or about June 26, 1996 to
the Corporation's stockholders in connection with the annual meeting
scheduled for July 25, 1996 are incorporated herein by reference into Part
III hereof.
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PART I
Item 1(a) GENERAL DEVELOPMENT OF BUSINESS
Incorporated in Connecticut in 1922, MacDermid, Incorporated and its
subsidiaries (collectively, "MacDermid" or the "Corporation") develops,
produces and markets a broad line of specialty chemical products which
are used in the metal and plastic finishing and electronics industries.
MacDermid offers a line of horizontal processing equipment used in the
production of printed circuit boards and in chemical machining, through
its wholly-owned subsidiary, MacDermid Equipment, Inc. MacDermid also
markets chemical supplies and equipment produced by others.
In December 1995, MacDermid acquired the assets, subject to certain
liabilities of the Electronics and Printing Division of Hercules
Incorporated, forming a new wholly-owned subsidiary, MacDermid Imaging
Technology, Inc., for that purpose. The acquired business consists
principally of the manufacture and sale of proprietary products
including photoresists, used to imprint electrical pattern on circuit
boards, and photopolymer printing, which reproduces quality graphics
on package printing and in-store displays. The acquisition, accounted
for as a purchase transaction, was financed through bank borrowings and
the issuance of preferred stock.
In May 1995, the Corporation acquired certain assets of the Allied-
Kelite Company (a subsidiary of Witco Corporation), a major supplier of
plating surface preparation proprietary chemical products to automotive,
electronics hardware and other industries. The business, located
primarily in the United States includes licensing of technology to
companies in several other countries. The acquisition, accounted for as
a purchase and financed through borrowings, complements the Corporation's
existing metal finishing and electronics business and provides cost
benefits from consolidation.
On August 1, 1994, MacDermid acquired, for approximately $26 million,
851,899 shares of its common stock (approximately 24% of the shares then
outstanding) through a "Dutch Auction" self-tender offer. The self-
tender was financed by bank borrowings.
For a description of the Corporation's business, see Item 1(c) on the
following page.
Item 1(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
MacDermid has one primary industry segment which is the manufacture and
sale of specialty chemicals used in finishing metals and non metallic
surfaces and in the marketing of supplies and equipment related to the
use of these chemicals.
Item 1(c) of this Report provides information concerning MacDermid's
classes of products and Item 1(d) of this report includes financial
information concerning operations by geographic area and on a
consolidated basis. Additional information with respect to the one
primary business is shown in the portions of MacDermid's 1996 Annual
Report to Shareholders, included as Exhibit 13 to this Form 10-K, and
is incorporated by reference.
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Item 1(c) NARRATIVE DESCRIPTION OF BUSINESS
(i) MacDermid produces and markets over 1,000 proprietary chemical
compounds. The proprietary chemical compounds are used for the following
purposes: cleaning, activating and polishing, mechanical plating,
mechanical galvanizing, electro-plating and phosphatizing metal surfaces,
stripping of metal and final coating of metal surfaces, filtering, anti-
tarnishing and rust retarding and etching, imaging, deposition of metal
and other chemical processes. Research in connection with proprietary
products is conducted principally in the United States, with additional
research facilities in Israel and Japan.
In North America, MacDermid markets its entire line of products in the
United States through more than 100 sales and service personnel employed
by it and, in certain areas of the United States, through distributors
and manufacturing representatives. The Corporation maintains inventories
at distribution points throughout the United States which typically
are leased or rented. In Canada the Corporation both manufactures and
markets certain of its products through MacDermid Chemicals, Inc.
In Europe, the Corporation markets its proprietary products through
wholly owned subsidiaries. European sales are made from inventory stock
through approximately 45 sales and service representatives who are
employed by the Corporation's subsidiaries located in France, Germany,
Great Britain, Italy, Holland, Spain and Switzerland. MacDermid owns
and operates manufacturing facilities in Spain and Great Britain.
In the Asia/Pacific area, the Corporation markets its proprietary
products through wholly owned subsidiaries in Australia, Hong Kong,
Japan, Korea, New Zealand, Singapore, and Taiwan, and sales are made
through more than 30 sales and service representatives who are employed
by local subsidiaries. In addition, sales are made in China, Thailand,
Malaysia and The Philippines directly or through distributors. MacDermid
owns and operates manufacturing facilities in Australia and Taiwan.
In certain other foreign markets, MacDermid manufactures and sells
certain of its proprietary chemicals and conducts research through
wholly or majority owned subsidiaries. In certain countries in South
America, Europe and Asia, MacDermid products are sold through
distributors or manufactured and sold through licensees.
Chemicals, supplies and equipment manufactured by others and resold by
MacDermid consist of basic chemicals, automatic plating conveyors, barrel
plating and pollution control equipment, rectifiers, pumps and filters.
Resale items are marketed primarily in conjunction with and as an aid to
the sale of proprietary chemicals.
MacDermid's principal products fall into the three following classes:
(A) Chemical compounds produced by MacDermid, most of
which are the result of the Corporation's own research
and development and, therefore, are referred to as
proprietary products;
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(B) Resale chemicals and supplies; and
(C) Equipment, substantially all of which is manufactured
by others and marketed by the Corporation.
The following table sets forth the classes of MacDermid's products and
the respective percentage of total consolidated revenue for each of the
last three fiscal years:
Class of Products 1996 1995 1994
Proprietary Chemicals 88% 90% 87%
Resale Chemicals
and Supplies 6 7 9
Equipment 6 3 4
(ii) MacDermid has not made a public announcement of, nor has
information otherwise become public about, a new product or line of
business requiring investment of a material amount of assets or which
otherwise is material.
(iii) MacDermid uses in excess of 700 chemicals as raw materials in
the manufacture of its proprietary products. With few exceptions,
several domestic sources of supply are available for all such raw
materials and for resale chemicals, supplies and equipment. During
fiscal 1996, there were no significant difficulties in obtaining raw
materials essential to its business.
(iv) During fiscal 1996, approximately 20% of MacDermid's proprietary
sales were derived from products covered by patents owned by the
Corporation or produced under patent license agreements. MacDermid owns
more than 70 unexpired U.S. Patents, for which corresponding patents have
been obtained or are pending in most industrialized nations, and has more
than 20 patent applications pending in the U.S. The patents owned by
Registrant are important to its business and have varying remaining lives.
Although certain of MacDermid's patents are increasingly more important
to its business, it believes that its ability to provide technical and
testing services to its customers and to meet the rapid delivery
requirements of its customers is equally, if not more, important. In
addition, MacDermid has many proprietary products which are not covered
by patents and which make a large contribution to its total sales.
Further, the Corporation owns a number of domestic and foreign trade
names and trademarks which it considers to be of value in identifying
MacDermid and its products. MacDermid neither holds nor has granted any
franchises or concessions.
(v) No material portion of MacDermid's business is seasonal.
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(vi) It is necessary to maintain finished goods inventory at locations
throughout the United States and in the foreign countries in which the
Corporation operates so that it may meet the rapid delivery requirements
of its customers. This impacts working capital requirements by requiring
a considerable investment in inventories to service its customers.
Customer payment terms, which vary by country, are generally in accord
with local industry practice.
(vii) No major portion of MacDermid's business is dependent upon a
single customer or a few customers, the loss of whom would have a
materially adverse effect on its business.
(viii) Since products are taken from inventory stock to ship against
current orders, there is essentially no backlog of orders for MacDermid's
proprietary chemical products. MacDermid does not consider the absence
of a backlog to be significant.
(ix) No material portion of MacDermid's business is subject to
renegotiation of profits or termination of contracts or subcontracts at
the election of the Government.
(x) The Corporation provides a broad line of proprietary chemical
compounds and supporting services. MacDermid has many competitors,
estimated to be in excess of 100 in some proprietary product areas.
Some large competitors operate globally, as does MacDermid, but most
operate locally or regionally. To the best of the Corporation's
knowledge no single competitor competes with all its proprietary
products. MacDermid maintains extensive supporting technical and
testing services for its customers, and is continuously developing new
products. Management believes that the Corporation's combined abilities
to manufacture, sell, service and develop new products and applications
enables it to compete successfully both locally and world-wide.
(xi) MacDermid spent approximately $10,042,000, $9,644,000 and
$6,687,000 during fiscal years 1996, 1995 and 1994, respectively, on
research and development activities. Substantially all research and
development activities were sponsored by the Corporation, the greater
percentage of which related to the development of new products.
(xii) For many years, MacDermid has developed proprietary products
designed to reduce the discharge of pollutant materials into the
environment and eliminate the use of certain targeted raw materials
while enhancing the efficiency of customer chemical processes. For
this reason, efforts to comply with Federal, State and local provisions,
which have been enacted or adopted regulating the discharge of materials
into the environment, may have had a positive effect upon the
Corporation's competitive position. Capital expenditures of
approximately $4.3 million were made in fiscal 1996 and an estimated $1
million will be spent for environmental control facilities in fiscal 1997.
Though difficult to predict, future spending for this purpose is likely to
average more than 10% of the capital budget.
(xiii) MacDermid employed 1,083 and 828 full time, regular employees
as of March 31, 1996 and 1995, respectively.
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Item 1(d) FOREIGN AND DOMESTIC OPERATIONS
MacDermid's 1996 Annual Report to Shareholders, included as Exhibit 13 to
this Form 10-K and incorporated by reference, provides information with
respect to the Corporation's geographic segments including operating
information and the effect upon shareholder's equity of the translation
of foreign currency financial statements.
Item 2 PROPERTIES
In the United States, MacDermid owns the following properties:
In Waterbury, Connecticut, a 51,700 square foot building, principally
used for executive offices, marketing and corporate support, and a
62,000 square foot research and customer service facility, both of
which are located on a 5.8 acre tract. In addition, a 180,000 square
foot wood brick and concrete building complex is principally used for
manufacturing and warehousing but also includes some offices and
laboratories. The complex is located on a 7.2 acre tract. Directly
across a street from this property, a 31 acre tract of land is held
for possible future development.
In Middletown, Delaware, a concrete and steel building of 97,000 square
feet consisting of factory, laboratory, warehouse and office facilities
located on a 10.97 acre tract.
In Wilmington, Delaware, a concrete and steel building of 26,520 square
feet used principally as a technical and administrative services center
located on a 3.8 acre tract. Also on this site is an 18,000 square foot
concrete and steel building which may be used for manufacturing expansion.
In Ferndale, Michigan, a steel frame and steel sided building of 75,000
square feet consisting principally of factory, warehouse and office
facilities, located on a 6.25 acre tract.
In Blue Ash, Ohio, a steel and brick single story building of 16,350 square
feet consisting of a warehouse and offices located on a 2.75 acre tract.
In New Hudson, Michigan, a steel and brick single story building of 15,000
square feet consisting of research laboratories and offices located on a 7
acre tract.
The Corporation also owns properties in Vernon, Connecticut, and Leominster,
Massachusetts, which are being held for sale or lease but which could be
used for manufacturing should the need arise.
Outside the United States, the Corporation owns additional properties as
follows:
At Barcelona, Spain, 31,000 square feet of factory, warehouse, laboratory
and office space.
At Telford, England, two brick, concrete and steel buildings, connected
by a walkway, containing a total of 43,000 square feet of manufacturing,
warehouse, laboratory and office space.
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At Hsin Chu, Taiwan, Republic of China, two buildings of reinforced
concrete totaling 30,000 square feet, located on a 1.8 acre tract, used
for factory, warehouse and offices.
At Hong Kong, 31,000 square feet of office, laboratory and warehouse space
in a concrete block building.
In addition, MacDermid leases office, laboratory, warehouse and
manufacturing facilities as needed. During the year, such additional
facilities were leased in Minnesota, Vermont, Canada, Holland, Hong
Kong, Israel, Japan, Singapore and several other foreign countries.
