MacDermid Announces Fourth Quarter 2005 Diluted Earnings Per Share $0.34; Earnings Per Share for the Year $1.52; ($0.39 and $1.62 Respectively before Special Charges)*.DENVER Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. -- MacDermid, Incorporated, a worldwide manufacturer of proprietary specialty chemical A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. products and materials for the electronics, metal finishing and printing industries, (NYSE NYSE See: New York Stock Exchange : MRD MRD or mrd abbr. minimal reacting dose ) today announced financial results for the fourth quarter ended December December: see month. 31, 2005. Fourth-Quarter Operating Results The Company recorded fourth quarter sales of $196.3 million, a 14.0% increase over the same period in 2004. The company's acquisition of Autotype (1) To automatically determine the type or configuration of a hardware model or elements within a program (variables). (2) To automatically fill in the remainder of a field with name, address, URL or any other data as soon as you have typed in the first several in June June: see month. 2005 contributed $22.3 million to sales in the fourth quarter. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were negatively impacted by $5.8 million due to the strengthening of the US dollar against foreign currencies in the quarter. Excluding the effects of currency and the Autotype acquisition, sales increased by 4.6% over 2004. Fourth quarter net earnings were $10.4 million, $.34 per share compared to $14.9 million, $.48 per share in the prior period. Included in earnings were unusual costs of $2.1 million, $.04 per share for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and the provision for loss on the sale of a
small equipment business in the US. *These are non-GAAP financial
measures. *These and all non-GAAP financial measures are reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. on the company's investor relations Investor relations The process by which the corporation communicates with its investors. Web site and in attachments to this news release. The Gross Profit % was negatively affected, as anticipated, by the lower inherent gross margins of Autotype, and higher raw material prices, and by unfavorable overhead variances primarily in the USA due to factory upgrades resulting in temporarily higher unit production costs as new plant capacity was ramped up to normal production levels. Raw material costs increased $2.2 million or $.05 per share in the quarter, as price increases lagged higher costs. It is expected these higher costs will be fully recovered in the first half of 2006. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (S G & A) were $0.6 million lower this quarter excluding the effect of the Autotype acquisition. Currency affected expenses favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. by $ 1.9 million and in constant $ expenses would have increased $1.3 million (2.4%) over the prior quarter. Earnings were positively impacted in the fourth quarter by higher earnings in the Advanced Surface Finishing Surface finishing is used to describe a number of industrial processes that can be applied to improve the surface of a manufactured item. The major reason to apply these processes is to improve appearance, improve adhesion or ink wettability, corrosion protection, wear resistance and (ASF See Windows Media formats. 1. (language) ASF - Algebraic Specification Language. 2. (body) ASF - Analytical Solutions Forum. ) business in Asia, and ColorSpan (ColorSpan Corporation, Minnetonka, MN, www.colorspan.com) A manufacturer of wide-format color printers. Founded in 1985 as LaserMaster Corporation, it was originally involved in high-resolution upgrades for LaserJet printers, followed by a line of laser printers and plain paper which is in the MacDermid Printing Solutions (MPS (MultiProcessing Specification) A specification from Intel for designing SMP-based PCs using its Pentium processors. It defines how memory and interrupts are shared. ) segment. Autotype performed well and contributed $0.05 per share to earnings. Owner Earnings In 1986, Warren Buffett detailed his valuation method. He stated that what he used to determine income was something called Owner Earnings. He defined owner earnings as follows: BOLD Brotherhood of Lost Dogs (band) BOLD Belgian Online Libraries Directory BOLD Bibliographic On-Line Display BOLD Benevolent Order of Law Dawgs BOLD Building Our Lives Drug-free in the attached Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Summary of Cash Flows), were $24.9 million for the quarter ended December 31, 2005, compared with $22.8 million for the same quarter in the prior year. Cash balance as of year end was $81 million. Full-Year Operating Results Sales for the twelve months ended December 31, 2005 were $738.0 million, or an 11.7% increase compared to the same period in the prior year. The company's acquisition of Autotype in June 2005 contributed $49.7 million to sales for the six and a half months ended December 31, 2005. On a year to date basis, sales benefited by $1.7 million as the dollar remains weaker than the Euro and British Pound Sterling on a year to date average basis. On a constant dollar basis and excluding the Autotype acquisition our sales increased by 3.9%. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the twelve months ended December 31, 2005 were $1.52, or a $0.20 decrease from the prior year. *Excluding special charges for restructuring and for purchase accounting MacDermid's Earnings per Share would have amounted to $1.62 for the year. In addition, the legal settlement of $2.5 million in the second quarter and increased raw material costs throughout the year contributed to lower earnings this year compared to last year. Currency fluctuations positively impacted diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings on a year to date basis by $0.01 per share compared to prior year. The tax rate remained at much the same level it has been throughout 2005 at 28.3% decreased 3.2% from the prior year rate of 31.5%, due predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. to less repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of overseas dividends in 2005, which primarily resulted from the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of cash for the June 2005 Autotype acquisition and from the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. settlement of prior years' tax returns with the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. . Cash repatriation strategy significantly impacts the effective tax rate and can cause the rate to fluctuate as financing strategies change. Owner earnings for fiscal 2005 and 2004 were $46.8 million and $76.7 million, respectively. The decrease in owner earnings is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the lower net earnings and the investment in working capital arising from the increased sales in the year. Capital expenditure was $14 million compared to $12.2 million in the prior year reflecting increased capacity and infrastructure build in China. Working capital metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. were improved from the prior year to record levels. Advanced Surface Finishing ("ASF") segment ASF segment sales for the fourth quarter 2005 increased by $9.0 million, or 9.0%, compared to the same quarter in the prior year. The acquisition of Autotype contributed $11.6 million, or 11.5%, to this increase. Sales in other ASF businesses decreased $2.6 million, or 2.6% primarily to order patterns in Offshore Solutions. For the twelve months ended December 31, 2005, sales increased $36.5 million, or 9.4%, compared to the prior year. The acquisition of Autotype contributed $24.6 million, or 6.4%, to this increase. Sales in other ASF businesses increased $12.0 million, or 3.1%. The Asia and Offshore divisions predominantly contributed to this increase. ASF segment gross profit for the fourth quarter decreased 5.0% compared to the same quarter last year. For the twelve months ended December 31, 2005, ASF segment gross profit declined 3.5%. The decrease is due primarily to the increase in raw material costs and lower sales and production volumes which negatively affected overhead costs overhead costs see fixed costs. . ASF segment operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the fourth quarter decreased 13.3% compared to the same quarter in the prior year. The acquisition of Autotype, after a slow start in quarter 3, contributed to operating profits as planned, before acquisition and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . The lower gross profit percentage on lower fourth quarter sales and the increased price of raw materials amounting to 1.1% of sales were also contributors to the lower operating profit. Price increases implemented in the quarter are expected to reverse this effect in 2006. For the twelve months ended December 31, 2005, ASF segment operating profits decreased 1.7% compared to the same period last year. The acquisition of Autotype diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. the effect of this decrease by contributing to operating profits, before acquisition and certain restructuring charges. Excluding the special charges (purchase accounting and restructuring) in the ASF segment amounting to $1.8 million and the effect of the Autotype acquisition, the operating profit for the twelve months would have been $61.1 million, which is 2.6% less than the prior year. Significant costs were incurred in the Middletown Middletown, cities, United States Middletown. 1 Industrial city (1990 pop. 42,762), Middlesex co., central Conn., on the west bank of the Connecticut River; settled 1650, inc. 1784, town and city consolidated 1923. Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). plant to enable manufacturing flexibility for the plant to produce Autotype products and products for our printing business. Profits in Asia did not grow at normal levels due to significant investment in infrastructure including a new technical and manufacturing facility in China. Many of these costs are a "step function" and as such will remain relatively fixed. As a result it is believed starting in 2006 the normal level of profit growth will return to this important region. Printing Solutions Segment ("MPS") The Printing Solutions segment increased sales $15.1 million, or 21.1% in the fourth quarter of 2005. The Autotype and Colorspan divisions contributed strongly to the quarterly increase. Packaging revenues grew in the quarter. Newspaper order pattern was negative for the quarter. For the twelve months ended December 31, 2005, sales increased $40.7 million, or 14.9%, compared to the prior year. MPS segment gross profit decreased 3.3% in the fourth quarter and 3.1% for the twelve months ended December 31, 2005. The decline is attributable to lower inherent gross margins for Autotype, increased raw material costs, plant upgrade and start up expenses. MPS segment operating profit for the fourth quarter decreased by 24.9% compared to the same period last year. The acquisition of Autotype and excellent performance of ColorSpan diminished the effect of this decrease. Excluding the effects of Autotype and Colorspan's positive impact on earnings and the restructuring costs of $ 1.2 million in the quarter, MPS operating profit decreased by $2.5 million compared to the same quarter last year due to lower sales, higher raw material and factory costs and higher selling and technical and R & D expenses, primarily in the Americas A·mer·i·cas , the See America. . Multimillion dollar investments were incurred in R&D for computer to plate technology in newspaper printing and the establishment of a new plate R&D team in Europe. It is expected these investments while costly in 2005, will lead to higher revenues in the future. In 2005 a new plant in Europe to produce newspaper printing plates was successfully commissioned and is ramping up. It is believed this market represents excellent growth opportunities. For the twelve months ended December 31st 2005, operating profit decreased 24.8% compared to the prior year. Excluding the effects of Autotype and the restructuring costs of $1.9 million the MPS operating profit decreased by $10.6 million compared to last year due to lower sales in Europe, increases in raw material costs, higher plant costs and increased selling & technical costs, increased spending on R&D and the legal settlement amounting to $2.5 million in the second quarter. Autotype acquisition The acquisition of Autotype in June of 2005 added product lines to the ASF and MPS segments. On a consolidated basis, Autotype added $ 22.3 million of sales for the quarter and $49.7 million dollars in sales for the year. Management continues to integrate synergies that are expected to result in performance in 2006 at levels planned in the acquisitions models used in evaluating this acquisition. Dan Leever Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. said, " 2005 represents a test. We have long said we would invest in the future when the opportunities were right, not when it was convenient. This year was not a particularly convenient time to significantly increase our investments in innovation and plant technology. That hurt earnings. We believe there are excellent opportunities to reap excellent returns from these investments. We believe we will see returns, not in years, but in months. We are very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about 2006. We thank you for your patience Patience, poem Patience: see Pearl, The. patience, card game patience: see solitaire. Patience See also Longsuffering. . We don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. take it for granted. Note: Owner Earnings is calculated as Net Cash flows provided by operating activities (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). definition) less net capital expenditures. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become comprises Earnings before Interest, Taxation, Depreciation and Amortization. This press release and additional financial information together with our reconciliation of GAAP to Non-GAAP numbers are available on our website.
Website: http://www.macdermid.com
MacDermid, Incorporated
NYSE - MRD
CUSIP 554273 10 2
February 13th, 2006
This report and other Corporation reports and statements describe many of the positive factors affecting the Corporation's future business prospects. Investors should also be aware of factors that could have a negative impact on those prospects. These include political, economic or other conditions such as currency exchange rates, inflation rates, recessionary or expansive trends, taxes and regulations and laws affecting the business; competitive products, advertising, promotional and pricing activity; the degree of acceptance of new product introductions in the marketplace; technical difficulties which may arise with new product introductions; and the difficulty of forecasting sales at certain times in certain markets.
