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MacDermid Inc.
245 Freight Street
Waterbury, CT 06702-0671
203-575-5700,
http://www.macdermid.com
Sales (fiscal 1997): $293.7 million
Net income (fiscal 1997): $22 million
Market capitalization: $750 million
Chief executive: Daniel Leever
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Business New Haven
3/9/1998
By: BNH
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When MacDermid Inc. graduated on February 26 from NASDAQ to the New York Stock Exchange, it was the culmination of a period of remarkable growth, growth that produced a three-for-one stock split and dividend increase last month.
MacDermid's revenues have grown on average by 25 percent each of the last three years, while net income has increased better than 50 percent a year over the same period. The company has ot had a down year since 1994, and the stock price has jumped accordingly, rewarding investors with total returns of 64 percent in 1995, 40 percent in 1996, and a startling 210 percent in 1997.
MacDermid manufactures specialty chemicals for use in metal and plastic finishing. Its lines include anti-corrosion chemicals, as well as a wide range of products for cleaning, polishing, coating and plating metal goods.
As much as 60 percent of MacDermid's sales derive from the electronics industry. Within electronics, MacDermid's particular niche is the chemicals and manufacturing processes for circuit boards and printed circuits.
Within that business, MacDermid minimizes competition by providing contract manufacture of proprietary chemicals for manufacturers. The company's line includes over 1,000 proprietary chemicals for customers worldwide.
MacDermid's global scope is reflected in the 20 percent of its sales to Europe and 25 percent to Asia. While that broad market provides diversification, it also leaves the company vulnerable to financial crises and business turmoil in Asian economies.
Chief executive Daniel Leever argues, however, that MacDermid's business has been strong in spite of recent upheaval. Manufacturers of electronics and computer technology, MacDermid's principal market, find their costs of production have plummeted. That means more production - and more demand for MacDermid chemicals. Unless consumer demand slackens - something that has not yet happened - MacDermid's revenue base appears secure.
Investors in MacDermid will have to hope that developed economies shake off the effects of Asia, and that MacDermid's move to the NYSE will make expansion and growth simpler, if they expect the company's phenomenal growth to continue.
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