All owned and leased facilities are in good condition and are of
adequate size for present business volume.
Item 3 Legal Proceedings
There are no pending legal proceedings to which the Corporation or its
subsidiaries is a party which, in the opinion of Management, would
materially affect the Corporation's consolidated financial position,
results of operations or cash flow.
The Corporation is subject to the usual reviews and inspections by
environmental agencies of the various states in which the Corporation
has facilities and the Corporation has entered into agreements and
consent decrees at various times in connection with such reviews. On
two occasions the Corporation also has been identified as a potentially
responsible party ("PRP") by the U. S. Environmental Protection Agency
in connection with its investigation of certain waste disposal sites.
In both such instances the Corporation's involvement has been de minimis
(less than 0.3%). The Corporation has recorded its best estimate of
liabilities in connection with site clean-up based upon the extent of
its involvement, the number and financial resources of other PRPs and
estimates of the total costs of the site clean-up. Management believes
that the recorded liabilities are reasonable estimates of probable
liability and that future cash outlays are unlikely to be material to
the future financial condition of the Corporation.
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Corporation's security
holders during the fourth quarter of fiscal 1996.
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Item 4A EXECUTIVE OFFICERS OF MACDERMID
The following is a list of the names, offices and ages (as of March 31,
1996) of all the executive officers of MacDermid, each of whom has been
employed in his respective office(s) for more than five years, except as
noted:
Name Age Office with Registrant
Harold Leever 81 Chairman since 1977
Daniel H. Leever 47 President and Chief Executive Officer
since August 1990, previously and
since April 1989 was Senior Vice
President and Chief Operating Officer.
Terrence C. Copeland * 48 Vice President since July 1991.
Previously was Managing Director of
European Operations since June 1989.
John L. Cordani 33 Corporate Secretary since April 1995.
Previously was General Counsel since
May 1993. From the beginning of 1992,
he was Manager of Patents and Trademarks
prior to which he was a Research Chemist.
David A. Erdman 53 Vice President since November 1993.
Previously, and since 1988, was Director
of Quality of the Electronics Group of
E.I. Dupont de Nemours, Inc.
John J. Grunwald 66 Vice President/Research since 1981
Peter E. Kukanskis 49 Vice President/Technical since 1986
Gary B. Larson 56 Vice President/Research since 1981
Arthur J. LoVetere, Jr. 32 Vice President and Chief Financial
Officer since 1995. Previously,
was Director of European Operations
since 1993. From February 1992, he
was Corporate Controller, prior to
which he was Manager of Accounting and
Management Information Systems.
Michael A. Pfaff 52 Vice President/Industrial Products
since 1984
Sharon J. Stone 46 Assistant Treasurer since February
1995. Previously, she was for more
than five years, and continues to be,
Manager of General Accounting
* Mr. Copeland resigned as Vice President effective April 15, 1996.
<PAGE>
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PART II
Item 5 MARKET FOR MACDERMID'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS
Information with respect to the market for MacDermid's Common Stock,
dividends paid and other related information is contained in its 1996
Annual Report to Shareholders included as Exhibit 13 to this form 10-K
and incorporated by reference.
Item 6 SELECTED FINANCIAL DATA
The selected financial data (Five-Year Summary) is contained in
MacDermid's 1996 Annual Report to Shareholders included as Exhibit 13
to this form 10-K and incorporated by reference.
Item 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results
of Operations is contained in MacDermid's 1996 Annual Report to
Shareholders included as Exhibit 13 to this form 10-K and incorporated
by reference.
Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, including the notes thereto, of
the Corporation are contained in MacDermid's 1996 Annual Report to
Shareholders included as Exhibit 13 to this form 10-K and incorporated
by reference. Additional financial information is contained in the
Financial Data Schedule appearing as Exhibit 27 to this report.
Item 9 DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10 DIRECTORS AND OFFICERS
The discussion of "Election of Directors" and a portion of the discussion
in the section, "Interest of Management and Others in Certain Transactions
and Family Relationships" contained in MacDermid's Proxy Statement dated
June 24, 1996 are incorporated herein by reference thereto. Officers of
the Corporation are listed in Item 4A, above.
Item 11 EXECUTIVE COMPENSATION
The discussion of "Executive Compensation" contained in MacDermid's Proxy
Statement dated June 24, 1996 is incorporated herein by reference thereto.
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Item 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to the security ownership of certain beneficial
owners and management contained in.MacDermid's Proxy Statement dated June
24, 1996 is incorporated herein by reference thereto.
Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND FAMILY
RELATIONSHIPS
The discussion of "Interest of Management and Others in Certain
Transactions and Family Relationships" contained in MacDermid's Proxy
Statement dated June 24, 1996 is incorporated herein by reference thereto.
PART IV
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements
The consolidated financial statements and report thereon of KPMG Peat
Marwick LLP, dated May 22, 1996 are contained in MacDermid's 1996 Annual
Report to Shareholders included as Exhibit 13 to this form 10-K and
incorporated herein by reference. Additional financial information is
contained in the Financial Data Schedule included as Exhibit 27 to this
report.
(2) Financial Statement Schedules
The following supplementary financial data should be read in conjunction
with the consolidated financial statements and comments thereto referred
to above. Schedules not included with this supplementary financial data
have been omitted because they are not applicable, are immaterial or the
required information is included in the consolidated financial statements
or related notes to consolidated financial statements.
Schedule II - Valuation and Qualifying Accounts and Reserves
Auditors' Report on Supporting Schedule
(3) Exhibits
An index to the exhibits filed or incorporated by reference immediately
precedes such exhibits.
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(c) Reports on Form 8-K
MacDermid has not filed any reports on Form 8-K
during the last quarter of the fiscal year covered
by this report.
(d) Schedules
The schedules listed above are filed as part of this
Annual Report on Form 10-K.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report
on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
MACDERMID, INCORPORATED
(Registrant)
Dated: June 24, 1996
By /s/ Harold Leever By /s/ Daniel H. Leever
Harold Leever Daniel H. Leever
Director, Chairman Director, President and
Chief Executive Officer
By /s/ Arthur J. LoVetere, Jr. By /s/ Gregory M. Bolingbroke.
Arthur J. LoVetere, Jr. Gregory M. Bolingbroke
Vice President and Controller and Principal
Chief Financial Officer Accounting Officer
Harold Leever, pursuant to powers of attorney which are being filed
with this Annual Report on Form 10-K, has signed below on June 24, 1996
as attorney-in-fact for the following directors of the Registrant:
Donald G. Ogilvie James C. Smith
Thomas W. Smith
/s/ Harold Leever
Harold Leever
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<TABLE>
SCHEDULE II
MACDERMID, INCORPORATED AND SUBSIDIARIES
Valuation and Qualifying Accounts and Reserves
Years ended March 31, 1996, 1995 and 1994
<CAPTION>
Balance at Additions Balance
beginning charged to Deductions at end
Description of period earnings <F1> of period
----------- ---------- ---------- ---------- ---------
1996
----
<S> <C> <C> <C> <C>
Allowance for
doubtful
receivables $2,859,000 $1,793,000 $ (177,000) $4,829,000
========== ========== ========== ==========
1995
----
Allowance for
doubtful
receivables $2,317,000 664,000 122,000 2,859,000
========== ========== ========== ==========
1994
----
Allowance for
doubtful
receivables $2,660,000 1,792,000 2,135,000 2,317,000
========== ========== ========== ==========
<FN>
<F1> Bad debts charged off less recoveries and translation adjustments.
</TABLE>
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REPORT OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP (Logo)
Certified Public Accountants
CityPlace II
Hartford, CT 06103-4103
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
MacDermid, Incorporated:
Under date of May 22, 1996, we reported on the consolidated balance
sheets of MacDermid, Incorporated and subsidiaries as of March 31,
1996 and 1995, and the related consolidated statements of earnings
and cash flows for each of the years in the three-year period ended
March 31, 1996, as contained in the 1996 annual report to shareholders.
These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for the
year 1996. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related
financial statement schedule as listed in the accompanying index
under Item 14(a)(2). This financial statement schedule is the
responsibility of the Company's management. Our responsibility is
to express an opinion on this financial statement schedule based
on our audits.
In our opinion, such schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
May 22, 1996
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EXHIBIT INDEX
1996 FORM 10-K ANNUAL REPORT
Exhibit
No.
3.1 Restated Certificate of Incorporation, MacDermid, By reference
Incorporated, dated November 19, 1984. Exhibit 19
to September 30, 1991 Form 10-Q Quarterly Report
is incorporated by reference herein.
3.2 By-Laws, amended as of November, 1984. Exhibit 3b By reference
to 1985 Form 10-K Annual Report is incorporated
by reference herein.
4.1 Credit Agreement, dated as of December 5, 1995, By reference
among MacDermid, Incorporated, the Banks signatory
thereto and Chase Manhattan Bank, N.A., as Agent,
is incorporated by reference herein.
10.1 MacDermid, Incorporated Special Stock Purchase By reference
Plan, amended as of November 1, 1992. Exhibit 10
to 1993 Form 10-K Annual Report is incorporated
by reference herein.
10.2 MacDermid, Incorporated 1995 Equity Incentive Plan By reference
Exhibit 10.2 to 1995 Form 10-K Annual Report is
Incorporated by reference herein.
13 Portions of MacDermid's 1996 Annual Report to Attached
Stockholders as required by Item 8
21 Subsidiaries of MacDermid, Incorporated Attached
23 Independent Auditors' Consent Attached
24 Power of Attorney Attached
27 Financial Data Schedule Attached
EXHIBIT 13
PORTIONS OF MACDERMID'S 1996 ANNUAL REPORT TO STOCKHOLDERS.
Except for the pages and information expressly incorporated by
reference, the financial and other information included in this Exhibit
13 is provided solely for the information of the Securities and Exchange
Commission and is not deemed "filed."
(All amounts except share and per share data in this financial report are
shown in thousands.)
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
(In thousands, except share and
per share amounts) 1996 1995 Change %
-----------------------------------
<S> <C> <C> <C>
Net Sales, North America $ 131,404 $ 93,867 40
Overseas 104,487 88,233 18
-----------------------------------
Total Net Sales $ 235,891 $ 182,100 30
===================================
Net Earnings* $ 13,195 $ 11,142 18
Return on Sales* 5.6% 6.1% -
Return on Average Equity* 22.1% 18.3% -
Net Cash Provided by Operations $ 17,493 $ 20,733 (16)
Research and Development Expense $ 10,042 $ 9,644 4
Capital Expenditures $ 4,303 $ 3,990 8
Long-term Debt (Includes
Short-term Portion) $ 112,254 $ 22,642 396
Average Shares Outstanding 2,928,352 3,141,855 (7)
Shareholders' Equity $ 65,817 $ 53,654 23
Per Common Share
Net Earnings* $4.51 $3.55 27
Cash Dividends $0.60 $0.60 -
Book Value $23.55 $19.56 20
</TABLE>
<TABLE>
GRAPHIC PRESENTATION
(Three horizontal bar graphs are provided here, net sales, net earnings
and earnings per share. Each graph depicts one facet of results of
operations for the fiscal years 1992 through 1996. The graph for net
sales indicates an increase in 1993, followed by a marginal decrease in
1994 and large increases in 1995 and 1996. The graphs for both net
earnings and earnings per share indicate increases in each year since
1992 with substantial increases in 1995 and 1996.)
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GRAPH VALUES
(In thousands, except share and per share amounts)
<CAPTION>
1992 1993 1994 1995 1996
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $144,984 $156,324 $150,026 $182,100 $235,891
Net earnings <F1> $ 7,244 $ 7,687 $ 7,771 $ 11,142 $ 13,195
Earnings per common
share <F1> $2.03 $2.16 $2.18 $3.55 $4.51
<FN>
<F1> Before the cumulative effect of accounting changes which resulted
in one-time after tax charges of $371 ($0.12/common share) in 1995
and $2,082 ($0.58/common share) in 1994. Fiscal 1995 and 1996
indicate primary earnings per common share.
