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, 1997.
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, 1997 (based on the closing price on such date
as reported on Nasdaq Stock Market) was $194,546,000.
The number of shares of Registrant's Common Stock outstanding as of May
31, 1997 was 8,247,254 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 1997 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 23, 1997 to
the Corporation's stockholders in connection with the annual meeting
scheduled for July 23, 1997 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, electronics and photopolymer printing
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 patterns 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,
2,555,697 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, printing 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 1997 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 Japan.
In North America, MacDermid markets its entire line of products in the
United States through more than 110 sales and service personnel employed
by it and, in certain areas of the United States, through distributors and
manufacturing representatives. The Corporation maintains chemical
inventories at more than 20 distribution points throughout the United States
which typically are leased or rented. In Vermont a wholly owned subsidiary
manufactures and markets equipment in support of the proprietary chemical
business. 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 55 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 subsidiary 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 55 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 subsidiary 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.
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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;
(B) Resale chemicals and supplies; and
(C) Equipment, of which more than 60% is manufactured
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 1997 1996 1995
Proprietary Chemicals 88% 88% 90%
Resale Chemicals
and Supplies 6% 6% 7%
Equipment 6% 6% 3%
(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 1997, there were no significant difficulties in obtaining raw
materials essential to its business.
(iv) During fiscal 1997, 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.
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(v) No material portion of MacDermid's business is seasonal.
(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 $10,850,000, $10,042,000 and
$9,644,000 during fiscal years 1997, 1996 and 1995, 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 approx-
imately $6.9 million were made in fiscal 1997 and an estimated $1
million will be spent for environmental control facilities in fiscal 1998.
Though difficult to predict, future spending for this purpose is likely to
average more than 10% of the capital budget.
<PAGE>
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(xiii) MacDermid employed 1,086 and 1,083 full time, regular
employees as of March 31, 1997 and 1996, respectively.
Item 1(d) FOREIGN AND DOMESTIC OPERATIONS
MacDermid's 1997 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 85,520 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 26,000 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 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 property in Vernon, Connecticut,
which is being held for sale or lease but which could be
used for manufacturing should the need arise.
<PAGE>
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Outside the United States, the Corporation owns additional properties as
follows:
At Barcelona, Spain, a steel and brick building of 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.
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, 30,000 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 Vermont, Canada, Holland, Germany, Korea,
Australia, 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
Legal proceedings are contained in MacDermid's 1997 Annual Report to
Shareholders included as Exhibit 13 to this form 10K and incorporated
by reference.
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 1997.
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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,
1997) 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 82 Chairman since 1977
Daniel H. Leever 48 President and Chief Executive Officer
since 1990.
Arthur J. LoVetere, Jr. 33 Executive Vice President and Chief
Financial Officer since December 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.
Gregory M. Bolingbroke 47 Corporate Controller since April 1995.
Previously, was since 1993 Cost
Accounting Manager. Prior to that and
since 1974 he was a Chartered
Accountant and Auditor.
John L. Cordani 34 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 54 Vice President since November 1993.
Previously, and since 1988, was
Director of Quality of the Electronics
Group of E.I. Dupont de Nemours, Inc.
Patricia I. Janssen 46 Vice President/Electronics and Printing
since December 1995. Previously, and
since 1978 she was with Hercules
Incorporated, serving as general
manager of the E&P Division since 1992.
Peter E. Kukanskis 50 Vice President/Technical since 1986
Gary B. Larson 57 Vice President/Research since 1981
Michael A. Pfaff 53 Vice President/Industrial Products
since 1984
Sharon J. Stone 47 Assistant Treasurer since February
1995. Previously, she was for more
than five years, and continues to be,
Manager of General Accounting
<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 1997
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 1997 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 1997 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 1997 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 23, 1997 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 23, 1997 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
23, 1997 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 23, 1997 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 13, 1997, except as to note 8, which is
May 28, 1997 are contained in MacDermid's 1997 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
The Corporation filed a report on Form 8-K dated May 14,1997
superceeding a report on Form 8-K dated February 28, 1991, filed
during the fourth quarter of fiscal 1997. These reports relate
to environmental investigation involving MacDermid and are
incorporated by reference.
(d) Schedules
The schedules listed above are filed as part of this
Annual Report on Form 10-K.
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 30, 1997
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
Executive Vice President Controller and Principal
and 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 30, 1997
as attorney-in-fact for the following directors of the Registrant:
Donald G. Ogilvie Thomas W. Smith James C. 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, 1997, 1996 and 1995
<CAPTION>
Balance at Additions Balance
beginning charged to Deductions at end
Description of period earnings of period
----------- ---------- ---------- ---------- ---------
1997
----
<S> <C> <C> <C> <C>
Allowance for
doubtful
receivables $4,829,000 $ 547,000 $ 1,997,000 $3,379,000
========== ========== ============ ==========
1996
----
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
========== ========== ========= ==========
<FN>
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 13, 1997, except as to note 8, which is May 28, 1997,
we reported on the consolidated balance sheets of MacDermid,
Incorporated and subsidiaries as of March 31, 1997 and 1996, and
the related consolidated statements of earnings, cash flows, and
changes in shareholders' equity for each of the years in the
three-year period ended March 31, 1997, as contained in the 1997
annual report to shareholders. Our report refers to a change
in the Company's method of accounting for postemployment benefits.
These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for the
year 1997. 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 13, 1997
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EXHIBIT INDEX
1997 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, amended and restated, dated as of By reference
August 23, 1996, 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 1997 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 1997 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>
GRAPHIC PRESENTATION
(Three horizontal bar graphs are provided here, net sales, net earnings per
common share and return on equity. Each graph depicts one facet of results of
operations for the fiscal years 1993 through 1997. 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 per common share and return on equity indicate increases in each
year since 1992 with substantial increases in 1995, 1996 and 1997.)
GRAPH VALUES
(In thousands, except share and per share amounts)
<CAPTION>
1993 1994 1995 1996 1997
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $156,324 $150,026 $182,100 $235,891 $293,720
Net earnings per
common share <F1> $ 0.72 $ 0.73 $ 1.18 $ 1.50 $ 2.55
Return on Equity <F1> 12.1% 11.7% 18.3% 22.1% 30.2%
<FN>
<F1> Before the cumulative effect of accounting changes which resulted
in one-time after tax charges of $371 ($0.04/common share) in 1995
and $2,082 ($0.19/common share) in 1994.
</TABLE>
<PAGE>
MESSAGE TO SHAREHOLDERS
Fellow Shareholder,
Nineteen hundred ninety-seven, our 75th year, marked our sixth consecutive
year of record performance. Sales increased to $293.7 million, up 25%
from $235.9 million in 1996. Net earnings increased to $22.0 million,
up 67% from last year's $13.2 million. Per share earnings, restated
for a 3-for-1 stock split, increased to $2.55, up 70% from $1.50.