MacDermid, Incorporated
Condensed Consolidated Summary of Earnings
(Unaudited)
$ in thousands, except share and per share amounts
Three Months Ended Twelve Months Ended
----------------------- -----------------------
Dec 31st Dec 31st Dec 31st Dec 31st
2005 2004 2005 2004
----------- ----------- ----------- -----------
Proprietary sales $187,964 $161,014 $699,867 $619,135
Other sales 8,291 11,121 38,176 41,650
----------- ----------- ----------- -----------
Total net sales $196,255 $172,135 $738,043 $660,785
----------- ----------- ----------- -----------
Gross margin 83,771 81,266 324,732 313,241
GM % 42.7% 47.2% 44.0% 47.4%
Selling, technical and
administrative 52,959 49,074 200,536 185,915
Research and
development 7,475 5,988 27,200 21,916
Acquisition
/Restructuring
/Impairment 1,801 0 3,263
----------- ----------- ----------- -----------
Operating profit 21,536 26,204 93,733 105,410
Other income
(expense), net (249) 1,411 (40) 1,942
Interest (expense),
net (6,906) (7,074) (28,082) (29,615)
----------- ----------- ----------- -----------
Earnings before income
taxes 14,381 20,541 65,611 77,737
Income tax (expense) (3,967) (5,638) (18,568) (24,513)
----------- ----------- ----------- -----------
Net earnings $10,414 $14,903 $47,043 $53,224
=========== =========== =========== ===========
----------- ----------- ----------- -----------
Diluted earnings per
share $0.34 $0.48 $1.52 $1.72
=========== =========== =========== ===========
Diluted average common
shares outstanding 30,940,941 30,794,808 30,892,052 30,961,108
=========== =========== =========== ===========
MacDermid, Incorporated
Sales and Margins by Region
$ in thousands
Three Months Ended Twelve Months Ended
--------------------- ----------------------
Dec 31st Dec 31st Dec 31st Dec 31st
2005 2004 2005 2004
----------- --------- ---------- -----------
Americas
Total net sales $78,433 $69,361 $294,031 $269,779
Operating profit $6,884 $11,320 $33,696 $45,229
OP % 8.8% 16.3% 11.5% 16.8%
Europe
Total net sales $67,171 $62,618 $258,248 $240,063
Operating profit $3,149 $6,999 $22,603 $29,075
OP % 4.7% 11.2% 8.8% 12.1%
Asia
Total net sales $50,651 $40,156 $185,764 $150,943
Operating profit $11,503 $7,885 $37,434 $31,106
OP % 22.7% 19.6% 20.2% 20.6%
Consolidated Total
Total net sales $196,255 $172,135 $738,043 $660,785
Operating profit $21,536 $26,204 $93,733 $105,410
OP % 11.0% 15.2% 12.7% 16.0%
MacDermid, Incorporated
Sales and Margins by Group
$ in thousands
Three Months Ended Twelve Months Ended
--------------------- ----------------------
Dec 31st Dec 31st Dec 31st Dec 31st
2005 2004 2005 2004
----------- --------- ---------- -----------
Advanced Surface Finishing
Total net sales $109,780 $100,723 $423,256 $386,723
Operating profit $13,864 $15,986 $61,632 $62,728
OP % 12.6% 15.9% 14.6% 16.2%
Printing Solutions
Total net sales $86,475 $71,412 $314,787 $274,062
Operating profit $7,672 $10,218 $32,101 $42,682
OP % 8.9% 14.3% 10.2% 15.6%
Consolidated Total
Total net sales $196,255 $172,135 $738,043 $660,785
Operating profit $21,536 $26,204 $93,733 $105,410
OP % 11.0% 15.2% 12.7% 16.0%
MacDermid, Incorporated
Condensed Consolidated Balance Sheets
$ in thousands
Dec 31st Dec 31st
2005 2004
------------- -------------
(Unaudited)
Cash and cash equivalents $80,932 $137,829
Accounts receivable, net 155,718 142,455
Inventories, net 92,973 80,445
Other current assets 30,737 28,486
------------- -------------
Current Assets 360,360 389,215
Property, plant & equipment, net 123,229 110,463
Goodwill 236,532 194,287
Intangibles 40,128 28,434
Other Assets 52,487 51,320
------------- -------------
Total assets $812,736 $773,719
============= =============
Payables and accruals $141,109 $128,359
Short-term debt 730 753
------------- -------------
Current Liabilities 141,839 129,112
Long-term debt 301,043 301,077
Other long-term liabilities 37,968 39,499
------------- -------------
Total Liabilities 480,850 469,688
Shareholders' equity 331,886 304,031
------------- -------------
Total liabilities & shareholders' equity $812,736 $773,719
============= =============
----------------------------------------------------------------------
Debt to total capital 48% 50%
----------------------------------------------------------------------
MacDermid, Incorporated
Condensed Consolidated Summary of Cash Flows
(Unaudited)
$ in thousands
Three Months Twelve Months
Ended Ended
----------------- ------------------
Dec. Dec. Dec. Dec.
