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MacDermid Q1: Earnings And Sales Both Up

Press release from the issuing company

WATERBURY, Conn.--April 28, 2003-- 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 quarter ended March 31, 2003. Quarter ended March 31 2003 compared to March 31 2002. Earnings for the first quarter were $11.6 million or $0.36 per share compared to $7.3 million, $0.23 in the prior year quarter. Proprietary sales of $140.8 million increased by 3% or $3.7 million, and total sales were $172.4 up $5.5 million or 3%. Favorable currency exchange rates had the effect of increasing total sales by $13.5 million. Excluding the effect of foreign currency exchange rate changes, proprietary sales would have decreased 3.6% and total sales would have been down 4.8%. Owner Earnings, a measure of free cash flow, were $18.4 million up 57%. The March quarter included a semi annual bond interest payment of $13.8 million. Cash retained ended at $46.6 million. Net debt to EBITDA ended at 2.3X well below the internal target of 2.5X (debt equals no more than 2.5 times EBITDA). Quarter ended March compared to Quarter ended December 31, 2002. Earnings per share were $0.36 for the quarter ended March 2003 compared to the previous sequential quarter loss of $0.51 per share. Earnings in the December quarter were $0.35, excluding the effect of special charges amounting to $40.6 million. In this quarter Proprietary sales were lower by $0.5 million but were assisted by favorable currency exchange rates to the extent of $3.2 million or 2%. Total sales declined by $3.3 million (2%) and by $8.2 million (4.7%) on a constant $ basis compared to December 2002. Dan Leever, Chairman and CEO stated, "The March quarter was similar in feel to the December quarter. Economic head winds continued and we experienced seasonal weakness this quarter. Weak advertising revenues impacted our Printing Solutions volume. The electronics market continued to bump along the bottom, although we experienced the first signs of demand pick up in Asia. The soft macroeconomic situation in Europe and the Americas made comparisons difficult for our Industrial Products product lines, but we experienced share gain, especially in Europe and Asia which offset the decline. MacDermid continued to control what we could. We are especially gratified to report a significant increase in gross profit percentage which allowed us to entirely offset the revenue weakness. SG&A control was important as well. Adjusted for currency, total operating expenses were down 4.2% against the prior year quarter. Our visibility remains limited. Were it not for the SARS epidemic in China, we would be more confident. Any sustained improvement from the level experienced this quarter will require a world wide return to economic prosperity and or a sustained return to growth in the electronics markets." Owner Earnings is calculated as Net Cash flows provided by operating activities (GAAP definition) less net capital expenditures.