Free cash flow (before financing activities) was more than $30.0 million.
We used $9.0 million to repurchase shares at an average price of
$23 per share. We reduced our borrowings by $25.4 million. After
the fiscal year end, we exercised our option to retire the more than
$30.0 million in preferred shares outstanding, after which our
total debt to capital ratio will be 60%. We have more than $150.0
million in additional borrowing available under current bank facilities.
In December of 1995, we acquired the Electronics and Printing Division
of Hercules, Incorporated. A top priority in 1996 was to make the
transfer of this acquisition as seamless as possible for both our
customers and our new associates. We achieved greater success in
this effort than we expected due to the competence and to the commitment
of both our new and old members of the MacDermid clan.
While we celebrate our 75th year, a much bigger company, with
greater potential than ever before, our focus remains unchanged - we
continue to work every day to improve our products and our services,
to remove excess costs, and to grow as rapidly as is prudently possible.
We have important growth opportunities within our current business and,
as such, are funding investments in printing, printed circuits and
industrial products. Of particular note, we will begin construction
of a manufacturing plant in China this year, fueling one of our most
important growth opportunities. We expect to fund these investments
in capital improvement, R&D and marketing, while at the same time
continuing to grow our cash flow and per share earnings.
Our acquisition philosophy remains unchanged - to make acquisitions
that strengthen the competitive position of our current business in
both technology and market share, and to add areas of growth that
compliment our core competencies. Most important, we intend to
increase the intrinsic value of our company on a per share basis.
As you see from our repeated references to per share results, we
are acutely conscious that we work for our shareholders and that our
stewardship is measured in per share terms over the long run.
That is easy for us, your employees, since stock ownership in
the company is both widespread and substantial. Your employees
own approximately 35% of the outstanding shares.
On behalf of the Board of Directors, congratulations to the
entire MacDermid clan. Thank you for a job well done.
From the MacDermid clan and the board, thank you, our shareholders,
for your continued commitment.
/s/ Harold Leever /s/ Daniel H. Leever
Harold Leever Daniel H. Leever
Chairman of the Board Chief Executive Officer
<PAGE>
<TABLE>
MACDERMID, INCORPORATED FINANCIAL HIGHLIGHTS
<CAPTION>
(In thousands, except share and
per share amounts) 1997 1996 % Change
-----------------------------------
<S> <C> <C> <C>
Total Net Sales $ 293,720 $ 235,891 25
Net Earnings $ 22,010 $ 13,195 67
Return on Average Equity<F1> 30.2% 22.1% -
Average Shares Outstanding<F2> 8,642,329 8,817,137 (2)
Net Earnings Per Common Share<F1> <F2> $2.55 $1.50 70
<F1> Before the cumulative effect of accounting changes which
resulted in one-time after tax charges of $371 ($0.04/common
share) in 1995 and $2,082 ($0.19/common share) in 1994.
<F2> Net earnings per common share and average shares
outstanding have been restated to reflect the effects of a 3-for-
1 stock split effective November 15, 1996.
</TABLE>
<PAGE>
<TABLE>
FIVE YEAR SELECTED FINANCIAL DATA
(In thousands, except share and per share amounts)
<CAPTION>
OPERATING RESULTS 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $293,720 $235,891 $182,100 $ 150,026 $156,324
Net Earnings<F1> $ 22,010 $ 13,195 $ 11,142 $ 7,771 $ 7,687
Net Earnings Per
Common Share <F1><F2> $2.55 $1.50 $1.18 $0.73 $0.72
Return On Sales
(%)<F1> 7.5 5.6 6.1 5.2 4.9
Return On Average
Equity (%)<F1> 30.2 22.1 18.3 11.7 12.1
FINANCIAL POSITION AT YEAR END
- -----------------------------------------------------------------------------
Working Capital $ 46,883 $ 59,714 $ 34,711 $ 34,959 $ 31,050
Current Ratio 1.7 2.0 1.7 2.0 1.8
Capital Expenditures $ 6,914 $ 4,303 $ 3,990 $ 7,526<F3> $4,594
Total Assets $260,978 $264,756 $123,305 $ 105,867 $107,173
Long-term Debt
(Includes Short-
term Portion) $ 82,981 $112,254 $ 22,642 $ 1,157 $ 2,684
Percent of Total
Capitalization (excluding
preferred stock) 50.9 63.0 29.7 1.7 4.0
SHARE DATA
- -------------------------------------------------------------------------------
Shareholders' Equity $ 80,058 $ 65,817 $ 53,654 $ 68,169 $ 65,181
Per Common Share <F2> $ 9.78 $ 7.85 $ 6.52 $ 6.37 $ 6.09
Cash Dividends Per
Common Share <F2> $0.20 $0.20 $0.20 $0.20 $0.20
Common Shares
Outstanding <F2>
Average During Year 8,642,329 8,817,137 9,425,607 10,703,625 10,696,113
At Year End 8,187,153 8,382,693 8,227,599 10,703,646 10,702,146
Stock Price <F2>
High 39 24 1/16 14 7/8 10 3/8 9 13/16
Low 21 1/2 13 7/8 8 8 3/16 7 15/16
Year End 34 3/4 21 15/16 14 3/8 8 5/8 9
<FN>
<F1> Before cumulative effect of accounting change which resulted in one-
time after tax charges of $371 ($0.04/common share) in 1995 and $2,082
($0.19/common share) in 1994.
<F2> Share and per share data have been restated to reflect the effects of
a 3-for-1 stock split effective November 15, 1996.
<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>
<TABLE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION & RESULTS OF OPERATIONS
(In thousands, except share and per share amounts)
FIVE YEAR SUMMARY
<CAPTION>
1997 1996 1995 1994 1993
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales:
North America $171,782 $131,404 $ 93,867 $ 73,861 $ 74,068
Overseas 121,938 104,487 88,233 76,165 82,256
--------------------------------------------------------
$293,720 $235,891 $182,100 $150,026 $156,324
========================================================
Net Earnings<F1> $ 22,010 $ 13,195 $ 11,142 $ 7,771 $ 7,687
Net Earnings per
Common Share<F1>
<F2> $2.55 $1.50 $1.18 $0.73 $0.72
Cash Dividends
Declared per
Common Share <F2> $0.20 $0.20 $0.20 $0.20 $0.20
Cash Provided
by Operations $ 37,437 $ 17,493 $ 19,854 $ 15,545 $ 9,342
Total Assets $260,978 $264,756 $123,305 $105,867 $107,173
Long-term
Obligations -
non current $ 75,165 $105,189 $ 18,229 $ 922 $ 983
<FN>
<F1> Before cumulative effect of accounting changes which resulted in one-
time after tax charges of $371 ($0.04/common share) in 1995 and $2,082
($0.19/common share) in 1994.
