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, 1999.
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, 1999 (based on the closing price on such date
as reported on New York Stock Exchange) was $1,004,242,000.
The number of shares of Registrant's Common Stock outstanding as of May
31, 1999 was 25,145,343 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 1999 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 21, 1999 to
the Corporation's stockholders in connection with the annual meeting
scheduled for July 21, 1999 are incorporated herein by reference into Part
III hereof.
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, graphic arts
and offshore lubricants industries. MacDermid offers a line of
horizontal processing equipment used in conjunction with certain of the
Corporation's chemical products. This equipment is used primarily in
the production of printed circuit boards and in chemical machining.
In December 1995, MacDermid acquired the assets, subject to certain
liabilities of the Electronics and Printing Division of Hercules
Incorporated. 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, at closing, through bank borrowings and the
issuance of preferred stock. On May 28, 1997 all the preferred stock was
redeemed by utilizing a portion of a revolving credit facility. In
December 1998, MacDermid acquired 95% of the outstanding share capital of W
Canning plc and in February 1999, the remaining shares were acquired, by the
Corporation, through a statutory compulsory procedure. The acquired business
consists principally of the manufacture and sale of proprietary products
including metal and plastic finishing for automotive and other consumer
surface finishing industries, offshore fluids for oil drilling and
exploration, as well as, sealants, adhesives and fuel and water additives.
The Corporation's original listing application to the New York Stock Exchange
was accepted on February 26, 1998 and since that date its common shares have
traded on the N.Y.S.E. Prior to that, and since 1966, the Corporation's
common shares had traded on the NASDAQ stock market.
In previous fiscal years the Corporation's Board of Directors authorized
separate three-for-one stock splits. On February 6, 1998, there was an
authorization for which shares were distributed on April 1, 1998 to
common shareholders of record at the close of business on March 16, 1998.
On October 21, 1996, there was an authorization for which shares were
distributed on November 15, 1996 to common shareholders of record at the
close of business on November 1, 1996.
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 operates one industry segment which is the development,
manufacture and sale of specialty chemicals used in finishing metals and
non metallic surfaces, printing, offshore drilling lubricants 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 business is shown
in the notes to Consolidated Financial Statements portion of the
Corporation's 1999 Annual Report to Shareholders, included as Exhibit 13
to this Form 10-K, and is incorporated by reference.
Item 1(c) NARRATIVE DESCRIPTION OF BUSINESS
(i) MacDermid produces and markets over 5,000 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 Great
Britain and Japan.
In North America, the Corporation markets its entire line of products in the
United States through more than 140 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 25 distribution points throughout the United States which
typically are leased or rented. In Vermont a wholly owned subsidiary
manufactures and markets equipment in conjunction with 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 more
than 300 sales and service representatives who are employed by the
Corporation's subsidiaries located in France, Germany, Great Britain, Italy,
Holland, Spain, Sweden and Switzerland. MacDermid owns and operates
subsidiary manufacturing facilities in Spain, Great Britain, Germany and
France. In Germany a wholly owned subsidiary manufactures and markets
equipment in conjunction with the proprietary chemical business.
In the Asia/Pacific area, the Corporation markets its proprietary products
through wholly owned subsidiaries in Australia, China/Hong Kong, Japan, Korea,
New Zealand, Singapore, and Taiwan, and sales are made through more than 50
sales and service representatives who are employed by local subsidiaries. In
addition, sales are made in India, Malaysia, The Philippines and Thailand
directly or through distributors. MacDermid owns and operates subsidiary
manufacturing facilities in Taiwan, Australia and New Zealand. In Taiwan a
wholly owned subsidiary manufactures and markets equipment in conjunction
with the proprietary chemical business.
In other foreign markets certain of the Corporation's proprietary chemicals
are manufactured and sold and, as well, in certain countries in South America,
Europe and Asia, the Corporation's 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 in conjunction with and as an aid to the sale of
proprietary chemicals.
MacDermid's principal products fall into the three following classes:
(A) Chemical compounds produced by MacDermid, most of which are the result
of the Corporation's own research and development and, therefore, are referred
to as proprietary products;
(B) Equipment in support of the chemical business of which approximately
68% is manufactured by the Corporation: and
(C) Resale chemicals and supplies.
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 1999 1998 1997
Proprietary Chemicals 84% 88% 88%
Equipment 9% 7% 6%
Resale Chemicals
and Supplies 7% 5% 6%
(ii) MacDermid uses in excess of 900 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 1999, there were no
significant difficulties in obtaining raw materials essential to its business.
(iii) During fiscal 1999, 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 the Corporation are
important to its business and have varying remaining lives. During fiscal
1998, MacDermid announced its commercialization of a new process technology,
ViaTek which can be considered an important addition to the Corporation's
business. Although certain of the Corporation's patents are increasingly more
important to its business, the Corporation 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.
(iv) No material portion of MacDermid's business is seasonal.
(v) 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.
(vi) 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.
(vii) 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.
(viii) 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.
(ix) 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.
