Item 2 PROPERTIES Within the United States, MacDermid owns the following properties: In Connecticut; At Waterbury, a 51,700 square foot steel building, principally used for executive offices, marketing and corporate support, and a 62,000 square foot research and customer service facility, both of which are located on a 5.8 acre tract. In addition, a 180,000 square foot wood, brick and concrete building complex is principally used for manufacturing and warehousing but also includes some offices and laboratories. The complex is located on a 7.2 acre tract. Directly across a street from this property, a 31 acre tract of land is held for possible future development.
In Delaware; At Middletown, a concrete and steel building of 85,520 square feet consisting of factory, laboratory, warehouse and office facilities located on a 10.97 acre tract. At Wilmington, a concrete and steel building of 26,000 square feet used principally as a technical and administrative services center located on a 3.8 acre tract. Also on this site is an 18,000 square foot concrete and steel building which is used for research activities and may also be used for manufacturing expansion should the need arise. In Michigan; At Ferndale, a steel frame and steel sided building of 75,000 square feet consisting principally of factory, warehouse and office facilities, located on a 6.25 acre tract. At New Hudson, a steel and brick single story building of 15,000 square feet consisting of research laboratories and offices located on a 7 acre tract. In Illinois; At Waukeegan, a masonry building of 25,000 square feet consisting of factory, laboratory, warehouse and office facilities located on a 1 acre tract. In, addition, there are two adjacent tracts of land totaling 1.3 acres which are being held for sale or lease but which could be used for manufacturing should the need arise. In Massachusetts; At Adams, a brick and wood building of 130,000 square feet consisting of factory, warehouse and office facilities located on an 8 acre tract. In Tennessee; At Morristown, a brick and steel building of 250,000 square feet consisting of factory, warehouse and office facilities located on a 23.75 acre tract. In Georgia; At Atlanta, a brick and steel building of 65,000 square feet consisting of research laboratories and sales offices located on a 5.75 acre tract. In California; At San Marcos, a concrete building of 235,000 square feet consisting of factory, warehouse, research laboratories and office facilities located on an 11.75 acre tract. The Corporation also owns property in Vernon, Connecticut, which is being held for sale or lease but which could be used for manufacturing should the need arise. Outside the United States, the Corporation owns additional properties as follows: In Spain; At Barcelona, a steel and brick building of 31,000 square feet of factory, warehouse, laboratory and office space. In England; At Telford, two brick, concrete and steel buildings, connected by a walkway, containing a total of 43,000 square feet of manufacturing, warehouse, laboratory and office space. At Birmingham, two brick, concrete and steel buildings, connected by a walkway, containing a total of 110,000 square feet of manufacturing, warehouse, laboratory and office space and at a separate location nearby a brick, concrete and steel building of 120,000 square feet of manufacturing and warehouse space. At Sheffield, a steel and concrete building of 4,500 square feet of warehouse and laboratory space. At Wigan, a brick, concrete and steel building of 65,000 square feet of manufacturing, warehouse and office space. In France; At Villemeux, a steel and concrete building of 50,000 square feet of manufacturing, warehouse and office space. At Eure, a steel and concrete building of 41,000 square feet of manufacturing, warehouse, laboratory and office space. At Cernay, a steel and concrete building of 235,000 square feet of factory, warehouse and office space. At Steinbach, a wood and brick building of 150,000 square feet of factory and warehouse. At Evreux, a steel building of 68,000 square feet of factory and warehouse. In Germany; At Dusseldorf, a steel and concrete building of 17,000 square feet for manufacturing. At Zulpich, a steel and concrete building of 12,000 square feet of manufacturing and office space. In the Republic of China; At Hsin Chu, Taiwan, two buildings of reinforced concrete totaling 30,000 square feet, located on a 1.8 acre tract, used for factory, warehouse and offices. At Hong Kong, 30,000 square feet office, labs and warehouse space in a concrete block building. At Panyu, three buildings of reinforced concrete totaling 64,000 square feet, located on a 4 acre tract, used for factory, warehouse and offices. The Corporation also owns property at Birmingham, Wigan and Droitwich, England which is presently leased, as well as at Rosay Par Prouais, France which is being held for sale or lease. In addition, MacDermid leases office, laboratory, warehouse and manufacturing facilities as needed. During the year, such additional facilities were leased in California, Massachusetts, Michigan, North Carolina, New Jersey, Rhode Island, Texas, Vermont, Washington, Canada, Mexico, Holland, Italy, France, Germany, Sweden, Korea, Australia, Japan, Singapore, China 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
Item 3 LEGAL PROCEEDINGS Legal proceedings are contained in MacDermid's 2000 Annual Report to Shareholders included as Exhibit 13 to this form 10K and incorporated by reference. Item 4
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the Corporation's security holders during the fourth quarter of fiscal 2000.
