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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549 - 1004

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2002
------------------

COMMISSION FILE NUMBER 0-2413

MacDermid, Incorporated
-----------------------
(Exact name of registrant as specified in its charter)

Connecticut 06-0435750
----------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

245 Freight Street, Waterbury, Connecticut 06702
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (203) 575-5700
--------------

Former name, former address or former fiscal year, if changed
since last report.

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 and 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 such filing
requirements for the past 90 days.

Yes X No .
- -------- ------------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Class Outstanding at November 1, 2002
------- -----------------------------------
Common Stock, no par value 32,149,882 shares

MACDERMID, INCORPORATED
INDEX




Page No.

Part I. Financial Information

Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
September 30, 2002 and December 31, 2001 . . . . . . . . . 2-3
Consolidated Condensed Statements of Earnings
and Retained Earnings - Nine and Three Months Ended
September 30, 2002 and 2001. . . . . . . . . . . . . . . . 4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended September 30, 2002 and 2001. . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . . . 6-23
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . 24-31
Item 3. Quantitative and Qualitative Disclosures about Market Risk 31
Item 4. Controls and Procedures. . . . . . . . . . . . . . . . . . 32
Part II. Other Information. . . . . . . . . . . . . . . . . . . . 32
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Certifications under Section 302 of the Sarbanes-Oxley Act of 2002. 34-35


MACDERMID, INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in Thousands of Dollars)




September 30, December 31,

2002 2001
--------------- --------------
Assets. . . . . . . . . . . . . . . . . . (Unaudited) (Audited)

Current assets:
Cash and cash equivalents . . . . . . . . $ 22,316 $ 17,067
Accounts and notes receivable, (net
of allowance for doubtful receivables
of $15,434 and $14,642). . . . . . . . 149,198 164,230
Inventories:
Finished goods . . . . . . . . . . . . 48,692 57,882
Raw materials. . . . . . . . . . . . . 48,261 53,152
--------------- --------------
96,953 111,034
Prepaid expenses. . . . . . . . . . . . . 7,057 8,068
Deferred income tax asset . . . . . . . . 13,673 13,831
--------------- --------------
Total current assets. . . . 289,197 314,230
Property, plant and equipment (net
of accumulated depreciation of
$146,647 and $140,234) . . . . . . . . 138,395 152,482
Goodwill (Note 2) . . . . . . . . . . . . 224,603 222,571
Intangibles, (net of accumulated
amortization of $18,403
and $36,585) (Note 2). . . . . . . . . 32,696 37,425
Other assets. . . . . . . . . . . . . . . 64,725 64,177
--------------- --------------
$ 749,616 $ 790,885
=============== ==============


See accompanying notes to consolidated condensed financial statements.



MACDERMID, INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in Thousands of Dollars Except Per Share Amounts)




September 30, December 31,

2002 2001
--------------- --------------
Liabilities and shareholders' equity:. . . . . (Unaudited) (Audited)

Current liabilities:
Notes payable. . . . . . . . . . . . . . . . . $ 5,077 $ 12,961
Current installments of long-term obligations. 6,788 5,614
Accounts and dividends payable . . . . . . . . 63,887 62,031
Accrued expenses (Note 7). . . . . . . . . . . 69,537 82,886
Income taxes . . . . . . . . . . . . . . . . . 7,995 10,468
--------------- --------------
Total current liabilities. . . . 153,284 173,960

Long-term obligations. . . . . . . . . . . . . 340,099 393,788
Accrued post-retirement and
post-employment benefits. . . . . . . . . . 12,864 12,308
Deferred income taxes. . . . . . . . . . . . . 4,210 4,364
Other long-term liabilities. . . . . . . . . . 1,144 281
Minority interest. . . . . . . . . . . . . . . 3,288 2,753

Shareholders' equity:
Common stock stated value
$1.00 per share (Note 3). . . . . . . . . . 46,460 46,410
Additional paid-in capital . . . . . . . . . . 19,899 16,923
Retained earnings. . . . . . . . . . . . . . . 242,354 218,619
Cumulative comprehensive
income equity adjustments (Note 5). . . . . (14,601) (19,579)
Cost of treasury shares (Note 3) . . . . . . . (59,385) (58,942)
--------------- --------------
Total shareholders' equity . . . 234,727 203,431
--------------- --------------
$ 749,616 $ 790,885
=============== ==============


See accompanying notes to consolidated condensed financial statements.



MACDERMID, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
AND RETAINED EARNINGS
(Amounts in Thousands of Dollars Except Share and Per Share Amounts)
(Unaudited)




Nine Months Ended September 30, Three Months Ended September 30,

2002 2001 2002 2001
------------------- --------------- -------------------- ---------------
Net sales. . . . . . . . . . . . . . . . . . . . . $ 511,824 $ 568,550 $ 168,146 $ 171,663

Cost and expenses:
Cost of sales . . . . . . . . . . . . . . . . . 281,522 332,318 92,345 100,392
Selling, technical and administrative expenses. 159,055 172,378 51,560 52,328
Amortization (Note 2) . . . . . . . . . . . . . 4,696 9,096 1,558 2,246
Interest income . . . . . . . . . . . . . . . . (472) (1,151) (196) (319)
Interest expense. . . . . . . . . . . . . . . . 26,798 28,396 8,855 10,217
Other expense (net) . . . . . . . . . . . . . . 1,689 1,942 1,136 889
------------------- --------------- -------------------- ---------------
473,288 542,979 155,258 165,753
------------------- --------------- -------------------- ---------------

Earnings before taxes and
minority interest . . . . . . . . . . . . . . . 38,536 25,571 12,888 5,910
Income taxes . . . . . . . . . . . . . . . . . . . (12,331) (8,995) (4,123) (1,818)
Minority interest. . . . . . . . . . . . . . . . . (535) 105 (100) 78
------------------- --------------- -------------------- ---------------
Net earnings . . . . . . . . . . . . . . . . . . . 25,670 16,681 8,665 4,170

Retained earnings, beginning of period . . . . . . 218,619 245,471 234,334 256,716
Cash dividends declared. . . . . . . . . . . . . . (1,935) (1,909) (645) (643)
------------------- --------------- -------------------- ---------------
Retained earnings, end of period . . . . . . . . . $ 242,354 $ 260,243 $ 242,354 $ 260,243
=================== =============== ==================== ===============


Net earnings per common share - (Note 4):
Basic . . . . . . . . . . . . . . . . . . . . . $ 0.80 $ 0.53 $ 0.27 $ 0.13
=================== =============== ==================== ===============
Diluted . . . . . . . . . . . . . . . . . . . . $ 0.79 $ 0.51 $ 0.27 $ 0.13
=================== =============== ==================== ===============


Cash dividends per common share. . . . . . . . . . $ 0.06 $ 0.06 $ 0.02 $ 0.02
=================== =============== ==================== ===============

Weighted average common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . 32,215,244 31,588,426 32,196,368 32,132,147
=================== =============== ==================== ===============
Diluted . . . . . . . . . . . . . . . . . . . . 32,496,043 32,392,471 32,480,682 32,393,205
=================== ==================== ===============


See accompanying notes to consolidated condensed financial statements.






MACDERMID, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Amounts In Thousands of Dollars)
(Unaudited)




Nine Months Ended September 30,

2002 2001
--------------------------------- ----------

Net cash flows from operating activities (Note 8): $ 78,889 $ 68,812

Cash flows from investing activities:
Capital expenditures. . . . . . . . . . . . . . (4,587) (16,119)
Proceeds from disposition of fixed assets . . . 2,310 2,462
Acquisitions of businesses. . . . . . . . . . . - (17,756)
Dispositions of businesses. . . . . . . . . . . - 9,415
--------------------------------- ----------
Net cash flows used in investing activities . . (2,277) (21,998)

Cash flows from financing activities:
Net repayments of short-term borrowings . . . . (12,183) (3,712)
Long-term borrowings. . . . . . . . . . . . . . 82,451 377,795
Long-term repayments. . . . . . . . . . . . . . (139,577) (404,808)
Bond financing fees . . . . . . . . . . . . . . - (8,167)
Purchase of treasury shares . . . . . . . . . . (443) -
Dividends paid. . . . . . . . . . . . . . . . . (1,935) (1,909)
--------------------------------- ----------
Net cash flows used in financing activities . . (71,687) (40,801)

Effect of exchange rate changes on
cash and cash equivalents . . . . . . . . . . . 324 (1,855)
--------------------------------- ----------

Increase in cash and cash equivalents . . . . . 5,249 4,158
Cash and cash equivalents at beginning of period . 17,067 17,732
--------------------------------- ----------

Cash and cash equivalents at end of period . . . . $ 22,316 $ 21,890
================================= ==========



See accompanying notes to consolidated condensed financial statements.



