UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549-1004
Form 10-K/A
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 2002
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number 1-13889
MACDERMID, INCORPORATED
(Exact name of Registrant as specified in its Charter)
Connecticut 06-0435750
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(State of incorporation) (IRS Employer I.D. No.)
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245 Freight Street, Waterbury, Connecticut 06702-0671
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code (203) 575-5700
Securities registered pursuant to Section 12(g) of the Act: NONE
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock Without Par Value New York Stock Exchange
9.125% Senior Subordinated Notes due 2011 New York Stock Exchange
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days.
Yes (X) No ( )
Indicate by check mark whether the Registrant is an accelerated filer as defined
in Rule 12b-2 of the Act.
Yes (X) No ( )
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of the last business day of the Registrant's most recently
completed second fiscal quarter (based on the closing price on such date as
reported on the New York Stock Exchange) was $522,095,000.
The number of shares of Registrant's Common Stock outstanding as of March 1,
2003 was 32,314,172 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 2002 Annual Report to Shareholders are
incorporated herein by reference into Parts I and II hereof and filed as Exhibit
13 to this Report. The definitive proxy statement to be filed, and mailed to
the Corporation's stockholders on, or before 30 days prior to the Corporation's
annual meeting scheduled for April 30, 2003, is incorporated herein by reference
into Part III hereof.
PART I
ITEM 1:BUSINESS
Item 1(a) GENERAL DEVELOPMENT OF BUSINESS
Established in Waterbury, Connecticut, in 1922, MacDermid, Incorporated and its
subsidiaries' (collectively, the "Corporation" or "MacDermid") common shares
have traded on the New York Stock Exchange under the symbol "MRD" since 1998.
Prior to that, and since 1966, its common shares were traded on the NASDAQ stock
exchange. The Corporation develops, produces and markets a broad line of
specialty chemical products that are used worldwide. These products are
supplied to the metal and plastic finishing markets (for automotive and other
applications), the electronics industry (to imprint electrical patterns on
circuit boards), the offshore oil and gas markets (for oil drilling and
exploration) and to the commercial printing and packaging industries (for image
transfer and offset printing applications). The Corporation, through its
majority owned subsidiary, also designs and manufactures electronic circuit
boards. For a further description of the Corporation's business, see Items
1(b), 1(c) and 1(d).
During 2001, the Corporation changed its fiscal year end from March 31, to
December 31. Therefore, the results of operations for the period from April 1,
2001 to December 31, 2001 (referred to as "transition year 2001") covers a
period of nine months.
Item 1(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Corporation develops, manufactures, and markets over 5,000 proprietary
chemical compounds. The Corporation operates on a worldwide basis, supplying
proprietary chemicals for two distinct segments, Advanced Surface Finishing and
Printing Solutions (formerly Graphic Arts). A third segment, Electronics
Manufacturing designs and manufactures printed circuit boards in Europe through
a majority owned subsidiary. These three segments, under which the Corporation
operates, are managed separately as each segment has differences in technology
and marketing strategies. Item 1(c) of this report provides information
concerning the Corporation's classes of products and Item 1(d) of this report
includes financial information concerning operations by business segment and by
geographic region as well as on a consolidated basis. Additional information
with respect to the business is shown in the Notes to Consolidated Financial
Statements portion of the Corporation's 2002 Annual Report to Shareholders,
included as Exhibit 13 to this Form 10-K, and is incorporated by reference.
Item 1(c) NARRATIVE DESCRIPTION OF BUSINESS
(i) MacDermid develops, manufactures and markets a broad line of specialty
chemicals, solutions and other products for three distinct businesses segments:
Advanced Surface Finishing, Printing Solutions and Electronics Manufacturing.
