WATERBURY, Conn.--Feb. 9, 2004-- 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 and year ended December 31, 2003.
Quarter ended December 31, 2003 compared to December 31, 2002
Earnings for the fourth quarter were $19.3 million or $0.63 per diluted share compared to a loss of $16.3 million or $(0.51) per share in the prior year quarter.
Included in earnings is $5.6 million, $0.18 per share arising from discontinued operations as a result of the disposal of Eurocir, a majority-owned subsidiary. Earnings from continuing operations of $0.45 per share compare to $0.33 in the prior year quarter as presented in the table below.
Proprietary sales of $151.5 million increased by 5% or $7.3 million, and total sales were $162.1 up $5.2 million or 3.3%. Favorable currency exchange rates aided total sales by $11.8 million, proprietary sales by $9.8 million, and earnings by $0.8 million or $0.03 per share. Owner Earnings, a measure of free cash flow, were $ 23.9 million.
Year ended December 31, 2003 compared to year ended December 31, 2002
Total sales from continuing operations increased to $619.9 million, up $8.4 million or 1.4%. Favorable currency exchange rates aided total sales by $38.8 million or 6%, and earnings by $ 3.1 million or $0.10 cents per share.
Earnings per share on a diluted basis was $1.80 as compared to $0.29 in 2002. On a non-GAAP basis earnings per share increased from $1.10 to $1.55 up 41% as presented in the table below.
Disposal of Eurocir Joint Venture
During the December 2003 quarter the company sold its interest in its 60% owned subsidiary company, Eurocir, resulting in a gain of $0.18 cents per share. This operation comprised the Electronics manufacturing segment and pursuant to current accounting literature these operations are reported for both current and prior years as discontinued operations.
Affect of accounting change and SFAS 150
The company adopted SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Debt," as required during the September 2003 quarter. The SFAS required MacDermid to recognize in the Income Statement the gain on the call and put for the repurchase of stock arising from the previously announced agreement with CVC.
Daniel Leever, Chairman and CEO said, "We are proud and pleased to report much improved Earnings Per Share in the quarter as we finished up a solid if not outstanding year after two difficult years. Although the external environment was still challenging this quarter we again controlled what we could. Sequentially sales and operating profits improved off seasonal lows. Owner earnings were a solid $23.9 million. For the full year we generated $80 million in cash which enabled us to extinguish all our senior bank loans leaving only $301 million subordinated debt due in 2011. This free cash also enabled us to buy back 2.2 million of our shares for $51.8 million and still end up with over $60 million in cash at year end. The lower debt and lower share count were the predominant factors in a quarterly 36%, and a yearly 41% increase in Earnings per Share before other non operating gains.
"An important non-financial move was made with the promotion of Stephen Largan to Executive Vice President Operations. Stephen was the executive who lead the successful turn around of our Printing Solutions business after the acquisition of PTI. This promotion signifies we believe there is more room for improvement operationally. Stephen and I will be working hand in hand with the dual focus of maximizing organizational efficiency and driving our innovation process.
"In the quarter we closed on the divestiture of our partial interest in the Eurocir Group. This closed the chapter in a financially disappointing investment in a once promising technology called ViaTek. The Eurocir group will transition from partner to customer. We look forward to a long and fruitful relationship with these fine people.
"It is difficult to forecast 2004. There does appear to be signs of improved business conditions, so we are hopeful we will enjoy a prosperous year."
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