MACDERMID, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(In Thousands of Dollars, Except Share and Per Share Amounts)
Note 1. Summary of Significant Accounting Policies
The accompanying unaudited consolidated condensed financial statements reflect
all normal and recurring adjustments that are, in the opinion of management,
necessary to present fairly the financial position of MacDermid, Incorporated
("the Corporation") and its subsidiary companies as of September 30, 2002 and
the results of operations and cash flows for the nine and three month periods
ended September 30, 2002 and 2001. The results of operations for these periods
are not necessarily indicative of trends, or of the results to be expected for
the full year. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been omitted. These
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Corporation's transition
year 2001 Annual Report for the year ended December 31, 2001.
Note 2. Goodwill and Other Intangible Assets
In accordance with Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets ("SFAS 142"), there is no amortization expense
recorded for goodwill in current, or future periods. Goodwill and other
intangible assets will be subject to an annual review for impairment or earlier
if circumstances or events indicate that impairment has occurred. This could
result in future write-downs or the write-off of such assets.
Goodwill carrying amounts, identified for the following segments; Advanced
Surface Finishes "ASF", Printing Solutions (formerly Graphic Arts) "PS" and
Electronics Manufacturing "EM", are as follows:







ASF PS EM Total
-------- ------- ------- --------
Balance as of December 31, 2001. $123,052 $72,130 $27,389 $222,571
Effects of currency translation. 1,648 384 - 2,032
-------- ------- ------- --------
Balance as of September 30, 2002 $124,700 $72,514 $27,389 $224,603
======== ======= ======= ========


Acquired intangible asset amounts are summarized as follows:




September 30, 2002 December 31, 2001
------------------- -------------------

Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
------------------- ------------------- --------------- --------------
Patents. . $ 19,698 $ (7,764) $ 20,865 $ (8,357)
Trademarks 27,481 (8,675) 28,281 (8,093)
Others . . 3,920 (1,964) 24,864 (20,135)
------------------- ------------------- --------------- --------------
Total . $ 51,099 $ (18,403) $ 74,010 $ (36,585)
=================== =================== =============== ==============



Aggregate estimated amortization expense is expected to approximate $2,500 for
each of the fiscal years ended December 31, 2002 - 2006.







Additional transitional disclosures: Nine Months Ended September 30, Three Months Ended September 30,

2002 2001 2002 2001
------------------ -------------- ------------------- --------------
Reported net income. . . . . . . . . $ 25,670 $ 16,681 $ 8,665 $ 4,170
Add back: goodwill amortization . . - 1,913 - -
------------------ -------------- ------------------- --------------
Adjusted net income. . . . . . . . . $ 25,670 $ 18,594 $ 8,665 $ 4,170
================== ============== =================== ==============

Basic earnings per share:
Reported net income. . . . . . . . $ 0.80 $ 0.53 $ 0.27 $ 0.13
Goodwill amortization. . . . . . . - $ 0.06 - -
------------------ -------------- ------------------- --------------
Adjusted net income. . . . . . . . $ 0.80 $ 0.59 $ 0.27 $ 0.13
================== ============== =================== ==============
Diluted earnings per share:
Reported net income. . . . . . . . $ 0.79 $ 0.51 $ 0.27 $ 0.13
Goodwill amortization. . . . . . . - $ 0.06 - -
------------------ -------------- ------------------- --------------
Adjusted net income. . . . . . . . $ 0.79 $ 0.57 $ 0.27 $ 0.13
================== ============== =================== ==============



Note 3. Common Share Data
The following table summarizes common share activity during the nine month
periods ended September 30, 2002 and 2001.






2002 2001
----------- ----------
Balance beginning of period. . . . 46,409,757 45,408,464
Shares issued - stock awards . . . 130,000 -
Shares cancelled - stock awards. . (80,000) -
Shares issued - warrants exercised - 1,001,293
----------- ----------
Balance end of period. . . . . . . 46,459,757 46,409,757
=========== ==========



The Board of Directors has from time-to-time authorized the purchase of issued
and outstanding shares of the Corporation's common stock. Common shares held in
treasury, were 14,331,075 at September 30, 2002 and 14,309,654 at December 31,
2001. There remained authorization to purchase approximately 121,000 common
shares as of September 30, 2002. Such additional shares may be acquired through
privately negotiated transactions or on the open market from time to time. Any
future repurchases by MacDermid will depend on various factors, including the
market price of the shares, the Corporation's business and financial position
and general economic and market conditions. Additional shares acquired pursuant
to such authorization will be held in the Corporation's treasury and will be
available for the Corporation to issue for various corporate purposes without
further shareholder action (except as required by applicable law or the rules of
any securities exchange on which the shares are then listed).
Note 4. Earnings Per Common Share
The computation of basic earnings per share is based upon the weighted average
number of outstanding common shares. The computation of diluted earnings per
share is based upon the weighted average number of outstanding common shares
plus the effect of all dilutive contingently issuable common shares from stock
options, stock awards and share warrants outstanding during the period.
Earnings per share ("EPS") is calculated based upon net earnings available for
common shareholders. Options to purchase 1,886,484 shares of common stock were
outstanding during the period but were not included in the computation of
diluted EPS because those options would be antidilutive based on current market
prices.

The following table reconciles basic weighted-average common shares outstanding
to diluted weighted-average common shares outstanding.






Nine Months Ended September 30, Three Months Ended September 30,

2002 2001 2002 2001
----------------- ------------- ------------------ -------------
Basic common shares . . . . . . . 32,215,244 31,588,426 32,196,368 32,132,147
Dilutive effect of stock options. 280,799 260,292 284,314 261,058
Dilutive effect of share warrants - 543,753 - -
----------------- ------------- ------------------ -------------
Diluted common shares . . . . . . 32,496,043 32,392,471 32,480,682 32,393,205
================= ============= ================== =============



Note 5. Comprehensive Income and Cumulative Comprehensive Equity Adjustment
The components of comprehensive income for the nine and three month periods
ended September 30, 2002 and 2001 are as follows:




Nine Months Ended September 30, Three Months Ended September 30,

2002 2001 2002 2001
------------------- --------------- -------------------- --------------
Net earnings. . . . . . . . . . . . . . . $ 25,670 $ 16,681 $ 8,665 $ 4,170
Other comprehensive income:
Foreign currency translation adjustment 5,081 (3,709) (3,316) 2,198
Minimum pension liability . . . . . . . - (9,670) - -
Hedging activities. . . . . . . . . . . (103) - (102) 258
------------------- --------------- -------------------- --------------
Comprehensive income. . . . . . . . . . . $ 30,648 $ 3,302 $ 5,247 $ 6,626
=================== =============== ==================== ==============



The components of cumulative equity adjustments for comprehensive income as of
September 30, 2002 and December 31, 2001 are as follows:






September 30, 2002 December 31, 2001
-------------------- -------------------
Cumulative equity adjustments for:
Foreign currency translation . . . . $ (11,268) $ (16,349)
Additional minimum pension liability (2,954) (2,954)
Hedging activities . . . . . . . . . (379) (276)
-------------------- -------------------
Cumulative comprehensive income . . . . $ (14,601) $ (19,579)
==================== ===================


Note 6. Segment Reporting
The Corporation provides development, manufacture and technical service for a
large variety of specialty chemical processes and related equipment in two
reportable operating segments: Advanced Surface Finishing and Printing
Solutions, which was previously referred to as Graphic Arts. In addition, the
Corporation operates a third reportable segment, Electronics Manufacturing, for
the design and manufacture of printed circuit boards. These three segments
under which the Corporation operates on a worldwide basis are managed separately
as each segment has differences in technology and marketing strategies. The
chemicals supplied by Advanced Surface Finishing are used for a broad range of
purposes including finishing metals and non metallic surfaces, electro-plating
metal surfaces, etching, imaging, metalization, high pressure fluids and
cleaning. The chemicals supplied by Printing Solutions are used for diverse
purposes including offset blankets, printing plates, textile blankets and
rubber-based covers for industrial rollers used in the printing industry. The
Electronics Manufacturing segment produces a wide variety of both single and
double sided printed circuit boards.
The business segments reported below are the segments of the Corporation for
which separate financial information is available and for which operating
results are reviewed by executive management to assess performance of the
Corporation. The accounting policies of each business segment are the same as
those described in the Summary of Significant Accounting Policies, Note 1.
Net sales for all of the Corporation's products fall into one of the three
business segments. The business segment results of operations include certain
operating costs, which are allocated based on the relative burden each segment
bears on those costs. Operating income amounts are reviewed before amortization
of intangible assets and non-recurring charges. The business segment
identifiable assets which follow are reconciled to total consolidated assets
including unallocated corporate assets which consist primarily of deferred tax
assets and certain other long term assets not directly associated with the
support of the individual segments.







Results of operations by segment: Nine Months Ended September 30, Three Months Ended September 30,

2002 2001 2002 2001
------------------- --------------- -------------------- ---------------
Net sales:
Advanced surface finishing . . . . . $ 239,465 $ 274,627 $ 80,476 $ 79,592
Printing solutions.. . . . . . . . . 211,810 225,798 69,959 73,887
Electronics manufacturing. . . . . . 60,549 68,125 17,711 18,184
------------------- --------------- -------------------- ---------------
Consolidated net sales . . . . . . $ 511,824 $ 568,550 $ 168,146 $ 171,663
------------------- --------------- -------------------- ---------------

Operating income (loss):
Advanced surface finishing . . . . . $ 32,132 $ 39,853 $ 11,233 $ 9,586
Printing solutions . . . . . . . . . 36,277 34,984 12,455 10,586
Electronics manufacturing. . . . . . 2,838 (5,109) 553 (1,229)
Restructuring and impairment expense - (5,874) - -
Amortization expense . . . . . . . . (4,696) (9,096) (1,558) (2,246)
------------------- --------------- -------------------- ---------------
Consolidated operating income. . . $ 66,551 $ 54,758 $ 22,683 $ 16,697

Interest income . . . . . . . . . 472 1,151 196 319
Interest expense. . . . . . . . . (26,798) (28,396) (8,855) (10,217)
Other (expense) income, net . . . (1,689) (1,942) (1,136) (889)
Earnings before income taxes
------------------- --------------- -------------------- ---------------
and minority interest . . . . . $ 38,536 $ 25,571 $ 12,888 $ 5,910
=================== =============== ==================== ===============







