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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 June 30, 2003
-------------

COMMISSION FILE NUMBER 1-13889
-------

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
---------------

n/a
---
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 by check mark whether the registrant is an accelerated filer as defined
in Rule 12b-2 of the Act.

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 August 1, 2003
---------------------- ---------------------------------
Common Stock, no par value 30,966,885 shares

MACDERMID, INCORPORATED
INDEX




Page No.
--------

Part I. Financial Information

Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
June 30, 2003 and December 31, 2002. . . . . . . . . . . . 2-3
Consolidated Condensed Statements of Earnings
and Retained Earnings - Six and Three Months Ended
June 30, 2003 and 2002 . . . . . . . . . . . . . . . . . . 4
Consolidated Condensed Statements of Cash Flows -
Six Months Ended June 30, 2003 and 2002. . . . . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . . . 6-22
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . 23-31
Item 3. Quantitative and Qualitative Disclosures about Market Risk 32
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)
(Unaudited)




June 30, 2003 December 31, 2002
-------------- ------------------

Assets
Current assets:
Cash and cash equivalents. . . . . . . . $ 38,303 $ 32,019
Accounts and notes receivable, (net
of allowance for doubtful receivables
of $15,378 and $12,743). . . . . . . . 146,706 142,806
Inventories:
Finished goods . . . . . . . . . . . . 47,649 43,639
Raw materials, supplies and equipment. 44,316 42,099
-------------- ------------------
91,965 85,738
Prepaid expenses . . . . . . . . . . . . 6,959 5,457
Deferred income tax asset. . . . . . . . 21,996 22,598
-------------- ------------------
Total current assets . . . . . . . . 305,929 288,618
Property, plant and equipment (net
of accumulated depreciation of
$170,965 and $152,751) . . . . . . . . 129,879 132,581
Goodwill . . . . . . . . . . . . . . . . 194,200 194,200
Intangibles, (net of accumulated
amortization of $16,801
and $18,961) . . . . . . . . . . . . . 31,095 31,825
Other assets . . . . . . . . . . . . . . 58,691 60,669
-------------- ------------------
$ 719,794 $ 707,893
============== ==================


See accompanying notes to consolidated condensed financial statements.


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




June 30, 2003 December 31, 2002
--------------- -------------------

Liabilities and shareholders' equity:
Current liabilities:
Notes payable . . . . . . . . . . . . . . . . $ 2,732 $ 5,124
Current installments of long-term obligations 6,400 6,230
Accounts and dividends payable. . . . . . . . 69,252 64,465
Accrued expenses. . . . . . . . . . . . . . . 73,033 69,562
Income taxes. . . . . . . . . . . . . . . . . 5,063 3,727
--------------- -------------------
Total current liabilities . . . . . . . . 156,480 149,108

Long-term obligations . . . . . . . . . . . . 312,216 311,813
Accrued post-retirement and
post-employment benefits. . . . . . . . . . 20,408 19,688
Deferred income taxes . . . . . . . . . . . . 5,525 5,535
Other long-term liabilities . . . . . . . . . 1,084 1,138
Minority interest . . . . . . . . . . . . . . 2,873 2,873
Put and call agreement on common stock. . . . 21,293 -
Shareholders' equity:
Common stock stated value
$1.00 per share . . . . . . . . . . . . . . 46,645 46,640
Additional paid-in capital. . . . . . . . . . 2,148 21,261
Retained earnings . . . . . . . . . . . . . . 247,817 225,387
Cumulative comprehensive
income equity adjustments . . . . . . . . . (6,471) (15,786)
Less, cost of common shares in treasury . . . (90,224) (59,764)
--------------- -------------------
Total shareholders' equity. . . . . . . . 199,915 217,738
--------------- -------------------
$ 719,794 $ 707,893
=============== ===================


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)




Six Months Ended Three Months Ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------ -------------- ------------

Net sales . . . . . . . . . . . . . . . . . $ 348,169 $ 343,678 $ 175,739 $ 176,722
Cost of sales . . . . . . . . . . . . . . . 198,004 198,287 99,824 100,752
------------ ------------ -------------- ------------
Gross profit. . . . . . . . . . . . . . 150,165 145,391 75,915 75,970

Operating expenses:
Selling, technical and administrative . . 98,476 98,385 49,354 51,322
Amortization. . . . . . . . . . . . . . . 1,622 3,138 852 1,570
------------ ------------ -------------- ------------
100,098 101,523 50,206 52,892
------------ ------------ -------------- ------------
Operating profit. . . . . . . . . . . . 50,067 43,868 25,709 23,078

Interest income . . . . . . . . . . . . . (525) (277) (330) (137)
Interest expense. . . . . . . . . . . . . 16,234 17,944 8,343 8,744
Other income. . . . . . . . . . . . . . . (2,008) (890) (1,088) (438)
Other expense . . . . . . . . . . . . . . 1,518 1,443 946 798
------------ ------------ -------------- ------------
15,219 18,220 7,871 8,967
------------ ------------ -------------- ------------

Earnings before taxes and
minority interest . . . . . . . . . . . . 34,848 25,648 17,838 14,111
Income taxes. . . . . . . . . . . . . . . . (11,152) (8,208) (5,708) (4,169)
Minority interest . . . . . . . . . . . . . -- (435) -- (269)
------------ ------------ -------------- ------------
Net earnings. . . . . . . . . . . . . . . . 23,696 17,005 12,130 9,673

Retained earnings, beginning of period. . . 225,387 218,619 236,307 225,306
Cash dividends declared . . . . . . . . . . (1,266) (1,290) (620) (645)
------------ ------------ -------------- ------------
Retained earnings, end of period. . . . . . $ 247,817 $ 234,334 $ 247,817 $ 234,334
============ ============ ============== ============


Net earnings per common share:
Basic . . . . . . . . . . . . . . . . . . $ 0.74 $ 0.53 $ 0.38 $ 0.30
============ ============ ============== ============
Diluted . . . . . . . . . . . . . . . . . $ 0.74 $ 0.52 $ 0.38 $ 0.30
============ ============ ============== ============


Cash dividends per common share . . . . . . $ 0.04 $ 0.04 $ 0.02 $ 0.02
============ ============ ============== ============

Weighted average common shares outstanding:
Basic . . . . . . . . . . . . . . . . . . 31,908,054 32,224,787 31,526,408 32,228,064
============ ============ ============== ============
Diluted . . . . . . . . . . . . . . . . . 32,091,145 32,503,828 31,720,959 32,514,702
============ ============ ============== ============


See accompanying notes to consolidated condensed financial statements.