31st 31st 31st 31st
2005 2004 2005 2004
-------- -------- --------- --------
Net earnings $10,414 $14,903 $47,043 $53,224
Depreciation 4,829 4,137 17,038 16,148
Amortization 1,561 850 4,357 3,009
Provision for bad
debt 259 538 1,839 3,562
Stock compensation
expense 1,552 2,162 6,779 6,545
Defered Taxes (887) 7,110 (1,882) 5,679
Restructuring
Charges 1,801 - 3,263 -
Working capital
changes 8,450 (1,531) (19,269) (2,890)
-------- -------- --------- --------
Cash from operations 27,979 28,169 59,168 85,277
Capital spending,
net (3,249) (6,237) (14,059) (8,534)
Proceeds from asset
disposal 175 915 1,682 -
-------- -------- --------- ---------
Owner earnings** 24,905 22,847 46,791 76,743
Acquisition of
business - - (93,182) -
Dividends paid (1,835) (1,212) (6,693) (3,635)
Increase/(decrease)
in debt (2,767) (44) (296) (1,032)
Treasury shares - 13 33 31
Other 325 4,172 (3,550) 4,428
-------- -------- --------- --------
Increase/(decrease)
in cash $20,628 $25,776 $(56,897) $76,535
======== ======== ========= ========
**Note: Pro forma owner earnings adjusted for
semi-annual bond
interest $(6,900) $(6,900) $- $-
payments would have
been as follows: $18,005 $15,947 $46,791 $76,743
======== ======== ========= ========
MacDermid, Inc.
Regulation G: GAAP to Non-GAAP Reconciliation
Gross Profit Before Special Charges (a)(b)
-------------------------------------------
(In thousands)
Three Months Ended
Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05
-----------------------------------------------------------
Net Sales
as reported $162,106 $162,012 $165,053 $161,585 $172,135 $170,247
-----------------------------------------------------------
Gross Profit as
reported $74,363 $77,526 $78,074 $76,375 $81,266 $77,653
Add:
Special
Charges - - - - - -
Gross Profit
Before Special
Charges $74,363 $77,526 $78,074 $76,375 $81,266 $77,653
GP % Before
Special Charges 45.9% 47.9% 47.3% 47.3% 47.2% 45.6%
Year Year Year
Three Months Ended Ended Ended Ended
Jun-05 Sep-05 Dec-05 Dec-03 Dec-04 Dec-05
Net Sales
as reported $178,281 $193,260 $196,255 $619,886 $660,785 $738,043
Gross Profit as
reported $80,026 $83,282 $83,771 $290,615 $313,241 $324,732
Add:
Special Charges 117 654 293 - - 1,064
Gross Profit
Before Special
Charges $80,143 $83,936 $84,064 $290,615 $313,241 $325,796
GP % Before
Special Charges 45.0% 43.4% 42.8% 46.9% 47.4% 44.1%
Operating Profit Before Amortization and Special Charges (a)(b)
----------------------------------------------------------------------
(In thousands) Three Months Ended
Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05
Net Sales
per above $162,106 $162,012 $165,053 $161,585 $172,135 $170,247
-----------------------------------------------------------
Earnings Before
Interest
and Taxes $27,689 $26,551 $27,348 $25,838 $27,615 $24,481
Add: Other
(Income)
Expense (1,142) 258 (697) (92) (1,411) (30)
Add:
Special Charges - - - - - -
Operating Profit
Before Special
Charges $26,547 $26,809 $26,651 $25,746 $26,204 $24,451
===========================================================
% OP Before Special
Charges to
Net Sales 16.4% 16.5% 16.1% 15.9% 15.2% 14.4%
Year Year Year
Three Months Ended Ended Ended Ended
Jun-05 Sep-05 Dec-05 Dec-03 Dec-04 Dec-05
Net Sales
per above $178,281 $193,260 $196,255 $619,886 $660,785 $738,043
----------------------------------------------------------------------
Earnings Before
Interest
and Taxes $22,988 $24,937 $21,287 $103,464 $107,352 $93,693
Add: Other
(Income)
Expense 620 (799) 249 (4,314) (1,942) 40
Add:
Special Charges 502 1,731 2,094 - - 4,327
Operating Profit
Before Special
Charges $24,110 $25,869 $23,630 $99,150 $105,410 $98,060
======================================================================
% OP Before Special
Charges to
Net Sales 13.5% 13.4% 12.0% 16.0% 16.0% 13.3%
(a) as a result of the Company's sale of Eurocir in Q4 2003, all
applicable historical figures have been modified to exclude the
results now reflected as Discontinued Operations.
