MacDermid Reports 2Q Results, EPS Falls from $.34 to $.13
Press release from the issuing company
For the Second Quarter Net Sales $171,663 down 14% Earnings Per Share $0.13
WATERBURY, Conn.--Oct. 25, 2001-- 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, 2001.
Earnings per share were $0.13 for the quarter compared to $0.34 for the prior year. Proprietary revenues of $145,545.00 were down 19% compared to the prior year. Foreign currency translation reduced per share earnings, primarily in the European markets, by approximately $0.01 or 8% and reduced proprietary sales by $2,500,000 or 2%.
Owner earnings, a measure of free cash flow, was $28,535.00 up 61% from the prior year and 69% more than the previous sequential quarter.
Due to the continuing difficult state of the electronic market the company is closing the remaining activities of Dynacircuits in Chicago. The closure will be complete within the next few weeks. This will result in a charge to earnings in the December quarter of approximately $7 million, mostly non-cash.
The Company announced the appointments of Stephen Largan and Gerard Loeb as Presidents of MacDermid Graphic Arts worldwide. Stephen, formerly Vice President Finance for the corporation will have primary responsibility for the Graphic Arts businesses based in the Americas, including ColorSpan. Gerard Loeb, formerly Executive Vice President of Graphic Arts, will have primary responsibilities for all Graphic Arts businesses based outside the Americas. The two will share responsibility on all major issues and strategies.
Daniel Leever Chairman of MacDermid said, "The business environment is providing us the opportunity to dramatically demonstrate the competitive advantage we enjoy due to the strength of our business model. The external environment is the most difficult we have ever experienced. In addition to general macroeconomic difficulties that are affecting industrial production virtually everywhere we do business, we find ourselves in the middle of ''a hundred year flood" in the electronic chemicals business. The demand for our type of electronic chemicals is down almost 50% from the prior year. Our revenues for the quarter in electronic chemicals were down 29% year on year and 7% sequentially (almost entirely due to the summer seasonality). We believe this performance is much better than our competitors. Additionally, in the face of this very difficult situation we are pleased to report that every region and every business (except discontinued Dynacircuits) was profitable for the quarter. We believe we may be the only profitable electronic chemicals supplier. We are especially proud that the MacDermid team around the world answered our call to manage for cash flow and generated an all time record $28.5 million or $0.88 per share in owner earnings even in face of sharply lower underlying profits. This was achieved by a reduction in capital spending and control of working capital, and accrual of bond interest. We believe we can do even better. The tragic events of September 11, make visibility very limited. However, we experienced improved revenues as the quarter progressed which is continuing in October. Coming off the summer seasonality we are cautiously optimistic we will see improved performance going forward. A return to more normal business conditions is dependent on a return to growth in worldwide industrial demand as well as a more stable electronics market, which is not expected in the short term.
We are pleased have the graphic arts management solidified with the appointment of Mr.'s Largan and Loeb. They will work together to deliver our strategy of "printing solutions'' an integrated efficient approach to the graphic arts market. We now believe we have a management team in place that can take this already excellent business to new heights."
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