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




Six Months Ended June 30,
2003 2002
------------ ----------------

Net cash flows from operating activities:. . . . $ 44,983 $ 49,953

Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . (2,753) (2,579)
Proceeds from disposition of fixed assets. . . 52 299
------------ ----------------
Net cash flows used in investing activities. . (2,701) (2,280)

Cash flows from financing activities:
Short-term repayments, net of borrowings . . . (5,674) (9,626)
Long-term borrowings . . . . . . . . . . . . . 3,570 68,451
Long-term repayments . . . . . . . . . . . . . (3,488) (107,138)
Purchase of treasury shares. . . . . . . . . . (30,460) (103)
Dividends paid . . . . . . . . . . . . . . . . (1,266) (1,290)
------------ ----------------
Net cash flows used in financing activities. . (37,318) (49,706)

Effect of exchange rate changes on
cash and cash equivalents. . . . . . . . . . . 1,320 659
------------ ----------------

Increase (decrease) in cash and cash equivalents 6,284 (1,374)
Cash and cash equivalents at beginning of period 32,019 17,067
------------ ----------------

Cash and cash equivalents at end of period . . . $ 38,303 $ 15,693
============ ================



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 June 30, 2003 and the
results of operations and cash flows for the six and three month periods ended
June 30, 2003 and 2002. 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 Annual Report for the
year ended December 31, 2002.
Note 2. Common Share Data
The following table summarizes common shares issued as of June 30, 2003 and June
30, 2002.






2003 2002
---------- ----------
Balance beginning of period. 46,639,757 46,409,757
Shares issued - stock awards 5,381 130,000
---------- ----------
Balance end of period. . . . 46,645,138 46,539,757
========== ==========



The Board of Directors from time-to-time authorizes the purchase of issued and
outstanding shares of the Corporation's common stock. Such additional shares
may be acquired through privately negotiated transactions or on the open market.
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 authorizations 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). On May
7, 2003, the Board of Directors voted in favor of an authorization to purchase
up to 3,000,000 common shares, replacing all previous authorizations. Also, on
May 7, 2003, the Corporation executed a purchase and sale agreement with
Citicorp Venture Capital Ltd ("CVC"), to acquire all of their 2,201,720
outstanding MacDermid, Incorporated common shares, on or before November 3,
2003. The Corporation purchased 1,350,000 on that date. In accordance with the
purchase and sale agreement with CVC, the Corporation has committed to purchase
the remaining 851,720 common shares owned by CVC at a price between $22.60 and
$25.00 per share, to be determined based on the price that the shares are
trading on the date the purchase is executed. An amount of $21,293,000 has been
reclassified as temporary equity with a transfer from additional paid in capital
to put and call agreement on common stock, on the consolidated condensed balance
sheet at June 30, 2003, representing a value of $25.00 per share as of that
date, in accordance with Emerging Issues Task Force Issue No. 00-19, "Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock.". The common shares remain outstanding for purposes of
earnings per share calculations. Authorization to purchase 1,650,000 common
shares remained as of June 30, 2003. Common shares held in treasury, were
15,696,884 as of June 30, 2003 and 14,349,453 as of December 31, 2002. See Note
3. Earnings Per Common Share for a reconciliation of the average common shares
outstanding, resulting from the information provided above.
Note 3. 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
Note 3. Earnings Per Common Share (continued)
period. Earnings per share ("EPS") is calculated based upon net earnings
available for common shareholders. Options to purchase common shares that were
outstanding during the period but were not included in the computation of
diluted EPS because those options were antidilutive based on current market
prices amounted to 1,168,197 for 2003 and 2,061,310 for 2002.

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




Six Months Ended June 30, Three Months Ended June 30,

2003 2002 2003 2002
---------- -------------- ------------ --------------
Basic common shares. . . . . . . 31,908,054 32,224,787 31,526,408 32,228,064
Dilutive effect of stock options 183,091 279,041 194,551 286,638
---------- -------------- ------------ --------------
Diluted common shares. . . . . . 32,091,145 32,503,828 31,720,959 32,514,702
========== ============== ============ ==============



Note 4. Stock-Based Plans
Effective April 1, 2001, the Corporation adopted the fair value expense
recognition provisions of Statement of Financial Accounting Standards No. 123,
Accounting for Stock Based Compensation (SFAS123), prospectively, to all stock
options granted, modified or settled after April 1, 2001. Accordingly,
compensation expense is measured using the fair value at the date of grant for
options granted after April 1, 2001, with the resulting expense charged over the
period in which the options are earned. In the six and three month periods
ended June 30, 2003, there was $2,185 and $1,154, respectively, charged to
expense as compared to $1,544 and $815 for the same periods in 2002.
Previously, and since April 1, 1996, the Corporation had adopted the disclosure
requirements of SFAS123 while accounting for its stock options by applying the
expense recognition provisions of APB Opinion No. 25, Accounting for Stock
Issued to Employees ("APB25").