(b) "Gross Profit Before Special Charges" and "Operating Profit
Special Charges" are not intended to represent Net Earnings as defined
by Generally Accepted Accounting Principles. These measurements should
not be used as an alternative to Net Earnings as an indicator of
operating performance and may not be comparable to similarly titled
measures used by other entities. Management believes that these
measurements portray a meaningful measure of past operating
performance and believes these measurements play an important factor
toward the growth of shareholder value over time.
MacDermid, Inc.
Regulation G: GAAP to Non-GAAP Reconciliation
---------------------------------------------------------------------
EPS from Continuing Operations Before Special Charges & Stock
Compensation (a)(b)
---------------------------------------------------------------------
(In thousands, except share and per share amounts)
Three Months Ended
Dec-03 Mar-04 Jun-04 Sep-04 Dec-04
-------------------------------------------------------
Net Income (Loss)
as reported $19,289 $12,893 $13,385 $12,043 $14,903
Deduct:
Income (Loss)
from Discontinued
Ops, net of
income taxes 5,632 - - - -
-------------------------------------------------------
Income (Loss)
from
Continuing
Operations 13,657 12,893 13,385 12,043 14,903
Change in
accounting
method - - - - -
SFAS 150 gain
on stock call
option - - - - -
Cost of sales
impact of
acquisition
inventory adj - - - - -
Write-off of
In process
R&D - - - - -
Restructuring & Other Charges
Total Special Charges
(Income) - - - - -
After Tax Effect of
Special Charges
(Income) - - - - -
Net Income from Continuing Operations Before
Tax Effected
Special Charges $13,657 $12,893 $13,385 $12,043 $14,903
===================================================
Stock
Compensation
Expense 1,119 1,560 1,472 1,351 2,112
After Tax
Effect Stock
Compensation
Expense 761 1,061 1,001 905 1,415
---------------------------------------------------
Net Income from Continuing Operations Before Tax
Effected Special
Charges & Stock
Compensation $14,418 $13,954 $14,386 $12,948 $16,318
===================================================
Earnings Per Share from Continuing Operations
Before Tax Effected
Special Charges $0.45 $0.42 $0.43 $0.39 $0.48
===================================================
Earnings Per Share from Continuing Operations
Before Tax Effected Special
Charges and Stock
Compensation $0.47 $0.45 $0.46 $0.42 $0.53
===================================================
Diluted Average
Common Shares
Outstanding 30,501,615 31,041,763 31,014,374 30,988,259 30,794,808
Three Months Ended
Mar-05 Jun-05 Sep-05 Dec-05
------ ------ ------ ------
Net Income (Loss) as
reported $11,785 $11,928 $12,916 $10,414
Deduct: Income (Loss) from
Discontinued Ops, net of
income taxes - -
--------------------------------------------
Income (Loss) from
Continuing Operations 11,785 11,928 12,916 10,414
Change in accounting
method -
SFAS 150 gain on stock
call option -
Cost of sales impact of
acquisition inventory adj 117 654 293
Write-off of In process
R&D - 385
Restructuring & Other
Charges 1,077 1,801
--------------------------------------------
Total Special Charges
(Income) - 502 1,731 2,094
After Tax Effect of
Special Charges
(Income) - 356 1,238 1,516
--------------------------------------------
Net Income from Continuing
Operations Before Tax
Effected Special Charges $11,785 $12,284 $14,154 $11,930
============================================
Stock Compensation
Expense 2,177 1,873 1,177 1,418
After Tax Effect Stock
Compensation Expense 1,361 1,330 842 1,027
--------------------------------------------
