MacDermid Third Quarter Diluted Earnings Per Share $0.42.DENVER -- 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 third quarter ended September 30, 2006. Third Quarter Operating Results Sales of $ 200.3 million were $ 7.0 million higher, a 3.6% increase over the same period in 2005. Sales were strong in 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 reflecting demand for our Offshore, Electronics and Industrial products in all regions while our Printing businesses continued with the weak performance we have seen all year. The sales 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 were $0.9 million lower than the third quarter last year. Foreign currency had a negligible affect on sales in the quarter. The gross margin percentage declined from 43.1% to 42.0% due in part to continuing inefficiencies at our Middletown, DE plant, higher raw material costs in our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. printing (packaging) business and the increased costs associated with the temporary shutdown of a production line at Autotype in the United Kingdom. The production line was shutdown to convert to a clean coating line to support the demand for the successful commercialization of our in-mold decoration process. 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. increased due to an increase in selling and technical expenses in Asia to support the higher level of business, and expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the special committee's consideration of the proposed buy-out offer. Offsetting these higher expenses was a $1.1 million gain on disposal of assets related to the disposal of a small joint venture in Asia and the disposal of a building in America. 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. increased by $ 1.0 million (4.2%). The effective tax rate is higher this quarter at 30.7% than the 27.6% recorded last year. The difference is almost entirely due to the absence of the R & D credit this year. It is expected that Congress will renew this credit but the timing is uncertain. The higher tax rate offset the lower net interest paid leaving our 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 at $0.42, the same as in 2005. 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: 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 Summary of Cash Flows), were $ 12.0 million. Our Cash balance at the end of the quarter was $ 109 million. Year to date Operating Results Sales of $ 607.9 million were $ 66.1 million higher, a 12.2% increase over the same period in 2005. Autotype, our June 2005 acquisition, added $ 42.9 million compared with last year, leaving our sales excluding Autotype up by $ 23.2 million or 4.3%. Year to date sales were strong in Advanced Surface Finishing reflecting growth in North America and in Asia, while MPS sales (excluding Autotype) have declined slightly in the Americas and Europe. Foreign currency had a small unfavorable affect on sales, reducing our reported sales by 1.1%. The gross margin percentage declined from 44.5% to 43.4% mainly as a result the inclusion of the results of our June 2005 acquisition of Autotype which has a lower gross margin percentage than our other businesses, and to a lesser extent because of the lower yields of our MPS Americas business. Selling, technical and administrative expenses increased by $ 10.8 million due primarily to the inclusion of Autotype for a full three quarters this year versus 3 and one half months in last year, and the absence of the $2.5 litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. costs in the second quarter of last year. Operating profit increased by $ 5.4 million (7.5%) to $ 77.6 million. In the first quarter of this year we had unusual charges of $1.9 million to recognize the costs for the investigation of a potential acquisition and $2.2 million for the loss on the disposal of assets, less the $1.1 million gain on disposal of assets recorded in the third quarter this year. Our net interest paid decreased due to higher cash balances and higher interest rates on cash on deposit. Diluted earnings per share of $1.34 were 12.6% higher than the $1.19 per share in 2005. Owner Earnings, a measure of free cash flow (defined below and shown in BOLD in the attached Condensed Consolidated Summary of Cash Flows), were $ 28.1 million versus $21.6 million last year to date. 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 "The summer quarter is always the most difficult quarter to predict. There was good news. Our Industrial Group had an excellent quarter, more than offsetting the normal summer decline. Printing Solutions continues to under perform. Recent improvements in product development and manufacturing give us hope for MPS, but solid improvement in results still eludes us. ColorSpan had a down quarter, but management believes it is only a seasonal effect and that Q4 will be back closer to the record results we have seen this year. Autotype suffered this quarter. Order timing and seasonal effect affected results as well as continuing losses in the Middletown Delaware plant which the Autotype team has been attacking. We expect the fourth quarter to improve, but as always we have very limited visibility." 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
November 8(th), 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. |
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