Had the Corporation used the fair value expense recognition method of accounting
for all stock options granted under its plans between April 1, 1996 and April 1,
2001, net earnings and net earnings per common share for the six and three month
periods ended June 30, 2003 and 2002, would have been reduced to the following
pro forma amounts:




Six Months Three Months
Ended June 30, Ended June 30,

2003 2002 2003 2002
-------- ---------- -------- ----------
Net earnings available for common
shareholders as reported. . . . . . . . $23,696 $ 17,005 $12,130 $ 9,673
Add: stock based employee
compensation expense included in
reported net income, net of related tax
effects . . . . . . . . . . . . . . . . 1,486 1,050 785 576
Deduct: total stock based employee
compensation expense determined
under fair value based method for all
awards, net of related tax effects. . . (1,724) (1,398) (863) (753)
-------- ---------- -------- ----------
Pro forma net earnings. . . . . . . . . $23,458 $ 16,657 $12,052 $ 9,496
======== ========== ======== ==========
Net earnings per common share:
Basic, as reported. . . . . . . . . . $ 0.74 $ 0.53 $ 0.38 $ 0.30
Basic, pro forma. . . . . . . . . . . $ 0.74 $ 0.52 $ 0.38 $ 0.29

Diluted, as reported. . . . . . . . . $ 0.74 $ 0.52 $ 0.38 $ 0.30
Diluted, pro forma. . . . . . . . . . $ 0.73 $ 0.51 $ 0.38 $ 0.29


Note 5. Goodwill and Other Intangible Assets
In accordance with Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets ("SFAS 142"), goodwill and intangible assets with
indeterminable lives are no longer amortized, but instead the carrying amounts
will be periodically compared to the current fair value and, if impairment
occurs, an adjustment to the carrying amount will be required with a charge to
expense in the period identified. This could result in a future write-down or
write-off of such assets.
Goodwill carrying amounts for both the period ended June 30, 2003 and December
31, 2002, by segment, are as follows; Advanced Surface Finishing "ASF", $122,070
and Printing Solutions "PS", $72,130; for a total balance of $194,200.

Acquired intangible assets are summarized as follows:




June 30, 2003 December 31, 2002
--------- -------------- ------- --------- -------------- -------
Gross Gross
Carrying Accumulated Net Carrying Accumulated Net
Amount Amortization Amount Amount Amortization Amount
--------- -------------- ------- --------- -------------- -------

Patents. . $ 17,566 $ (5,829) $11,737 $ 19,698 $ (8,123) $11,575
Trademarks 27,481 (9,045) 18,436 27,481 (8,788) 18,693
Others . . 2,849 (1,927) 922 3,607 (2,050) 1,557
--------- -------------- ------- --------- -------------- -------
Total . $ 47,896 $ (16,801) $31,095 $ 50,786 $ (18,961) $31,825
========= ============== ======= ========= ============== =======



Included in the table above, is the net carrying amount of $16,233 at June 30,
2003 and December 31, 2002 for trademarks which are not being amortized due to
the indefinite life associated with these assets.
Note 6. Comprehensive Income and Accumulated Other Comprehensive Income

The components of comprehensive income for the six and three month periods ended
June 30, 2003 and 2002 are as follows:




Six Months Ended June 30, Three Months Ended June 30,

2003 2002 2003 2002
----------- ---------------- ------------- ----------------
Net earnings. . . . . . . . . . . . . . . $ 23,696 $ 17,005 $ 12,130 $ 9,673
Other comprehensive income:
Foreign currency translation adjustment 9,315 8,397 6,470 8,807
Hedging activities. . . . . . . . . . . - (1) - (251)
----------- ---------------- ------------- ----------------
Comprehensive income. . . . . . . . . . . $ 33,011 $ 25,401 $ 18,600 $ 18,229
=========== ================ ============= ================


The components of accumulated other comprehensive income as of June 30, 2003 and
December 31, 2002 are as follows:






June 30, 2003 December 31, 2002
--------------- -------------------
Cumulative equity adjustments for:
Foreign currency translation adjustment $ 3,943 $ (5,372)
Additional minimum pension liability. . (10,414) (10,414)
--------------- -------------------
Accumulated other comprehensive income . . $ (6,471) $ (15,786)
=============== ===================



Note 7. Segment Reporting
The Corporation operates on a worldwide basis, supplying proprietary chemicals
for two distinct segments, Advanced Surface Finishing and Printing Solutions. A
third segment, Electronics Manufacturing designs and manufactures printed
circuits boards in Europe through a majority owned subsidiary. These three
segments, under which the Corporation operates, are managed separately as each
segment has differences in technology and marketing strategies. Chemicals
supplied by the Advanced Surface Finishing segment are used for cleaning,
activating, polishing, mechanical plating
Note 7. Segment Reporting (continued)
and galvanizing, electro-plating, phosphatising, stripping and coating,
filtering, anti-tarnishing and rust retarding for metal and plastic surfaces
associated with automotive and industrial applications, as well as, etching
copper and imprinting electrical patterns for various electronics applications,
and as lubricants and cleaning agents associated with offshore oil and gas
operations. The products supplied by the Printing Solutions segment include
offset printing blankets and photo-polymer plates used in packaging and
newspaper printing, offset printing applications, and digital printers and
supplies. The Electronics Manufacturing segment produces a wide variety of both
single-sided 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 senior 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,
deferred bond financing fees and certain other long term assets not directly
associated with the support of the individual segments.






Results of operations by segment: Six Months Ended Three Months Ended
June 30, June 30,

2003 2002 2003 2002
------------ --------- -------------- ---------
Net sales:
Advanced surface finishing. . . $ 168,071 $158,989 $ 84,256 $ 80,558
Printing solutions. . . . . . . 137,526 141,851 69,693 73,498
Electronics manufacturing . . . 42,572 42,838 21,790 22,666
------------ --------- -------------- ---------
Consolidated net sales. . . . $ 348,169 $343,678 $ 175,739 $176,722
------------ --------- -------------- ---------

Operating income (loss):
Advanced surface finishing. . . $ 26,104 $ 20,899 $ 13,204 $ 10,806
Printing solutions. . . . . . . 25,340 23,822 13,081 12,554
Electronics manufacturing . . . 245 2,285 276 1,288
Amortization expense. . . . . . (1,622) (3,138) (852) (1,570)
------------ --------- -------------- ---------
Consolidated operating profit $ 50,067 $ 43,868 $ 25,709 $ 23,078
============ ========= ============== =========