The Advanced Surface Finishing segment's proprietary chemical compounds are
primarily used for automotive, electrical and other industrial applications. In
automotive and other applications its products are used for cleaning,
activating, polishing, mechanical plating, mechanical galvanizing,
electro-plating, phosphatizing, stripping and coating, filtering,
anti-tarnishing and rust retarding for metal and plastic surfaces. In
electronic applications its products are used to etch copper and imprint
electrical patterns on circuit boards and in offshore oil and gas exploration
its chemicals and fluids are used in hydraulic systems as lubricants and
cleaning agents to assist in drilling and logging operations. MacDermid also
offers a line of horizontal processing equipment primarily for the production of
printed circuit boards and chemical machining applications used in conjunction
with certain of its chemical products.
The Printing Solutions segment's complete line of offset and textile printing
blankets and photo-polymer plates are used by commercial printing and packaging
industries. These products allow for both image transfer in flexographic
applications and in offset printing applications. Its products are used to
improve print quality and productivity for commercial printing. It also
manufactures and markets a complete line of digital printers with color graphics
and other features.
The Electronics Manufacturing segment is a leading designer and manufacturer of
both single-sided and double-sided printed circuit boards in Europe through its
majority owned subsidiary Eurocir SA.
In the Americas, MacDermid markets its entire line of proprietary products by
way of more than 280 sales and service personnel. In certain areas of the
United States, distributors and manufacturing representatives also sell and
service many of its products. The Corporation maintains chemical inventories at
approximately 14 distribution points throughout the United States. Typically,
these facilities are leased or rented. MacDermid owns and operates six
manufacturing facilities within the United States. In Canada, Mexico and Brazil
the Corporation markets certain of its products through wholly owned
subsidiaries.
In Europe, the Corporation markets its proprietary products through wholly owned
subsidiaries. European business is generated by way of more than 380 sales and
service representatives who are employed by the Corporation's subsidiaries
located in France, Germany, Great Britain, Italy, Holland, Spain, and Sweden.
MacDermid owns and operates manufacturing facilities in Spain, Great Britain,
Italy, France and Germany. In Germany, a wholly owned subsidiary manufactures
and markets equipment in conjunction with the proprietary chemical business.
In the Asia-Pacific region, the Corporation markets its proprietary products
through either wholly owned subsidiaries or branch operations in Australia,
China/Hong Kong, Japan, Korea, New Zealand, Singapore, and Taiwan. Asia-Pacific
business is generated by way of more than 260 sales and service representatives
who are employed by those local subsidiaries. In addition, sales are made in
India, Indonesia, Malaysia, the Philippines, Sri Lanka, Thailand and Vietnam
directly or through distributors. MacDermid owns and operates subsidiary
manufacturing facilities in Taiwan, mainland China, Japan, Australia and New
Zealand.
In other foreign markets some of the Corporation's proprietary chemicals are
sold in certain countries of South America, Europe and Asia through distributors
or are manufactured and sold through licensees.
Research in connection with proprietary products is performed principally in the
United States, with additional research support activities conducted in Great
Britain, Spain, France and Japan.
Chemicals, supplies and equipment manufactured by others and resold by MacDermid
consist of basic chemicals, automatic plating conveyors, barrel plating and
pollution control equipment, rectifiers, pumps and filters. Resale items are
marketed in conjunction with and as an aid to the sale of proprietary chemicals.
(ii) The Corporation has the following four classes of principal products:
a) chemical compounds, printing plates and blankets produced by the
Corporation, most of which are the result of its own research and development
and, therefore, are referred to as proprietary products;
(b) printed circuit boards for a wide variety of consumer applications;
(c) resale non-proprietary chemicals and supplies; and
(d) equipment in support of the chemical business of which approximately 30% is
manufactured by the Corporation.
The following table sets forth the classes of the Corporation's products and the
respective percentage of total consolidated revenue for the year 2002 and the
previous two fiscal years:
Class of Products . . . . . . December 31, 2002 Transition Year 2001 March 31, 2001
Proprietary chemicals . . . . 82% 82% 89%
Electronic boards . . . . . . 12% 12% 4%
Resale chemicals and supplies 4% 3% 4%
Equipment . . . . . . . . . . 2% 3% 3%
(iii) MacDermid uses in excess of 1,100 chemicals as raw materials in the
manufacture of its proprietary products. With few exceptions, several domestic
sources of supply are available for all such raw materials and for resale
chemicals, supplies and equipment. During fiscal year 2002, there were no
significant difficulties in obtaining raw materials essential to its business.