Identifiable assets by segment: September 30, 2002 December 31, 2001
------------------- ------------------

Advanced surface finishing. . . $ 154,804 $ 177,253
Printing solutions. . . . . . . 406,890 431,353
Electronics manufacturing . . . 131,234 132,296
Corporate-wide. . . . . . . . . 56,688 49,983
------------------- ------------------
Consolidated assets. . . . . $ 749,616 $ 790,885
=================== ==================



Note 7. Restructuring Charges and Acquisition Liabilities
The Corporation initiated restructuring programs (included in accrued expenses)
each of the two previous fiscal years in order to reduce its manufacturing and
operating cost structures.
Transition year ended December 31, 2001 included a $21,264 restructuring charge,
representing management and office support redundancies. The resulting cash
payments and other charges, including cash payments of $2,597 for the nine
months ended September 30, 2002, are summarized, cumulative, since inception, on
the following table:






Inception Cash Payments Non-cash Charges Balance
---------- -------------- ----------------- --------
Severance. . . . . . . $ 2,918 $ 2,548 $ - $ 370
Lease/asset write-offs 18,346 105 17,262 979
---------- -------------- ----------------- --------
Total . . . . . . . $ 21,264 $ 2,653 $ 17,262 $ 1,349
========== ============== ================= ========



Fiscal year ended March 31, 2001 included a $6,663 restructuring charge,
primarily representing management and office support redundancies. The
resulting cash payments and other charges, including cash payments of $22 for
the nine months ended September 30, 2002, are summarized, cumulative, since
inception, on the following table:






Inception Cash Payments Non-cash Charges Balance
---------- -------------- ----------------- --------
Severance. . . . . . . $ 6,133 $ 5,798 $ 335 $ -
Lease/asset write-offs 530 106 424 -
---------- -------------- ----------------- --------
Total . . . . . . . $ 6,663 $ 5,904 $ 759 $ -
========== ============== ================= ========



The Corporation established liabilities (included in accrued expenses) in fiscal
year 1999 when recording the acquisition of W.Canning, plc. The reorganization
of employees has been completed. The reorganization of facilities is proceeding
as planned. Five facilities have been closed with those activities assimilated
elsewhere. Negotiations are ongoing regarding the elimination of leased
facilities and sale of owned facilities. See Contingencies and Legal Matters,
Note 10, regarding environmental activity.
The following table summarizes the cumulative activity to this account, since
inception, including cash payments of $159 for the nine months ended September
30, 2002:






Inception Adjustments Payments Balance
---------- ----------- -------- --------
Facilities. . $ 4,200 885 3,464 $ 1,621
Redundancies. 2,050 3,100 5,150 -
Environmental 2,000 - 120 1,880
---------- ----------- -------- --------
Total. . . $ 8,250 3,985 8,734 $ 3,501
========== =========== ======== ========



Note 8. Supplemental Cash Flow Information
The following table illustrates the major components of net cash flows from
operating activities as well as cash paid for interest and income taxes for the
nine months ended September 30, 2002 and 2001:




Nine Months Ended September 30,

2002 2001
----------------------------- -------
Net cash flows from operating activities:
Net earnings. . . . . . . . . . . . . . . . . . . $ 25,670 $16,681
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . 15,828 18,306
Amortization . . . . . . . . . . . . . . . . . 4,696 9,096
Provision for bad debts. . . . . . . . . . . . 4,451 3,506
Stock option expense . . . . . . . . . . . . . 2,143 247
Other changes in assets and liabilities. . . . 26,101 20,976
----------------------------- -------

Net cash flows from operating activities . . . $ 78,889 $68,812
============================= =======


Cash paid for interest. . . . . . . . . . . . . . $ 37,052 $19,540
============================= =======

Cash paid for income taxes. . . . . . . . . . . . $ 7,101 $14,893
============================= =======




Note 9. Market Risk
The Corporation is exposed to market risk in the normal course of its business
operations due to its operations in different foreign countries 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. 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.
At September 30, 2002, the aggregate notional amount covers 80% of its
borrowings on this credit facility. The resulting weighted-average fixed
interest rate is 6.2% under this facility. The Corporation further reduced its
exposure to interest rate risk with a fixed rate bond offering during transition
year 2001. For additional information, see Financial Information for Guarantors
of the Corporation's Bond Offering, Note 11. Based upon expected levels of
borrowing in 2002 and providing for swap protection, an increase in interest
rates of 100 basis points would result in an incremental interest expense of
less than $200.

The Corporation operates manufacturing facilities in ten countries and sells
products in over twenty-five countries. Approximately 45% of the Corporation's
sales are denominated in currencies other than the US Dollar, predominantly the
Pound Sterling, currencies pegged to the Euro, the Yen, Hong Kong and New Taiwan
Dollars. For the nine month period ending September 30, 2002, there was a
positive impact on earnings of less than 1%. The impact on operating cash flows
has been less than $2,600 annually. Management continually reviews the balance
between foreign currency denominated assets and liabilities in order to minimize
the exposure to foreign exchange fluctuations. Approximately 60% of the
Corporation's identifiable assets are denominated in currencies other than the
US Dollar, predominantly the Pound Sterling, currencies pegged to the Euro, the
Yen, Hong Kong and New Taiwan Dollars.
The Corporation does not enter into any derivative financial instruments for
trading purposes. The Corporation has certain other supply agreements for raw
material inventories but has chosen not to enter into any price hedging with its
suppliers for commodities.
The Corporation's business operations, consist principally of manufacture and
sale of specialty chemicals, supplies and related equipment to customers
throughout much of the world. Approximately 40% of the business is concentrated
in the printing industry used for a wide variety of applications, including
offset blankets, printing plates, textile blankets and rubber based covers for
industrial rollers, while 30% of the business is concentrated in the electronics
industry, between manufacturers of printed circuit boards which are used in a
wide variety of end-use applications, including computers, communications and
control equipment, appliances, automobiles and entertainment products as well as
the manufacture of printed circuit boards. As is usual for this business, the
Corporation generally does not require collateral or other security as a
condition of sale rather relying on credit approval, balance limitation and
monitoring procedures to control credit risk of trade account financial
instruments. Management believes that reserves for losses, which are
established based upon review of account balances and historical experience, are
adequate.
Note 10. Contingencies and Legal Matters
The nature of the Corporation's operations and products, including raw
materials, as manufacturers and distributors of specialty chemicals and systems,
expose it to the risk of liabilities or claims with respect to environmental
cleanup or other matters, including those in connection with the disposal of
hazardous materials. As such, the Corporation is subject to extensive U.S. and
foreign laws and regulations relating to environmental protection and worker
health and safety, including those governing discharges of pollutants into the
air and water, the management and disposal of hazardous substances and wastes;
and the cleanup of contaminated properties. The Corporation has incurred, and
will continue to incur, significant costs and capital expenditures in complying
with these laws and regulations. The Corporation could incur significant
additional costs, including cleanup costs, fines, sanctions and third-party
claims, as a result of violations of or liabilities under environmental laws.
In order to ensure compliance with applicable environmental, health and safety
laws and regulations, the Corporation maintains a disciplined environmental and
occupational safety and health compliance program, which includes conducting
regular internal and external audits at its plants to identify and categorize
potential environmental exposure.
The Corporation has been named as a potentially responsible party ("PRP") at
three Superfund sites. There are many other PRPs involved at each of these
sites. The Corporation has recorded its best estimate of liabilities in
connection with site clean-up based upon the extent of its involvement, the
number of PRPs and estimates of the total costs of the site clean-up that
reflect the results of environmental investigations and remediation estimates
produced by remediation contractors. While the ultimate costs of such
liabilities are difficult to predict, the Corporation does not expect that its
costs associated with these sites will be material.
In addition, some of the Corporation's facilities have an extended history of
chemical processes or other industrial activities. Contaminants have been
detected at some of these sites, with respect to which the Corporation is
conducting environmental investigations and/or cleanup activities. These sites
include some of the Canning sites acquired in December 1998, such as the Kearny,
New Jersey and Waukegan, Illinois sites. The Corporation has established an
environmental remediation reserve, predominantly attributable to those Canning
sites that it believes will require environmental
remediation. With respect to those sites, it also believes that its Canning
subsidiary is entitled under the acquisition agreement to withhold a deferred
purchase price payment of approximately $2,000. The Corporation estimates the
range of cleanup costs at its Canning sites between $2,000 and $5,000.
Investigations into the extent of contamination, however, are ongoing with
respect to some of these sites. To the extent the Corporation's liabilities
exceed $2,000, it may be entitled to additional indemnification payments. Such
recovery may be uncertain, however, and would likely involve significant
litigation expense. See Restructuring Charges and Acquisition Liabilities, Note
7. The Corporation does not anticipate that it will be materially affected by
environmental remediation costs, or any related claims, at any contaminated
sites, including the Canning sites. It is difficult, however, to predict the
final costs and timing of costs of site remediation. Ultimate costs may vary
from current estimates and reserves, and the discovery of additional
contaminants at these or other sites or the imposition of additional cleanup
obligations, or third-party claims relating thereto, could result in significant
additional costs.
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 Graphic Arts, Inc., 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 complaint seeks $318 in penalties. The Corporation's subsidiary has
responded to the complaint and will engage a defense to the allegations. The
Corporation currently believes that this matter will not have a material impact
on its results of operations and financial position.
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 is 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 and $10 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 $2,000, without interest, over six quarterly installments. As of
September 30, 2002, the Corporation has paid $1,333 to the Connecticut
Department of Environmental Protection and will pay the remaining amount of $667
over the next two quarters. In addition, the Corporation is required to pay
$2,050 to various local charitable and environmental organizations and causes.
The amount of $542 has been paid through September 30, 2002 leaving the
remaining $1,508 required to be paid by April 30, 2003. The Corporation will be
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 will not be 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.
Note 11. Financial Information for Guarantors of the Corporation's Bond
Offering
The Corporation issued 9 1/8% Senior Subordinated Notes ("bond offering")
effective June 20, 2001, for the face amount of $301,500, which pay interest
semiannually on January 15th and July 15th and mature in 2011. The proceeds
were used to pay down existing long-term debt. This bond offering is guaranteed
by substantially all existing and future directly or indirectly wholly-owned
domestic restricted subsidiaries of the Corporation ("guarantors"). The
guarantors, fully, jointly and severally, irrevocably and unconditionally
guarantee the performance and payment when due of all the obligations under the
bond offering. The Corporation's unrestricted subsidiaries that resulted from
the January 2001 Eurocir acquisition and its foreign subsidiaries are not
guarantors of the indebtedness under the bond offering. The following financial
information is presented to give additional disclosures to the Corporation's
consolidated condensed financial statements, with respect to: a) the parent
(MacDermid, Incorporated as the issuer), b) the guarantors, c) the non-guarantor
subsidiaries, d) the unrestricted non-guarantor subsidiaries, e) elimination
entries and f) the Corporation on a consolidated basis for and as of the the
fiscal periods ended September 30, 2002 and 2001 and December 31, 2001. The
equity method has been used by the Corporation with respect to investments in
subsidiaries. The equity method also has been used by subsidiary guarantors
with respect to investments in non-guarantor subsidiaries and by subsidiary
non-guarantors with respect to investments in unrestricted non-guarantor
subsidiaries. Financial statements for subsidiary guarantors are presented as a
combined entity. The financial information includes certain allocations of
revenues and expenses based on management's best estimates which is not
necessarily indicative of financial position, results of operations and cash
flows that these entities would have achieved on a stand-alone basis and should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Corporation's transition year 2001 Annual Report for the
year ended December 31, 2001.