</TABLE>
<TABLE>
FIVE YEAR FINANCIAL REVIEW
(In thousands, except share and per share amounts)
<CAPTION>
OPERATING RESULTS 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $235,891 $182,100 $150,026 $156,324 $144,984
Net Earnings<F1> $ 13,195 $ 11,142 $ 7,771 $ 7,687 $ 7,244
Net Earnings Per
Common Share <F1><F2> $4,51 $3.55 $2.18 $2.16 $2.03
Return On Sales
(%)<F1> 5.6 6.1 5.2 4.9 5.0
Return On Average
Equity (%)<F1> 22.1 18.3 11.7 12.1 12.7
FINANCIAL POSITION AT YEAR END
- -----------------------------------------------------------------------------
Working Capital $ 59,714 $ 34,711 $ 34,959 $ 31,050 $ 27,620
Current Ratio 2.0 1.7 2.0 1.8 1.7
Capital Expenditures $ 4,303 $ 3,990 $ 7,526<F3> $ 4,594 $ 4,453
Total Assets $264,756 $123,305 $105,867 $107,173 $101,214
Long-term Debt
(Includes Short-
term Portion) $112,254 $ 22,642 $ 1,157 $ 2,684 $ 2,812
Percent of Total
Capitalization 63.0 29.7 1.7 4.0 4.4
<PAGE>
-3-
SHARE DATA
- ------------------------------------------------------------------------------
Shareholders' Equity $ 65,817 $ 53,654 $ 68,169 $ 65,181 $ 61,050
Per Common Share $23.55 $19.56 $19.11 $18.27 $17.12
Cash Dividends Per
Common Share $0.60 $0.60 $0.60 $0.60 $0.60
Payout as Percent
of Net Earnings <F1> 12.7 15.9 27.6 27.8 29.5
Common Shares
Outstanding
Average During Year 2,928,352 3,141,855 3,567,875 3,565,371 3,565,000
At Year End 2,794,231 2,742,533 3,567,882 3,567,382 3,565,000
Stock Price
High 72 1/4 44 1/2 31 29 1/2 29
Low 41 1/2 24 24 1/2 23 3/4 21
Year End 65 7/8 43 26 27 28 1/8
<FN>
<F1> Before cumulative effect of accounting changes which resulted in one-
time after tax charges of $371 ($0.12/common share) in 1995 and $2,082
($0.58/common share) in 1994.
<F2> For 1996 and 1995 indicates primary earnings per common share. Fully
diluted earnings per common share were $4.49 in 1996 and $3.50 for
1995, the first period during which the dilutive effect was large
enough to report.
<F3> Includes cost attributable to a new Hong Kong warehouse and office
facility and is not offset by proceeds from disposal of the previous
facilities which occurred in fiscal 1995 and 1994.
</TABLE>
<PAGE>
-4-
MESSAGE TO SHAREHOLDERS
Fiscal 1996 was the fifth consecutive year of record earnings per share
for MacDermid. Sales increased to $235.9 million from $182.1 million in
1995, up 30%. Earnings increased to $13.2 million from $11.1 million in
1995, up 18%. Earnings per share increased to $4.51 from $3.55 in 1995,
up 27%. We continue to benefit in per share terms from our repurchase
in August of 1994 of 24% of our then outstanding shares.
For the second year, we enjoyed growth across all product lines in all
markets, both domestic and international. We continued to benefit from
acquisitions, from our ongoing effort to improve our efficiency, and
from the 1995 turnaround in a number of our European operations. In
almost every country in which we operate, fiscal 1996 was an outstanding
year. This is important since 47% of our sales are outside the United
States.
In the third quarter, we acquired the Electronics and Printing Division
of Hercules Incorporated, a producer of photoresists used in forming
patterns on printed circuits and photopolymers used in the manufacturing
of advanced printing plates for commercial printing.
This is an important acquisition. It brings a new technology in
commercial printing with excellent growth potential and fills out our
product offerings to the printed circuits market so that we now have
unique total systems capabilities to offer our customers. The
management is excellent, the integration has gone smoothly, and our
competitive position has been significantly strengthened.
Because of the strength of our cash flow and balance sheet, we were
able to finance this $130 million acquisition with added debt and a
callable, non-convertible preferred stock issue, both at attractive
fixed rates. Our cash flow is at record levels. Our debt/capital
ratio is 63%. Nevertheless, a dividend increase is not currently
planned. Your Board of Directors believes shareholders are better
served by utilizing excess cash flow to reduce debt and to fund
internal growth and acquisitions.
Our Acquisition Philosophy, simply stated, is to acquire businesses
that will strengthen the competitive position of our core business in
both technology and market share thus, most important, increasing the
intrinsic value of your company on a per share basis.
We place a high priority on R&D. It is not considered a discretionary
expenditure. Our focus is not only on broadening and improving our
current product line but on new products in new markets, all within our
core competencies. In 1996, our R&D investment was $10 million compared
with $9.6 million in 1995.
Our Corporate Philosophy is on the inside cover of our annual report.
Everyone at MacDermid is dedicated to conducting our business in
accordance with that Philosophy.
We begin fiscal 1997 a much bigger company than just a year ago with
greater potential than at any time in our history. Nevertheless, our
policies remain unchanged--improve our product and services so as to be
<PAGE>
-5-
the preferred supplier/partner with our customers, remove all excess
costs, and grow as rapidly as prudently possible. Our awareness, that
we work for our shareholders and that our stewardship will be measured
by the long-term per share results, is heightened by the fact that,
through personal holdings, our ESOP and other plans, we, your employees,
own 34% of the outstanding shares. Our objective is to look back on our
progress to date as but a beginning.
All of our worldwide associates at MacDermid have worked hard and
effectively to produce outstanding results in fiscal 1996. They deserve
congratulations. We enthusiastically welcome our new associates from
Hercules. We look forward to a long and productive relationship.
Importantly, we thank our shareholders for their confidence.
/s/ Harold Leever /s/ Daniel H. Leever
Harold Leever Daniel H. Leever
Chairman of the Board Chief Executive Officer
<PAGE>
-6-
<TABLE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION & RESULTS OF OPERATIONS
(In thousands, except share and per share amounts)
FIVE YEAR SUMMARY
<CAPTION>
1996 1995 1994 1993 1992
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales:
North America $131,404 $ 93,867 $ 73,861 $ 74,068 $ 73,119
Overseas 104,487 88,233 76,165 82,256 71,865
--------------------------------------------------------
$235,891 $182,100 $150,026 $156,324 $144,984
========================================================
Net Earnings<F1> $ 13,195 $ 11,142 $ 7,771 $ 7,687 $ 7,244
Net Earnings per
Common Share<F1>
<F2> $4.51 $3.55 $2.18 $2.16 $2.03
Cash Dividends
Declared per
Common Share $0.60 $0.60 $0.60 $0.60 $0.60
Total Assets $264,756 $123,305 $105,867 $107,173 $101,214
Long-term
Obligations -
non current $105,189 $ 18,229 $ 922 $ 983 $ 1,348
<FN>
<F1> Before cumulative effect of accounting changes which resulted in one-
time after tax charges of $371 ($0.12/common share) in 1995 and $2,082
($0.58/common share) in 1994.
<F2> For 1996 and 1995 indicates primary earnings per common share. Fully
diluted earnings per common share were $4.49 for 1996 and $3.50 for
1995, the first period during which the dilutive effect was large
enough to report.
</TABLE>
NET SALES & OPERATING PROFITS
OVERVIEW
Worldwide net sales were $235,891, a 30% increase in fiscal 1996
over the previous year's record levels. This increase reflects the
effects of new accounts in every geographic segment, improving
business conditions overseas and a business acquisition in the U.S.
After giving effect to preferred stock dividend requirements,net earnings
increased for the sixth consecutive year to $13,195, $4.51 per common
share, as compared to fiscal 1995 net earnings of $11,142, $3.55 per
common share (before deducting for the cumulative effect of an accounting
change in 1995).
<PAGE>
-7-
SALES
1996 vs 1995
In North America, net sales were up 40% in fiscal 1996 over fiscal
1995, principally a result of the third quarter purchase of the
Electronics and Printing Division of Hercules Incorporated (discussed
below). This new business enhances the Corporation's position as a
supplier to the electronics industry and provides new market
opportunities in the printing industry. European and Asia/Pacific
sales were up 20% and 17%, respectively, as a result of continued
success in introducing new products and to penetration of emerging
markets.
1995 vs 1994
In North America, sales increased 27% because of a strengthening
economic climate strongly enhanced by the effects of the purchase
of Allied-Kelite's proprietary chemical business during the first
quarter of fiscal 1995 and despite reduced direct sales of process
equipment. Sales throughout Europe increased strongly despite a
change in the marketing of certain resale products to a commission
basis completed during fiscal 1994. The strongest sales growth was
reported in the Asia/Pacific markets where expanding markets were
enhanced by economic recovery in certain areas.
COSTS AND EXPENSES
1996 VS 1995
Costs of sales decreased as a percentage of sales because of customer
acceptance of newer, more environmentally friendly proprietary products
which replace older, less efficient products. This decrease was achieved
despite recognition of the acquisition related accounting charge of
approximately $1,700 associated with purchased inventories (in
accordance with purchase accounting requirements) and a higher level of
equipment sales.
Selling, technical and administrative expenses declined as a
percentage of sales because of ongoing cost control programs. Actual
costs increased as a result of business acquisitions and a higher level
of employee costs.
New borrowings to finance the purchase of the electronics and
printing business caused interest expense to more than double that of
fiscal 1995. Since the additional borrowings were only in place during
the last four months of fiscal 1996, interest expense for the coming
full year are likely to be as much as double the 1996 level.
1995 VS 1994
During the transition period following the acquisition of assets,
costs of sales in the United States were affected by inventory
purchased from Allied-Kelite at prices higher than MacDermid's
normal replacement costs. These effects were largely offset by
marketing changes in Europe and by growth in the proportion of
proprietary chemical sales in the Far East.
Selling, technical and administrative expenses decreased 3%
as a percentage of sales though actual costs were higher. The
increases were principally the result of new business throughout
<PAGE>
-8-
the world, the newly-acquired Allied-Kelite business in the
United States, product development and employee incentives.
A sharp increase in interest expense resulted principally from
borrowings in August, 1994 to finance a common stock repurchase and
from short-term financing of the Allied-Kelite business acquisition.
ACQUISITIONS
During the third quarter of fiscal 1996, MacDermid acquired the assets,
subject to certain liabilities, of the Electronics and Printing
Division of Hercules Incorporated through a wholly-owned subsidiary,
MacDermid Imaging Technology, Inc. ("MIT"). The acquisition brought
new technology in commercial printing and enhanced the Corporation's
product offerings to the printed circuits market. The purchase price
of $130,000, excluding closing costs, funded by $100,000 cash and
$30,000 in redeemable preferred stock, was paid at closing. A further
$15,000 is contingently payable in fiscal year 2004 in the event that
the Corporation's consolidated cumulative earnings, before interest,
taxes on earnings, depreciation, and amortization, exceed $250,000
for the first four full fiscal years following December 5, 1995. The
acquisition, which included $77,000 in goodwill, being amortized over
25 years, has been accounted for under the purchase method of
accounting. MIT activity has been included in the consolidated results
of operations beginning December 1, 1995. Additionally, during fiscal
1996 MacDermid acquired the remaining 50% share in its joint venture
for equipment manufacture. This investment had been accounted for on
the equity method and as of July 1, 1995 was consolidated.