Item 4A EXECUTIVE OFFICERS OF MACDERMID The names, offices and ages (as of March 31, 2000) of all the executive officers of MacDermid, each of whom has been employed in his/her respective office(s) for more than five years, except as noted are as follows: Daniel H. Leever, age 51, has been Board Chairman since July 1998 and Chief Executive Officer since 1990.
R. Nelson Griebel, age 50, has been President and Chief Operating Officer since February 1999. Previously, and since 1977 he was with BankBoston, serving as Executive Vice President and as Regional President of Connecticut and western Massachusetts operations.
Stephen Largan, age 32, has been Vice President, Finance since February 1999. Previously, and since 1993 he was with a subsidiary of Ford Motor Company, serving as Director of Finance.
Gregory M. Bolingbroke, age 50, has been Corporate Controller since 1995.
John L. Cordani, age 37, Mr. Cordani resigned effective May 19, 2000. Previously, he was Corporate Secretary since 1995 and General Counsel since 1993.
Mary Anne B. Tillona, age 42, has been Corporate Secretary since June 2000 and Deputy General Counsel since April 2000. Previously, and since 1995 she was Corporate Counsel for Dexter Corporation.
PART II Item 5
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 2000 Annual Report to Shareholders included as Exhibit 13 to this form 10-K and incorporated by reference. Item 6
Item 6 SELECTED FINANCIAL DATA The selected financial data (Five-Year Summary) is contained in MacDermid's 2000 Annual Report to Shareholders included as Exhibit 13 to this Form 10-K and incorporated by reference. Item 7
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 2000 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. The Corporation is exposed to interest rate risk primarily from its credit facility which is based upon various floating rates. At March 31, 2000, the Corporation had entered into interest rate swaps with an aggregate notional amount that approximates one-third of its borrowings. The resulting weighted-average fixed interest rate is 6.2%. Based upon expected levels of borrowing under this facility in 2001, an increase in interest rates of 100 basis points would result in an incremental $2.8 million interest expense and would not have a material adverse affect on the Corporation's consolidated financial position, results of operations or cash flows. The Corporation operates manufacturing facilities in eight countries and sells products in over 25 countries. Approximately 45% of the Corporation's sales are denominated in currencies other than the US Dollar. Historically, the Corporation returns slightly less than 10% on sales and foreign exchange fluctuations have not had any significantly measurable effect on earnings. Furthermore, those earnings are generally reinvested locally and the impact on operating cash flows has been less than $3.5 million annually. Management continually reviews the balance between foreign currency denominated assets and liabilities in order to minimize the exposure to foreign exchange fluctuations. The Corporation does not enter into any derivative financial instruments for trading purposes, nor does it enter into any foreign currency hedging. The Corporation has certain 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 2000 Annual Report to Shareholders included as Exhibit 13 to this Form 10-K and incorporated by reference.