CONSOLIDATED CONDENSED BALANCE SHEET
SEPTEMBER 30, 2002
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED

MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
------------- -------------- -------------- -------------- -------------- -------------

ASSETS
Current assets:
Cash and cash equivalents . $ 7,083 $ 1,294 $ 13,505 $ 434 $ - $ 22,316
Accounts receivables, net . 12,569 26,679 97,095 12,855 - 149,198
Due (to) from affiliates. . 152,058 (88,919) (37,401) (25,738) - -
Inventories . . . . . . . . 13,108 27,698 47,678 8,469 - 96,953
Prepaid expenses. . . . . . 937 1,000 4,947 173 - 7,057
Deferred income taxes . . . 9,781 - 3,229 663 - 13,673
------------- -------------- -------------- -------------- -------------- -------------
Total current assets. . . . 195,536 (32,248) 129,053 (3,144) - 289,197

Property, plant and
equipment, net. . . . . . 15,031 49,892 54,008 19,464 - 138,395
Goodwill. . . . . . . . . . 13,240 68,178 116,078 27,107 - 224,603
Intangibles, net. . . . . . - 7,058 25,547 91 - 32,696
Investments in subsidiaries 326,438 238,014 7,541 - (571,993) -
Other assets. . . . . . . . 41,690 10,938 9,069 3,028 - 64,725
------------- -------------- -------------- -------------- -------------- -------------
$ 591,935 $ 341,832 $ 341,296 $ 46,546 $ (571,993) $ 749,616
============= ============== ============== ============== ============== =============


CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)
SEPTEMBER 30, 2002
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
--------------- -------------- -------------- -------------- -------------- --------------

LIABILITIES AND . . . . . . . SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable . . . . . . . . $ - $ - $ 1,931 $ 3,146 $ - $ 5,077
Current installments of
long-term obligations. . . - 146 340 6,302 - 6,788
Accounts and dividend payable 11,118 8,723 31,223 12,823 - 63,887
Accrued expenses. . . . . . . 26,594 14,665 25,412 2,866 - 69,537
Income taxes. . . . . . . . . 8,494 (8,139) 7,234 406 - 7,995
--------------- -------------- -------------- -------------- -------------- --------------
Total current liabilities . . 46,206 15,395 66,140 25,543 - 153,284

Long-term obligations . . . . 301,783 705 28,391 9,220 - 340,099
Accrued postretirement. . . . 9,219 - 3,645 - - 12,864
Deferred income taxes . . . . - (760) 4,165 805 - 4,210
Other long-term liabilities . - 54 941 149 - 1,144
Minority interest . . . . . . - - - 3,288 - 3,288

Shareholders' equity:
Common stock. . . . . . . . . 46,460 (50) 3,760 3 (3,713) 46,460
Additional paid-in capital. . 19,899 187,630 89,502 10,260 (287,392) 19,899
Retained earnings . . . . . . 242,354 150,502 150,336 (2,053) (298,785) 242,354
Cumulative comprehensive
income equity
adjustment, net. . . . . . (14,601) (11,644) (5,584) (669) 17,897 (14,601)
Less cost common shares
in treasury. . . . . . . . (59,385) - - - - (59,385)
--------------- -------------- -------------- -------------- -------------- --------------
Total shareholders' equity. . 234,727 326,438 238,014 7,541 (571,993) 234,727
--------------- -------------- -------------- -------------- -------------- --------------

$ 591,935 $ 341,832 $ 341,296 $ 46,546 $ (571,993) $ 749,616
=============== ============== ============== ============== ============== ==============


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
NINE MONTHS ENDED SEPTEMBER 30, 2002
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
-------------- -------------- -------------- -------------- -------------- --------------


Net sales . . . . . . . . $ 73,125 $ 137,624 $ 252,662 $ 60,549 $ (12,136) $ 511,824

Costs and expenses:
Cost of sales . . . . . . 43,085 65,690 132,775 52,108 (12,136) 281,522
Selling, technical and
administrative . . . . 42,915 33,676 76,861 5,603 - 159,055
Amortization. . . . . . . 2,595 1,232 848 21 - 4,696
Equity in earnings of
Subsidiaries . . . . . (45,659) (26,783) 162 - 72,280 -
Interest income . . . . . (55) (70) (325) (22) - (472)
Interest expense. . . . . 14,316 6,223 4,268 1,991 - 26,798
Other expense
(income), net. . . . . 2,173 (45) (405) (34) - 1,689
-------------- -------------- -------------- -------------- -------------- --------------

59,370 79,923 214,184 59,667 60,144 473,288
-------------- -------------- -------------- -------------- -------------- --------------
Earnings before taxes
And minority interest. 13,755 57,701 38,478 882 (72,280) 38,536
Income taxes benefit
(expense). . . . . . . 11,915 (12,042) (11,695) (509) - (12,331)
Minority interest . . . . - - - (535) - (535)
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss) . . . $ 25,670 $ 45,659 $ 26,783 $ (162) $ (72,280) $ 25,670
============== ============== ============== ============== ============== ==============


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
THREE MONTHS ENDED SEPTEMBER 30, 2002
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
-------------- -------------- -------------- -------------- -------------- --------------


Net sales . . . . . . . . $ 22,913 $ 43,782 $ 87,158 $ 17,711 $ (3,418) $ 168,146

Costs and expenses:
Cost of sales . . . . . . 13,788 19,906 46,505 15,564 (3,418) 92,345
Selling, technical and
administrative . . . . 13,804 11,050 25,112 1,594 - 51,560
Amortization. . . . . . . 865 411 275 7 - 1,558
Equity in earnings of
subsidiaries . . . . . (17,194) (10,233) 195 - 27,232 -
Interest income . . . . . (15) (18) (155) (8) - (196)
Interest expense. . . . . 5,925 977 1,280 673 - 8,855
Other expense
(income), net. . . . . 1,385 115 (312) (52) - 1,136
-------------- -------------- -------------- -------------- -------------- --------------

18,558 22,208 72,900 17,778 23,814 155,258
-------------- -------------- -------------- -------------- -------------- --------------
Earnings before taxes
and minority interest. 4,355 21,574 14,258 (67) (27,232) 12,888
Income taxes benefit
(expense). . . . . . . 4,310 (4,380) (4,025) (28) - (4,123)
Minority interest . . . . - - - (100) - (100)
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss) . . . $ 8,665 $ 17,194 $ 10,233 $ (195) $ (27,232) $ 8,665
============== ============== ============== ============== ============== ==============



CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2002
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
-------------- -------------- -------------- -------------- ------------- --------------

Net cash flows (used in)
provided by
operating activities: . . $ 1,344 $ 27,317 $ 45,022 $ 5,206 $ - $ 78,889

Investing activities:
Capital expenditures . . . . (898) (1,038) (1,554) (1,097) - (4,587)
Proceeds from disposition
of fixed assets . . . . . - 1,999 155 156 - 2,310
-------------- -------------- -------------- -------------- ------------- --------------
Net cash flows used in
investing activities. . . (898) 961 (1,399) (941) - (2,277)
-------------- -------------- -------------- -------------- ------------- --------------