During the first quarter of fiscal year 1995, the
Corporation acquired certain assets of the Allied-Kelite Company
(a subsidiary of Witco Corporation), a major supplier of plating
surface preparation proprietary chemical products to automotive and
electronics hardware industries. The business, located primarily in
the United States, includes licenses of technology to companies in
several other countries. The acquisition cost (approximately $8,900)
financed through short-term borrowings, included inventories, a
research facility and technology. The acquisition, accounted for as
a purchase, is producing consolidation cost benefits in addition to
improved domestic sales coverage.
ACCOUNTING CHANGE
During fiscal 1995, the Corporation adopted the provisions
of Statement of Financial Accounting Standards No. 112,
Employers' Accounting for Postemployment Benefits (SFAS 112).
SFAS 112 requires accrual accounting for recognition of the
postemployment cost of salary continuation benefits rather than
the previously used cash basis accounting. Adoption of SFAS 112
resulted in a one-time $371 charge against earnings, net of
income taxes. The ongoing expense effects are not material to
the consolidated financial statements.
<PAGE>
-9-
INCOME TAXES
Overall effective income tax rates increased to 41.6% in fiscal
1996 from 38.6% in fiscal 1995 as compared to 37.5% in fiscal 1994.
The 1996 and 1995 increases were principally attributable to changes
in the amounts included in each year's earnings before income taxes
for non taxable one-time profits on sales of property and minority
equity interests, a 1995 non tax-deductible charge for losses in a
joint venture and prior year losses in a subsidiary where tax
benefits were not recognized until 1995.
DIVIDENDS
MacDermid has paid cash dividends out of accumulated earnings
continuously since 1948. The total dividend paid for fiscal
1996 was $0.60 per share or approximately 13% of the net
earnings available to common shareholders.
LIQUIDITY & CAPITAL RESOURCES
Cash flows from operations are used to fund dividend payments
to shareholders, other working capital requirements of the
Corporation and most capital projects. From time to time
MacDermid utilizes additional outside sources to fund overall
needs, including major capital projects for new and upgraded
research and technical, manufacturing and administrative
facilities, and for business acquisitions.
During the last two years, MacDermid has embarked on programs
which have required significant amounts of funds in excess of those
available from cash flows from operations. Early during fiscal 1995,
MacDermid purchased certain assets used in Allied-Kelite's metal
finishing business for approximately $8,900, financed through short-
term loans. Subsequently (August 1, 1994), the Corporation completed
the purchase of approximately 852,000 shares of MacDermid's common
stock under a self-tender offer at a price of $30 per share. The
total cost of this purchase, including commitment fees, professional
costs, etc., was approximately $26,200, financed through a six-year
term loan with a group of banks. During the third quarter of fiscal
1996, MacDermid purchased the assets, subject to certain liabilities,
of the Electronics and Printing Division of Hercules Incorporated for
a purchase price of $130,000. This purchase was financed through
bank borrowing, under a seven-year term loan (which incorporated
outstanding balances remaining under the six-year term loan), a
revolving credit agreement and issuance of $30,000 in unregistered 6%
redeemable preferred stock. As previously discussed, another $15,000
may be payable in fiscal year 2004, contingent upon future earnings.
New capital spending during fiscal 1996 of approximately
$4,303 as compared with $3,990 in fiscal 1995 and $7,526 in
fiscal 1994, included upgrades to manufacturing facilities and
new equipment to provide for the transfer of Allied-Kelite
manufacturing operations to existing facilities and technical
equipment. For fiscal 1997, planned new capital projects total
approximately $7,500.
<PAGE>
-10-
New opportunities for business acquisitions, which become
available from time to time, are evaluated individually as they
arise based upon MacDermid's criteria for technological
improvement and innovation, potential for earnings growth and
compatibility with existing manufacturing capability and
distribution channels. Management intends to pursue those
opportunities which have strong potential to enhance shareholder
value.
The Board of Directors has, from time to time, authorized the
purchase of issued and outstanding shares of the Corporation's
common stock for its treasury. Following the August 1, 1994
completion of the self-tender offer, the directors authorized the
purchase of up to an additional 148,000 shares of MacDermid's
common stock. Pursuant to this authorization, MacDermid acquired
12,400 shares during fiscal 1996 and 11,000 shares during fiscal 1995
in privately negotiated purchases. Treasury shares may be used for
transfer or sale to employee benefit plans, business acquisitions or
for other Corporate purposes. The outstanding authorization to
purchase up to 124,600 shares, if exercised at the Nasdaq Stock
Market closing price on March 31, 1996, would cost approximately
$8,208.
<TABLE>
The principal sources and uses of cash in fiscal years 1996
and 1995 were as follows:
<CAPTION>
1996 1995
------------------------
<S> <C> <C>
Cash provided by:
Operations $ 17,493 $19,854
Proceeds from dispositions of
fixed assets and certain
business 630 3,376
Option exercises 659 879
Net increase in borrowings 93,268 17,718
------------------------
$112,050 $41,827
========================
Cash used for:
Capital expenditures $ 4,303 $ 3,990
Business acquisitions 104,100 8,910
Purchase of treasury shares 685 26,152
Dividend payments 1,674 1,767
Other - net 85 (138)
------------------------
$110,847 $40,681
========================
</TABLE>
MacDermid's financial position is strong and, other than
satisfaction of debt and preferred stock redemption obligations, there
are no long-range commitments which would have a significant impact
<PAGE>
-11-
upon results of operations, financial condition or liquidity. At March
31, 1996 the Corporation had domestic and foreign short-term uncommitted
credit lines with banks approximating $40,000 in addition to a domestic
$65,000 committed revolving credit line. Management believes that
additional borrowing could be obtained if needed.
INFLATION AND CHANGING PRICES
MacDermid operates principally in stable areas throughout the world.
Sales are mainly to companies whose outputs become components in
consumer and industrial products having wide application and demand
and no one customer accounts for a material proportion of sales.
Management, therefore, believes that inflation, generally, has had
little overall impact upon the Corporation's operations and reported
earnings. While there may be temporary disruptions of economic
stability, management believes that their long-term effects will not
be significant to the Corporation.
ENVIRONMENTAL ACTIVITIES
MacDermid continues its commitment to an active program of
environmental responsibility through its Environmental Initiative
2000 program, research and development of alternative,
environmentally safer products and installation of equipment to
reduce or eliminate emissions.
The Corporation sponsors community clean-up programs and
promotes community awareness of environmental issues. The terms of
a State of Connecticut permit require MacDermid to have periodic
environmental compliance and environmental management audits
performed at its Waterbury, Connecticut facility. These audits take
place over a five-year period which commenced in 1993. An
environmental consultant retained by MacDermid conducts the audits
and submits appropriate recommendations.
MacDermid continuously conducts research to formulate products
which are environmentally friendly and which provide superior
operating characteristics in customer applications. Many companies
have come to MacDermid for assistance in meeting their environmental
needs.
Environmental expenditures that relate to current operations
are expensed; long-term betterments are capitalized. The
expenditure by MacDermid for these various programs is estimated to
be in excess of $1,000 per year. MacDermid has been named as a
potentially responsible party (PRP) by the Environmental Protection
Agency in connection with two waste sites. There are many other
companies involved at each of these sites and MacDermid's
participation is minor. The Corporation has recorded its best
estimate of liabilities in connection with site clean-up based upon
the extent of its involvement, the number of PRPs and estimates of
the total costs of the site clean-up. Though it is difficult to
predict the final costs of site remediation, management believes
<PAGE>
-12-
that the recorded liabilities are reasonable estimates of probable
liability and that future cash outlays are unlikely to be material
to financial condition, results of operations or cash flows.
OUTLOOK: ISSUES AND RISKS
This report and other Corporation reports and statements describe
many of the positive factors affecting the Corporation's future
business prospects. Readers should also be aware of factors which
could have a 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 various times in various markets.
<PAGE>
-12-
<TABLE>
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except share and
per share amounts) Year Ended March 31
--------------------------------------
<CAPTION>
1996 1995 1994
--------------------------------------
<S> <C> <C> <C>
Net sales $235,891 $182,100 $150,026
Cost of Sales 119,812 94,059 76,914
--------------------------------------
Gross profit 116,079 88,041 73,112
Selling, technical and
administrative expenses 86,978 68,423 60,378
--------------------------------------
Operating profit 29,101 19,618 12,734
Other income (expense):
Interest income 430 185 300
Interest expense (4,435) (2,029) (1,403)
Miscellaneous, net (1,475) 373 793
--------------------------------------
(5,480) (1,471) (310)
--------------------------------------
Earnings before income
taxes and cumulative
effect of accounting change 23,621 18,147 12,424
Income taxes (note 5) 9,826 7,005 4,653
--------------------------------------
Earnings before cumulative
effect of accounting change 13,795 11,142 7,771
Cumulative effect of accounting
change (note 4) - (371) (2,082)
--------------------------------------
Net earnings 13,795 10,771 5,689
Preferred dividends (600) - -
--------------------------------------
Net earnings available for
common shareholders $ 13,195 $ 10,771 $ 5,689
======================================
<PAGE>
-13-
Net earnings per common
share (note 1):
Primary
Before cumulative effect
of accounting change $4.51 $3.55 $2.18
Cumulative effect of
accounting change (note 4) - (0.12) (0.58)
--------------------------------------
$4.51 $3.43 $1.60
======================================
Fully diluted
Before cumulative effect of
accounting change $4.49 $3.50 $2.18
Cumulative effect of
accounting changes (note 4) - (0.12) (0.58)
--------------------------------------
$4.49 $3.38 $1.60
======================================
Weighted average number of common
shares outstanding (note 1)
Primary 2,928,352 3,141,855 3,567,875
=======================================
Fully Diluted 2,941,732 3,179,832 3,567,875
=======================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
-14-
<TABLE>
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands) March 31
---------------------
<CAPTION>
1996 1995
---------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,833 $ 7,630
Accounts receivable, less allowance for
doubtful receivables of $4,829 and $2,859 64,410 45,559
Inventories (note 2) 38,538 22,801
Prepaid expenses 2,911 2,052
Deferred income taxes 4,045 3,155
---------------------
118,737 81,197
Total current assets ---------------------
Property, plant and equipment, at cost:
Land and improvements 3,930 2,829
Buildings and improvements 31,930 26,346
Machinery, equipment and fixtures 43,372 33,581
---------------------
79,232 62,756
Less accumulated depreciation and amortization 37,916 35,721
---------------------
Net property, plant and equipment 41,316 27,035
---------------------
Goodwill, net 80,398 4,541
Other assets, net 24,305 10,532
---------------------
$264,756 $123,305
=====================
</TABLE>
<PAGE>
-15-
<TABLE>
LIABILITIES & SHAREHOLDERS' EQUITY
(In thousands except share and
per share amounts) March 31
---------------------
<CAPTION>
1995 1994
---------------------
<S> <C> <C>
Current liabilities:
Notes payable (note 3) $ 5,219 $ 4,720
Current installments of long-term
obligations (note 7) 7,065 4,413
Accounts payable 20,877 18,064
Dividends payable 419 411
Accrued compensation 7,966 6,089
Accrued expenses, other 11,299 7,258
Income taxes (note 5) 6,178 5,531
---------------------
Total current liabilities 59,023 46,486
---------------------
Long-term obligations (note 7) 105,189 18,229
Accrued postretirement benefits (note 4) 3,997 3,899
Deferred income taxes (note 5) 45 960
Minority interest in subsidiary 85 77
Preferred Stock - 6% redeemable
Series A (no par) (note 8) 30,600 -
Shareholders' equity (note 9):
Common stock. Authorized 20,000,000 shares;
issued 4,200,178 shares in 1996 and 4,136,080
shares in 1995 at stated value of $1.00 per
share (note 4) 4,200 4,136
Additional paid-in capital (note 4) 3,456 1,676
Retained earnings 95,564 84,043
Equity adjustment from foreign currency
translation 1,034 1,551
Less cost of 1,405,947 and 1,393,547 common
shares in treasury (38,437) (37,752)
---------------------
Total shareholders' equity 65,817 53,654
---------------------
Contingencies and commitments (notes 10 and 11)
$264,756 $123,305
=====================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
-16-
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) Year Ended March 31
---------------------------
<CAPTION>
1996 1995 1994
---------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 13,195 $10,771 $ 5,689
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 4,525 4,349 4,596
Effect of change in accounting (note 4) - 371 2,082
Amortization of goodwill and other
intangible assets 3,307 685 1,011
Provision for bad debts 1,793 664 1,792
Deferred income taxes 226 (1,420) (422)
Changes in assets and liabilities net of
effects from acquisitions and dispositions:
Decrease (increase) in receivables (3,792) (4,685) 1,090
Decrease (increase) in inventories (654) (265) 931
Decrease (increase) in prepaid expenses (789) (713) (111)
Increase (decrease) in accounts payable (1,791) 4,453 (1,697)
Increase (decrease) in accrued expenses 5,059 3,505 2,094
Increase (decrease) in income tax
liabilities 555 2,860 596
Other (4,141) (721) (2,106)
---------------------------
Net cash flows provided by operating
activities 17,493 19,854 15,545
---------------------------
Cash flows from investing activities:
Capital expenditures (4,303) (3,990) (7,526)
Proceeds form disposition of fixed assets 630 3,376 2,998
Acquisitions of businesses (104,100) (8,910) -
Other investments - (216) (1,062)
---------------------------
Net cash flows used in investing
activities (107,773) (9,740) (5,590)
---------------------------
Cash flows from financing activities:
Long-term and short-term borrowings 109,101 26,609 1,943
Long-term and short-term repayments (15,833) (8,891) (9,238)
Exercise of stock options 659 879 221
Acquisition of treasury stock (note 9) (685) (26,152) -
Dividends paid (1,674) (1,767) (2,141)
---------------------------
Net cash flows used in financing
activities 91,568 (9,322) (9,215)
---------------------------
Effect of exchange rate changes on cash
and cash equivalents (85) 354 (87)
---------------------------
Net increase in cash and cash equivalents 1,203 1,146 653
Cash and cash equivalents at beginning of year 7,630 6,484 5,831
---------------------------
Cash and cash equivalents at end of year $ 8,833 $ 7,630 $ 6,484
===========================
Cash paid for interest $ 4,534 $ 2,182 $ 1,627
===========================
Cash paid for income taxes $ 7,198 $ 4,226 $ 4,398
===========================
<FN>
Supplemental disclosure of non cash financing activities:
During fiscal 1996, MacDermid Imaging Technology, Inc. issued
unregistered 6% redeemabele Series A preferred stock for $30,000
and issued $600 preferred stock as dividends in kind.