(iv) For the year ended December 31, 2002, more than 20% of the
Corporation's proprietary sales were derived from products covered by patents
owned by MacDermid or produced under patent license agreements. MacDermid owns
approximately 190 non-expired U.S. Patents, for which corresponding patents have
been obtained or are pending in most industrialized nations, and has more than
20 patent applications pending in the U.S. In addition, the Corporation owns
approximately 445 non-expired foreign patents. The patents owned by the
Corporation are important to its business and have varying remaining lives.
Although certain of these patents are increasingly more important to its
business, the Corporation believes that its ability to provide technical and
testing services to its customers and to meet the rapid delivery requirements of
its customers is equally, if not, more important. In addition, MacDermid has
many proprietary products which are not covered by patents and which make a
large contribution to its total sales. Further, the Corporation owns a number
of domestic and foreign trade names and trademarks for which it considers to be
of value in identifying MacDermid and its products. The Corporation neither
holds nor has granted any franchises or concessions.
(v) No material portion of the Corporation's business is seasonal. The
Corporation records revenue from product sales, including freight charged to
customers, upon shipment to the customer if the collection of the resulting
receivable is probable The Corporation's stated shipping terms are FOB
shipping point and CIP shipping point and do not include customer inspection or
acceptance provisions. Where circumstances arise where title has not passed, or
revenue is not earned the Corporation defers revenue recognition in accordance
with criteria set forth in Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements.
(vi) It is necessary to maintain finished goods inventory at locations
throughout the United States and in the foreign countries in which the
Corporation operates so that it may meet the rapid delivery requirements of its
customers. This impacts working capital requirements by requiring a
considerable investment in inventories to service its customers. Customer
payment terms, which vary by country, are generally in accord with local
industry practice.
(vii) No major portion of the Corporation's business is dependent upon a
single customer or a few customers, the loss of whom would have a materially
adverse effect on its business.
(viii) Since products are taken from inventory stock to ship against current
orders, there is essentially no backlog of orders for the Corporation's
proprietary chemical products. MacDermid does not consider the absence of a
backlog to be significant.
(ix) No portion of the Corporation's business is subject to re-negotiation
of profits or termination of contracts or subcontracts at the election of the
Government.
(x) The Corporation provides a broad line of proprietary chemical compounds
and supporting services. MacDermid has many competitors, estimated to be in
excess of 100 in some proprietary product areas. Some large competitors operate
globally, as does MacDermid, but most operate locally or regionally. To the
best of the Corporation's knowledge no single competitor competes with all its
proprietary products. The Corporation maintains extensive support, technical
and testing services for its customers, and is continuously developing new
products. Management believes that the Corporation's combined abilities to
manufacture, sell, service and develop new products and applications, enables it
to compete successfully both locally and worldwide.
(xi) MacDermid spent approximately $19,104,000 during fiscal year 2002,
$14,922,000 for transition year 2001 and $24,466,000 for fiscal year 2001 on
research and development activities. Substantially all research and development
activities were performed by the Corporation with the greater percentage related
to the development of new products.
(xii) For many years, MacDermid has developed proprietary products designed
to reduce the discharge of pollutant materials into the environment and
eliminate the use of certain targeted raw materials while enhancing the
efficiency of customer chemical processes. For this reason, efforts to comply
with Federal, State and Local provisions, which have been enacted or adopted
regulating the discharge of materials into the environment, are expected to have
a positive effect upon the Corporation's competitive position. Capital
expenditure for environmental control facilities and compliance has been
approximately $500,000 to $1,000,000 historically. For the fiscal year ended
December 31, 2002, spending of this nature continued at these levels and though
difficult to predict, future spending of this nature is likely to remain in this
range.
(xiii) As of December 31, 2002, MacDermid had 3,166 full time employees as
compared to 3,484 full time employees as of December 31, 2001.