Financing activities:
Net proceeds from
(repayments of)
short-term borrowings . . (9,029) (17,010) 18,517 (4,661) - (12,183)
Long-term borrowings . . . . 79,500 - - 2,951 - 82,451
Long-term repayments . . . . (88,500) - (48,379) (2,698) - (139,577)
Purchase of treasury shares. (443) - - - - (443)
Dividends paid . . . . . . . 20,690 (11,855) (10,770) - - (1,935)
-------------- -------------- -------------- -------------- ------------- --------------
Net cash flows provided
by / (used in)
financing activities. . . 2,218 (28,865) (40,632) (4,408) - (71,687)
-------------- -------------- -------------- -------------- ------------- --------------

Effect of exchange rate

changes on
cash and equivalents. . . - - 253 71 - 324
-------------- -------------- -------------- -------------- ------------- --------------

Net (decrease) increase in
cash and equivalents. . . 2,664 (587) 3,244 (72) - 5,249
Cash and cash equivalents
at beginning of period. . 4,419 1,881 10,261 506 - 17,067
-------------- -------------- -------------- -------------- ------------- --------------
Cash and cash equivalents
at end of period. . . . . $ 7,083 $ 1,294 $ 13,505 $ 434 $ - $ 22,316
============== ============== ============== ============== ============= ==============


CONSOLIDATED CONDENSED BALANCE SHEET
DECEMBER 31, 2001
(audited)




MACDERMID
UNRESTRICTED INCORPORATED

MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
------------- -------------- -------------- -------------- -------------- -------------

ASSETS
Current assets:
Cash and cash equivalents . $ 4,419 $ 1,881 $ 10,261 $ 506 $ - $ 17,067
Accounts receivables, net . 14,361 28,107 106,645 15,117 - 164,230
Due (to) from affiliates. . 246,066 (184,474) (39,295) (22,297) - -
Inventories, net. . . . . . 17,442 35,849 49,314 8,429 - 111,034
Prepaid expenses. . . . . . 779 2,707 4,582 - - 8,068
Deferred income taxes . . . 9,781 - 3,451 599 - 13,831
------------- -------------- -------------- -------------- -------------- -------------
Total current assets. . . . 292,848 (115,930) 134,958 2,354 - 314,230

Property, plant and
equipment, net. . . . . . 20,231 57,730 54,702 19,819 - 152,482
Goodwill. . . . . . . . . . 16,056 80,221 99,187 27,107 - 222,571
Intangibles, net. . . . . . - 11,219 26,106 100 - 37,425
Investments in subsidiaries 231,820 224,640 9,192 - (465,652) -
Other assets. . . . . . . . 40,529 9,325 12,273 2,050 - 64,177
------------- -------------- -------------- -------------- -------------- -------------
$ 601,484 $ 267,205 $ 336,418 $ 51,430 $ (465,652) $ 790,885
============= ============== ============== ============== ============== =============



CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)
DECEMBER 31, 2001
(audited)




MACDERMID
UNRESTRICTED INCORPORATED

MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
--------------- -------------- -------------- -------------- -------------- --------------

LIABILITIES AND . . . . . . . SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable . . . . . . . . $ - $ - $ 5,898 $ 7,063 $ - $ 12,961
Current installments of
long-term obligations. . . - 148 482 4,984 - 5,614
Accounts and dividend payable 9,273 9,091 28,649 15,018 - 62,031
Accrued expenses. . . . . . . 37,955 18,250 24,138 2,543 - 82,886
Income taxes. . . . . . . . . (2,533) 7,785 5,214 2 - 10,468
--------------- -------------- -------------- -------------- -------------- --------------
Total current liabilities . . 44,695 35,274 64,381 29,610 - 173,960

Long-term obligations . . . . 349,140 802 34,733 9,113 - 393,788
Accrued postretirement. . . . 4,218 - 8,055 35 - 12,308
Deferred income taxes . . . . - (762) 4,399 727 - 4,364
Other long-term liabilities . - 71 210 - - 281
Minority interest . . . . . . - - - 2,753 - 2,753

Shareholders' equity:
Common stock. . . . . . . . . 46,410 (99) 3,809 3 (3,713) 46,410
Additional paid-in capital. . 16,923 125,936 100,248 10,260 (236,444) 16,923
Retained earnings . . . . . . 218,619 126,625 135,166 (1,891) (259,900) 218,619
Cumulative comprehensive
income equity
adjustment, net. . . . . . (19,579) (20,642) (14,583) 820 34,405 (19,579)
Less cost common shares
in treasury. . . . . . . . (58,942) - - - - (58,942)
--------------- -------------- -------------- -------------- -------------- --------------
Total shareholders' equity. . 203,431 231,820 224,640 9,192 (465,652) 203,431

--------------- -------------- -------------- -------------- -------------- --------------
$ 601,484 $ 267,205 $ 336,418 $ 51,430 $ (465,652) $ 790,885
=============== ============== ============== ============== ============== ==============



CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
NINE MONTHS ENDED SEPTEMBER 30, 2001
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED

MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
-------------- -------------- -------------- -------------- -------------- --------------

Net sales . . . . . . . . $ 94,921 $ 171,656 $ 278,920 $ 57,511 $ (34,458) $ 568,550

Costs and expenses:
Cost of sales . . . . . . 63,074 103,619 148,214 51,869 (34,458) 332,318
Selling, technical and
administrative . . . . 42,156 45,491 79,457 5,274 - 172,378
Amortization. . . . . . . 955 4,225 3,544 372 - 9,096
Equity in earnings of
subsidiaries . . . . . (29,889) (31,701) 1,856 - 59,734 -
Interest income . . . . . (153) (416) (567) (17) - (1,153)
Interest expense. . . . . 14,483 11,426 305 2,183 - 28,397
Other expense
(income), net. . . . . 962 634 554 (207) - 1,943
-------------- -------------- -------------- -------------- -------------- --------------

91,588 133,278 233,363 59,474 25,276 542,979
-------------- -------------- -------------- -------------- -------------- --------------
Earnings before taxes
and minority interest. 3,333 38,378 45,557 (1,963) (59,734) 25,571
Income taxes benefit
(expense). . . . . . . 13,348 (8,489) (13,856) 2 - (8,995)
Minority interest . . . . - - - 105 - 105
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss) . . . $ 16,681 $ 29,889 $ 31,701 $ (1,856) $ (59,734) $ 16,681
============== ============== ============== ============== ============== ==============


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
THREE MONTHS ENDED SEPTEMBER 30, 2001
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED

MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
-------------- -------------- -------------- -------------- -------------- --------------

Net sales . . . . . . . . $ 26,418 $ 54,079 $ 85,760 $ 15,298 $ (9,892) $ 171,663

Costs and expenses:
Cost of sales . . . . . . 17,416 31,900 47,324 13,644 (9,892) 100,392
Selling, technical and
Administrative . . . . 11,764 13,738 25,339 1,487 - 52,328
Amortization. . . . . . . - 836 1,409 1 - 2,246
Equity in earnings of
Subsidiaries . . . . . (8,144) (7,811) 470 - 15,485 -
Interest income . . . . . (44) (33) (239) (3) - (319)
Interest expense. . . . . 5,824 4,247 (554) 700 - 10,217
Other expense
(income), net. . . . . 840 106 (42) (15) - 889
-------------- -------------- -------------- -------------- -------------- --------------

27,656 42,983 73,707 15,814 5,593 165,753
-------------- -------------- -------------- -------------- -------------- --------------
Earnings before taxes
and minority interest. (1,238) 11,096 12,053 (516) (15,485) 5,910
Income taxes benefit
(expense). . . . . . . 5,408 (2,952) (4,242) (32) - (1,818)
Minority interest . . . . - - - 78 - 78
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss) . . . $ 4,170 $ 8,144 $ 7,811 $ (470) $ (15,485) $ 4,170
============== ============== ============== ============== ============== ==============



CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2001




MACDERMID
(unaudited) UNRESTRICTED INCORPORATED

MACDERMID GUARANTOR NONGUARANTOR NONGUARANTOR AND
INCORPORATED SUBSIDIARIES SUBSIDIARIES SUBSIDIARIES ELIMINATIONS SUBSIDIARIES
-------------- -------------- -------------- -------------- -------------- --------------

Net cash flows provided
by (used in)
operating activities:. . $ (38,843) $ 47,432 $ 42,009 $ 18,214 $ - $ 68,812

Investing activities:
Capital expenditures. . . . (4,366) (2,503) (4,403) (4,847) - (16,119)
Proceeds from disposition
of fixed assets. . . . . 71 - 2,206 185 - 2,462
Acquisitions of businesses. - 15,333 (13,432) (19,657) - (17,756)
Dispositions of businesses. - - 9,415 - - 9,415
-------------- -------------- -------------- -------------- -------------- --------------
Net cash flows (used in)
provided by
investing activities . . (4,295) 12,830 (6,214) (24,319) - (21,998)
-------------- -------------- -------------- -------------- -------------- --------------

Financing activities:
Net proceeds from
(repayments of)
short-term borrowings. . 54,919 (45,361) (21,248) 7,978 - (3,712)
Long-term borrowings. . . . 317,008 3,000 57,787 - - 377,795
Long-term repayments. . . . (327,094) (20,645) (57,069) - - (404,808)
Bond financing fees . . . . (8,167) - - - - (8,167)
Dividends paid. . . . . . . 9,604 266 (11,779) - - (1,909)
-------------- -------------- -------------- -------------- -------------- --------------
Net cash flows provided
by (used in)
financing activities . . 46,270 (62,740) (32,309) 7,978 - (40,801)
-------------- -------------- -------------- -------------- -------------- --------------