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
-18-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of Consolidation. The accompanying consolidated
financial statements include accounts of the parent corporation and
all of its domestic and foreign subsidiaries. Certain foreign
subsidiaries, for practical purposes, are included on a calendar
year basis. All significant intercompany accounts and transactions
have been eliminated in consolidation.
(b) Acquisitions. In December 1995 the Corporation acquired the
assets, subject to certain liabilities, of the Electronics and
Printing Division of Hercules Incorporated, forming a new wholly-
owned subsidiary, MacDermid Imaging Technology, Inc. ("MIT"), for
that purpose. The acquired business consists principally of the
manufacture and sale of proprietary products including photoresists,
used to imprint electrical patterns on circuit boards, and photopolymer
printing, which reproduces quality graphics on package printing and
in-store displays. The total purchase price for the acquisition,
accounted for as a purchase transaction, was approximately $130,000
including inventory, fixed assets, goodwill (being amortized over 25
years) and other intangibles. A further $15,000 is contingently
payable in fiscal year 2004 in the event that the consolidated
cumulative earnings, before interest, taxes on earnings, depreciation
and amortization exceed $250,000 for the first four full fiscal years
following December 5, 1995. Consolidated operating results for fiscal
1996 include the results of the MIT business from December 1, 1995.
The following unaudited pro forma summary of consolidated results is
presented as if the acquisition had occurred on April 1, 1994 after
giving effect to certain pro forma adjustments, including recognition
of additional interest expense on debt to acquire the business,
amortization of goodwill and other intangibles, additional depreciation
for purchasee price allocation, elimination of corporate allocations
previously levied on the acquired business, the related tax effects and
recognition of the preferred dividend requirement.
(In thousands, except per share amounts)(Unaudited)
1996 1995
-------------------------
Net sales $283,318 $248,180
Net earnings $ 16,351 $ 12,414
Earnings per common share $5.58 $3.95
The pro forma financial information is presented for informational
purposes only and is not necessarily indicative of the results which
would have occurred if the acquisition had commenced at that date, nor
are they indicative of future results.
In May 1994 the Corporation acquired certain assets of the U.S.
based Allied-Kelite Company from Witco Corporation. Chemical products
produced by Allied-Kelite include plating and surface preparation
proprietary chemical products which are sold to customers in the
<PAGE>
-19-
aerospace, automotive and electronics hardware industries. Certain
technology was also acquired which is licensed to several customers
in specific overseas markets. The total purchase price for the
acquisition was approximately $8,900 including inventory, fixed assets,
goodwill (being amortized over 15 years) and other intangibles. Total
assets and pretax earnings resulting from the purchase were less than
10% of the Corporation's consolidated total assets and pretax earnings
before acquisition. The acquisition was accounted for as a purchase
transaction. Consolidated operating results include the results of
the Allied-Kelite business from May 2, 1994. Results of operations
were not significant for purposes of presenting pro forma information.
(c) Inventories. Inventories are stated at the lower of cost
(average moving cost) or replacement market.
(d) Property, Plant and Equipment. Property, plant and equipment
are stated at cost. Depreciation and amortization of property,
plant and equipment are provided over the estimated useful lives of
the respective assets, principally on the straight-line basis.
Expenditures for maintenance and repairs are charged directly to
expense; renewals and betterments, which significantly extend the
useful lives, in general are capitalized. Costs and accumulated
depreciation and amortization on assets retired or disposed of are
removed from the accounts and the gains or losses resulting
therefrom, if any, are credited or charged to earnings.
(e) Employee Benefits. The Corporation sponsors a variety of
employee benefit programs, most of which are non-contributory.
Retirement. Pension, profit sharing and other retirement plans
generally are non-contributory and cover substantially all employees.
Domestically, the Corporation funds a pension plan. The projected
unit credit actuarial method is used for financial reporting purposes.
The pension plan provides retirement benefits based upon years of
service and compensation levels. In addition, the Corporation
contributes to profit sharing and employee stock ownership plans which
provide retirement benefits based upon amounts credited to employee
accounts within the plans. The Corporation's funding policy for
qualified plans is consistent with federal or other regulations
and customarily equals the amount deducted for income tax purposes.
Foreign subsidiaries contribute to plans which may be administered
privately or by government agencies in accordance with local regulations.
Postretirement. The Corporation currently has accrued postretirement
health care benefits for most U.S. employees. The postretirement health
care plan is unfunded.
Postemployment. The Corporation currently accrues for postemployment
disability benefits to employees meeting specified service requirements.
The postemployment benefits plan is unfunded.
(f) Research and Development. Research and development costs, charged
to expenses as incurred, were $10,042, $9,644 and $6,687 in 1996, 1995
and 1994, respectively.
<PAGE>
-20-
(g) Income Taxes. The provision for income taxes includes Federal,
foreign, state and local income taxes currently payable and those
deferred because of temporary differences between the financial
statement and tax bases of assets and liabilities. No provision
for deferred income taxes is made with respect to equity adjustments
from foreign currency translation or to undistributed earnings of
subsidiaries which, in management's opinion, will be permanently
reinvested or repatriated at a minimal tax cost to the Corporation.
Foreign tax credits are recorded as a reduction of the provision for
Federal income taxes in the year realized.
(h) Foreign Operations. The balance sheet accounts of foreign
subsidiaries are translated into U.S. dollars at year-end rates of
exchange while revenue and expense accounts are translated at
weighted average rates in effect during the periods. Translation of
the balance sheets resulted in a decrease in equity of $517 in 1996,
an increase of $1,754 in 1995 and a decrease of $781 in 1994. Gains
and losses on foreign currency transactions are included in the
consolidated statements of earnings.
(i) Cash and Cash Equivalents. For the purpose of the consolidated
statements of cash flows, the Corporation considers all highly
liquid debt instruments purchased with an initial maturity of three
months or less to be cash equivalents.
(j) Fair Value of Financial Instruments. Statement of Financial
Accounting Standards No. 107 requires that reporting entities provide,
to the extent practicable, the fair value of financial instruments,
both assets and liabilities. The carrying amounts for the Corporation's
current financial instruments approximate fair value because of the
short maturity of those instruments. The carrying amounts of other
financial instruments approximate fair value due to the interest rate
at year end approximating that for similar instruments.
(k) Earnings Per Common Share. The computation of primary earnings per
common share is based upon the weighted average number of outstanding
common shares plus (in periods in which they have a dilutive effect) the
effect of common shares contingently issuable from stock options and
stock awards. The fully diluted per share computations also reflect
additional dilution related to stock options due to the use of the
market price at the end of the period, when higher than the average
price for the period. Fiscal years 1996 and 1995 are the only years
presented for which the dilutive effects were large enough to report.
(l) Stock-based Plans. In October 1995 the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation," which establishes
financial accounting and reporting standards for stock based plans.
The Statement, which becomes effective in fiscal 1997, requires the
Corporation to choose between accounting for issuances of stock and
other equity instruments to employees based on their fair value or
disclosing the pro forma effects such accounting would have had on
the Corporation's net income and earnings per share. The Corporation
continues to evaluate the impact of this statement as it prepares for
adoption.
<PAGE>
-21-
(m) Intangible Assets. Goodwill is amortized over its estimated
period of benefit on a straight line basis; other intangible assets
are amortized on an appropriate basis over their estimated useful
lives. No amortization period currently exceeds 25 years. MacDermid
evaluates the carrying value of intangible assets at each balance
sheet date to determine if impairment exists based upon estimated
undiscounted future cash flows. The impairment, if any, is measured
by the difference between carrying value and estimated fair value and
charged to expense in the period identified.
(n) Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(o) Reclassification of Accounts. Certain accounts have been
reclassified to conform with the 1996 presentation.
2. INVENTORIES
The major components of inventory at March 31 were as follows:
(In thousands) 1996 1995
----------------------
Finished goods $21,270 $16,074
Raw materials and supplies 17,268 6,727
----------------------
$38,538 $22,801
======================
3. NOTES PAYABLE
Notes payable at March 31, 1996 consisted of $5,219 of outstanding
borrowings under available lines of credit aggregating approximately
$40,000. The terms of the lines of credit generally provide for
interest rates at or below the prime rate on the date of borrowing
domestically and, for foreign company borrowings, rates that vary
with base rates in each currency. The lines of credit can be
withdrawn at any time at the option of the banks. The weighted
average interest rates on short-term borrowings outstanding were
5.6% and 5.1% at the end of 1996 and 1995, respectively.
4. EMPLOYEE RETIREMENT & WELFARE PLANS
The Corporation has defined benefit pension, defined contribution
profit sharing and employees' stock ownership plans for substantially
all its domestic employees. Aggregate amounts charged to earnings for
these plans were $1,892, $1,791, and $1,194 in 1996, 1995 and 1994,
respectively.