Net Income from Continuing
Operations Before Tax
Effected Special Charges
& Stock Compensation $13,146 $13,614 $14,996 $12,957
============================================
Earnings Per Share from
Continuing Operations
Before Tax Effected
Special Charges $0.38 $0.40 $0.46 $0.39
============================================
Earnings Per Share from
Continuing Operations
Before Tax Effected
Special Charges and Stock
Compensation $0.43 $0.44 $0.49 $0.42
============================================
Diluted Average Common
Shares Outstanding 30,809,620 30,787,829 30,865,440 30,940,941
Year Year Year
Ended Ended Ended
Dec-03 Dec-04 Dec-05
------ ------ ------
Net Income (Loss) as reported $56,426 $53,224 $47,043
Deduct: Income (Loss) from
Discontinued Ops, net of income
taxes 5,592 - -
---------------------------------
Income (Loss) from Continuing
Operations 50,834 53,224 47,043
Change in accounting method (1,014) - -
SFAS 150 gain on stock call option (2,214) - -
Cost of sales impact of acquisition
inventory adj - - 1,064
Write-off of In process R&D - - 385
Restructuring & Other Charges 2,878
---------------------------------
Total Special Charges (Income) (3,228) - 4,327
After Tax Effect of Special Charges
(Income) (2,520) - 3,110
---------------------------------
Net Income from Continuing Operations
Before Tax Effected Special Charges $48,314 $53,224 $50,153
=================================
Stock Compensation Expense 4,219 6,495 6,645
After Tax Effect Stock Compensation
Expense 2,869 4,382 4,560
---------------------------------
Net Income from Continuing Operations
Before Tax Effected Special Charges
& Stock Compensation $51,183 $57,606 $54,713
=================================
Earnings Per Share from Continuing
Operations Before Tax Effected
Special Charges $1.55 $1.72 $1.62
=================================
Earnings Per Share from Continuing
Operations Before Tax Effected
Special Charges and Stock
Compensation $1.63 $1.86 $1.77
=================================
Diluted Average Common Shares
Outstanding 31,430,398 30,961,108 30,892,052
EBITDA from Continuing Operations Before Special Charges (a)(b)
----------------------------------------------------------------
(In thousands)
Three Months Ended
Dec-03 Mar-04 Jun-04 Sep-04 Dec-04
-------------------------------------------------------
Earnings Before
Interest and
Taxes $27,689 $26,551 $27,348 $25,838 $27,615
SFAS 150 gain
on stock call
option - - - - -
Cost of sales
impact of
acquisition
inventory adj - - - - -
Write-off of
In Process R&D - - - - -
Restructuring & Other Charges
---------------------------------------------------------------------
Total Special Charges - - - - -
Amortization 889 734 717 708 850
Depreciation 3,976 4,125 3,989 3,897 4,137
EBITDA from Continuing Operations Before
-------------------------------------------------------
Special Charges $32,554 $31,410 $32,054 $30,443 $32,602
=======================================================
Three Months Ended
Mar-05 Jun-05 Sep-05 Dec-05
------ ------ ------ ------
Earnings Before Interest and Taxes $24,481 $22,988 $24,937 $21,287
SFAS 150 gain on stock call option - -
Cost of sales impact of acquisition
inventory adj - 117 654 293
Write-off of In Process R&D - 385
Restructuring & Other Charges 1,077 1,801
--------------------------------
Total Special Charges - 502 1,731 2,094
Amortization 891 897 1,008 1,561
Depreciation 3,846 3,771 4,592 4,829
EBITDA from Continuing Operations
Before Special Charges
--------------------------------
$29,218 $28,158 $32,268 $29,771
================================
Year Year Year
Ended Ended Ended
Dec-03 Dec-04 Dec-05
------ ------ ------