Effect of exchange rate
changes on
Changes on
cash and equivalents . . - (412) (1,310) (133) - (1,855)
-------------- -------------- -------------- -------------- -------------- --------------
Net (decrease) increase in
cash and equivalents . . 3,132 (2,890) 2,176 1,740 - 4,158
Cash and cash equivalents
at beginning of period . 4,979 4,826 7,927 - - 17,732
-------------- -------------- -------------- -------------- -------------- --------------
Cash and cash equivalents
at end of period . . . . $ 8,111 $ 1,936 $ 10,103 $ 1,740 $ - $ 21,890
============== ============== ============== ============== ============== ==============



ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION COMPARES THE RESULTS OF OPERATIONS FOR THE THREE MONTH
PERIOD WHICH ENDED SEPTEMBER 30, 2002 TO THE SAME PERIOD IN 2001.
SALES, COSTS AND EXPENSES
Advanced Surface Finishing: Total sales for the current quarter were $80.5
million, an increase of $0.9 million, or 1% from $79.6 million in the same
period last year. This includes a positive foreign currency translation effect
of $3.1 million. Proprietary sales, excluding the effects of foreign currency
translation, were 1% higher than the same period last year. The proprietary
sales remain flat due to weak consumer volume in the worldwide electronics
industry.
Cost of sales, as a percentage of sales were well below the same period last
year. Lower costs were significantly influenced by the closure of a North
American production facility. Gross profit percentage was 53.0% as compared to
50.2% for the same period last year, in a large part, the result of the
previously mentioned facility closure and other cost reduction efforts.
Selling, technical and administrative expenses ("ST&A") were $31.5 million this
quarter, a 4% increase as compared to $30.4 million for the same period last
year. The increase is primarily from higher insurance costs and a $1.2 million
foreign currency translation effect. ST&A as a percentage of sales for the
current quarter was 39.1% as compared to 38.2% in the same period last year.
Total amortization expense was $1.4 million for the three month period ended
September 30, 2002. This was $0.7 million less than the same period last year.
As a result of the factors discussed above, advanced surface finishing operating
profit (after amortization) increased 31% from $7.5 million to $9.8 million.
Printing Solutions: The printing solutions business segment had previously been
referred to as graphic arts. Total sales for the current quarter were $69.9
million, a decrease of $4.0 million, or 5% from $73.9 million in the same period
last year. This includes a positive foreign currency translation effect of $1.4
million. Sales in the worldwide commercial printing and publication areas of
the printing solutions business were weak as compared to the same period last
year as economies remain soft.
Cost of sales, as a percentage of sales were slightly below the same period last
year due to the closure of a North American production facility. Gross profit
percentage was 44.3% as compared to 41.4% for the same period last year.
ST&A expenses were $18.5 million this quarter, a 7% decrease as compared to
$20.0 million for the same period last year, as a result of the elimination of
certain management and office support redundancies. ST&A as a percentage of
sales for the current quarter was 26.5% as compared to 27.0% in the same period
last year. Total amortization expense was $0.2 million for the three month
period ended September 30, 2002, similar to the same period last year.
As a result of the factors discussed above, printing solutions operating profit
(after amortization) increased 18% from $10.4 million to $12.3 million.
Electronics Manufacturing: Total sales for the current quarter were $17.7
million, a decrease of $0.5 million, or 3% from $18.2 million in the same period
last year. This includes a positive effect of foreign currency translation of
$1.7 million. The decrease is due to the closure of the Corporation's North
American circuit board manufacturer, Dynacircuits, for which sales of $2.9
million were included in the same period last year.
Cost of sales, as a percentage of sales decreased with the closure of the
Dynacircuits operation. Gross profit percentage was 12.1% as compared to 4.1%
for the same period last year, as a result.
ST&A expenses decreased $0.4 million, or 19% as compared to the same period last
year, primarily as a result of the Dynacircuits closure.
As a result of the factors discussed above, electronics manufacturing had
operating income (after amortization) of $0.5 million for the three month period
ended September 30, 2002 as compared to an operating loss (after amortization)
of $1.2 million for the same period last year.
Consolidated: Total sales for the current quarter, $168.1 million decreased $3.6
million or 2% from $171.7 million in the same period last year. This includes a
$6.2 million positive effect from foreign currency translation which resulted in
higher reported sales. Without this effect, reported sales would have decreased
6% and proprietary sales, which were roughly 84% of total sales in both periods
would have decreased 5%.
Gross profits increased 6% for the three month period ended September 30, 2002
as compared to the same period last year, in spite of less proprietary sales,
due to the closure of production facilities and other cost reduction efforts in
each of the three business segments. Gross profit as a percentage of sales was
45.1% for the three month period as compared to 41.5% for the same period last
year.
ST&A expenses were $0.7 million, or 1% less than the same period last year.
ST&A as a percentage of sales for the three month period was 31.1% as compared
to 29.3% for the same period last year. Total amortization expense was $1.6
million for the three month period ended September 30, 2002. This was $0.6
million less than the same period last year.
Operating profit (after amortization) for the three month period was $22.7
million, an increase of $6.0 million, or approximately 36% more than $16.7
million for the same period last year.
PROVISION FOR INCOME TAXES
The Corporation's effective income tax rate approximates 32% for the three month
period ended September 30, 2002 and 31% for the same period in 2001. The rate
difference is mainly a result of a change in earnings mix between higher and
lower taxed jurisdictions.
NET EARNINGS
Net earnings available to common shareholders for the three month period ended
September 30, 2002, $0.27 per share was more than double the $0.13 per share for
the same period last year. The impact from foreign currency translation was
favorable to reported earnings by approximately $0.01 per share for the three
month period.
THE FOLLOWING DISCUSSION COMPARES THE RESULTS OF OPERATIONS FOR THE NINE MONTH
PERIOD WHICH ENDED SEPTEMBER 30, 2002 TO THE SAME PERIOD IN 2001.
SALES, COSTS AND EXPENSES
Advanced Surface Finishing: Total sales for the nine months ended September 30,
2002 were $239.5 million, a decrease of $35.1 million, or 13% from $274.6
million in the same period last year. The disposition of a certain business in
February 2001 resulted in $2.1 million less sales as compared to the same period
last year. Proprietary sales declined 10% from lower consumer volume, as the
worldwide electronics industry remains soft. Proprietary sales, excluding the
positive effect of $1.5 million of foreign currency translation, were 11% below
the same period last year.
Cost of sales, as a percentage of sales for the nine month period were below the
same period last year due to the closure of a North American production facility
and certain other cost reduction efforts. Gross profit percentage was 54.1% as
compared to 50.7% for the same period last year, due in large part to cost
reduction efforts.
ST&A expenses were $97.4 million for the nine month period, a 2% decrease as
compared to $99.4 million for the same period last year, primarily from lower
selling expenses associated with the lower sales volume and reduced
administrative costs due to the previous years restructuring programs. ST&A as
a percentage of sales for the nine month period was 40.7% as compared to 36.2%
in the same period last year, reflecting lower sales volumes. Total
amortization expense was $4.2 million for the nine month period ended September
30, 2002. This was $2.8 million less than the same period last year, due to the
adoption of SFAS142 which requires that goodwill not be amortized.
As a result of the factors discussed above, advanced surface finishing operating
profit (after amortization) decreased 15% from $32.8 million to $27.9 million.
Printing Solutions: Total sales for the nine months ended September 30, 2002
were $211.8 million, a decrease of $14.0 million, or 6% from $225.8 million in
the same period last year. The underlying sales in all areas of the printing
solutions business were below the same period last year as worldwide economies,
particularly in publication and advertising remain soft. A positive effect of
foreign currency translation of $1.1 million did not significantly impact the
reported decline in sales.
Cost of sales, as a percentage of sales were below the same period last year due
to the closure of a North American production facility and other cost reduction
efforts. As a result, gross profit percentage for the nine month period was
43.6% as compared to 42.0% for the same period last year.
ST&A expenses were $56.0 million for the nine month period, a 7% decrease as
compared to $59.9 million for the same period last year, as a result of the
elimination of certain management and office support redundancies. ST&A as a
percentage of sales for the nine month period was 26.5%, unchanged as compared
to the same period last year. Total amortization expense was $0.5 million for
the nine month period ended September 30, 2002. This was $1.2 million less than
the same period last year, due to the adoption of SFAS142 which requires that
goodwill not be amortized.
As a result of the factors discussed above, printing solutions operating profit
(after amortization) increased 8% from $33.3 million to $35.8 million.
Electronics Manufacturing: Total sales for the nine months ended September 30,
2002 were $60.5 million, a decrease of $7.6 million, or 11% from $68.1 million
in the same period last year. The decrease is due to the closure of
Dynacircuits, for which sales of $10.7 million were included in the previous
year.
Cost of sales, as a percentage of sales decreased with the closure of the
Dynacircuits operation. Gross profit percentage was 13.9% as compared to 2.9%
for the same period last year, as a result of this action.
ST&A expenses were $5.6 million for the nine month period, a 21% decrease as
compared to $7.1 million for the same period last year, primarily due to the
closure of Dynacircuits.
As a result of the factors discussed above, electronics manufacturing had
operating income (after amortization) of $2.8 million for the nine month period
ended September 30, 2002 as compared to an operating loss (after amortization)
of $5.5 million for the same period last year.
Consolidated: Total sales for the nine months ended September 30, 2002, of
$511.8 million decreased $56.8 million or 10% from $568.6 million in the same
period last year. Proprietary sales, which were approximately 83% of total
sales as compared to approximately 81% in the same period last year, decreased
$36.6 million, or 8% reflecting the slowdown in consumer spending and softness
in the worldwide electronics and publishing markets. Disposition of an advanced
surface finishing business resulted in $2.1 million less sales as compared to
the same period last year. This was offset in part by a positive effect from
foreign currency translation of $4.7 million.
Gross profits decreased 3% for the nine month period ended September 30, 2002 as
compared to the same period last year, as a result of less proprietary sales.
Gross profit as a percentage of sales was 45.0% for the nine month period as
compared to 41.5% for the same period last year, in large part due to
manufacturing cost reductions, including plant closures.
ST&A expenses for the nine month period were 4% less than the same period last
year, excluding restructuring and impairment charges. The resulting ST&A as a
percentage of sales for the nine month period was 31.1% as compared to 29.3% for
the same period last year. In the nine month period ending September 30, 2001,
there was $1.1 million for restructuring and $4.8 million for impairment charged
to earnings. Total amortization expense was $4.7 million for the nine month
period ended September 30, 2002. This was $4.4 million less than the same
period last year due to the adoption of SFAS142 as previously mentioned.
Operating profit (after amortization) for the nine month period was $66.5
million, an increase of $11.7 million, or approximately 22% more than $54.8
million for the same period last year. Excluding the effects of restructuring
and impairment charges in the prior year, operating profit for the nine month
period was 10% more than the prior year.
PROVISION FOR INCOME TAXES
The Corporation's effective income tax rate approximates 32% for the nine month
period ended September 30, 2002 and 35% for the same period in 2001. This
reduction in the income tax rate is mainly a result of the change in earnings
mix from higher to lower taxed jurisdictions, during the nine months ended
September 30, 2002.
NET EARNINGS
Net earnings available to common shareholders for the nine month period ended
September 30, 2002, $0.79 per share increased 54% as compared to $0.52 per share
for the same period last year. Foreign currency translation did not have a
measurable effect on reported earnings for the nine month period.
THE FOLLOWING DISCUSSION PROVIDES INFORMATION WITH RESPECT TO CHANGES IN
FINANCIAL CONDITION DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2002.
Financial Condition
Operating activities during the nine months ending September 30, 2002 provided a
net cash inflow of $78.9 million. This included net earnings of $25.7 million,
non-cash expenses for depreciation, amortization, bad debts and stock options of
$27.1 million and a net decrease in operating assets and liabilities of $26.1
million which is primarily attributable to trade accounts receivable and
inventory balance reductions. Cash generated during this period was used for
semi-annual interest payments totaling $29.5 million on its senior subordinated
bonds and the investing and financing activies explained below.
Investing activities for the nine months ended September 30, 2002 utilized net
cash of $2.3 million. Capital expenditures of $4.6 million, compares with total
planned expenditures of approximately $14.0 million for the full year, was
offset in part by proceeds of $2.3 million from the sale of fixed assets.
Financing activities for the nine months ended September 30, 2002 consisted of a
net use of cash of $71.7 million primarily used for net long-term debt
repayments of $57.1 million and dividends to shareholders of $1.9 million ($0.06
per common share).
The Corporation's financial position remains strong. Working capital at
September 30, 2002 was $135.9 million as compared to $140.3 million at December
31, 2001. There are no long-term commitments (including the short-term portion)
which would have a significant impact upon results of operation, financial
condition or liquidity of the Corporation, other than the debt obligations in
the following table:







---------- ---------- ---------------- ------
($millions) . . . . . . . . . . . . This Year 2-4 Years 5 or More Years Total
---------- ---------- ---------------- ------
Long-term debt. . . . . . . . . . . $ 5.5 $ 37.1 $ 301.2 $343.8
Capital leases. . . . . . . . . . . 1.3 1.1 0.7 3.1
Operating leases. . . . . . . . . . 9.8 10.8 4.2 24.8
---------- ---------- ---------------- ------
Total contractual cash commitments. $ 16.6 $ 49.0 $ 306.1 $371.7
========== ========== ================ ======


The Corporation issued 9 1/8% senior subordinated notes effective June 20, 2001,
for the face amount of $301.5 million, which pay interest semiannually on
January 15th and July 15th and mature in 2011. The Corporation also has a
long-term credit arrangement, which consists of a combined revolving loan
facility that permits borrowings, denominated in US dollars and foreign
currencies, of up to $175 million. The outstanding balance on the revolving
loan facility decreased $53.3 million during the nine months ended September 30,
2002. There was the amount of $27.6 million (Euro 27.9 million) outstanding on
the revolving loan at September 30, 2002. The Corporation has other uncommitted
credit facilities which presently total approximately $64 million. These,
together with the Corporation's cash flows from operations are adequate to fund
working capital and expected capital expenditures.
The following table contains other data for the nine and three month periods
ended September 30, 2002 and 2001. EBITDA is earnings before interest, taxes,
depreciation and amortization. Owner earnings is cash flow from operations less
net capital spending. Neither EBITDA nor owner earnings are intended to
represent cash flow from operations as defined by generally accepted accounting
principles. These measures should not be used as an alternative to net income
as an indicator of operating performance or to cash flows as a measure of
liquidity.






($millions) Nine Months Ended September 30, Three Months Ended September 30,
2002 2001 2002 2001
------------------- --------------- -------------------- ---------------

Cash provided by operations. . . . $ 78.9 $ 68.8 $ 28.9 $ 32.7
Cash ued in investing activities . ($2.3) ($22.0) - ($4.2)
Cash used in financing activities. ($71.7) ($40.8) ($22.0) ($22.4)

EBITDA (before one-time costs) . . $ 85.4 $ 86.1 $ 28.2 $ 24.2

Cash provided by operations. . . . $ 78.9 $ 68.8 $ 28.9 $ 32.7
Less: net capital spending . . . . (2.3) (13.7) - (1.6)
------------------- --------------- -------------------- ---------------
Owner earnings . . . . . . . . . . $ 76.6 $ 55.2 $ 28.9 $ 31.2
=================== =============== ==================== ===============