<PAGE>
-22-
<TABLE>
Pension. Net pension cost of the Corporation's defined benefit plan
included the following components for the years ended March 31:
<CAPTION>
(In thousands) 1996 1995 1994
---------------------------------
<S> <C> <C> <C>
Service cost $ 678 $ 581 $ 557
Interest cost 1,421 1,158 1,119
Actual return on investment (4,263) (1,879) (238)
Net amortization and deferrals 2,604 341 (1,320)
---------------------------------
Net periodic pension cost $ 440 $ 201 $ 118
=================================
</TABLE>
<TABLE>
The following table sets forth the plan's funded status at March
31, 1996 and 1995 and the amount recognized in the Corporation's
consolidated balance sheet at March 31:
<CAPTION>
(In thousands) 1996 1995
-----------------------
<S> <C> <C>
Actuarial present value of
benefit obligation:
Accumulated benefit obligation
including vested benefits of
$15,401 and $11,989 $16,043 $12,588
=======================
Projected benefit obligation 21,411 $15,947
Plan assets at fair value (primarily
listed stocks, bonds and guaranteed
investment contracts) 21,189 16,685
-----------------------
Plan assets (less than) in excess of
projected benefits obligation (222) 738
Unrecognized portion of transition
asset (being amortized over 14 years) (954) (1,145)
Unrecognized net loss 1,587 311
-----------------------
Prepaid (accrued) pension cost $ 411 $ (96)
=======================
</TABLE>
The rate of increase in future compensation levels used in determining
the actuarial present value of the projected benefit obligation was 5%
for 1996 and 1995. The expected long-term rate of return on assets was
9% for 1996 and 1995 and the weighted average settlement rate was 7.25%
and 8% for 1996 and 1995, respectively.
Plan assets included 43,695 shares of the Corporation's common stock
having a market value of $2,878 and $1,879 at March 31, 1996 and 1995,
respectively.
<PAGE>
-23-
Postretirement benefits. The Corporation sponsors a defined
benefit postretirement medical and dental plan that covers all of
its domestic full-time employees. Employees who retire after age 55
with at least 10 to 20 years of service (depending upon the date of
hire) are eligible. Current retirees are required to contribute
toward the cost of the plan until they attain age 65. All future
retirees will be required to contribute. The Corporation's subsidy
level is subject to a cap which increases by 3% each year. Retirees
will be required to contribute the plan cost in excess of the cap in
addition to other required contributions.
During fiscal 1994, adoption of SFAS 106 resulted in a one-
time charge against earnings for the transition obligation for
past services of $2,082 (net of a $1,382 deferred income tax
benefit).
The Corporation's postretirement medical and dental plan is
unfunded. The following table sets forth the plan amounts, covering
both active and retired employees, recognized in the Corporation's
consolidated balance sheet at March 31:
(In thousands) 1996 1995
---------------------
Accumulated postretirement
benefit obligation $4,267 $3,882
Unrecognized net loss 760 380
---------------------
Accrued postretirement medical
and dental liability $3,507 $3,502
=====================
For measurement purposes, an 8.5% annual rate of increase in the
per capita cost of covered medical benefits was assumed for fiscal
1996; the rate is assumed to decrease gradually down to 6% for
fiscal 2002 and remain at that level thereafter. No annual rate
increase is assumed for the dental benefit cost since it is a
scheduled plan. The medical cost trend rate assumption has only a
small effect on the amounts reported due to the cap on contributions
paid by the Corporation. Increasing the assumed health care cost
trend rate one percentage point in each year would increase the
accumulated postretirement benefit obligation as of March 31, 1996
by approximately $200 (5%). The aggregate of the service and
interest cost components of the net periodic postretirement benefit
cost for fiscal 1996 would increase by approximately $12 (4%).
The weighted average discount rate used in determining the
accumulated postretirement benefit obligation was 7.25% at March
31, 1996 and 8% at March 31, 1995. Since the plan is unfunded, no
assumption is needed as to the long-term rate of return on assets.
<PAGE>
-24-
<TABLE>
The net periodic postretirement benefit costs for the years ended
March 31 were as follows:
<CAPTION>
(In thousands) 1996 1995 1994
------------------------------
<S> <C> <C> <C>
Service cost $ 61 $ 62 $ 47
Interest cost 305 292 279
Net amortization 2 11 -
Recognition of transition
obligation at April 1, 1993 - - 3,464
------------------------------
Net periodic postretirement
benefit cost $ 368 $ 365 $3,790
==============================
</TABLE>
Postemployment benefits. The Corporation sponsors a defined
benefit postemployment compensation continuation plan that covers
all of its full time domestic employees. Employees who have
completed at least six months of service, become permanently
disabled and are unable to return to work are eligible to receive a
benefit under the plan. The benefit may range from one week to a
maximum of six months of compensation.
During fiscal 1995 adoption of SFAS 112 resulted in a one-time
charge against earnings for the transition obligation for past
services of $371 (net of a $248 deferred income tax benefit) which
was recorded on April 1, 1994. The estimated ongoing additional
after-tax annual cost of this unfunded plan is not material.
Stock option plan. 1992 Plan. Under a non-qualified stock
option plan approved by the Shareholders in July 1992 (the 1992
Plan), certain employees have been granted options to purchase
up to an aggregate 294,500 shares of common stock. There were
15,000, 96,500 and 73,500 options granted during fiscal 1996,
1995 and 1994, respectively, at exercise prices of $30.85,
$16.1505 and $16.983 to $18.315, respectively. There were 20,500
and 8,500 options canceled upon termination of the grantees during
1996 and 1995, respectively. Options granted under the 1992 Plan
generally are exercisable during a four-year period beginning with
the grant date. Options for 42,268, 37,550 and 500 shares were
exercised during fiscal years 1996, 1995 and 1994, respectively,
at prices ranging from $14.652 to $18.315 per share. At March 31,
1996, there were 206,300 options outstanding with exercise prices
from $14.652 to $30.85 per share.
The options are exercisable into restricted shares of common
stock which cannot be sold or transferred, except back to the
Corporation at cost, during the four-year period commencing with
the exercise date. Compensation expense, which is equal to the
difference between the fair market value on the date of an option
grant and the exercise price of shares which may be purchased
thereunder, is amortized over an estimated combined period from
<PAGE>
-25-
the date of grant through the end of the four-year period during
which purchased shares must be held or resold to the Corporation.
The amounts of such compensation expense charged to results of
operations following the date of grant for the years ended March
31, 1996, 1995 and 1994 were $330, $370 and $213, respectively.
1995 Plan. Under a non-qualified equity incentive plan approved
by the Shareholders in July 1995 (the 1995 Plan), certain employees
may be granted shares of restricted stock for an aggregate of up to
50,000 shares of common stock. During fiscal 1996 there were 21,830
shares of such restricted shares granted having market prices of
$42.75 to $53 on the dates of the grant. A participant who is awarded
restricted stock has no rights with respect to such award until the
award is accepted in writing and the specified purchase price is paid
in full. All shares of restricted stock issued under the 1995 Plan
must be held and cannot be sold or transferred, except to MacDermid
for the price paid, for a period of four years from the date of the
award. Compensation expense, which is equal to the difference between
the fair market value on the date of an award and the purchase price
of the stock to be purchased thereunder, is generally amortized over
the four-year restricted period during which the purchased shares must
be held or resold to the Corporation. The amount of such compensation
expense charged to results of operations following the award date for
the year ended March 31, 1996 was $993.
<PAGE>
-26-
5. INCOME TAXES
Earnings before income taxes included foreign earnings of
$15,035, $11,896 and $7,864 for 1996, 1995 and 1994, respectively.
<TABLE>
Income tax expense attributable to income from operations for the
years ended March 31 consisted of:
<CAPTION>
(In thousands) Current Deferred Total
---------------------------------
1996
----
<S> <C> <C> <C>
U.S. Federal $7,108 $(3,259) $3,849
State and local 1,681 (999) 682
Foreign 811 4,484 5,295
---------------------------------
Totals $9,600 $ 226 $9,826
=================================
1995
----
U.S. Federal $3,887 $ (504) $3,383
State and local 500 36 536
Foreign 4,038 (952) 3,086
----------------------------------
Totals $8,425 $(1,420) $7,005
==================================
1994
----
U.S. Federal $2,272 $ (434) $1,838
State and local 590 (86) 504
Foreign 2,213 98 2,311
----------------------------------
Totals $5,075 $ (422) $4,653
==================================
</TABLE>
<PAGE>
-27-
<TABLE>
Income tax expense for the years ended March 31, 1996, 1995 and
1994 differed from the amounts computed by applying the U.S. Federal
statutory tax rates to pretax income from operations as a result of
the following:
<CAPTION>
(In thousands) 1996 1995 1994
--------------------------------
<S> <C> <C> <C>
U.S. Federal statutory tax rate 35% 35% 34%
================================
Computed "expected"
Federal income tax $8,267 $6,351 $4,224
State income taxes, net of
Federal tax benefit 474 354 333
Adjustment of prior years
tax accruals 193 1,251 (24)
Foreign tax rate differential 741 (132) (442)
Change in the beginning of
the year balance of the
valuation allowance for
deferred income taxes
allocated to income tax
expense - (872) 482
No tax benefit for (gain) loss
of unconsolidated corporate
joint venture (14) (172) (10)
Other, net 165 225 90
--------------------------------
Actual income taxes $9,826 $7,005 $4,653
================================
Effective tax rate 41.6% 38.6% 37.5%
================================
</TABLE>
<PAGE>
-28-
<TABLE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and liabilities at
March 31 are:
<CAPTION>
(In thousands) 1996 1995
------------------
<S> <C> <C>
Deferred tax assets:
Accounts receivable, principally due to
allowance for doubtful accounts $ 705 $ 228
Inventories, principally due to additional
costs inventoried for tax purposes pursuant
to the Tax Reform Act of 1986 and non-
deductible inventory reserves 1,022 607
Accrued liabilities 1,292 3,527
Foreign net operating loss carry forwards 1,018 1,198
Other 2,983 1,248
------------------
Total gross deferred tax assets 7,020 6,808
Deferred tax liabilities:
Plant and equipment, principally due to
differences in depreciation 894 773
Other 504 187
------------------
Total gross deferred tax liabilities 1,398 960
------------------
Net deferred asset $5,622 $5,848
==================
</TABLE>
The deferred tax asset of $1,018 and $1,198 at March 31, 1996 and
1995, respectively, which relate to foreign net operating loss carry
forwards, results primarily from prior year losses incurred by a
foreign subsidiary. The valuation allowance related to those losses
decreased by $872 in 1995. Management believes the deferred tax asset
is more likely than not to be realized from future taxable income
generated by the subsidiary. The net operating loss carry forward has
an indefinite expiration period.
The Corporation has not recognized a deferred tax liability for
the undistributed earnings of subsidiaries that arose in 1996 and
prior years because the Corporation currently does not expect those
unremitted earnings to reverse and become taxable to the Corporation
in the foreseeable future. A deferred tax liability will be
recognized when the Corporation expects that it will recover those
undistributed earnings in a taxable manner, such as through receipt
of dividends, net of available foreign tax credits, or sale of the
investments. At March 31, 1996, the undistributed earnings of those
subsidiaries were approximately $23,000.
During fiscal 1996 the exercise of stock options under the stock
option and award plans resulted in a tax benefit of $130 which was
recorded as an increase in additional paid-in capital.
<PAGE>
-29-
6. SEGMENT REPORTING
The Corporation is engaged in the business of developing,
manufacturing and marketing industrial chemicals, supplies and
related equipment.