Item 1(d) FOREIGN AND DOMESTIC OPERATIONS
The Corporation's 2002 Annual Report to Shareholders, included as Exhibit 13 to
this Form 10-K and is incorporated by reference, provides information with
respect to business segment, geographic regions as well as on a consolidated
basis, including operating information and the effect upon shareholders' equity
of the translation of foreign currency financial statements.
ITEM 2: PROPERTIES
The following table identifies certain information with regard to the principle
properties owned by the Corporation:
LOCATION . . . . . . . PRINCIPLE USE APPROXIMATE SQ. FT.
Waterbury, Connecticut Executive and marketing offices, 114,000
corporate service, customer support
and research labs
Waterbury, Connecticut Warehouse 180,000
Middletown, Delaware . Factory, warehouse, labs and offices 85,000
Ferndale, Michigan . . Factory, warehouse and offices 75,000
Cedar Rapids, Iowa . . Factory, warehouse and offices 25,000
Morristown, Tennessee. Factory, warehouse and offices 250,000
Atlanta, Georgia . . . Offices and labs 65,000
San Marcos, California Factory, warehouse, labs and offices 195,000
Pasadena, Texas. . . . Factory, warehouse and offices 35,000
Birmingham, England. . Warehouse, labs and offices 110,000
Birmingham, England. . Factory and warehouse 120,000
Wigan, England . . . . Factory, warehouse and offices 65,000
Cernay, France . . . . Factory, warehouse and offices 235,000
Dormans, France. . . . Factory, warehouse, labs and offices 35,000
Evreux, France . . . . Factory and warehouse 68,000
Steinbach, France. . . Factory and warehouse 150,000
Villemeux, France. . . Factory, warehouse and offices 50,000
Pioltello, Italy . . . Factory, warehouse and offices 40,000
Barcelona, Spain . . . Factory, warehouse, labs and offices 31,000
Hong Kong, China . . . Warehouse, labs and offices 30,000
Panyu, China . . . . . Factory, warehouse, labs and offices 64,000
Hsin Chu, Taiwan . . . Factory, warehouse, labs and offices 30,000
The Corporation also owns property in Franklin Park and Waukeegan, Illinois;
Adams, Massachusetts; New Hudson, Michigan; and Vernon, Connecticut. Outside
the United States, the Corporation also owns property in Droitwich, England.
These properties are vacant and could be used for manufacturing should the need
arise, or could be leased or sold should an opportunity arise.
In addition, MacDermid leases office, laboratory, warehouse and manufacturing
facilities as needed. During the year, such facilities were leased in
California, Massachusetts, Michigan, Minnesota, North Carolina, New Jersey,
Rhode Island, Texas, Vermont, Washington, Canada, Mexico, Holland, Italy,
France, Germany, Spain, Sweden, Australia, China, Japan, Korea, Singapore, New
Zealand and several other foreign countries. All owned and leased facilities
are in good condition and are of adequate size for present business volume.
ITEM 3: LEGAL PROCEEDINGS
On June 25, 2002, the U.S. Environmental Protection Agency brought an
administrative complaint against the Adams, Massachusetts manufacturing facility
owned by MacDermid Printing Solutions, LLC, alleging that the facility violated
certain regulations and permit requirements regarding air emissions and related
record keeping matters. The allegations arise primarily out of conduct that
allegedly occurred prior to the Corporation's acquisition of the facility
through its December 1999 acquisition of Polyfibron Technologies, Inc. The
Corporation has entered into a settlement with the EPA regarding these
allegations. The settlement required a payment of $230,000 and resolved the
issues alleged.
On January 30, 1997, the Corporation was served with a subpoena from a federal
grand jury in Connecticut requesting certain documents relating to an accidental
spill from its Huntingdon Avenue, Waterbury, Connecticut facility that occurred
in November of 1994, together with other information relating to operations and
compliance at the Huntingdon Avenue facility. The Corporation was subsequently
informed that it was a subject of the grand jury's investigation in connection
with alleged criminal violations of the federal Clean Water Act pertaining to
its wastewater handling practices. In addition, two of the Corporation's former
employees, who worked at the Huntington Avenue facility, pled guilty in early
2001 to misdemeanor violations under the Clean Water Act in connection with the
above matter. These individuals were sentenced to fines of $25,000 and $10,000
and 2 years probation, as well as community service.