CRITICAL ACCOUNTING POLICIES
In preparing the consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America, management must
undertake decisions that impact the reported amounts and related disclosures.
Such decisions include the selection of the appropriate accounting principles to
be applied and also assumptions upon which accounting estimates are based.
Management applies judgement based on its understanding and analysis of the
relevant circumstances to reach these decisions. By their nature, these
judgements are subject to an inherent degree of uncertainty, accordingly actual
results could differ significantly from the estimates applied.
The Corporation's critical accounting policies include the following:
Revenue recognition and accounts receivable: The Corporation records revenue
from product sales, including freight charged to customers, upon shipment if a
signed contract or purchase order exists and the collection of the resulting
receivable is probable. In addition, commissions and royalties are recorded
when earned. Provisions are recorded for estimated warranty claims and returns
at the time the products are shipped. The Corporation performs ongoing credit
evaluations of its customers and adjusts credit limits based upon payment
history and the customer's credit worthiness. The Corporation continually
monitors collections and payments from its customers and maintains a provision
for estimated credit losses based upon historical experience and any specific
customer collection issues that it has identified. While such credit losses
have historically been within management's expectations and the provisions for
bad debts established, there is no guarantee that the Corporation will continue
to experience the same credit loss rates as in the past.
Inventories: The Corporation values inventory at lower of average cost or
replacement market. Management regularly reviews obsolescence to determine that
inventories are appropriately reserved. In making any determination historical
write-offs, customer demand, alternative product uses, usage rates and
quantities of stock on hand are considered. Inventory in excess of the
Corporation's estimated usage requirements is written down to its estimated net
realizable value.
Property, plant and equipment and other long-lived assets: The Corporation
records property, plant and equipment at cost. Depreciation and amortization of
property, plant and equipment are provided over the estimated useful lives of
the respective assets, on the straight-line basis. Expenditures for maintenance
and repairs are charged directly to expense; renewals and betterments which
significantly extend the useful lives are capitalized. Costs and accumulated
depreciation and amortization on assets retired or disposed of are removed from
the accounts and any resulting gains or losses are credited or charged to
earnings. The Corporation performs periodic review of the carrying value of
long-lived assets for impairment in accordance with SFAS121 and SFAS142. In
many instances, projected future cash flows are used to assess the
recoverability of long-lived assets of the Corporation. Estimation factors,
including but not limited to, the timing of new product introductions, market
conditions and competitive environment could affect previous projections.
Environmental Matters: The nature of the Corporation's operations and products,
including raw materials, exposes it to the risk of liabilities or claims with
respect to environmental cleanup or other matters, including those in connection
with the disposal of hazardous materials. As such, the Corporation is subject
to extensive U.S. and foreign laws and regulations relating to environmental
protection and worker health and safety, including those governing: discharges
of pollutants into the air and water; the management and disposal of hazardous
substances and wastes; and the cleanup of contaminated properties. The
Corporation has incurred, and will continue to incur, significant costs and
capital expenditures in complying with these laws and regulations. The
Corporation could incur significant additional costs, including cleanup costs,
fines and sanctions and third-party claims, as a result of violations of or
liabilities under environmental laws. In order to ensure compliance with
applicable environmental, health and safety laws and regulations, the
Corporation maintains a disciplined environmental and occupational safety and
health compliance program, which includes conducting regular internal and
external audits at its plants to identify and categorize potential environmental
exposure. It is the Corporation's policy to review these environmental issues
in light of historical experience and to reserve for those that both a liability
has become probable and the cost is reasonably estimable, in accordance with
Statement of Financial Accounting Standards No. 5, Accounting for Contingencies.
NEW ACCOUNTING STANDARDS
The Corporation adopted the fair value expense recognition provisions of
Statement of Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation (SFAS123) for its stock options effective April 1, 2001. On April
1, 1996, the Corporation had adopted the disclosure requirements of SFAS123 and
accounted for its stock options by applying the expense recognition provisions
of APB Opinion No. 25, Accounting for Stock Issued to Employees ("APB25"). As a
result of this change, compensation expense is measured using the fair value for
options granted after April 1, 2001. The resulting expense is amortized over
the period in which it is earned. In the nine and three month periods ended
September 30, 2002 there was $2,143 and $599, respectively, charged to expense.
The Financial Accounting Standards Board (FASB) recently issued Statement of
Financial Accounting Standard No. 143, "Accounting for Asset Retirement
Obligations" (SFAS143), Statement of Financial Accounting Standard No. 145,
"Recission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections" (SFAS145) and Statement of Financial Accounting
Standard No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities" (SFAS146). The Corporation is currently evaluating the impact of
these standards and does not expect that adoption of these standards will have a
material impact on its results of operation or financial position. The FASB
also issued Statement of Financial Accounting Standard No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets" (SFAS144). The Corporation has
adopted SFAS144 effective January 1, 2002 and adoption of this standard did not
materially impact its results of operation or financial position.
ENVIRONMENTAL and LEGAL MATTERS
Environmental: The nature of the Corporation's operations and products,
including raw materials, as manufacturers and distributors of specialty
chemicals and systems, expose it to the risk of liabilities or claims with
respect to environmental cleanup or other matters, including those in connection
with the disposal of hazardous materials. As such, the Corporation is subject
to extensive U.S. and foreign laws and regulations relating to environmental
protection and worker health and safety, including those governing discharges of
pollutants into the air and water, the management and disposal of hazardous
substances and wastes; and the cleanup of contaminated properties. The
Corporation has incurred, and will continue to incur, significant costs and
capital expenditures in complying with these laws and regulations. The
Corporation could incur significant additional costs, including cleanup costs,
fines, sanctions and third-party claims, as a result of violations of or
liabilities under environmental laws. In order to ensure compliance with
applicable environmental, health and safety laws and regulations, the
Corporation maintains a disciplined environmental and occupational safety and
health compliance program, which includes conducting regular internal and
external audits at its plants to identify and categorize potential environmental
exposure.
The Corporation has been named as a potentially responsible party ("PRP") at
three Superfund sites. There are many other PRPs involved at each of these
sites. The Corporation has recorded its best estimate of liabilities in
connection with site clean-up based upon the extent of its involvement, the
number of PRPs and estimates of the total costs of the site clean-up that
reflect the results of environmental investigations and remediation estimates
produced by remediation contractors. While the ultimate costs of such
liabilities are difficult to predict, the Corporation does not expect that its
costs associated with these sites will be material.
In addition, some of the Corporation's facilities have an extended history of
chemical processes or other industrial activities. Contaminants have been
detected at some of these sites, with respect to which the Corporation is
conducting environmental investigations and/or cleanup activities. These sites
include some of the Canning sites acquired in December 1998, such as the Kearny,
New Jersey and Waukegan, Illinois sites. The Corporation has established an
environmental remediation reserve, predominantly attributable to those Canning
sites that it believes will require environmental remediation. With respect to
those sites, it also believes that its Canning subsidiary is entitled under the
acquisition agreement to withhold a deferred purchase price payment of
approximately $2.0 million. The Corporation estimates the range of cleanup
costs at its Canning sites between $2.0 million and $5.0 million.
Investigations into the extent of contamination, however, are ongoing with
respect to some of these sites. To the extent the Corporation's liabilities
exceed $2.0 million, it may be entitled to additional indemnification payments.
Such recovery may be uncertain, however, and would likely involve significant
litigation expense. The Corporation does not anticipate that it will be
materially affected by environmental remediation costs, or any related claims,
at any contaminated sites, including the Canning sites. It is difficult,
however, to predict the final costs and timing of costs of site remediation.
Ultimate costs may vary from current estimates and reserves, and the discovery
of additional contaminants at these or other sites or the imposition of
additional cleanup obligations, or third-party claims relating thereto, could
result in significant additional costs.
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 Graphic Arts, Inc., 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 complaint seeks $0.3 million in penalties. The Corporation's
subsidiary has responded to the complaint and will engage a defense to the
allegations. The Corporation currently believes that this matter will not have
a material impact on its results of operations and financial position.
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 is 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 thousand and $10
thousand 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 $2.0 million, without interest, over six quarterly installments. As of
September 30, 2002, the Corporation has paid $1.3 million to the Connecticut
Department of Environmental Protection and will pay the remaining amount of $0.7
million over the next two quarters. In addition, the Corporation is required to
pay $2.0 million to various local charitable and environmental organizations and
causes. The amount of $0.5 million has been paid through September 30, 2002
leaving the remaining $1.5 million required to be paid by April 30, 2003. The
Corporation will be 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 will not be 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.
FORWARD-LOOKING STATEMENTS
This report and other Corporation reports include forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements relate to analyses and other information that is based on
forecasts of future results and estimates of amounts not yet determinable. These
statements also relate to future prospects, developments and business
strategies. The statements contained in this report that are not statements of
historical fact may include forward-looking statements that involve a number of
risks and uncertainties.
The words "anticipate," "believe," "could," "estimate," "expect," "intend,"
"may," "plan,""predict," "project," "will" and similar terms and phrases,
including references to assumptions, have been used to identify forward-looking
statements. These forward-looking statements are made based on management's
expectations and beliefs concerning future events affecting the Corporation and
are subject to uncertainties and factors relating to its operations and business
environment, all of which are difficult to predict and many of which are beyond
its control, that could cause actual results to differ materially from those
matters expressed in or implied by these forward-looking statements. The
following factors are among those that may cause actual results to differ
materially from the forward-looking statements: acquisitions and dispositions,
environmental liabilities, changes in general economic, business and industry
conditions, changes in current advertising, promotional and pricing levels,
changes in political and social conditions and local regulations, foreign
currency fluctuations, inflation, significant litigation; changes in sales mix,
competition, disruptions of established supply channels, degree of acceptance of
new products, difficulty of forecasting sales at various times in various
markets, the availability, terms and deployment of capital, and the other
factors discussed elsewhere in this report.
All forward-looking statements should be considered in light of these factors.
The Corporation undertakes no obligation to update forward-looking statements or
risk factors to reflect new information, future events or otherwise.
ITEM 3:
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Refer to the Notes to Consolidated Condensed Financial Statements, Note 9
"Market Risk"

ITEM 4:
CONTROLS AND PROCEDURES
The Corporation's principle executive and financial officers have evaluated the
effectiveness of the Corporation's disclosure controls and 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 II. OTHER INFORMATION

ITEM 1 : Legal Proceedings
Refer to the Notes to Consolidated Condensed Financial Statements, Note 10
"Legal Matters and Other Contingencies".
ITEM 2 : Changes in Securities and Use of Proceeds
None.
ITEM 3 : Defaults Upon Senior Securities
None.
ITEM 4 : Submission of Matters to a Vote of Security Holders
None.
ITEM 5 : Other Information
None.
ITEM 6(a) : Exhibits
99.1 Signature page for certifications under Section 906 of the Sarbanes-Oxley
Act of 2002
99.2 Separation release agreement
ITEM 6(b) : Reports on Form 8-K
On August 5, 2002, the Corporation filed its Form 8-K to report the release of a
mid-year letter to shareholders of the Corporation. The Form 8-K is
incorporated by reference herein.
On September 11, 2002, the Corporation filed its Form 8-K to report the
resignation of its Chief Financial Officer. The Form 8-K is incorporated by
reference herein.



SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


MacDermid, Incorporated
------------------------
(Registrant)






Date: November 8, 2002 /s/ Daniel H. Leever
------------------ -----------------------

Daniel H. Leever
Chairman, President and
Chief Executive Officer






Date: November 8, 2002 /s/ Gregory M. Bolingbroke
------------------ -----------------------------

Gregory M. Bolingbroke
Senior Vice President,
Treasurer and Corporate Controller





PRINCIPLE FINANCIAL OFFICER CERTIFICATION



I, Gregory M. Bolingbroke, certify that:
1. I have reviewed this quarterly report on Form 10-Q of MacDermid,
Incorporated;
2. Based on my knowledge, this quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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 quarterly 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
quarterly report (the "evaluation date"); and
c) presented in this quarterly 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
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequentt to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.




Date: November 8, 2002 / s / Gregory M. Bolingbroke
------------------ ---------------------------------

Name: Gregory M. Bolingbroke
Title: Senior Vice President, Treasurer
and Corporate Controller


PRINCIPLE EXECUTIVE OFFICER CERTIFICATION



I, Daniel H. Leever, certify that:
1. I have reviewed this quarterly report on Form 10-Q of MacDermid,
Incorporated;
2. Based on my knowledge, this quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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 quarterly 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
quarterly report (the "evaluation date"); and
c) presented in this quarterly 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
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequentt to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.




Date: November 8, 2002 /s/ Daniel H. Leever
------------------ -----------------------

Name: Daniel H. Leever
Title: Chairman, President and
Chief Executive Officer