<F2> Share and per share data have been restated to reflect the effects
of a 3-for-1 stock split effective November 15, 1996.
</TABLE>
NET SALES & OPERATING PROFITS
OVERVIEW
Worldwide net sales were $293,720, a 25% increase in fiscal 1997
over the previous year. This increase reflects the effects of new
accounts in every geographic segment, improving business conditions
overseas and the December 1995 photo imaging business acquisition in
the U.S. Fiscal year 1997 was the third consecutive
record year for net sales.
After giving effect to preferred stock dividend requirements, net
earnings increased to $22,010, $2.55
per common share, as compared to fiscal 1996 net earnings of $13,195,
$1.50 per common share. Fiscal year 1997 was the
fifth consecutive record year for net earnings and the sixth consecutive
record year for earnings per share.
<PAGE>
SALES
1997 vs 1996
In North America, net sales were up in fiscal 1997 over fiscal 1996,
principally the result of the third quarter fiscal 1996 acquisition of
MacDermid Imaging Technology Inc. (discussed below). MacDermid,
Incorporated (the Corporation) overseas sales were up 17%,
due to additional imaging business and continued success with
the acceptance of newer products, which are more efficient and
environmentally friendly, in both the European and Asian/Pacific
segments. Although certain foreign currencies recently have been
devalued on the strength of the dollar there was practically no impact
overall on overseas sales for the year.
1996 vs 1995
In North America, net sales were up 40% in fiscal 1996 over fiscal
1995, principally a result of the third quarter acquisition of
MacDermid Imaging Technology Inc. This new business enhances the
Corporation's position as a supplier to the electronics industry and
provides new market opportunities in the printing industry. Overseas,
sales were up 18% as a result of customer acceptance of
new products and the penetration of emerging markets in both European
and Asia / Pacific segments.
COSTS AND EXPENSES
1997 vs 1996
Costs of sales decreased as a percentage of sales for the second
consecutive year. A primary factor to the improvement in fiscal 1997
was the recognition in fiscal 1996 of an acquisition related
accounting charge of approximately $1,700 associated with purchased
inventories (in accordance with purchase accounting requirements).
Other influences on costs of sales include: higher margin incremental
sales from the acquisition, continuing growth of newer proprietary
products which are environmentally friendly and more efficient and
related overhead efficiencies and cost reduction programs.
Selling, technical and administrative expenses declined as a
percentage of sales because of ongoing cost control programs and an
improved account collection experience. Actual costs
increased to support additional business activity, product development
and additional goodwill amortization from the photo imaging business
acquisition. Accelerated debt reduction during 1997 helped to
mitigate the additional eight months interest from the acquisition
leaving interest expense 64% increased over 1996.
<PAGE>
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 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 photo imaging business during the third quarter left interest
expense more than double that of fiscal 1995.
ACQUISITIONS
In December 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
approximately $77,000 in goodwill, which is 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
included inventories, a research facility and technology. The
acquisition has been accounted for as a purchase.
<PAGE>
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.
INCOME TAXES
The overall effective income tax rate decreased to 38.4% in fiscal
1997 from 41.6% in fiscal 1996 and 38.6% in fiscal 1995.
The decrease in the effective rate for 1997 is primarily due to higher
earnings by foreign subsidiaries in low tax districts and a
dividend payment strategy which optimized the Corporation's foreign
tax credit position. The 1996 increase over 1995 was principally attributable
to changes in the amounts included in each year's earnings before
income taxes for nontaxable one-time profits on sales of property and
minority equity interests.
LIQUIDITY & CAPITAL RESOURCES
Cash flows from operations are used to fund dividend payments
($0.20 per common share for fiscal 1997)
to shareholders, other working capital requirements of the
Corporation and most capital projects. MacDermid has paid cash
dividends continuously since 1948. From time to time the Corporation
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 past year cash flows provided by operations more
than doubled. A large portion of these funds
were used to reduce debt, ahead of existing repayment
schedules, in order to minimize interest costs.
In certain years, MacDermid has embarked on programs
which have required significant amounts of funds in excess of those
available from cash flows from operations. 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 previously
existing 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. Subsequent to the fiscal year
end, the $30,000 of preferred stock, together with accumulated
dividends in kind was redeemed to eliminate non-deductible
preferred stock dividends.
<PAGE>
New capital spending during fiscal 1997 of approximately
$6,914 as compared with $4,303 in fiscal 1996 and $3,990 in
fiscal 1995, included upgrades to manufacturing facilities worldwide
and a new technical center in Wilmington, Delaware, as well as
replacement of technical equipment. For fiscal 1998, planned new
capital projects total approximately $8,000.
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 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. The directors authorized the
purchase of up to an additional 100,000 shares of MacDermid's
common stock on August 28, 1996. Pursuant to this, and previous
authorizations, MacDermid acquired 395,345 shares during fiscal
1997 and 37,200 shares during fiscal 1996 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 93,198 shares,
if exercised at the Nasdaq Stock Market closing price on March 31, 1997,
would cost approximately $3,239.
<TABLE>
The principal sources and uses of cash in fiscal years 1997
and 1996 were as follows:
<CAPTION>
1997 1996
------------------------
<S> <C> <C>
Cash provided by:
Operations $ 37,437 $ 17,493
Proceeds from dispositions of
fixed assets and certain
business 1,508 630
Option exercises 958 659
Net increase in borrowings - 93,268
-------------------------
$ 39,903 $112,050
=========================
Cash used for:
Capital expenditures $ 6,914 $ 4,303
Business acquisitions - 104,100
Purchase of treasury shares 8,970 685
Dividend payments 1,641 1,674
Net decrease in borrowings 24,316 -
Other - net 365 85
-------------------------
$ 42,206 $110,847
=========================
</TABLE>
<PAGE>
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
upon results of operations, financial condition or liquidity.
At March 31, 1997 the Corporation had domestic and foreign short-term
uncommitted credit lines with banks approximating $33,000 in addition
to a domestic $65,000 committed revolving credit line (against which $30,000
was borrowed in May 1997 to redeem the preferred stock, as noted above) and
an additional $100,000 acquisition credit facility. Management believes
that additional borrowing could be obtained if needed.
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
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.
<PAGE>
On January 30, 1997, the Company was served with a subpoena from
a federal grand jury in Connecticut requesting certain documents.