Identifiable assets by segment: June 30, 2003 December 31, 2002
-------------- ------------------

Advanced surface finishing. . . $ 180,168 $ 136,436
Printing solutions. . . . . . . 372,598 410,087
Electronics manufacturing . . . 101,069 95,961
Corporate-wide. . . . . . . . . 65,959 65,409
-------------- ------------------
Consolidated assets. . . . . $ 719,794 $ 707,893
============== ==================



Note 8. Acquisition Reserves
The Corporation established acquisition reserves (included in accrued expenses)
in fiscal year 1999 when recording the acquisition of W. Canning, plc. The
reorganization of employees and facilities has been completed. Five facilities
have been closed with those activities assimilated elsewhere. Leases associated
with these facilities have expired with the exception of one location which is
leased through March 2008 and has been sub-leased to partially offset the future
cash payments. See Contingencies and Legal Matters, Note 11, regarding
environmental activity.
Note 8. Acquisition Reserves (continued)

The following table summarizes the cumulative activity for these reserves, since
inception through June 30, 2003, including cash payments of $88 for the six
months ended June 30, 2003:






Inception Adjustments Payments Balance
---------- ----------- -------- --------
Facilities. . $ 4,200 885 3,501 $ 1,584
Redundancies. 2,050 3,100 5,150 -
Environmental 2,000 - 222 1,778
---------- ----------- -------- --------
Total. . . $ 8,250 3,985 8,873 $ 3,362
========== =========== ======== ========


Note 9. Supplemental Cash Flow Information
The following table lists the major components of net cash flows from operating
activities as well as cash paid for interest and income taxes for the six months
ended June 30, 2003 and 2002:




Six Months Ended June 30,

2003 2002
----------------- ---------
Net cash flows from operating activities:
Net earnings. . . . . . . . . . . . . . . . . . . $ 23,696 $ 17,005
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . 10,603 10,700
Amortization . . . . . . . . . . . . . . . . . 1,622 3,138
Provision for bad debts. . . . . . . . . . . . 2,679 3,991
Stock compensation expense . . . . . . . . . . 2,185 1,544
Other changes in assets and liabilities. . . . 4,198 13,575
----------------- ---------
Net cash flows from operating activities . . . $ 44,983 $ 49,953
================= =========


Cash paid for interest. . . . . . . . . . . . . . $ 16,118 $ 20,854
================= =========
Cash paid for income taxes. . . . . . . . . . . . $ 4,778 $ 5,390
================= =========



Note 10. Market Risk
The Corporation is exposed to market risk in the normal course of business
activity 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. Management continually reviews the balance between foreign currency
denominated assets and liabilities in order to minimize the Corporation's
exposure to foreign exchange fluctuations.
The Corporation operates manufacturing facilities in ten countries and sells
products in over twenty-five countries. Approximately 60% of the Corporation's
net sales and identifiable assets are denominated in currencies other than the
US Dollar, predominantly the Euro, the Pound Sterling, the Yen, Hong Kong and
New Taiwan Dollars. For the six month period ending June 30, 2003, there was a
favorable foreign currency translation effect on earnings of approximately $0.05
per share, or 7%. The annual impact on operating cash flows historically has
been insignificant.
The Corporation's business operations consist principally of the 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 a wide variety of applications used in the printing and packaging industries,
while 30% of the business is concentrated to customers supplying a wide variety
of chemicals to manufacturers of printed circuit boards with many different
end-use applications, as well as the manufacture of printed circuit boards
supplied to the electronics industry. As is usual for these businesses, 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. Market Risk (continued)
The Corporation has been exposed to interest rate risk, primarily from its
credit facility which is based upon various floating rates. The Corporation had
entered into interest rate swap agreements for the purpose of reducing its
exposure to possible future changes in interest rates. A remaining interest
rate swap is considered speculative as there are no outstanding balances under
the credit facility. The Corporation 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 12. Based upon the Corporation's current debt structure and
expected levels of borrowing in 2003, an increase in interest rates would not
result in an incremental interest expense. The Corporation does not enter into
derivative financial instruments for trading purposes, it has certain other
supply agreements for raw material inventories but has chosen not to enter into
any price hedging with its suppliers for commodities.
Note 11. Contingencies and Legal Matters
Environmental Issues:
The nature of the Corporation's operations, as manufacturers and distributors of
specialty chemicals and systems, and products, including raw materials, 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 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.
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 certain sites acquired in the December 1998 acquisition of W. Canning
plc, 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 ("the acquisition
agreement") to withhold a deferred purchase price payment of approximately
$1,600. 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. The Corporation has
instituted an arbitration to enforce the obligations of other parties to the
acquisition agreement concerning the remediation of the Kearney, New Jersey and
Waukegan, Illinois sites. The arbitration is in an early phase and as such its
resolution cannot be predicted. 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.
Note 11. Contingencies and Legal Matters (continued)
Legal Proceedings:
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 was required to pay fines and penalties
totaling $2,500, without interest, over six quarterly installments. In
addition, the Corporation was required to pay $1,550 to various local charitable
and environmental organizations and causes. As of June 30, 2003, the
Corporation has paid the full amounts for both of these arrangements. The
Corporation has been placed on probation for two years and will perform certain
environmental audits, as well as other environmentally related actions. The
Corporation had recorded liabilities during the negotiation period and therefore
its results of operations and financial position were not affected by these
arrangements.
Various other legal proceedings are pending against the Corporation. The
Corporation considers all such proceedings to be ordinary litigation incident to
the nature of its business. Certain claims are covered by liability insurance.
The Corporation believes that the resolution of these claims to the extent not
covered by insurance will not, individually or in the aggregate, have a material
adverse effect on its financial position or results of operations.
Note 12. Financial Information for Guarantors of the Corporation's Bond
Offering
The Corporation issued 9 1/8% Senior Subordinated Notes ("bonds") 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 long-term debt. These bonds are 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 bonds. 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 bonds.
The following financial information is presented to give additional disclosures
to the 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 fiscal periods ended June 30, 2003 and 2002 and December 31, 2002. The
equity method has been used by the parent with respect to investments in
guarantor 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 Annual Report for the year ended
December 31, 2002.

