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MacDermid Incorporated Newsline
Waterbury, CT 06720-9984
Tel (203) 575-5700
Offices located worldwide.
WATERBURY, CT., OCTOBER 26, 2000
For Immediate Release
- Second Quarter Earnings Announcement
- Restructuring Announced
For the Second Quarter For the Year to Date
------------------------- ------------------------
Net Sales $197,878,000 up 8.4% Net Sales $384,383,000 up 5.4%
------------ ---- ------------ ----
Earnings Per Share Before Charges $0.34 Earnings Per Share Before Charges $0.77
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MacDermid, Incorporated, a worldwide manufacturer of proprietary specialty
chemical products and materials for the electronics, metal finishing and graphic
arts industries, today reports earnings for its second quarter ended September
30, 2000.
Earnings per share were $0.29, including one-time merger costs of $0.03 and
restructuring costs of $0.02. Underlying earnings of $0.34 compare to $0.38 in
the prior fiscal year. Proprietary revenues of $184,603,000 are up 11% from the
prior period. Foreign currency translation had the effect of reducing the
reported per share earnings, primarily in the European markets, by approximately
$.01 or 2%. Excluding the effects of acquisitions and currency, proprietary
revenues were up 8.6%. Foreign currency translation had the effect of reducing
reported sales by $6,7000,000 or nearly 3%.
For the six month period, total sales were $384,383,000, up 5.4%, underlying
earnings per share were $0.77 compared to $0.83 in the prior year.
The company today announced a restructuring program that will represent ongoing
savings to the company in excess of $12 million, or $0.24 per share per annum.
This restructuring, already in progress, will be complete by the end of the
fiscal year. A restructuring charge of $1 million or $0.02 per share was taken
in the quarter. Approximately $3 million is expected to be taken between the
December and March quarters. The restructuring will predominately involve the
Graphic Arts, and the Advanced Surface Finishing North American and European
units.
Mr. Leever said, "We are very pleased with the momentum in all of our major
businesses. Significant positive signs emerged as the quarter progressed. We
are confident the next two quarters, especially the March quarter, will be much
better. We believe we have turned the corner towards performance more in line
with our expectations. The strategic repositioning of MacDermid leading to a
much more balanced earnings stream, is complete. It is now time to refocus our
efforts towards operational excellence. Our base of business is much larger,
and now we must create out of this larger base an organization that is the world
leader in offering our customers the highest value, lowest cost solutions, while
at the same time achieving the returns of which we know we are capable. We made
the decision to move slowly in integrating our two largest acquisitions,
ensuring first that the customer base was well established. We now feel the
time is right to reduce redundancies, especially management and back office
operations. The restructuring, which will have minimal effect on our technical
and field organizations, will be carried out quickly and with compassion to the
people affected.
The underlying earnings were below our targets due to the summer seasonal slow
down, continued Via Tek losses, and a poor performance from ColorSpan in the
beginning of the quarter. Via Tek is expected to continue losses in the
December quarter."
Daniel H. Leever
Chairman & CEO
October 26, 2000
NYSE-MRD CUSIP-554373 10 2
This report and other Corporation reports and statements describe many of the
positive factors affecting the Corporation's future business prospects.
Investors 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; technical difficulties which may arise
with new product introductions; and the difficulty of forecasting sales.