The Company was subsequently informed that it is a subject of the grand
jury's investigation. The subpoena requested information relating
to an accidental spill from the Company's Huntingdon Avenue,
Waterbury, Connecticut facility that occurred in November of 1994,
together with other information related to the Company's operations and
compliance at the Huntingdon Avenue facility. The Company has
retained outside law firms to assist the Company in complying
with the subpoena. The Company is cooperating with the government's
investigation. The Connecticut Fund for Environment, a private
organization, has notified MacDermid of its intent to sue MacDermid
in relation to the foregoing accidental spill and in relation to certain
permit exceedances. Since these matters are currently in very early
stages, it is impossible to determine what the ultimate outcome will be
and difficult to quantify the extent of the Company's exposure to
liability, if any. As such, no assurance can be given that the Company
will not be found to have liability. It is the Company's policy to accrue
probable liabilities to the extent that the Company can reasonably
quantify such liabilities.
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.
MacDermid operates throughout the world in areas generally
considered stable. 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.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except share and
per share amounts) Year Ended March 31
------------------------------------
<CAPTION>
1997 1996 1995
------------------------------------
<S> <C> <C> <C>
Net sales $293,720 $235,891 $182,100
Cost of Sales 144,281 119,812 94,059
------------------------------------
Gross profit 149,439 116,079 88,041
Selling, technical and
administrative expenses 102,728 86,978 68,423
------------------------------------
Operating profit 46,711 29,101 19,618
Other income (expense):
Interest income 666 430 185
Interest expense (7,277) (4,435) (2,029)
Miscellaneous, net (1,383) (1,475) 373
------------------------------------
(7,994) (5,480) (1,471)
------------------------------------
Earnings before income
taxes and cumulative
effect of accounting change 38,717 23,621 18,147
Income taxes (note 5) 14,871 9,826 7,005
------------------------------------
Earnings before cumulative
effect of accounting change 23,846 13,795 11,142
Cumulative effect of accounting
change (note 4) - - (371)
------------------------------------
Net earnings 23,846 13,795 10,771
Preferred dividends (1,836) (600) -
------------------------------------
Net earnings available for
common shareholders $ 22,010 $ 13,195 $ 10,771
====================================
Net earnings per common
share:
Before cumulative effect
of accounting change $2.55 $1.50 $1.18
Cumulative effect of
accounting change (note 4) - - (0.04)
------------------------------------
$2.55 $1.50 $1.14
====================================
Weighted average number of common
shares outstanding 8,642,329 8,817,137 9,425,607
====================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands) March 31
---------------------
<CAPTION>
1997 1996
---------------------
<S> <C> <C>
Current assets:
Cash and equivalents $ 6,530 $ 8,833
Accounts receivable, less allowance for
doubtful receivables of $3,379 and $4,829 61,419 64,410
Inventories (note 2) 40,748 38,538
Prepaid expenses 2,207 2,911
Deferred income taxes (note 5) 4,808 4,045
---------------------
115,712 118,737
Total current assets ---------------------
Property, plant and equipment, at cost:
Land and improvements 3,847 3,930
Buildings and improvements 31,933 31,930
Machinery, equipment and fixtures 47,188 43,372
---------------------
82,968 79,232
Less accumulated depreciation and amortization 41,424 37,916
---------------------
Net property, plant and equipment 41,544 41,316
---------------------
Goodwill, net 76,346 80,398
Other assets, net 27,376 24,305
---------------------
$260,978 $264,756
=====================
</TABLE>
<PAGE>
<TABLE>
LIABILITIES & SHAREHOLDERS' EQUITY
(In thousands except share and
per share amounts) March 31
---------------------
<CAPTION>
1997 1996
---------------------
<S> <C> <C>
Current liabilities:
Notes payable (note 3) $ 9,059 $ 5,219
Current installments of long-term
obligations (note 7) 7,816 7,065
Accounts payable 21,772 20,877
Dividends payable 409 419
Accrued compensation 9,259 7,966
Accrued expenses, other 13,756 11,299
Income taxes (note 5) 6,758 6,178
---------------------
Total current liabilities 68,829 59,023
---------------------
Long-term obligations (note 7) 75,165 105,189
Accrued postretirement benefits
Less Current Portion (note 4) 4,157 3,997
Deferred income taxes (note 5) 245 45
Minority interest in subsidiary 88 85
Preferred Stock - 6% redeemable
Series A (no par) (note 8) 32,436 30,600
Shareholders' equity (note 9):
Common stock. Authorized 20,000,000 shares;
issued 12,800,339 shares in 1997 and 12,600,534
shares in 1996 at stated value of $1.00 per
share (note 4) 12,800 4,200
Additional paid-in capital (note 4) 959 3,456
Retained earnings 113,632 95,564
Equity adjustment from foreign currency
translation 74 1,034
Less cost of 4,613,186 and 4,217,841 common
shares in treasury (47,407) (38,437)
---------------------
Total shareholders' equity 80,058 65,817
---------------------
Contingencies and commitments (notes 10 and 11)
$260,978 $264,756
=====================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) Year Ended March 31
---------------------------
<CAPTION>
1997 1996 1995
---------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 22,010 $ 13,195 $10,771
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 5,463 4,525 4,349
Effect of change in accounting (note 4) - - 371
Amortization of goodwill and other
intangible assets 4,787 3,307 685
Provision for bad debts 547 1,793 664
Deferred income taxes (184) 226 (1,420)
Changes in assets and liabilities net of
effects from acquisitions and dispositions:
Decrease (increase) in receivables 2,373 (3,792) (4,685)
Decrease (increase) in inventories (2,955) (654) (265)
Decrease (increase) in prepaid expenses 669 (789) (713)
Increase (decrease) in accounts payable 1,624 (1,791) 4,453
Increase (decrease) in accrued expenses 4,563 5,059 3,505
Increase (decrease) in income tax
liabilities 768 555 2,860
Other (2,228) (4,141) (721)
---------------------------
Net cash flows provided by operating
activities 37,437 17,493 19,854
---------------------------
Cash flows from investing activities:
Capital expenditures (6,914) (4,303) (3,990)
Proceeds from disposition of fixed assets 871 630 3,376
Acquisitions (and dispositions) of businesses 637 (104,100) (8,910)
Other investments - - (216)
---------------------------
Net cash flows used in investing
activities (5,406) (107,773) (9,740)
---------------------------
Cash flows from financing activities:
Long-term and short-term borrowings 10,508 109,101 26,609
Long-term and short-term repayments (34,824) (15,833) (8,891)
Exercise of stock options 958 659 879
Acquisition of treasury stock (note 9) (8,970) (685) (26,152)
Dividends paid (1,641) (1,674) (1,767)
---------------------------
Net cash flows provided by (used in) financing
activities (33,969) 91,568 (9,322)
---------------------------
Effect of exchange rate changes on cash
and cash equivalents (365) (85) 354
---------------------------
Net increase (decrease) in
cash and cash equivalents (2,303) 1,203 1,146
Cash and cash equivalents at beginning of year 8,833 7,630 6,484
---------------------------
Cash and cash equivalents at end of year $ 6,530 $ 8,833 $ 7,630
===========================
Cash paid for interest $ 7,106 $ 4,534 $ 2,182
===========================
Cash paid for income taxes $ 15,391 $ 7,198 $ 4,226
===========================
<FN>
Supplemental disclosure of non-cash financing activities:
During fiscal 1996 MacDermid Imaging Technology, Inc. issued
unregistered 6% redeemable Series A preferred stock for $30,000.