Earnings Before Interest and Taxes $103,464 $107,352 $93,693
SFAS 150 gain on stock call option (2,214) - -
Cost of sales impact of acquisition
inventory adj - - 1,064
Write-off of In Process R&D - - 385
Restructuring & Other Charges 2,878
---------------------------
Total Special Charges (2,214) - 4,327
Amortization 3,301 3,009 4,357
Depreciation 15,793 16,148 17,038
EBITDA from Continuing Operations Before
Special Charges $120,344 $126,509 $119,415
===========================
----------------------------------------------------------------------
Owners Earnings (b)
-------------------
(In thousands)
Three Months Ended
Dec-03 Mar-04 Jun-04 Sep-04 Dec-04
-------------------------------------------------------
Net cash flow
provided by
operating
activities $29,158 $5,977 $28,153 $22,978 $28,169
Capital
expenditures,
net 5,213 782 1,662 768 5,322
-------------------------------------------------------
Owner Earnings $23,945 $5,195 $26,491 $22,210 $22,847
=======================================================
Adjustment for Bond Interest assumed to be paid quarterly
---------------------------------------------------------------------
Owner Earnings $23,945 $5,195 $26,491 $22,210 $22,847
Assumed if
Bond Interest
was paid
quarterly (6,900) 6,900 (6,900) 6,900 (6,900)
-------------------------------------------------------
Adjusted Owner
Earnings $17,045 $12,095 $19,591 $29,110 $15,947
=======================================================
Three Months
Mar-05 Jun-05 Sep-05 Dec-05
------ ------ ------ ------
Net cash flow provided by operating
activities $2,023 $24,845 $4,321 $27,979
Capital expenditures, net 2,990 4,058 2,255 3,074
------------------------------
Owner Earnings ($967)$20,787 $2,066 $24,905
==============================
Adjustment for Bond Interest assumed to
be paid quarterly
---------------------------------------
Owner Earnings ($967)$20,787 $2,066 $24,905
Assumed if Bond Interest was paid
quarterly 6,900 (6,900) 6,900 (6,900)
------------------------------
Adjusted Owner Earnings $5,933 $13,887 $8,966 $18,005
==============================
Year Year Year
Ended Ended Ended
Dec-03 Dec-04 Dec-05
------ ------ ------
Net cash flow provided by operating
activities $91,417 $85,277 $59,168
Capital expenditures, net 10,704 8,534 12,377
------------------------
Owner Earnings $80,713 $76,743 $46,791
========================
Adjustment for Bond Interest assumed to be
paid quarterly
------------------------------------------
Owner Earnings $80,713 $76,743 $46,791
Assumed if Bond Interest was paid quarterly - - -
------------------------
Adjusted Owner Earnings $80,713 $76,743 $46,791
========================
(a) as a result of the Company's sale of Eurocir in Q4 2003, all
applicable historical figures have been modified to exclude the
results now reflected as Discontinued Operations.
(b) "EPS from Continuing Operations Before Special Charges and
Stock Compensation", "EBITDA from Continuing Operations Before Special
Charges" and "Owners Earnings" are not intended to represent Net
Earnings (loss) or Net Cash Flow From Operating Activities as defined
by Generally Accepted Accounting Principles. These measurements should
not be used as an alternative to Net Earnings or Net Cash Flow From
Operating Activities as an indicator of operating performance and may
not be comparable to similarly titled measures used by other entities.
Management believes that these measurements portray a meaningful
measure of past operating performance and believes these measurements
play an important factor toward the growth of shareholder value over
time.
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