<TABLE>
The following table is a summary of the Corporation's operations
by geographic area:
<CAPTION>
North Asia-
America Europe Pacific Consolidated
--------------------------------------------
(In thousands) 1996
----------------------------------------
<S> <C> <C> <C> <C>
Net sales to unaffiliated
customers $131,404 $49,461 $55,026 $235,891
Operating profit 10,945 7,069 11,087 29,101
Identifiable Assets 205,035 25,716 34,005 264,756
1995
----------------------------------------
Net sales to unaffiliated
customers $93,866 $41,196 $47,038 $182,100
Operating profit 5,799 4,424 9,395 19,618
Identifiable assets 67,780 21,943 33,582 123,305
1994
----------------------------------------
Net sales to unaffiliated
customers $73,861 $37,951 $38,214 $150,026
Operating profit 5,527 2,156 5,051 12,734
Identifiable assets 56,708 19,942 29,217 105,867
</TABLE>
<PAGE>
-30-
7. LONG-TERM OBLIGATIONS
<TABLE>
Long-term obligations at March 31 consisted of the following:
<CAPTION>
(In thousands) 1995 1994
-----------------------
<S> <C> <C>
Term loan, unsecured, variable interest
(6.44% at March 31, 1996) due in
quarterly installments to 2003 $ 83,482 $ -
Revolving loan, unsecured, variable
interest (6.44% at March 31, 1996)
due in 2001 27,500 -
Mortgage note, 9.25% interest due
in 1997 802 -
Term loan, unsecured, variable interest
(7.5% at March 31, 1995) - 21,875
Debenture, 3.5% interest due in
annual installments to 1999 359 607
Other, due in varying amounts
to 1999 111 160
------------------------
Total long-term obligations 112,254 22,642
Less current portion 7,065 4,413
------------------------
Long-term portion $105,189 $18,229
=======================
</TABLE>
Minimum future principal payments on long-term obligations
subsequent to March 31, 1996 are as follows:
(In thousands)
1997 $ 7,065
1998 7,752
1999 12,257
2000 12,144
2001 39,643
Thereafter 33,393
--------
Total $112,254
========
The term loan bears interest at a variable rate, which is based on
a ratio of the Corporation's debt to earnings before certain expenses
and which presently falls within a range of 0.5% to 1.25% above the
March 29, 1996 London interbank market rate (LIBOR) which was 5.44%.
At March 31, 1996 the effective interest rate was 6.44%. Under the
term loan, the most restrictive covenants provide that: earnings
before interest and taxes, as a ratio to interest expense, must be
greater than 2.5 to 1; consolidated net worth and the preferred stock
<PAGE>
-31-
must be at least $80,000; and the total debt must not exceed 200% of
net worth and the preferred stock.
The revolving loan represents amounts outstanding under a $65,000
committed revolving credit line which expires in 2001. Commitment
fees under the revolving credit line are variable, ranging from 18.75
to 37.5 basis points.
The Corporation has entered into interest rate swap agreements
with a bank for the purpose of reducing its exposure to possible
future changes in interest rates applicable to the term and revolving
loans. Pursuant to the terms of the agreements, the notational
amounts of $85,000 and $29,000 are reduced in accordance with
applicable schedules until the expiration dates, September 30, 2002
and September 30, 1998, respectively. Applicable fixed rates of
5.63% and 5.39%, respectively, are compared to the U.S. dollar LIBOR
rates every three months as a basis for payment or receipt of the
rate differential as applied to the then covered notational amount.
The value of these off balance sheet agreements at March 31, 1996 was
not material to the Corporation's consolidated financial position.
8. REDEEMABLE PREFERRED STOCK
On December 5, 1995 MacDermid Imaging Technology, Inc., a wholly-owned
subsidiary of the Corporation, issued 30,000 shares of unregistered 6%
redeemable Series A preferred stock of 75,000 authorized shares to
Hercules Incorporated in part payment for the purchase of its Electronics
and Printing Division. Dividends in kind are payable on March 31, each
year by the issuance of additional Series A preferred stock at the rate
of one share per $1 of dividends. Transfer of the preferred stock is
restricted for a period of ten years and Hercules Incorporated has the
right, under certain conditions, to appoint one person to be a director
of MacDermid, Incorporated. Cumulative payments for redemption of
preferred stock and dividends paid in kind are to be paid out of
cumulative net earnings which accrue beginning with the December 1, 1995
effective date and continuing through the payment dates, as follows:
(In thousands)
March 31, 2000 $12,877
March 31, 2001 13,650
March 31, 2002 14,469
-------
$40,996
=======
Cumulative redemption payments may not exceed 50% of the cumulative
net earnings through the payment date. Any preferred stock or
dividends not so redeemed because of this limitation will be redeemed
in the year(s) following 2002. The preferred stock may be redeemed
earlier at the option of MacDermid. In the event that MacDermid is in
default of its obligations with respect to the preferred dividend or
redemption, it may not pay a dividend with respect to its common stock.
<PAGE>
-32-
9. SHAREHOLDERS' EQUITY
<TABLE>
The following summarizes the changes in shareholders' equity accounts
for each of the three years in the period ended March 31,1996:
<CAPTION>
(In thousands, Common Stock Total
except share data) ------------ Additional Cumulative Treasury Stock Share-
Stated Paid-in Retained Translation -------------- holders
Shares Value Capital Earnings Adjustment Shares Cost Equity
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance March 31, 1993 4,098,030 $4,098 $ 614 $71,491 $ 578 530,648 $(11,600) $65,181
Stock options
exercised 500 1 220 221
Net earnings 5,689 5,689
Cash dividends
$.60 per share (2,141) (2,141)
Foreign currency
translation
adjustment (781) (781)
-------------------------------------------------------------------------------
Balance March 31, 1994 4,098,530 4,099 834 75,039 (203) 530,648 (11,600) 68,169
Stock options
exercised 37,550 37 842 879
Net earnings 10,771 10,771
Cash dividends
$.60 per share (1,767) (1,767)
Foreign currency
translation
adjustment 1,754 1,754
Treasury stock purchase 862,899 (26,152) (26,152)
-------------------------------------------------------------------------------
Balance March 31, 1995 4,136,080 4,136 1,676 84,043 1,551 1,393,547 (37,752) 53,654
Stock options
exercised 42,268 42 946 988
Tax benefit from
exercise of stock
options 130 130
Stock awards 21,830 22 704 726
Net earnings 13,195 13,195
Cash dividends
$.60 per share (1,674) (1,674)
Foreign currency
translation
adjustment (517) (517)
Treasury stock purchase 12,400 (685) (685)
-------------------------------------------------------------------------------
Balance March 31, 1996 4,200,178 $4,200 $3,456 $95,564 $1,034 1,405,947 $(38,437) $65,817
===============================================================================
</TABLE>
<PAGE>
-33-
Effective August 1, 1994, the Corporation purchased 851,899 shares
of its common stock at a price of $30 per share pursuant to a "Dutch
Auction" self tender offer. The shares purchased pursuant to the
Offer represented approximately 23.8% of the shares outstanding
immediately prior to the commencement of the Offer. The total cost
of the Offer, including all related fees and expenses, of
approximately $26,200 was funded primarily by bank borrowings.
The Board of Directors has authorized the additional purchase of
up to 148,000 shares of the Corporation's common stock to be acquired
through open market purchases or privately negotiated transactions
from time to time. Common stock repurchases of 12,400 shares in 1996,
at prices ranging from $42.25 to $64 per share, and 11,000 shares in
1995 at $35 per share, were completed pursuant to this authorization.
Any future repurchases under this authorization will depend on
various factors, including the market price of the shares, the
Corporation's business and financial position and general economic
and market conditions. Additional shares acquired pursuant to such
authorization will be held in the Corporation's treasury and will be
available for the Corporation to issue without further shareholder
action (except as required by applicable law or the rules of any
securities exchange on which the shares are then listed). Such shares
may be used for various Corporate purposes, including contributions
under existing or future employee benefit plans, the acquisition of
other businesses and the distribution of stock dividends. At March
31, 1996, there was a balance of such outstanding authorizations
totaling 124,600 shares.
10. LEASE COMMITMENTS
The Corporation leases certain warehouse space, transportation, computer
and other equipment. Contingent rentals are paid for warehouse space on
the basis of the monthly quantities of materials stored and for
transportation and other equipment on the basis of mileage or usage.
Total rental expense amounted to &$6,750, $4,968 and $4,126 in 1996, 1995
and 1994, respectively, of which $1,522, $821 and $587, respectively, were
contingent rentals.
Minimum lease commitments under operating leases for the fiscal years
subsequent to March 31, 1996 are as follows:
(In thousands) 1997 $3,079
1998 1,991
1999 761
2000 404
2001 254
Thereafter 208
------
$6,697
======
<PAGE>
-34-
11. CONTINGENCIES
The Corporation has been named as a potentially responsible party
(PRP) by the Environmental Protection Agency in connection with two
waste sites. There are many other companies involved at each of
these sites and the Corporation's participation is minor. The
Corporation has recorded its best estimate of liabilities in
connection with site clean-up based upon the extent of its
involvement, the number of PRPs and estimates of the total costs of
the site clean-up. Though it is difficult to predict the final
costs of site remediation, management believes that the recorded
liabilities are reasonable estimates of probable liability and that
future cash outlays are unlikely to be material to its consolidated
financial position, results of operations or cash flows.
The Corporation is a party to a number of lawsuits and claims
arising out of the ordinary conduct of business. While the ultimate
results of the proceedings against the Corporation cannot be
predicted with certainty, management does not expect that resolution
of these matters will have a material adverse effect upon its
consolidated financial position, results of operations or cash flows.
The Corporation's business operations, consist principally of
manufacture and sale of specialty chemicals, supplies and related
equipment to customers throughout much of the world. Approximately
60% of the business is concentrated with manufacturers of printed
circuit boards which are used in a wide variety of end-use
applications, including computers, communications and control
equipment, appliances, automobiles and entertainment products.
As is usual for this business, the Corporation generally does
not require collateral or other security as a condition of sale,
choosing, rather, to control credit risk of trade account financial
instruments by credit approval, balance limitation and monitoring
procedures. Management believes that reserves for losses, which are
established based upon review of account balances and historical
experience, are adequate.
<PAGE>
-35-
MANAGEMENT'S STATEMENT OF FINANCIAL RESPONSIBILITY
MacDermid, Incorporated (Logo)
245 Freight Street
Waterbury, CT 06702
To The Shareholders
MacDermid, Incorporated
The financial information in this report, including the audited
consolidated financial statements, has been prepared by management.
Preparation of consolidated financial statements and related data
involves the use of judgment. Accounting principles used in
preparing consolidated financial statements are those that are
generally accepted in the United States.
To safeguard Corporate assets, it is important to have a sound
but dynamic system of internal controls and procedures that balances
benefits and costs. The Corporation employs professional financial
managers whose responsibilities include implementing and overseeing
the financial control system, reporting on management's stewardship
of assets entrusted to it by share owners and performing accurate
and proper maintenance of the accounts.
Management has long recognized its responsibility for conducting
the affairs of the Corporation and its affiliates in an ethical and
socially responsible manner. MacDermid, Incorporated is dedicated
to the highest standards of integrity. Integrity is not an
occasional requirement, but a continuing commitment.
KPMG Peat Marwick LLP conducts an objective, independent review
of management's fulfillment of its obligations relating to the
fairness of reported operating results and financial condition.
Their report for 1996 appears below this statement.
The Audit Committee of the Board of Directors, consisting solely
of Directors independent of MacDermid, maintains an ongoing
appraisal on behalf of the share owners of the effectiveness of the
independent auditors and the Corporation's staff of financial and
operating management with respect to the financial and internal
controls.
/s/Daniel H. Leever /s/Arthur J. LoVetere, Jr.
Daniel H. Leever Arthur J. LoVetere, Jr.
Chief Executive Officer Vice President, Chief Financial
Officer and Treasurer
<PAGE>
-36-
INDEPENDENT AUDITORS' REPORT
KPMG Peat Marwick LLP (Logo)
Certified Public Accountants City Place II
Hartford, CT 06103-4103
The Board of Directors and Shareholders
MacDermid, Incorporated
We have audited the accompanying consolidated balance sheets of
MacDermid, Incorporated and subsidiaries as of March 31, 1996 and
1995, and the related consolidated statements of earnings and cash
flows for each of the years in the three-year period ended March 31,
1996. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of MacDermid, Incorporated and subsidiaries at March 31,
1996 and 1995 and the results of their operations and their cash
flows for each of the years in the three-year period ended March 31,
1996 in conformity with generally accepted accounting principles.