CONSOLIDATED CONDENSED BALANCE SHEET
JUNE 30, 2003
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


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

ASSETS
Current assets:
Cash and cash equivalents. . . . . $ 16,095 $ 1,825 $ 19,985 $ 398 $ - $ 38,303
Accounts receivables, net. . . . . 10,929 19,246 103,144 13,387 - 146,706
Due (to) from affiliates . . . . . 84,894 (23,157) (30,898) (30,839) - -
Inventories. . . . . . . . . . . . 9,384 27,316 45,334 9,931 - 91,965
Prepaid expenses . . . . . . . . . 543 2,140 4,276 - - 6,959
Deferred income taxes. . . . . . . 17,059 - 4,209 728 - 21,996
------------- -------------- -------------- -------------- -------------- -------------
Total current assets . . . . . . . 138,904 27,370 146,050 (6,395) - 305,929

Property, plant and equipment, net 14,631 40,132 55,986 19,130 - 129,879
Goodwill . . . . . . . . . . . . . 21,680 68,574 103,946 - - 194,200
Intangibles, net . . . . . . . . . - 6,182 24,831 82 - 31,095
Investments in subsidiaries. . . . 354,468 234,173 (23,939) - (564,702) -
Other assets . . . . . . . . . . . 39,259 7,903 8,328 3,201 - 58,691
------------- -------------- -------------- -------------- -------------- -------------
$ 568,942 $ 384,334 $ 315,202 $ 16,018 $ (564,702) $ 719,794
============= ============== ============== ============== ============== =============


CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)
JUNE 30, 2003
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


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

LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable . . . . . . . . $ - $ - $ 812 $ 1,920 $ - $ 2,732
Current installments of long-
term obligations. . . . . . . - 146 413 5,841 - 6,400
Accounts and dividend payable 10,937 7,407 35,018 15,890 - 69,252
Accrued expenses. . . . . . . 33,084 8,958 26,975 4,016 - 73,033
Income taxes. . . . . . . . . (13,673) 12,748 6,829 (841) - 5,063
-------------- -------------- -------------- -------------- -------------- --------------
Total current liabilities . . 30,348 29,259 70,047 26,826 - 156,480

Long-term obligations . . . . 301,784 569 504 9,359 - 312,216
Accrued postretirement. . . . 15,604 - 4,804 - - 20,408
Deferred income taxes . . . . (2) - 4,690 837 - 5,525
Other long-term liabilities . - 38 984 62 - 1,084
Minority interest . . . . . . - - - 2,873 - 2,873
Put and call agreement on
common stock. . . . . . . . . 21,293 - - - - 21,293

Shareholders' equity:
Common stock. . . . . . . . . 46,645 (50) 3,760 3 (3,713) 46,645
Additional paid-in capital. . 2,148 207,741 109,614 10,260 (327,615) 2,148
Retained earnings . . . . . . 247,817 137,213 124,727 (30,813) (231,127) 247,817
Cumulative comprehensive
income equity adjustments . . (6,471) 9,564 (3,928) (3,389) (2,247) (6,471)
Less, cost of common shares
in treasury . . . . . . . . . (90,224) - - - - (90,224)
-------------- -------------- -------------- -------------- -------------- --------------
Total shareholders' equity. . 199,915 354,468 234,173 (23,939) (564,702) 199,915

-------------- -------------- -------------- -------------- -------------- --------------
$ 568,942 $ 384,334 $ 315,202 $ 16,018 $ (564,702) $ 719,794
============== ============== ============== ============== ============== ==============



CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
SIX MONTHS ENDED JUNE 30, 2003
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


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

Net sales. . . . . . . . . $ 45,071 $ 84,544 $ 184,555 $ 42,572 $ (8,573) $ 348,169
Cost of sales. . . . . . . 28,636 37,867 101,331 38,743 (8,573) 198,004
-------------- -------------- -------------- -------------- -------------- --------------
Gross profit . . . . . . . 16,435 46,677 83,224 3,829 - 150,165

Operating expenses:
Selling, technical and
administrative . . . . . . 24,932 19,395 50,564 3,585 - 98,476
Amortization . . . . . . . - 1,066 539 17 - 1,622
-------------- -------------- -------------- -------------- -------------- --------------
24,932 20,461 51,103 3,602 - 100,098
-------------- -------------- -------------- -------------- -------------- --------------
Operating profit (loss). . (8,497) 26,216 32,121 227 - 50,067

Equity in earnings of
subsidiaries . . . . . . . (38,299) (20,644) 895 - 58,048 -
Interest income. . . . . . (80) (106) (320) (19) - (525)
Interest expense . . . . . 16,186 (2,244) 985 1,307 - 16,234
Other expense (income),
net. . . . . . . . . . . . (263) (278) 202 (151) - (490)
-------------- -------------- -------------- -------------- -------------- --------------
(22,456) (23,272) 1,762 1,137 58,048 15,219
-------------- -------------- -------------- -------------- -------------- --------------

Earnings before taxes and
minority interest. . . . . 13,959 49,488 30,359 (910) (58,048) 34,848
Income taxes benefit
(expense). . . . . . . . . 9,737 (11,189) (9,715) 15 - (11,152)
Minority interest. . . . . - - - - - -
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss). . . . $ 23,696 $ 38,299 $ 20,644 $ (895) $ (58,048) $ 23,696
============== ============== ============== ============== ============== ==============


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
THREE MONTHS ENDED JUNE 30, 2003
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


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

Net sales. . . . . . . . . $ 21,991 $ 41,943 $ 93,968 $ 21,789 $ (3,952) $ 175,739
Cost of sales. . . . . . . 13,836 18,146 52,126 19,668 (3,952) 99,824
-------------- -------------- -------------- -------------- -------------- --------------
Gross profit . . . . . . . 8,155 23,797 41,842 2,121 - 75,915

