WATERBURY, Conn.--Oct. 30, 2002--MacDermid, Incorporated, a worldwide manufacturer of specialty chemicals and materials for the electronics, surface treatment, and graphic arts industries, today reported earnings for the third quarter ended September 30, 2002 of $8.7 million or $0.27 per share, more than double the $4.2 million or $0.13 per share in the September 2001 quarter.
Total revenues in the current quarter were $168.1 million, down 2.0% from $171.7 million in the prior year. Currency had a favorable impact of $6.2 million on revenues in this year's quarter, and had a $0.01 positive impact on EPS.
The current quarter reflected seasonal slowness compared to the June 2002 quarter earnings of $9.7 million or $0.30 per share. September 2002 revenues were 4.8% lower than June 2002 revenues of $176.7 million. Proprietary revenues were 3.1% lower than June 2002.
Owner earnings (a measure of free cash flow) were $28.9 million for the quarter after the payment of $13.8 million in bond interest compared to $28.5 million in the 2001 quarter, and $36.0 million in the June 2002 quarter. The comparing quarters had no bond interest payment. The free cash was used to repay $21.0 million in debt. The debt to last twelve months EBITDA ratio improved to 3.1 to 1.
Operating profits improved both quarter over quarter and year over year because of improved cost management. The operating profit for September 2002 increased to14.4% from 11.0% in September 2001 and from 13.9% in June 2002.
For the nine months ended September 30, 2002, net earnings totaled $25.7 million or $0.79 per share. This compared to $20.4 million or $0.63 per share before restructuring and impairment charges in the prior period. Total revenues in the nine-month period declined 10.0% from $568.6 million to $511.8 million. Proprietary revenues declined by 8.0%. Operating profits before restructuring and impairment charges in the prior year improved from 12.3% to 13.9%.
Owner earnings for the nine months improved from $55.2 million to $76.6 million, a 39% increase compared to the year earlier nine-month period.
Dan Leever, Chairman and CEO, said. "We are extremely proud of the performance this quarter. Owner earnings adjusted for bond interest payment were an all time record for MacDermid. With any luck we will exceed $100 million and $3.00 per share in Owner earnings for the year. We are in striking distance of repaying all of the revolver debt under our senior bank agreement this year. Over the past nine months we have repaid $69.3 million in debt. Operating profits increased in both Printing Solutions and Advanced Surface Finishing, a very difficult task in this environment. MacDermid, in classic 'Clan MacDermid style', is controlling what we can. This is outstanding performance by our men and women around the world.
"We experienced no strengthening of business conditions in the quarter. The good news is conditions didn't weaken either. Electronics remains soft in Europe and North America offset by modest strengthening in Asia. In Printing Solutions, sales to packaging were stronger, offset by continued weakness in publications and commercial printing reflecting lower advertising activity.
"We are expecting no help from external demand in the December quarter although we hope for modest improvement coming off seasonal lows in the summer quarter. Going forward we will simply wait for the market conditions to improve knowing we have earnings leverage potential like we have never experienced before."
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