(x) MacDermid spent approximately $12,523,000, $12,028,000 and
$10,850,000 during fiscal years 1999, 1998 and 1997, respectively, on research
and development activities. Substantially all research and development
activities were sponsored by the Corporation, the greater percentage of which
elated to the development of new products.
(xi) 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 an estimated $1 million has been spent for environmental control
facilities annually. Though difficult to predict, future spending for this
purpose is likely to average roughly 10% of the capital budget.
(xii) MacDermid employed 1,877 and 1,179 full time, regular employees as of
March 31, 1999 and 1998, respectively.
Item 1(d) FOREIGN AND DOMESTIC OPERATIONS
MacDermid's 1999 Annual Report to Shareholders, included as Exhibit 13 to this
Form 10-K and incorporated by reference, provides information with respect to
geographic areas including operating information and the effect upon
shareholders' 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 is used for research activities and may also be used for
manufacturing expansion should the need arise.
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.
In Waukeegan, Illinois, a masonry building of 25,000 square feet consisting of
factory, laboratory, warehouse and office facilities located on a 1 acre
tract. In, addition, there are two adjacent tracts of land totaling 1.3 acres
which are being held for sale or lease but which could be used for
manufacturing should the need arise.
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.
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 Birmingham, England, two brick, concrete and steel buildings, connected by
a walkway, containing a total of 110,000 square feet of manufacturing,
warehouse, laboratory and office space and at a separate location nearby a
brick, concrete and steel building of 120,000 square feet of manufacturing and
warehouse space.
At Sheffield, England, a steel and concrete building of 4,500 square feet of
warehouse and laboratory space.
At Wigan, England, a brick, concrete and steel building of 65,000 square feet
of manufacturing, warehouse and office space.
At Villemeux, France, a steel and concrete building of 50,000 square feet of
manufacturing, warehouse and office space.
At Eure, France, a steel and concrete building of 41,000 square feet of
manufacturing, warehouse, laboratory and office space.
At Dusseldorf, Germany, a steel and concrete building of 17,000 square feet
for manufacturing.
At Zulpich, Germany, a steel and concrete building of 12,000 square feet of
manufacturing 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 office, labs and warehouse space in a
concrete block building.
At Panyu, China, three buildings of reinforced concrete totaling 64,000 square
feet, located on a 4 acre tract, used for factory, warehouse and offices.
The Corporation also owns property at Birmingham, Wigan and Droitwich,
England which is presently leased, as well as at Rosay Par Prouais, France
which is being held for sale or lease.
In addition, MacDermid leases office, laboratory, warehouse and manufacturing
facilities as needed. During the year, such additional facilities were leased
in California, Michigan, North Carolina, New Jersey, Rhode Island, Vermont,
Canada, Holland, Italy, Germany, Sweden, Korea, Australia, Japan, Singapore,
China 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 1999 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 1999.
Item 4A EXECUTIVE OFFICERS OF MACDERMID
The following is a list of the names, offices and ages (as of March 31, 1999)
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
Daniel H. Leever 50 Chairman since July 1998 and Chief Executive
Officer since 1990.
R. Nelson Griebel 49 President and Chief Operating Officer since
February 1999. Previously, and since 1977 he
was with BankBoston, serving as Executive Vice
President and as Regional President of
Connecticut and western Massachusettes
operations.
Stephen Largan 31 Vice President, Finance since February 1999.
Previously, and since 1993 he was with a
subsidiary of Ford Motor Company, serving as
Director of Finance.
Gregory M. Bolingbroke 49 Corporate Controller since April 1995.
Previously, was Cost Accounting Manager since
1993.
John L. Cordani 36 Corporate Secretary since April 1995. Previously,
was General Counsel since 1993.
Arthur J.
LoVetere, Jr. 35 Mr. LoVetere resigned effective April 1, 1999.
Previously, he was President, ViaTek since April
1998 and Chief Financial Officer since April 1995.
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 1999 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
1999 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 1999 Annual Report to Shareholders
included as Exhibit 13 to this Form 10-K and incorporated by reference.
Item 7(a) QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Corporation is exposed to market risk in the normal course of its business
operations due to its operations in different foreign currencies and its
ongoing investing and financing activities. The risk of loss can be assessed
from the perspective of adverse changes in fair values, cash flows and future
earnings. The Corporation has established policies and procedures governing
its management of market risks and the use of financial instruments to manage
exposure to such risks.
The Corporation is exposed to interest rate risk primarily from its credit
facility which is based upon various floating rates. At March 31, 1999, the
Corporation had entered into interest rate swaps with an aggregate notional
amount that approximates two-thirds of its borrowings. The resulting
weighted-average fixed interest rate is 5.5%. Based upon expected levels of
borrowing under this facility in 2000, an increase in interest rates of 100
basis points would result in an incremental $850 interest expense and would
not have a material adverse affect on the Corporation's consolidated financial
position, results of operations or cash flows.