Preferred stock issued as dividends in kind valued at $1,836 and
$600 were issued in 1997 and 1996, respectively.
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands, except share data) Shares
---------------------------------
<CAPTION>
1997 1996 1995
---------------------------------
<S> <C> <C> <C>
Common Stock:
Balance - beginning of year 4,200,178 4,136,080 4,098,530
Shares issued - stock options 59,870 42,268 37,550
Shares issued - stock awards 7,787 21,830 -
Three-for-one stock split 8,532,504 - -
----------------------------------
Balance - end of year 12,800,339 4,200,178 4,136,080
==================================
</TABLE>
<PAGE>
<TABLE>
Year Ended March 31
<CAPTION> -----------------------------------
1997 1996 1995
-----------------------------------
<S> <C> <C> <C>
Common Stock:
Balance - beginning of year $ 4,200 $ 4,136 $ 4,099
Shares issued - stock options 59 42 37
Shares issued - stock awards 8 22 -
Three-for-one stock split 8,533 - -
-----------------------------------
Balance - end of year 12,800 4,200 4,136
-----------------------------------
Additional Paid In Capital:
Balance - beginning of year 3,456 1,676 834
Stock options 1,595 946 842
Stock awards 670 704 -
Tax benefit from stock
options exercised 444 130 -
Three-for-one stock split (5,206) - -
-----------------------------------
Balance - end of year 959 3,456 1,676
-----------------------------------
Retained Earnings:
Balance - beginning of year 95,546 84,043 75,039
Net Earnings 22,010 13,195 10,771
Cash dividends at $0.20 per share (1,641) (1,674) (1,767)
Change in subsidiary fiscal year 1,026 - -
Three-for-one stock split (3,327) - -
-----------------------------------
Balance - end of year 113,632 95,546 84,043
-----------------------------------
Equity adjustment from foreign
currency translation:
Balance - beginning of year 1,034 1,551 (203)
Translation adjustment (960) (517) 1,754
-----------------------------------
Balance - end of year 74 1,034 1,551
-----------------------------------
Treasury stock:
Balance - beginning of year (38,437) (37,752) (11,600)
Shares acquired
(1997:395,345; 1996:37,200;
1995:2,588,697) (8,970) (685) (26,152)
-----------------------------------
Balance - end of year (47,407) (38,437) (37,752)
-----------------------------------
===================================
Total shareholder's equity $ 80,058 $65,817 $ 53,654
===================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
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 were in previous years, for practical purposes, included
on a calendar year basis. For those subsidiaries the fiscal year end is now
changed to coincide with the parent corporation, beginning with this
(1997) fiscal year. The results of the quarter ended March 31, 1996,
were credited directly to retained earnings to effect this changeover.
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 purchase 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 $1.86 $1.32
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.
<PAGE>
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
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 defined benefit pension plan.
The projected unit credit actuarial method is used for financial
reporting purposes.
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 $10,850, $10,042, and $9,644 in 1997, 1996
and 1995, respectively.
<PAGE>
(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 $960 in 1997
and $517 in 1996 and an increase of $1,754 in 1995. 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.
Interest rate swap agreements are employed by the Corporation
to optimize borrowing costs by reducing exposure of
possible future changes in interest rates. The estimated fair
value of these financial instruments at March 31, 1997 is $2,719
based on the quoted market price from the bank holding the
instruments.
(k) Common Share Data. The computation of 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. Fully diluted per share computations are not
included since the effect is less than 3%.
Net earnings per common share, dividend amounts declared
and share market price have been restated to give retroactive
effect to a three for one stock split as of November 15, 1996.
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Standards No. 128, Earnings per
Share (SFAS 128) and Statement of Financial Accounting
Standards No. 129, Disclosure of Information about Capital
Structure (SFAS 129). SFAS 128 revises and simplifies the
computation for earnings per share and requires certain additional
disclosures. SFAS 129 requires additional disclosures regarding
the Company's capital structure. Both standards are effective
beginning in fiscal year 1998.
<PAGE>
(l) Stock-based Plans. Effective April 1, 1996 the Corporation
adopted the disclosure requirements of Statement of Financial
Accounting Standards No 123, Accounting for Stock Based
Compensation (SFAS123). The Corporation continues to follow
Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees in accounting for its employee stock
options. Pro forma net income and per share amounts are
presented in the Employee Stock Incentive Plans note as if the
alternative fair value method of accounting provided for under
SFAS123 had been applied to options granted after March 31, 1995.
(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 the 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 and disclosure of
contingent 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.
2. INVENTORIES
The major components of inventory at March 31 were as follows:
(In thousands) 1997 1996
----------------------
Finished goods $23,125 $21,270
Raw materials and supplies 17,623 17,268
----------------------
$40,748 $38,538
======================
3. NOTES PAYABLE
Notes payable at March 31, 1997 consisted of $9,059 of outstanding
borrowings under available lines of credit aggregating approximately
$33,000. 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
5.8% and 5.6% at the end of 1997 and 1996, respectively.
<PAGE>
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 $1,566, $1,892, and $1,791 in 1997, 1996 and 1995,
respectively.