Operating expenses:
Selling, technical and
administrative . . . . . . 12,495 9,123 25,892 1,844 - 49,354
Amortization . . . . . . . - 556 287 9 - 852
-------------- -------------- -------------- -------------- -------------- --------------
12,495 9,679 26,179 1,853 - 50,206
-------------- -------------- -------------- -------------- -------------- --------------
Operating profit (loss). . (4,340) 14,118 15,663 268 - 25,709

Equity in earnings of
subsidiaries . . . . . . . (20,006) (10,123) 430 - 29,699 -
Interest income. . . . . . (49) (90) (182) (9) - (330)
Interest expense . . . . . 8,370 (1,122) 415 680 - 8,343
Other expense (income),
net. . . . . . . . . . . . (81) (231) 179 (9) - (142)
-------------- -------------- -------------- -------------- -------------- --------------
(11,766) (11,566) 842 662 29,699 7,871
-------------- -------------- -------------- -------------- -------------- --------------

Earnings before taxes and
minority interest. . . . . 7,426 25,684 14,821 (394) (29,699) 17,838
Income taxes benefit
(expense). . . . . . . . . 4,704 (5,678) (4,698) (36) - (5,708)
Minority interest. . . . . - - - - - -
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss). . . . $ 12,130 $ 20,006 $ 10,123 $ (430) $ (29,699) $ 12,130
============== ============== ============== ============== ============== ==============


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2003
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


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

Net cash flows provided
by (used in) operating
activities:. . . . . . . . $ (22,736) $ 36,143 $ 29,625 $ 1,951 $ - $ 44,983

Investing activities:
Capital expenditures . . . (785) (227) (1,341) (400) - (2,753)
Proceeds from disposition
of fixed assets. . . . . . - - 52 - - 52
-------------- -------------- -------------- -------------- ------------- --------------
Net cash flows provided
by (used in) investing
activities . . . . . . . . (785) (227) (1,289) (400) - (2,701)
-------------- -------------- -------------- -------------- ------------- --------------

Financing activities:
Short-term borrowings
(repayments), net. . . . . 40,707 (31,045) (13,477) (1,859) - (5,674)
Long-term borrowings . . . - - - 3,570 - 3,570
Long-term repayments . . . - - (269) (3,219) - (3,488)
Purchase of treasury
shares . . . . . . . . . . (30,460) - - - - (30,460)
Dividends paid . . . . . . 15,216 (5,360) (11,122) - - (1,266)
-------------- -------------- -------------- -------------- ------------- --------------
Net cash flows provided
by (used in) financing
activities . . . . . . . . 25,463 (36,405) (24,868) (1,508) - (37,318)
-------------- -------------- -------------- -------------- ------------- --------------

Effect of exchange rate
changes on cash and cash
equivalents. . . . . . . . - - 1,303 17 - 1,320
-------------- -------------- -------------- -------------- ------------- --------------
Net (decrease) increase in
cash and cash equivalents. 1,942 (489) 4,771 60 - 6,284

Cash and cash equivalents
at beginning of period . . 14,153 2,314 15,214 338 - 32,019

Cash and cash equivalents
-------------- -------------- -------------- -------------- ------------- --------------
at end of period . . . . . $ 16,095 $ 1,825 $ 19,985 $ 398 $ - $ 38,303
============== ============== ============== ============== ============= ==============


CONSOLIDATED CONDENSED BALANCE SHEET
DECEMBER 31, 2002
(audited)




MACDERMID
UNRESTRICTED INCORPORATED


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

ASSETS
Current assets:
Cash and cash equivalents . $ 14,153 $ 2,314 $ 15,214 $ 338 $ - $ 32,019
Accounts receivables, net . 10,561 21,322 98,228 12,695 - 142,806
Due (to) from affiliates. . 132,264 (69,017) (36,066) (27,181) - -
Inventories . . . . . . . . 9,002 26,269 42,497 7,970 - 85,738
Prepaid expenses. . . . . . 488 1,323 3,646 - - 5,457
Deferred income taxes . . . 17,059 - 4,587 952 - 22,598
------------- -------------- -------------- -------------- -------------- -------------
Total current assets. . . . 183,527 (17,789) 128,106 (5,226) - 288,618

Property, plant and
equipment, net. . . . . . . 15,100 42,779 55,129 19,573 - 132,581
Goodwill. . . . . . . . . . 21,680 68,574 103,946 - - 194,200
Intangibles, net. . . . . . - 6,686 25,049 90 - 31,825
Investments in subsidiaries 314,126 225,676 (21,318) - (518,484) -
Other assets. . . . . . . . 39,485 10,130 8,722 2,332 - 60,669
------------- -------------- -------------- -------------- -------------- -------------
$ 573,918 $ 336,056 $ 299,634 $ 16,769 $ (518,484) $ 707,893
============= ============== ============== ============== ============== =============


CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)
DECEMBER 31, 2002
(audited)




MACDERMID
UNRESTRICTED INCORPORATED


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

LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable . . . . . . . . $ - $ - $ 1,792 $ 3,332 $ - $ 5,124
Current installments of long-
term obligations. . . . . . . - 146 391 5,693 - 6,230
Accounts and dividend payable 11,854 7,975 30,347 14,289 - 64,465
Accrued expenses. . . . . . . 31,897 10,250 24,591 2,824 - 69,562
Income taxes. . . . . . . . . (4,763) 2,804 6,201 (515) - 3,727
-------------- -------------- -------------- -------------- -------------- --------------
Total current liabilities . . 38,988 21,175 63,322 25,623 - 149,108

Long-term obligations . . . . 301,732 705 719 8,657 - 311,813
Accrued postretirement. . . . 15,462 - 4,226 - - 19,688
Deferred income taxes . . . . - - 4,719 816 - 5,535
Other long-term liabilities . (2) 50 972 118 - 1,138
Minority interest . . . . . . - - - 2,873 - 2,873