In a separate matter, on July 26, 1999, the Corporation was named in a civil
lawsuit commenced in the Superior Court of the State of Connecticut brought by
the Connecticut Department of Environmental Protection alleging various
compliance violations at its Huntingdon Avenue and Freight Street locations
between the years 1992 through 1998 relating to wastewater discharges and the
management of waste materials. The complaint alleges violations of its permits
issued under the Federal Clean Water Act and the Resource Conservation and
Recovery Act, as well as procedural, notification and other requirements of
Connecticut's environmental regulations over the foregoing period of time.
The Corporation voluntarily resolved both of these matters on November 28, 2001.
As a result, MacDermid, Incorporated is required to pay fines and penalties
totaling $2,500,000, without interest, over six quarterly installments. As of
December 31, 2002, the Corporation has paid $2,042,000 and will pay the
remaining amount of $458,000 during the quarter ending March 31, 2003. In
addition, the Corporation is required to pay $1,550,000 to various local
charitable and environmental organizations and causes. As of December 31, 2002,
the Corporation has paid $1,420,000 and a final payment for these donations of
$130,000 will be paid on April 30, 2003. The Corporation has been placed on
probation for two years and will perform certain environmental audits, as well
as other environmentally related actions. The Corporation had recorded
liabilities during the negotiation period and therefore its results of
operations and financial position were not affected by these arrangements.
Various other legal proceedings are pending against the Corporation. The
Corporation considers all such proceedings to be ordinary litigation incident to
the nature of its business. Certain claims are covered by liability insurance.
The Corporation believes that the resolution of these claims to the extent not
covered by insurance will not, individually or in the aggregate, have a material
adverse effect on its financial position or results of operations.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Corporation's security holders during
the fourth quarter of fiscal year 2002.
PART II
ITEM 5: MARKET FOR MACDERMID'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
Information with respect to the market for MacDermid's Common Stock, dividends
paid and other related information is contained in its 2002 Annual Report to
Shareholders included as Exhibit 13 to this form 10-K and incorporated by
reference.
ITEM 6: SELECTED FINANCIAL DATA
The selected financial data (Five Year Summary) is contained in MacDermid's 2002
Annual Report to Shareholders included as Exhibit 13 to this Form 10-K and
incorporated by reference.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations is contained in MacDermid's 2002 Annual Report to Shareholders
included as Exhibit 13 to this Form 10-K and incorporated by reference.
ITEM 7(a): QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Corporation is exposed to market risk in the normal course of its business
operations due to its operations in different foreign currencies and its ongoing
investing and financing activities. The risk of loss can be assessed from the
perspective of adverse changes in fair values, cash flows and future earnings.
The Corporation has established policies and procedures governing its management
of market risks and the use of financial instruments to manage exposure to such
risks.
MacDermid has been exposed to interest rate risk primarily from its credit
facility, which is based upon various floating rates. The Corporation has
entered into interest rate swaps, a portion of which have been designated as
hedging instruments under the provisions of Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities.
There were no outstanding borrowings under this facility at December 31, 2002.
The Corporation reduced its exposure to interest rate risk with a fixed rate
bond offering during transition year 2001. See Note 15 to Consolidated
Financial Statements, Financial Information for Guarantors of the Corporation's
Bond Offering. Based upon expected levels of borrowing in 2003 and providing
for swap protection, an increase in interest rates of 100 basis points would
result in an incremental interest expense of approximately $150,000.