<TABLE>
The following table sets forth the components of the pension and
postretirement benefit plans for the years ended March 31:
<CAPTION>
PENSION
(In thousands) 1997 1996 1995
---------------------------------
<S> <C> <C> <C>
Service cost $1,092 $ 678 $ 581
Interest cost 1,741 1,421 1,158
Net amortization and deferrals 1,532 2,604 341
Actual return on investment (3,502) (4,263) (1,879)
---------------------------------
Net periodic pension cost $ 863 $ 440 $ 201
=================================
POSTRETIREMENT BENEFITS
(In thousands) 1997 1996 1995
---------------------------------
Service cost $ 56 $ 61 $ 62
Interest cost 302 305 292
Net amortization and deferrals 11 2 11
Actual return on investment - - -
---------------------------------
Net periodic pension cost $ 369 $ 368 $ 365
=================================
</TABLE>
<PAGE>
<TABLE>
The following table sets forth the plans funded status, amount
recognized in the balance sheet, plan amounts and rate
assumptions of the pension and postretirement benefit plans
at March 31:
<CAPTION>
PENSION
(In thousands) 1997 1996
-----------------------
<S> <C> <C>
Accumulated benefit obligation $19,049 $16,043
=======================
Plan assets at fair value 23,871 $21,189
Projected benefit obligation 24,375 21,411
-----------------------
Plan assets less than
projected benefits obligation (504) (222)
Unrecognized portion of transition
asset (being amortized over 14 years) (632) (954)
Unrecognized net loss 684 1,587
-----------------------
Prepaid (accrued) pension cost $ (452) $ 411
=======================
Rate assumptions:
Discount rate 7.5% 7.25%
Rate on return on plan assets 9% 9%
Salary increases 5% 5%
Annual increase in costs
of medical benefits n/a n/a
POSTRETIREMENT BENEFITS
(In thousands) 1997 1996
-----------------------
Accumulated benefit obligation $ - $ -
=======================
Plan assets at fair value - -
Projected benefit obligation 4,300 4,267
-----------------------
Plan assets less than
projected benefits obligation (4,300) (4,267)
Unrecognized portion of transition
asset (being amortized over 14 years) - -
Unrecognized net loss 477 760
-----------------------
Accrued postretirement liability $ 3,823 $ 3,507
=======================
Rate assumptions:
Discount rate 7.5% 7.25%
Rate on return on plan assets n/a n/a
Salary increases n/a n/a
Annual increase in costs
of medical benefits 3.0% 8.5%
</TABLE>
<PAGE>
Pension. The pension plan provides retirement benefits based
upon years of service and compensation levels. Plan assets at fair
value consist primarily of listed stocks, bonds and guaranteed
investment contracts, and included 131,085 shares of the
Corporation's common stock having a market value of $4,555 and
$2,878 at March 31, 1997 and 1996, respectively. Accumulated
benefits obligations included vested benefits of $17,836 and
$15,401 at March 31, 1997 and 1996, respectively.
Postretirement benefits. The Corporation sponsors a defined
benefit postretirement medical and dental plan (unfunded) that covers all of
its domestic full-time employees who retire after age 55
with at least 10 to 20 years of service (depending upon the date of
hire). 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 3% each year. Retirees
will be required to contribute the plan cost in excess of the cap in
addition to other required contributions.
The projected benefit obligation for the postretirement plan at
March 31, 1997 comprised 30% retirees, 24% fully eligible active
participants and 46% other active participants. The annual
increase in cost is 3.0% for postretirement medical benefits (no
assumed rate increase for dental benefits since it is a scheduled
plan) since the Corporation's contributions are at the defined cap.
The medical cost trend rate assumption has no effect on the
amounts reported due to the cap on contributions paid by the
Corporation.
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 is not material.
EMPLOYEE STOCK INCENTIVE PLANS
1992 Plan: In 1993, the Corporation adopted a non-qualified
stock option plan, approved by shareholders in July 1992 (the
1992 plan), for the issuance of up to 900,000 shares under which
certain employees have been granted options totaling 844,500
Options granted under the 1992 plan generally are exercisable
during a four-year period beginning with the grant date. 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.
<PAGE>
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 a six-year period. During 1997, 1996, and 1995,
compensation expense relating to this plan was $646, $330 and
$370, respectively.
1995 Plan. In 1996, the Corporation adopted a non-qualified
equity incentive plan, approved by the shareholders in July 1995
(the 1995 plan), for the issuance of up to 150,000 shares under
which certain employees have been granted restricted shares
totaling 88,851, having market prices of $14 1/4 to $23 3/16 on the
dates of grant. All shares of restricted stock issued under the 1995
plan must be held and cannot be sold or transferred, except to
MacDermid for a period of four years from the date of the award.
During 1997 and 1996, compensation expense relating to this plan
was $604 and $993, respectively.
Options issued under the Corporation's stock incentive plans have
exercise prices ranging from $4.88 to $10.56, expiring periodically
through fiscal 2002, summarized in the following table as of
March 31:
<TABLE>
<CAPTION>
Number Weighted-average
of Options Exercise Price
__________ ______________
<S> <C> <C>
Outstanding March 31, 1994 610,854 $ 5.54
1995 activity:
Granted 289,500 $ 5.38
Exercised (112,650) $ 5.33
Forfeited (25,500) $ 5.80
Outstanding at March 31, 1995 762,204 $ 5.50
Exercisable at March 31, 1995 762,204 $ 5.50
1996 activity:
Granted 45,000 $10.42
Exercised (126,804) $ 5.19
Forfeited (61,500) $ 5.52
Outstanding at March 31, 1996 618,900 $ 5.92
Exercisable at March 31, 1996 618,900 $ 5.92
1997 activity:
Granted 0 $ -
Exercised (176,444) $ 5.43
Forfeited 0 -
Outstanding at March 31, 1997 442,456 $ 6.12
Exercisable at March 31, 1997 442,456 $ 6.12
</TABLE>
<PAGE>
Had the Corporation used the fair value-based method of
accounting for its stock option plans beginning in 1996 and
charged compensation cost against income, over the six year
period, based on the fair value at the date of grant consistent with
FAS 123, net earnings and net earnings per common share for
1997 and 1996 would have been reduced to the following pro
forma amounts:
<TABLE>
(In thousands, except per share amounts)
<CAPTION>
1997 1996
_____ _____
<S> <C> <C>
Net earnings
As reported $22,010 $13,195
Pro forma $21,967 $13,161
Net earnings per common share
As reported $2.55 $1.50
Pro forma $2.54 $1.49
</TABLE>
The pro forma information above includes stock options granted
since April 1, 1995. Effects of applying FAS 123, using the fair
value-based method of accounting, is not representative of the pro
forma effect on earnings in future years because it does not take
into consideration pro forma compensation expense related to
stock options granted prior to 1996 and would increase in future
years if stock options were to be granted.
The weighted-average grant-date fair value of options, $10.55
for those granted in 1996, was determined by utilizing the
Black-Scholes option-pricing model and the following key assumptions:
Risk-free interest rate 5.68%
Expected option life 6 years
Expected volatility 28.8%
Dividend yield 1.1%
5. INCOME TAXES
Earnings before income taxes included foreign earnings of
$20,312, $15,035 and $11,896 for 1997, 1996 and 1995, respectively.