Shareholders' equity:
Common stock. . . . . . . . . 46,640 (50) 3,760 3 (3,713) 46,640
Additional paid-in capital. . 21,261 207,741 109,614 10,260 (327,615) 21,261
Retained earnings . . . . . . 225,387 115,397 115,205 (29,917) (200,685) 225,387
Cumulative comprehensive
income equity adjustments . . (15,786) (8,962) (2,903) (1,664) 13,529 (15,786)
Less, cost of common shares
in treasury . . . . . . . . . (59,764) - - - - (59,764)
-------------- -------------- -------------- -------------- -------------- --------------
Total shareholders' equity. . 217,738 314,126 225,676 (21,318) (518,484) 217,738
-------------- -------------- -------------- -------------- -------------- --------------

$ 573,918 $ 336,056 $ 299,634 $ 16,769 $ (518,484) $ 707,893
============== ============== ============== ============== ============== ==============


CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
SIX MONTHS ENDED JUNE 30, 2002
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


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

Net sales. . . . . . . . . $ 50,212 $ 93,842 $ 165,504 $ 42,838 $ (8,718) $ 343,678
Cost of sales. . . . . . . 31,220 47,484 91,061 37,240 (8,718) 198,287
-------------- -------------- -------------- -------------- -------------- --------------
Gross profit . . . . . . . 18,992 46,358 74,443 5,598 - 145,391

Operating expenses:
Selling, technical and
administrative . . . . . . 27,188 20,926 46,958 3,313 - 98,385
Amortization . . . . . . . 1,730 821 573 14 - 3,138
-------------- -------------- -------------- -------------- -------------- --------------
28,918 21,747 47,531 3,327 - 101,523
-------------- -------------- -------------- -------------- -------------- --------------
Operating profit (loss). . (9,926) 24,611 26,912 2,271 - 43,868

Equity in earnings of
subsidiaries . . . . . . . (28,465) (16,550) (33) - 45,048 -
Interest income. . . . . . (40) (52) (171) (14) - (277)
Interest expense . . . . . 8,391 5,246 2,989 1,318 - 17,944
Other expense (income),
net. . . . . . . . . . . . 788 (160) (93) 18 - 553
-------------- -------------- -------------- -------------- -------------- --------------
(19,326) (11,516) 2,692 1,322 45,048 18,220
-------------- -------------- -------------- -------------- -------------- --------------

Earnings before taxes and
minority interest. . . . . 9,400 36,127 24,220 949 (45,048) 25,648
Income taxes benefit
(expense). . . . . . . . . 7,605 (7,662) (7,670) (481) - (8,208)
Minority interest. . . . . - - - (435) - (435)
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss). . . . $ 17,005 $ 28,465 $ 16,550 $ 33 $ (45,048) $ 17,005
============== ============== ============== ============== ============== ==============


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




MACDERMID
UNRESTRICTED INCORPORATED


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

Net sales. . . . . . . . . $ 25,416 $ 47,551 $ 85,584 $ 22,666 $ (4,495) $ 176,722
Cost of sales. . . . . . . 15,509 23,441 46,748 19,549 (4,495) 100,752
-------------- -------------- -------------- -------------- -------------- --------------
Gross profit . . . . . . . 9,907 24,110 38,836 3,117 - 75,970

Operating expenses:
Selling, technical and
administrative . . . . . . 14,023 10,713 24,756 1,830 - 51,322
Amortization . . . . . . . 864 411 288 7 - 1,570
-------------- -------------- -------------- -------------- -------------- --------------
14,887 11,124 25,044 1,837 - 52,892
-------------- -------------- -------------- -------------- -------------- --------------
Operating profit (loss). . (4,980) 12,986 13,792 1,280 - 23,078

Equity in earnings of
subsidiaries . . . . . . . (15,369) (8,980) (84) - 24,433 -
Interest income. . . . . . (18) (19) (92) (8) - (137)
Interest expense . . . . . 4,375 2,240 1,460 669 - 8,744
Other expense (income),
net. . . . . . . . . . . . 331 20 5 4 - 360
-------------- -------------- -------------- -------------- -------------- --------------
(10,681) (6,739) 1,289 665 24,433 8,967
-------------- -------------- -------------- -------------- -------------- --------------

Earnings before taxes and
minority interest. . . . . 5,701 19,725 12,503 615 (24,433) 14,111
Income taxes benefit
(expense). . . . . . . . . 3,972 (4,356) (3,523) (262) - (4,169)
Minority interest. . . . . - - - (269) - (269)
-------------- -------------- -------------- -------------- -------------- --------------
Net earnings (loss). . . . $ 9,673 $ 15,369 $ 8,980 $ 84 $ (24,433) $ 9,673
============== ============== ============== ============== ============== ==============


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2002
(unaudited)




MACDERMID
UNRESTRICTED INCORPORATED


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

Net cash flows provided
by (used in) operating
activities:. . . . . . . . . $ 10,778 $ 9,873 $ 26,524 $ 2,778 $ - $ 49,953

Investing activities:
Capital expenditures . . . . (526) (522) (636) (895) - (2,579)
Proceeds from disposition
of fixed assets. . . . . . . - - 147 152 - 299
Net cash flows provided
by (used in) investing
-------------- -------------- -------------- -------------- ------------- --------------
activities . . . . . . . . . (526) (522) (489) (743) - (2,280)
-------------- -------------- -------------- -------------- ------------- --------------

Financing activities:
Short-term (repayments)
borrowings, net. . . . . . . (31,490) (2,432) 27,636 (3,340) - (9,626)
Long-term borrowings . . . . 65,500 - - 2,951 - 68,451
Long-term repayments . . . . (58,000) - (47,392) (1,746) - (107,138)
Purchase of treasury shares. (103) - - - - (103)
Dividends paid . . . . . . . 10,240 (7,372) (4,158) - - (1,290)
-------------- -------------- -------------- -------------- ------------- --------------
Net cash flows provided
by (used in) financing
activities . . . . . . . . . (13,853) (9,804) (23,914) (2,135) - (49,706)
-------------- -------------- -------------- -------------- ------------- --------------