The Corporation operates manufacturing facilities in ten countries and sells
products in over 25 countries. Approximately 60% of the Corporation's net sales
and identifiable assets are denominated in currencies other than the US Dollar,
predominantly the Euro, the Pound Sterling, the Yen, Hong Kong and New Taiwan
Dollars. For the year ended December 31, 2002, there was a favorable impact on
earnings of approximately $0.01 per share, or 4%. Earnings are generally
reinvested locally and the impact on operating cash flows has been less than
$2,500,000 annually. Management continually reviews the balance between foreign
currency denominated assets and liabilities in order to minimize the exposure to
foreign exchange fluctuations.
MacDermid does not enter into any derivative financial instruments for trading
purposes. The Corporation has certain other supply agreements for quantities
but has chosen not to enter into any price hedging with its suppliers for
commodities. Additional information about market risk is contained in
MacDermid's 2002 Annual Report to Shareholders included as Exhibit 13 to this
Form 10-K and incorporated by reference.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, including the notes thereto, of the
Corporation are contained in MacDermid's 2002 Annual Report to Shareholders
included as Exhibit 13 to this Form 10-K and incorporated by reference.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information called for by this item is hereby incorporated by reference from
the Corporation's definitive proxy statement to be filed pursuant to regulation
14A for the 2002 annual meeting of shareholders. Officers of the Corporation
are listed in Item 10(a), below.
Item 10(a) EXECUTIVE OFFICERS OF MACDERMID
The names, offices and ages (as of December 31, 2002) of the executive officers
of MacDermid, each of whom has been employed in their respective offices for
more than five years, except as noted, are as follows:
Daniel H. Leever . . . age 54 Board Chairman (since 1998), Chief Executive
Officer (since 1990) and President (since 1989)
John L. Cordani. . . . age 39 Corporate Secretary and General Counsel (since
2001 and previously from 1994 to 2000) Between
May 2000 and July 2001 he was a partner at
Carmody and Torrance LLP
Gregory M. Bolingbroke age 53 Senior Vice President and Treasurer (since 2000) and
Corporate Controller (since 1995)
Richard Boehner. . . . age 55 Vice President of Corporate Development (since
2001) Previously, and since 1998 he was a Senior
Vice President at Great Lakes Chemical
John P. Malfettone was named Executive Vice President and Chief Financial
Officer effective January 7, 2002. He served, since 1990, as Vice President and
Controller and Vice President of Finance at GE Capital and Managing Director at
GE Equity. On September 10, 2002, he resigned from the Corporation to pursue
other interests.
ITEM 11: EXECUTIVE COMPENSATION
The information called for by this item is hereby incorporated by reference from
the Corporation's definitive proxy statement to be filed pursuant to regulation
14A for the 2002 annual meeting of shareholders.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information called for by this item is hereby incorporated by reference from
the Corporation's definitive proxy statement to be filed pursuant to regulation
14A for the 2002 annual meeting of shareholders.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND FAMILY RELATIONSHIPS
The information called for by this item is hereby incorporated by reference from
the Corporation's definitive proxy statement to be filed pursuant to regulation
14A for the 2002 annual meeting of shareholders.
ITEM 14: CONTROLS AND PROCEDURES
The Corporation's principle executive and financial officers have evaluated the
effectiveness of the Corporation's disclosure controls and procedures (as
defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) as of a
date within 90 days of the filing of this report. Based on that evaluation,
they have concluded that the Corporation's disclosure controls and procedures
are adequate and effective. There have been no significant changes in the
Corporation's internal controls or in other factors that could significantly
affect internal controls subsequent to the date they completed their evaluation.
PART IV
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements
The consolidated financial statements and report thereon of KPMG LLP, dated
February 4, 2003 are contained in MacDermid's 2002 Annual Report to
Shareholders included as Exhibit 13 to this Form 10-K and incorporated
herein by reference.
(2) Financial Statement Schedules
The following schedules are filed as part of this Annual Report on Form
10-K. This supplementary financial data should be read in conjunction with
the consolidated financial statements and comments thereto referred to
above. Schedules not included with this supplementary financial data have
been omitted because they are not applicable, are immaterial or the
required information is included in the consolidated financial statements
or related notes to consolidated financial statements.