<PAGE>
<TABLE>
Income tax expense attributable to income from operations for the
years ended March 31 consisted of:
<CAPTION>
(In thousands) Current Deferred Total
---------------------------------
1997
----
<S> <C> <C> <C>
U.S. Federal $ 7,738 $( 775) $ 6,963
State and local 1,519 (176) 1,343
Foreign 5,798 767 6,565
---------------------------------
Totals $15,055 $ (184) $14,871
=================================
1996
----
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
=================================
</TABLE>
<PAGE>
<TABLE>
Income tax expense for the years ended March 31, 1997, 1996 and
1995 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) 1997 1996 1995
---------------------------------
<S> <C> <C> <C>
U.S. Federal statutory tax rate 35% 35% 35%
=================================
Taxes computed at U.S.
statutory rate $13,551 $8,267 $6,351
State income taxes, net of
Federal benefit 873 474 354
Adjustments of prior years
tax accruals - 193 1,251
Foreign tax rate differential (1,251) 741 (132)
Change in the beginning of
the year balance of the
valuation allowance for
deferred income taxes
allocated to income
expense - - (872)
No tax benefit for (gain) loss
of unconsolidated corporate
joint venture - (14) (172)
No tax benefit for loss on
disposition of subsidiary 438 - -
Other, net 1,260 165 225
---------------------------------
Actual income taxes $14,871 $9,826 $7,005
=================================
Effective tax rate 38.4% 41.6% 38.6%
=================================
</TABLE>
<PAGE>
<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) 1997 1996
------------------
<S> <C> <C>
Deferred tax assets:
Accounts receivable, primarily due to
allowance for doubtful accounts $ 945 $ 705
Inventories 1,369 1,022
Accrued liabilities 983 1,292
Foreign net operating losses 376 1,018
Other 5,525 2,983
------------------
Total gross deferred tax assets 9,198 7,020
Deferred tax liabilities:
Plant and equipment, primarily due to
depreciation 1,625 894
Other 1,767 504
------------------
Total gross deferred tax liabilities 3,392 1,398
------------------
Net deferred asset $5,806 $5,622
==================
</TABLE>
The deferred tax asset of $376 and $1,018 at March 31, 1997 and
1996, respectively, which relate to foreign net operating loss carry
forwards, results primarily from prior year losses incurred by a
foreign subsidiary. 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 foreign subsidiaries that arose in 1997 and
prior years because the Corporation does not expect to repatriate those
earnings in the foreseeable future. A deferred tax liability will be
recognized when the Corporation expects that it will recover those
earnings in a taxable transaction, such as through receipt
of dividends, net of foreign tax credits, or sale of the
investment. At March, 1997, the undistributed earnings of those
subsidiaries were approximately $25,171.
During fiscal 1997 and 1996 the lapse of restrictions upon
stock exercised under the stock option and award plans resulted
in a tax benefit of $444 and $130, respectively, which were
recorded as increases in additional paid-in capital.
<PAGE>
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 Asian
America European Pacific Consolidated
--------------------------------------------
(In thousands) 1997
--------------------------------------------
<S> <C> <C> <C> <C>
Net sales to unaffiliated
customers $171,782 $55,969 $65,969 $293,720
Operating profit 27,359 8,482 10,870 46,711
Identifiable Assets 192,983 30,122 37,873 260,978
1996
--------------------------------------------
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
</TABLE>
<PAGE>
7. LONG-TERM OBLIGATIONS
<TABLE>
Long-term obligations at March 31 consisted of the following:
<CAPTION>
(In thousands) 1997 1996
-----------------------
<S> <C> <C>
Term loan, unsecured, variable interest
(6.125% at March 31, 1997) due in
quarterly installments to 2003 $ 75,893 $ 83,482
Revolving loan, unsecured, variable
interest due in 2001
6.125% at March 31, 1997 3,300 27,500
3.565% at March 31, 1997 3,343 -
Mortgage note, 9.25% interest at
March 31, 1996 - 802
Debenture, 3.5% interest due in
annual installments to 1999 198 359
Other, due in varying amounts
to 2001 247 111
-------------------------
Total long-term obligations 82,981 112,254
Less current portion 7,816 7,065
-------------------------
Long-term portion $ 75,165 $105,189
=========================
</TABLE>
Minimum future principal payments on long-term obligations
subsequent to March 31, 1997 are as follows:
(In thousands)
1998 $ 7,816
1999 12,333
2000 12,168
2001 20,308
2002 18,214
Thereafter 12,142
--------
Total $ 82,981
========
<PAGE>
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 0.375% to
1.0% above the March 27, 1997 London interbank market rate
(LIBOR) which was 5.75%. At March 31, 1997 the effective
interest rate was 6.125%. 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 must be at least
$96,984 (subject to a one-time $30,000 reduction when the
preferred issue is paid.); and the total debt must not exceed
350% 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 and $100,000 acquisition
credit lines are variable, ranging from 12.5 to 25.0 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
notional amounts $77,411 and $7,816 are reduced in
accordance with applicable schedules until the expiration dates,
December 31, 2002 and December 31, 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 notional amount.
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. In accordance with the terms of the
preferred stock agreement, on May 28, 1997, subsequent to the
balance sheet date of this report, MacDermid exercised its option
to make early payment to Hercules Incorporated, in the amount
of $32,745 to fully satisfy the amounts owed for the preferred
stock and dividends in kind.
9. SHAREHOLDER'S EQUITY
On October 21, 1996 the Board of Directors authorized a three-
for-one stock split. The shares were distributed on November 15,
1996 to common shareholders of record at the close of business
on November 1, 1996. The stated value remained unchanged at
$1.00 per share. As a result, $5,206 was first transferred from
additional paid in capital with an excess of $3,327 transferred
from retained earnings to the common stock account. Amounts
per share and number of common shares have been restated to
give retroactive effect to the stock split.
<PAGE>
Effective August 1, 1994, the Corporation purchased 2,555,697
shares of its common stock at a price of $10 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.
Common stock repurchases of 395,345 shares in 1997, at
prices ranging from $21 7/8 to $33 5/8 per share, and 37,200
shares in 1996, at prices ranging from $14 1/16 to $21 5/16 per
share, were completed pursuant to board authorizations. An
additional purchase of up to 100,000 shares of the Corporation's
common stock was authorized by the Board of Directors on
August 28, 1996, to be acquired through open market purchases
or privately negotiated transactions from time to time. 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 emp-
loyee benefit plans, the acquisition of other businesses and the
distribution of stock dividends. At March 31, 1997, there was a
balance of such outstanding authorizations totaling 93,198
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
$5,710, $6,750, and $4,968 in 1997, 1996 and 1995, respec-
tively, of which $1,159, $1,522, and $821, respectively, were
contingent rentals.
Minimum lease commitments under operating leases for the fiscal
years subsequent to March 31, 1997 are as follows:
(In thousands)
1998 $2,569
1999 1,102
2000 539
2001 436
2002 380
Thereafter 721
------
Total $5,747
======
<PAGE>
11. CONTINGENCIES
The Corporation has been named as a potentially responsible
party (PRP) by the Environmental Protection Agency in connec-
tion 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 PRP's 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.