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<CAPTION>
MacDermid, Incorporated
Condensed Consolidated Summary of Earnings
In $ Thousands Three months ended Sept. 30th Six months ended Sept. 30th
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Total Net Sales $197,878 $182,552 $384,383 $364,709
Gross Margin 89,300 86,869 180,863 175,047
Gross Margin % 45.1% 47.6% 47.1% 47.9%
Selling, Technical and
Administrative Expenses* 59,724 55,447 115,633 109,338
Operating Profit - EBITA 29,576 31,422 65,230 65,709
Operating Profit % 14.9% 17.2% 16.9% 18.0%
Amortization 5,540 4,490 10,435 8,866
Other 291 1,024 2,060 363
EBIT 23,745 25,908 52,735 56,480
Net Interest Expense 8,908 7,674 16,089 16,104
Earnings Before Income Taxes 14,837 18,234 36,646 40,376
Income Taxes 5,460 6,295 13,485 14,179
Net Earnings $9,377 $11,939 $23,161 $26,197
Diluted Earnings Per Common Share $0.29 $0.37 $0.72 $0.81
Diluted Average Common Shares
Outstanding 32,404,015 32,429,598 32,404,722 32,429,896
*ST&A includes:
One-Time Merger Costs 1,473 - 1,473 -
Restructuring Costs 973 - 973 -
Net Earnings excluding these costs $10,923 $11,939 $24,707 $26,197
Diluted Earnings per Common
Share Excluding these costs $0.34 $0.37 $0.77 $0.81
</TABLE>
<TABLE>
<CAPTION>
MacDermid, Incorporated
Condensed Consolidated Balance Sheets
In $Thousands Sept. 30, 2000 Mar. 31, 2000
<S> <C> <C>
Cash and Equivalents 16,036 20,116
Accounts Receivable 196,859 180,628
Inventories 130,316 115,602
Other Current Assets 13,985 16,092
--------------- --------------
357,196 332,438
Property, Plant & Equip. (net) 167,400 154,149
Goodwill 225,773 206,848
Other Intangibles 68,108 54,891
Other Long Lived Assets 33,962 42,166
--------------- --------------
Total Assets 852,439 790,492
Payables 154,236 148,210
Short Term Debt 60,956 50,910
Long Term Debt 393,970 360,348
Other Long Term Liabilities 11,858 17,770
Shareholders Equity 231,419 213,254
--------------- --------------
Total Liabilities and Shareholders Equity 852,439 790,492
Debt to Total Capital 66% 66%
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<TABLE>
<CAPTION>
MacDermid, Incorporated
Condensed Consolidated Summary of Cash Flows
In $Thousands Second Quarter For the Year
-------------- ------------
FY '01 FY '00 FY '01 FY '00
<S> <C> <C> <C> <C>
Net Income 9,377 11,939 23,161 26,197
Depreciation 4,822 4,706 9,634 9,311
Amortization 5,540 4,491 10,435 8,866
Provision for bad debt 971 524 1,519 528
Working Capital changes 500 1,228 <13,077> <15,593>
Cash from Operations 21,210 22,888 31,672 29,309
Capital Spending (Net) <3,509> <4,987> <5,557> <9,284>
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Owners Earnings 17,701 17,901 26,115 20,025
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Cash from Investing/Financing <17,774> <12,811> <29,124> <20,982>
Currency translation <855> 8 <1,071> <272>
Increase/(Decrease) in Cash <928> 5,098 <4,080> <1,229>
</TABLE>
<TABLE>
<CAPTION>
MacDermid, Incorporated
Sales and Margins by Region
In $ Thousands Second Quarter Year-to-Date
-------------- ------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Americas
Sales 103,442 95,417 196,294 191,107
Op. Margin 16,920 19,980 37,130 42,821
OM % 16.4% 20.9% 18.9% 22.4%
Europe
Sales 58,667 57,432 118,313 116,379
Op. Margin 8,680 6,807 17,677 13,993
OM % 14.8% 11.9% 14.9% 12.0%
Asia
Sales 35,769 29,703 69,776 57,223
Op. Margin 6,422 5,077 12,869 9,777
OM % 18.0% 17.1% 18.4% 17.1%
Total Company
Sales 197,878 182,552 384,383 364,709
Op. Margin 32,022 31,864 67,676 66,591
OM % 16.2% 17.5% 17.6% 18.3%
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<TABLE>
<CAPTION>
MacDermid, Incorporated
Sales and Margins by Group
In $Thousands Second Quarter Year-to-Date
--------------- ------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Surface Finishes:
Sales 115,438 112,071 228,928 221,343
Operating Margin 17,898 19,291 41,083 39,692
OM% 15.5% 17.2% 17.9% 17.9%
Graphic Arts:
Sales 82,440 70,481 155,455 143,366
Operating Margin 14,124 12,573 26,593 26,899
OM% 17.1% 17.8% 17.1% 18.8%
Total Company:
Sales 197,878 182,552 384,383 364,709
Operating Margin 32,022 31,864 67,676 66,591
OM% 16.2% 17.5% 17.6% 18.3%
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