Item 8
Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements, including the notes thereto, of the Corporation are contained in MacDermid's 2000 Annual Report to Shareholders included as Exhibit 13 to this Form 10-K and incorporated by reference. Additional financial information is contained in the Financial Data Schedule appearing as Exhibit 27 to this report. Item 9
Item 9 DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
PART III Item 10
Item 10 DIRECTORS AND OFFICERS The discussion of "Election of Directors" and a portion of the discussion in the section, "Interest of Management and Others in Certain Transactions and Family Relationships" contained in MacDermid's Proxy Statement dated June 19, 2000 are incorporated herein by reference thereto. Officers of the Corporation are listed in Item 4A, above. Item 11
Item 11 EXECUTIVE COMPENSATION The discussion of "Executive Compensation" contained in MacDermid's Proxy Statement dated June 19, 2000 is incorporated herein by reference thereto. Item 12
Item 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information with respect to the security ownership of certain beneficial owners and management contained in MacDermid's Proxy Statement dated June 19, 2000 is incorporated herein by reference thereto. Item 13
Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND FAMILY RELATIONSHIPS The discussion of "Interest of Management and Others in Certain Transactions and Family Relationships" contained in MacDermid's Proxy Statement dated June 19, 2000 is incorporated herein by reference thereto.
PART IV
Item 14
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) Financial Statements The consolidated financial statements and report thereon of KPMG LLP, dated May 12, 2000 are contained in MacDermid's 2000 Annual Report to Shareholders included as Exhibit 13 to this Form 10-K and incorporated herein by reference. Additional financial information is contained in the Financial Data Schedule included as Exhibit 27 to this report. (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 2000 Annual Report to Shareholders included as Exhibit 13 to this Form 10-K and incorporated herein by reference
Auditors' Report on Supporting Schedule (3) Exhibits An index to the exhibits filed or incorporated by reference immediately precedes such exhibits. (b) Reports on Form 8-K The Corporation filed a report on Form 8-K, dated January 3, 2000, during the fourth quarter of fiscal 2000. This report contains information with respect to a press release announcing the consummation of the merger on December 29, 1999 between the Corporation and PTI Inc. upon approval from the Federal Trade Commission and is incorporated by reference. The Corporation filed a report on Form 8-K, dated May 15, 2000, during the first quarter of fiscal 2001. This report contains information with respect to a press release announcing the Corporation's fiscal year 2000 earnings and is incorporated by reference.
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: June 26, 2000 By /s/ Daniel H. Leever By /s/ Gregory M. Bolingbroke Daniel H. Leever Gregory M. Bolingbroke Director, Chairman and Corporate Controller and Chief Executive Officer Chief Accountant
Daniel H. Leever, pursuant to powers of attorney which are being filed with this Annual Report on Form 10-K, has signed below on May 12, 2000 as attorney-in-fact for the following directors of the Registrant: Donald G. Ogilvie - Thomas W. Smith - James C. Smith - R. Nelson Griebel - Joseph M. Silvestri /s/ Daniel H. Leever Daniel H. Leever
EXHIBIT INDEX 2000 FORM 10-K ANNUAL REPORT Exhibit No. 3.1 Restated Certificate of Incorporation, MacDermid, Incorporated, amended as of December 1, 1997. Exhibit 19 to September 30, 1991 Form 10-Q Quarterly Report is incorporated by reference herein. By reference 3.2 By-Laws, amended as of February, 1997. Exhibit 3b to 1985 Form 10-K Annual Report is incorporated by reference herein. By reference 4.1 Credit Agreement, amended and restated, dated as of November 11, 1999, among MacDermid, Incorporated, the Banks signatory thereto and Bank of America, as Agent, letter of credit issuing bank and swing line lender is incorporated by reference herein. By reference 10.1 MacDermid, Incorporated Special Stock Purchase Plan, amended as of November 1, 1992. Exhibit 10 to 1993 Form 10-K Annual Report is incorporated by reference herein. By reference 10.2 MacDermid, Incorporated 1995 Equity Incentive Plan Exhibit 10.2 to 1996 Form 10-K Annual Report is Incorporated by reference herein. By reference 10.3 MacDermid, Incorporated 1998 Equity Incentive Plan Exhibit 10.3 to 1999 Form 10-K Annual Report is Incorporated by reference herein. By reference 11 Computation of per share earnings. Note 7 to MacDermid's 2000 Annual Report to Stockholders Attached 13 Portions of MacDermid's 2000 Annual Report to Stockholders as required by Item 8 Attached 21 Subsidiaries of MacDermid, Incorporated Attached 23 Independent Auditors' Consent Attached 24 Power of Attorney Attached 27 Financial Data Schedule Attached