On January 30, 1997, the Company was served with a subpoena
from a federal grand jury in Connecticut requesting certain
documents. The Company was subsequently informed that it is a
subject of the grand jury's investigation. The subpoena requested
information relating to an accidental spill from the Company's
Huntingdon Avenue, Waterbury, Connecticut facility that occurred
in November of 1994, together with other information related to
the Company's operations and compliance at the Huntingdon
Avenue facility. The Company has retained outside law firms to
assist the Company in complying with the subpoena. The
Company is cooperating with the government's investigation.
The Connecticut Fund for the Environment, a private organization,
has notified MacDermid if its intent to sue MacDermid in relation
to the foregoing accidental spill and in relation to certain permit
exceedances. Since these matters are currently in very early
stages, it is impossible to determine what the ultimate outcome
will be and difficult to quantify the extent of the Company's
exposure to liability, if any. As such, no assurance can be given
that the Company will not be found to have liability. It is the
Company's policy to accrue probable liabilities to the extent that
the Company can reasonably quantify such liabilities.
The Corporation is a party to a number of lawsuits and claims
in addition to those discussed above arising out of the ordinary
conduct of business. While the ultimate results of the proceed-
ings 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. Approxi-
mately 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>
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 1997 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 Executive Vice President
<PAGE>
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, 1997
and 1996, and the related consolidated statements of earnings,
cash flows and changes in shareholders' equity for each of the
years in the three-year period ended March 31, 1997. 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, 1997 and 1996
and the results of their operations and their cash flows for each of the
years in the three-year period ended March 31, 1997 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.
/s/KPMG Peat Marwick LLP
May 13, 1997, except as to note 8, which is May 28, 1997
<PAGE>
<TABLE>
SELECTED QUARTERLY FINANCIAL DATA
(UNAUDITED)
(In thousands, except share and per share amounts)
SELECTED QUARTERLY RESULTS
<CAPTION>
1997 by Quarters
----------------------------------------------
June September December March Total
----------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $72,655 $74,038 $74,367 $72,660 $293,720
Gross profit 36,215 36,696 38,365 38,163 149,439
Net earnings 4,470 5,047 5,423 7,070 22,010
Earnings
per common share $0.51 $0.59 $0.63 $0.82 $2.55
1996 by Quarters
----------------------------------------------
June September December March Total
----------------------------------------------
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
Earnings
per common share <F1> $0.34 $0.35 $0.35 $0.46 $1.50
<FN>
<F1> Restated to reflect the effects of a 3-for-1 stock split
effective November 15, 1996.
</TABLE>
<PAGE>
<TABLE>
MARKET RANGE TRADING RECORD
<CAPTION>
Fiscal 1997 Fiscal 1996 <F1>
------------------ ------------------
High Low High Low
QUARTER ------------------ ------------------
<S> <C> <C> <C> <C>
June 23 3/4 21 1/2 15 5/16 13 7/8
September 23 29/32 22 1/2 15 13/16 14 5/16
December 37 22 5/16 20 1/32 15 5/16
March 39 29 1/4 24 1/16 19 11/16
Closing price March 31 34 3/4 21 15/16
<FN>
<F1> Restated to reflect the effects of a 3-for-1 stock split
effective November 15, 1996.
Source: Nasdaq Stock Market Monthly Statistical Report
</TABLE>
<TABLE>
DIVIDEND RECORD
<CAPTION>
Fiscal 1997 Fiscal 1996 <F1>
--------------------------- ---------------------------
Record Payable Amount Record Payable Amount
QUARTER Date Date Declared Date Date Declared
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
June 6/15/96 7/1/96 $0.05 6/15/95 7/3/95 $0.05
September 9/15/96 10/1/96 $0.05 9/15/95 10/2/95 $0.05
December 12/15/96 1/2/97 $0.05 12/15/95 1/2/96 $0.05
March 3/15/97 4/1/97 $0.05 3/15/96 4/3/96 $0.05
<FN>
<F1> Restated to reflect the effects of a 3-for-1 stock split
effective November 15. 1996
</TABLE>
<PAGE>
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, General Partner of Prescott Investors
CORPORATE OFFICERS:
Daniel H. Leever, Chief Executive Officer
Arthur J. LoVetere, Jr., Executive Vice Presidnet
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
Peter E. Kukanskis
Gary B. Larson
Division Vice Presidents
Michael P. D'Angelo
David Rosenberg
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>
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, 1997 - 800. CUSIP-554273 102.
ANNUAL MEETING:
The Annual Meeting of Shareholders will be held on Wednesday,
July 23, 1997 at 11:00 a.m., at the Sheraton Four Points
Hotel, 3580 East Main Street, Waterbury, CT.
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 Italiana SRL Italy
MacDermid Korea, Ltd. Hong Kong
MacDermid New Zealand, Ltd. New Zealand
MacDermid Overseas, Asia, Incorporated Delaware
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 13, 1997, except as to note 8
which is May 28, 1997, relating to the consolidated balance sheets of
MacDermid, Incorporated and subsidiaries as of March 31, 1997 and 1996,
and the related consolidated statements of earnings, cash flows and
changes in shareholders' equity for each of the years in the three-year
period ended March 31, 1997, and related schedule, which reports appear
or are incorporated by reference in the March 31, 1997 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.
/s/ KPMG Peat Marwick LLP
June 30, 1997
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, 1997, 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 13, 1997
* 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, 1997 and the
consolidated statement of earnings for the fiscal year ended March 31, 1997
included in Exhibit 13 to the 1997 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-31-1997
<PERIOD-START> Apr-01-1996
<PERIOD-END> Mar-31-1997
<CASH> 6530
<SECURITIES> 0
<RECEIVABLES> 64798
<ALLOWANCES> 3379
<INVENTORY> 40748
<CURRENT-ASSETS> 115712
<PP&E> 82968
<DEPRECIATION> 41424
<TOTAL-ASSETS> 260978
<CURRENT-LIABILITIES> 68829
<BONDS> 75165
32436
0
<COMMON> 12800
<OTHER-SE> 67258
<TOTAL-LIABILITY-AND-EQUITY> 260978
<SALES> 293720
<TOTAL-REVENUES> 293720
<CGS> 144281
<TOTAL-COSTS> 255003
<OTHER-EXPENSES> 110722
<LOSS-PROVISION> 547
<INTEREST-EXPENSE> 7277
<INCOME-PRETAX> 38717
<INCOME-TAX> 14871
<INCOME-CONTINUING> 22010
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22010
<EPS-PRIMARY> 2.55
<EPS-DILUTED> 2.54
</TABLE>