Schedule II - Valuation and Qualifying Accounts and Reserves is contained
in MacDermid's 2002 Annual Report to Shareholders included as Exhibit 13 to
this Form 10-K and incorporated herein by reference
(3) Exhibits
The following exhibits are filed as part of, or incorporated by reference
into, this report on Form 10-K.
EXHIBIT INDEX TO 2002 FORM 10-K ANNUAL REPORT
Exhibit No.
3.1 . . . . Restated Certificate of Incorporation, MacDermid, Incorporated By reference
amended as of December 1, 1997. Exhibit 19 to September 30,
1991 Form 10-Q Quarterly Report is incorporated by reference
herein.
3.2 . . . . Restated By-Laws of MacDermid, Incorporated amended as of May By reference
21, 2001. Exhibit 3.2 to March 31, 2001 Form 10-K Annual Report
is incorporated by reference herein.
4.1 . . . . Credit Agreement, amended, dated as of November 9, 2001 By reference
among MacDermid, Incorporated, the Banks signatory
thereto and Bank of America, as Agent, letter of credit issuing
bank and swing line lender. Exhibit 4.2 to December 31, 2001
transition report on Form 10-K Annual Report is incorporated by
reference, herein.
10.1. . . . MacDermid, Incorporated Special Stock Purchase Plan, By reference
amended as of November 1, 1992. Exhibit 10 to 1993
Form 10-K Annual Report is incorporated by reference herein.
10.2. . . . MacDermid, Incorporated 1995 Equity Incentive Plan. Exhibit By reference
10.2 to 1996 Form 10-K Annual Report is incorporated by
reference herein.
10.3. . . . MacDermid, Incorporated 1998 Equity Incentive Plan. Exhibit By reference
10.3 to 1999 Form 10-K Annual Report is incorporated by
reference herein.
10.4. . . . MacDermid, Incorporated 2001 Equity Incentive Plans. Exhibit By reference
10.4 to March 31, 2001 Form 10-K Annual Report is incorporated
by reference herein.
10.5. . . . Severance Agreement Attached
11. . . . . Computation of per share earnings. By reference
Note 1(p) to MacDermid's 2002 Annual Report to Stockholders.
13. . . . . MacDermid's 2002 Annual Report to Stockholders as required by Attached
Item 8.
21. . . . . Subsidiaries of MacDermid, Incorporated Attached
23. . . . . Independent Auditors' Consent Attached
24. . . . . Power of Attorney Attached
99. . . . . Statement Under Section 906 of the Sarbanes-Oxley Act of 2002 Attached
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.
MACDERMID, INCORPORATED
(Registrant)
Dated: March 27, 2003
By /s/ Daniel H. Leever By
Daniel H. Leever Gregory M. Bolingbroke
Chairman, President Senior Vice President, Treasurer
and Chief Executive Officer and Corporate Controller
Daniel H. Leever, pursuant to powers of attorney, which are being filed with
this Annual Report on Form 10-K, has signed below on February 25, 2003 as
attorney-in-fact for the following directors of the Registrant:
Donald G. Ogilvie
James C. Smith
Joseph M. Silvestri
T. Quinn Spitzer, Jr.
Robert L. Ecklin
/s/ Daniel H. Leever
Daniel H. Leever
PRINCIPLE EXECUTIVE OFFICER CERTIFICATION
I, Daniel H. Leever, certify that:
1. I have reviewed this annual report on Form 10-K of MacDermid, Incorporated;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "evaluation date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
evaluation date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weakness in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 27, 2003
/s/ Daniel H. Leever
Name: Daniel H. Leever
Title: Chairman, President and Chief Executive Officer
PRINCIPLE FINANCIAL OFFICER CERTIFICATION
I, Gregory M. Bolingbroke, certify that:
1. I have reviewed this annual report on Form 10-K of MacDermid, Incorporated;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "evaluation date"); and
c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
evaluation date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weakness in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 27, 2003
/ s / Gregory M. Bolingbroke
Name: Gregory M. Bolingbroke
Title: Senior Vice President, Treasurer and Corporate Controller