The Corporation operates manufacturing facilities in six countries and sells
products in over 25 countries. Approximately 50% of the Corporation's sales
are denominated in currencies other than the US Dollar. Historically, the
Corporation returns slightly less than 10% on sales and foreign exchange
fluctuations have not had any significantly measurable effect on earnings.
Furthermore, those earnings are generally reinvested locally and the impact
on operating cash flows has been less than $500 annually. Management
continually reviews the balance between foreign currency denominated assets
and liabilities in order to minimize the exposure to foreign exchange
fluctuations.
The Corporation does not enter into any derivative financial instruments
for trading purposes. Additional information about market risk is contained
in MacDermid's 1999 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 1999 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 21,
1999 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 21, 1999 is incorporated herein by reference thereto.
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 21, 1999 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
21, 1999 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 LLP, dated
May 14, 1999 are contained in MacDermid's 1999 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 schedules are filed as part of this Annual Report on Form 10-K.
This 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.
(b) Reports on Form 8-K
The Corporation filed three reports on Form 8-K/A, dated February 16,1999 and
March 19, 1999 during the fourth quarter of fiscal 1999 and dated June 9, 1999
during the first quarter of fiscal 2000. These reports contain financial
statements, pro forma financial information and exhibits as amendment to its
report on Form 8-K dated December 17, 1998, filed during the third quarter of
fiscal 1999. These reports relate to the acquisition of W Canning plc and are
incorporated by reference.
The Corporation filed a report on Form 8-K, dated February 24,1999, during the
fourth quarter of fiscal 1999. This report relates to an announcement of a
definitive agreement to acquire PTI Inc., the holding company for Polyfibron
Technologies, Inc. and is incorporated by reference
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 21, 1999
By /s/ Daniel H. Leever By /s/ Gregory M. Bolingbroke
Daniel H. Leever Gregory M. Bolingbroke
Director, Chairman and Controller and Principal
Chief Executive Officer Accounting Officer
Daniel H. Leever, pursuant to powers of attorney which are being filed with
this Annual Report on Form 10-K, has signed below on June 21, 1999 as attorney-
in-fact for the following directors of the Registrant:
Donald G. Ogilvie - Thomas W. Smith - James C. Smith -
R. Nelson Griebel
/s/ Daniel H. Leever
Daniel H. Leever
SCHEDULE II
MACDERMID, INCORPORATED AND SUBSIDIARIES
Valuation and Qualifying Accounts and Reserves
Years ended March 31, 1999, 1998 and 1997
Balance at Additions Additions Balance
beginning charged to due to Deductions at end
Description of period earnings acquisition <F1> of period
1999
Allowance for
doubtful
receivables $3,598,000 $ 1,382,000 $2,820,000 $ 1,389,000 $6,411,000
========== =========== ========== ============ ==========
1998
Allowance for
doubtful
receivables $3,379,000 $ 817,000 - $598,000 $3,598,000
========== ========== ======== ==========
1997
Allowance for
doubtful
receivables $4,829,000 $ 547,000 - $ 1,997,000 $3,379,000
========== =========== =========== ==========
<F1> Bad debts charged off less recoveries and translation adjustments.
REPORT OF INDEPENDENT AUDITORS
KPMG 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 14, 1999, we reported on the consolidated balance sheets
of MacDermid, Incorporated and subsidiaries as of March 31, 1999 and 1998,
and the related consolidated statements of earnings and cash flows for each
of the years in the three-year period ended March 31, 1999, as contained in
the 1999 annual report to shareholders. These consolidated financial
statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year 1999. In connection with our
audits of the aforementioned consolidated financial statements, we also
audited the related consolidated 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 financial statement 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 LLP
May 14, 1999
EXHIBIT INDEX
1999 FORM 10-K ANNUAL REPORT
Exhibit
No.
3.1 Restated Certificate of Incorporation, MacDermid,
Incorporated, amended as of December 1, 1997. By reference
Exhibit 19 to September 30, 1991 Form 10-Q
Quarterly Report is incorporated by reference herein.
3.2 By-Laws, amended as of February, 1997. Exhibit 3b to 1985
Form 10-K Annual Report is incorporated by reference
herein. Attached
4.1 Credit Agreement, amended and restated, dated as of
December 15, 1998, among MacDermid, Incorporated, the
Banks signatory thereto and NationsBank,
N.A., as Agent, letter of credit issuing bank and
Swing line lender is incorporated by reference herein. By reference
10.1 MacDermid, Incorporated Special Stock Purchase Plan,
amended as of November 1, 1992. Exhibit 10 to
1993 Form 10-K Annual Report is incorporated by
reference herein. By reference
10.2 MacDermid, Incorporated 1995 Equity Incentive Plan
Exhibit 10.2 to 1995 Form 10-K Annual Report is
Incorporated by reference herein. By reference
13 Portions of MacDermid's 1999 Annual Report
to Stockholders as required by Item 8 Attached
21 Subsidiaries of MacDermid, Incorporated Attached
23 Independent Auditors' Consent Attached
24 Power of Attorney Attached
27 Financial Data Schedule Attached