As discussed in Note 4 to the consolidated financial statements,
the Company adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits" in 1995,
and Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" in 1994.
/s/KPMG Peat Marwick LLP
/s/KPMG Peat Marwick LLP
May 22, 1996
<PAGE>
-37-
<TABLE>
SELECTED FINANCIAL DATA
(UNAUDITED)
(In thousands, except share and per share amounts)
SELECTED QUARTERLY RESULTS
1996 by Quarters
----------------------------------------------
<CAPTION>
June September December March Total
----------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $48,966 $53,359 $58,279 $75,287 $235,891
Gross profit 25,204 26,032 28,223 36,620 116,079
Net earnings 2,910 3,114 3,088 4,083 13,195
Primary earnings
per common share <F1> $1.00 $1.07 $1.05 $1.39 $4.51
1995 by Quarters
----------------------------------------------
June September December March Total
----------------------------------------------
Net sales $42,587 $46,498 $44,547 $48,468 $182,100
Gross profit 21,262 21,779 21,684 23,316 88,041
Net earnings 2,799<F1> 2,667 2,637 2,668 10,771<F1>
Primary earnings
per common share <F1> $0.78<F1> $0.85 $0.92 $0.92 $3.43<F1>
<FN>
<F1> After cumulative effect of accounting changes which resulted
in one-time after tax charges of $371 ($0.12/common share).
</TABLE>
<TABLE>
MARKET RANGE TRADING RECORD
Fiscal 1996 Fiscal 1995
------------------ ------------------
<CAPTION>
High Low High Low
QUARTER ------------------ ------------------
<S> <C> <C> <C> <C>
June 46 41 1/2 29 1/2 24
September 47 1/2 43 36 1/2 29
December 60 1/8 46 42 34
March 72 1/4 59 44 1/2 36 1/2
Closing price March 31 65 7/8 43
<FN>
Source: Nasdaq Stock Market Monthly Statistical Report
</TABLE>
<PAGE>
-38-
<TABLE>
DIVIDEND RECORD
Fiscal 1996 Fiscal 1995
--------------------------- ---------------------------
<CAPTION>
Record Payable Amount Record Payable Amount
QUARTER Date Date Declared Date Date Declared
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
June 6/15/95 7/3/95 $0.15 6/15/94 7/1/94 $0.15
September 9/15/95 10/2/95 $0.15 9/15/94 10/3/94 $0.15
December 12/15/95 1/2/96 $0.15 12/15/94 1/3/95 $0.15
March 3/15/96 4/3/96 $0.15 3/15/95 4/3/95 $0.15
</TABLE>
<PAGE>
-39-
CORPORATE INFORMATION
DIRECTORS:
Harold Leever, Chairman of the Board
Daniel H. Leever, Chief Executive Officer
Donald G. Ogilvie, Executive Vice President,
American Bankers Association
James C. Smith, Chairman of the Board and Chief Executive
Officer, Webster Financial Corporation
Thomas W. Smith, Managing Partner of Prescott Investors
CORPORATE OFFICERS:
Harold Leever, Chairman of the Board
Daniel H. Leever, Chief Executive Officer
Arthur J. LoVetere, Jr., Vice President, Chief Financial
Officer
EXECUTIVE MANAGEMENT:
Patricia I. Janssen, Group Vice President and President,
Electronics and Printing
Michael A. Pfaff, Group Vice President and President,
Industrial Products
Thomas M. Leever, President, MacDermid Equipment, Inc.
OTHER OFFICERS:
Vice Presidents-
David A. Erdman
John J. Grunwald
Peter E. Kukanskis
Gary B. Larson
Division Vice Presidents-
Michael P. D'Angelo
David Rosenberg
Michael J. Siegmund
Victor L. Sprenger
Other-
Gregory M. Bolingbroke, Corporate Controller
John L. Cordani, Corporate Secretary
Sharon J. Stone, Assistant Treasurer
CORPORATE HEADQUARTERS:
245 Freight Street
Waterbury, Connecticut 06702
(203) 575-5700
AUDITORS:
KPMG Peat Marwick LLP
<PAGE>
-40-
REGISTRAR OF STOCK AND TRANSFER AGENT:
Harris Trust Company of New York
SEC FORM 10-K:
The Annual Report and the SEC Form 10-K report are
available without charge by written request to:
Corporate Secretary
MacDermid, Incorporated
245 Freight Street
Waterbury, CT 06702
DIVIDEND REINVESTMENT PLAN:
A systematic investment service is available to all MacDermid
shareholders. The service permits investment of MacDermid,
Incorporated dividends and voluntary cash payments in additional
shares of MacDermid stock.
Please direct any inquiries to:
Harris Trust Company of New York
c/o Harris Trust and Saving Bank
Dividend Reinvestment Department
P.O. Box A3309
Chicago, IL 60690
SHAREHOLDERS' QUESTIONS:
Shareholders with questions concerning non-receipt of dividend
checks, transfer requirements, registration and address changes,
or who need a duplicate 1099 statement, should write to:
Harris Trust Company of New York
c/o Harris Trust and Savings Bank
111 West Monroe, P.O. Box 755
Chicago, IL 60690
MARKET & DIVIDEND INFORMATION:
The common shares of MacDermid, Incorporated are traded on
the Nasdaq Stock Market (Symbol: MACD). Price and shares
traded are listed in principal daily newspapers and are
supplied by Nasdaq. Approximate number of Holders as of
May 31, 1996 - 800. CUSIP-554273 102.
ANNUAL MEETING:
The Annual Meeting of Shareholders will be held on Thursday,
July 25, 1996 at 3:30 p.m., at the Marriott Courtyard,
63 Grand Street, Waterbury, CT.
<PAGE>
-41-
LOCATIONS IN THE AMERICAS:
United States: Waterbury, CT; New Hudson, MI; Cincinnati, OH; Ferndale,
MI; Middletown and Wilmington, DE; Springfield, VT
Canada: MacDermid Chemicals, Inc.
LOCATIONS WORLDWIDE:
Australia: MacDermid Australia Branch
Belgium: MacDermid Imaging Technology Belgium NV;
Benelux: MacDermid Benelux, B.V.; MacDermid Imaging Technology Europe BV
England: MacDermid G.B., Ltd.
France: MacDermid France, S.A.
Germany: MacDermid GmbH; MacDermid Equipment GmbH
Hong Kong: MacDermid Asia Ltd; MacDermid Hong Kong, Ltd.
Israel: MacDermid Israel Ltd.
Italy: MacDermid Italiana SRL
Japan: Nippon MacDermid Co. Ltd.
Korea: MacDermid Korea Ltd.
New Zealand: MacDermid New Zealand, Ltd.
Rep. of South Africa: MacDermid S.A. (PTY) Ltd.
Singapore: MacDermid Singapore, Pte Ltd.
Spain: MacDermid Espanola, S.A.
Switzerland: MacDermid Suisse, S.A.
Taiwan: MacDermid Taiwan, Ltd.
EXHIBIT 21
SUBSIDIARIES OF MACDERMID, INCORPORATED
MacDermid's principal subsidiaries, primarily wholly-owned, are as follows:
State of
Incorporation
MacDermid Asia, Ltd. Hong Kong
MacDermid Benelux BV Holland
MacDermid Chemicals, Inc. Canada
MacDermid Equipment, Inc. Vermont
MacDermid Equipment GmbH Germany
MacDermid Espanola, S.A. Spain
MacDermid Europe, Incorporated Delaware
MacDermid France, S.A. France
MacDermid G.B., Ltd. United Kingdom
MacDermid GmbH Germany
MacDermid Hong Kong, Ltd. Hong Kong
MacDermid Imaging Technology, Inc. Delaware
MacDermid Imaging Technology Belgium NV Belgium
MacDermid Imaging Technology Europe BV Holland
MacDermid Israel, Ltd. Israel
MacDermid Italiana SRL Italy
MacDermid Korea, Ltd. Hong Kong
MacDermid New Zealand, Ltd. New Zealand
MacDermid S.A. (Pty.) Ltd. South Africa
MacDermid Singapore, Pte. Ltd. Singapore
MacDermid Suisse, S.A. Switzerland
MacDermid Taiwan, Ltd. Taiwan
Nippon MacDermid Co., Inc. Japan
In addition, the Corporation has several non operating subsidiaries
which, in the aggregate, are not significant.
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
KPMG Peat Marwick LLP (Logo)
Certified Public Accountants
CityPlace II
Hartford, CT 06103-4103
Independent Auditors' Consent
The Board of Directors
MacDermid, Incorporated:
We consent to incorporation by reference in the Registration
Statements (Nos. 2-66987 and 2-68181) on Form S-8 of MacDermid,
Incorporated of our reports dated May 22, 1996, relating to the
consolidated balance sheets of MacDermid, Incorporated and
subsidiaries as of March 31, 1996 and 1995, and the related
consolidated statements of earnings and cash flows and related
schedules for each of the years in the three-year period ended
March 31, 1996, which reports appear or are incorporated by
reference in the March 31, 1996 annual report on Form 10-K of
MacDermid, Incorporated.
Our report refers to a change in the Company's method of
accounting for postemployment benefits and postretirement benefits.
/s/ KPMG Peat Marwick LLP
June 28, 1996
EXHIBIT 24
POWER OF ATTORNEY
Each of the non employee Directors of MacDermid, Incorporated
signed identical powers of attorney in the following form:
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned, a director
of MacDermid, Incorporated, hereby constitutes and appoints Harold
Leever and Daniel H. Leever, and each of them acting alone, the true
and lawful agents and attorneys-in-fact of the undersigned, with full
power and authority in said agents and attorneys-in-fact to delegate
the power herein conferred to any person or persons said agents and
attorneys-in-fact shall select, to sign in the place of the undersigned
in his capacity as a director of the Corporation, the Form 10-K for the
fiscal year ended March 31, 1996, of the Corporation to be filed with
the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, and sign any amendment or
amendments to such Form 10-K; hereby ratifying and confirming all acts
taken by such agents and attorneys-in-fact or any one of them, as
herein authorized.
(Signature)*
May 14, 1996
* The Directors who signed the powers of attorney were:
Donald G. Ogilvie
James C. Smith
Thomas W. Smith
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from the consolidated balance sheet as of March 31, 1996 and the
consolidated statement of earnings for the fiscal year ended March 31, 1996
included in Exhibit 13 to the 1996 Form 10-K Annual Report of MacDermid,
Incorporated and is qualified in its entirety to such statements.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Mar-31-1996
<PERIOD-START> Apr-01-1995
<PERIOD-END> Mar-31-1996
<CASH> 8833
<SECURITIES> 0
<RECEIVABLES> 69239
<ALLOWANCES> 4829
<INVENTORY> 38538
<CURRENT-ASSETS> 118737
<PP&E> 79232
<DEPRECIATION> 37916
<TOTAL-ASSETS> 264756
<CURRENT-LIABILITIES> 59023
<BONDS> 105189
30600
0
<COMMON> 4200
<OTHER-SE> 61617
<TOTAL-LIABILITY-AND-EQUITY> 264756
<SALES> 235891
<TOTAL-REVENUES> 235891
<CGS> 119812
<TOTAL-COSTS> 212270
<OTHER-EXPENSES> 92458
<LOSS-PROVISION> 1793
<INTEREST-EXPENSE> 4435
<INCOME-PRETAX> 23621
<INCOME-TAX> 9826
<INCOME-CONTINUING> 13195
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13195
<EPS-PRIMARY> 4.51
<EPS-DILUTED> 4.49
</TABLE>
