WATERBURY, Conn.--Aug. 4, 2004-- MacDermid, Incorporated a worldwide manufacturer of proprietary specialty chemical products and materials for the electronics, metal finishing and graphic arts industries today reported second quarter sales of $165.1 million, a 6% increase over the same period in 2003. Revenues reflected strong demand in its Advanced Surface Finishing business offset partially by continued weakness in its Printing Solutions business, along with the favorable impact of foreign currency. Earnings of $13.4 million were up 10% over $12.1 and diluted earnings per share of $0.43 were up 13% over $0.38 in the same period a year ago. Owner Earnings a measure of free cash flow (defined below) were $26.5 million. Cash retained as of June 30th, 2004 is $90.9 million.
"I would characterize this quarter as solid but not spectacular," said Daniel Leever Chairman and Chief Executive Officer. "We saw excellent growth in Advanced Surface Finishing in Asia and North America, while Printing Solutions continues to struggle. Overall the European economy continues to lag the rest of the world. The combined effect is only fair top line performance. We were pleased to see our cash generation was back to the level we have come to expect. We ended up with $90.9 million in cash on hand. We are increasingly optimistic about opportunities to put that cash to work creating significant shareholder value. We are hopeful we can grow earnings from this base throughout the rest of the year."
Sales in Advanced Surface Finishing of $96.4 million were up 12.6% (7.7% after currency) over the same period in 2003, primarily driven by strong demand in Asia, improved penetration in North America, and favorable currency. Operating profit of $15.7 million was 26% higher than the prior year reflecting expected earnings leverage on higher revenue.
Printing Solutions sales of $68.7 million were down 1.5% (3.3% after currency) reflecting poor market conditions especially in Europe. Operating profit of $10.9 million was down 16% from the prior period due to unabsorbed overheads and lower volume.
Comments on Second Quarter Income Statement.
Gross profit margin in the quarter was 47.3% similar to the prior year reflecting stable selling and raw material prices, better factory utilization in Advanced Surface Finishing and modest under absorption in Printing Solutions.
Total operating expenses were 6.3% higher than the prior year about half of which was currency and the other largest item was expenses related to the ongoing build of staff in Asia.
Interest expense was flat to the prior period.
Income tax was the same 32% as the prior period.
Year-To-Date 2004 Performance
Sales for the six months ended June 30, 2004 were $327.1 million, up 6% from the prior year. Earnings for the six months were $26.3 million up 11%. Earnings per share were $0.85 up 15% over the prior year.
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