Effect of exchange rate
changes on cash and cash
equivalents. . . . . . . . . - - 624 35 - 659
-------------- -------------- -------------- -------------- ------------- --------------

Net (decrease) increase in
cash and cash equivalents. . (3,601) (453) 2,745 (65) - (1,374)

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 . . . . . . $ 818 $ 1,428 $ 13,006 $ 441 $ - $ 15,693
============== ============== ============== ============== ============= ==============


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 JUNE 30, 2003 TO THE SAME PERIOD IN 2002.
SALES, COSTS AND EXPENSES
Advanced Surface Finishing: Net sales for the current quarter were $84.3
million, an increase of $3.7 million, or 5% from $80.6 million in the same
period last year. This includes a positive foreign currency translation effect
of $6.8 million. Excluding this effect total sales would have shown a decrease
of 4%. Proprietary sales, excluding the effects of foreign currency
translation, were 5% lower than the same period last year. Proprietary sales
remain weak largely due to lower consumer spending in the electronics industries
and a cyclical slowdown for industrial applications.
Costs of sales, as a percentage of sales were similar to the same period last
year. Gross profit percentage was 51.6% as compared to 51.9% for the same
period last year as plant closures and cost reduction efforts have been
established.
Selling, technical and administrative expenses ("ST&A") were $30.2 million this
quarter, a 2% decrease as compared to $31.0 million for the same period last
year. The decrease in ST&A was offset by a $2.3 million unfavorable foreign
currency translation effect, otherwise ST&A would have decreased 10%. Customer
credit risk was heightened last year and as such a provision for bad debts was
higher than is normal for the electronics business in last year's three month
period. ST&A as a percentage of sales for the current quarter was 35.9% as
compared to 38.5% in the same period last year. Total amortization expense was
$0.7 million for the quarter, which 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) for the three months ended June 30, 2003 increased
33% to $12.5 million from $9.4 million in the same period last year.
Printing Solutions: Net sales for the current quarter were $69.7 million, a
decrease of $3.8 million, or 5% from $73.5 million in the same period last year.
This includes a positive foreign currency translation effect of $3.6 million.
Excluding this effect total sales would have shown a 10% decrease. Sales to the
commercial advertising customers have been depressed while activity in these
industries remains soft.
Costs of sales, as a percentage of sales were below the same period last year
due to production facility reorganization and a related decrease in production
overheads. Gross profit percentage was 43.6% as compared to 42.2% for the same
period last year as these cost improvements were realized.
ST&A expenses were $17.3 million this quarter, a 7% decrease as compared to
$18.5 million for the same period last year. The decrease in costs structure
was offset by a $0.9 million unfavorable foreign currency translation effect,
otherwise ST&A would have decreased 11%. ST&A as a percentage of sales for the
current quarter was 24.8% as compared to 25.2% in the same period last year.
Total amortization expense was $0.2 million for the current and prior year
quarters.
As a result of the factors discussed above, printing solutions operating profit
(after amortization) for the three months ended June 30, 2003 increased 4% to
$12.9 million from $12.4 million in the same period last year.
Electronics Manufacturing: Net sales for the current quarter were $21.8 million,
a decrease of $0.9 million, or 4% from $22.7 million in the same period last
year. This includes a positive effect of foreign currency translation of $4.1
million, otherwise total sales would have shown a 22% decrease.
Costs of sales, as a percentage of sales increased and as a result gross profit
percentage decreased to 9.7% as compared to 13.8% for the same period last year.
The major factors were higher labor costs, as well as, to a lesser extent
depreciation, rental and utilities.
ST&A expenses were less than 1% higher as compared to the same period last year,
the result of a $0.3 million unfavorable foreign currency translation effect.
ST&A as a percentage of sales for the current quarter was 8.5% as compared to
8.1% in the same period last year.
As a result of the factors discussed above, the electronics manufacturing
operating profit (after amortization) for the three months ended June 30, 2003
decreased 79% to $0.3 million from $1.3 million in the same period last year.
Consolidated: Net sales for the current quarter of $175.7 million decreased $1.0
million or 1% from $176.7 million in the same period last year. This includes a
$14.6 million positive effect from foreign currency translation which resulted
in higher reported net sales. Excluding this effect, reported sales would have
decreased 9% and proprietary sales, which were roughly 82% of total net sales in
both periods would have decreased 8%.
Gross profits were flat for the three month period ended June 30, 2003 as
compared to the same period last year. Cost reduction efforts were offset by
lower sales volumes. Accordingly, gross profit as a percentage of sales was
43.2% for the three month period ended June 30, 2003, as compared to 43.0% for
the same period last year.
ST&A expenses were $2.0 million, or 4% less than the same period last year.
Excluding a $3.5 million unfavorable foreign currency translation effect, ST&A
expenses would have been 11% lower. ST&A as a percentage of sales for the three
month period was 28.1% as compared to 29.0% for the same period last year.
Total amortization expense was $0.9 million for the quarter. This was $0.7
million less than the same period last year.
Operating profit (after amortization) for the three months ended June 30, 2003
was $25.7 million, an increase of $2.6 million, or approximately 11% more than
$23.1 million for the same period last year.
PROVISION FOR INCOME TAXES
The Corporation's effective income tax rate approximates 32% for the three and
six month periods ended June 30, 2003. The effective income tax rate for the
three and six month periods ended June 30, 2002 were 30% and 32%, respectively.
The rate difference for the three months ended June 30, 2002 is attributable to
a reduction of the tax rate in that quarter from 35% to 32%, with year-to-date
effect, due to the benefits realized from domestic tax minimization strategies.
NET EARNINGS
Net interest expense of $8.0 million was approximately 7% less than the same
period last year, as a result of lower average bank debt balances. Net earnings
available to common shareholders for the three month period ended June 30, 2003
of $0.38 per share was 27% higher than $0.30 per share for the same period last
year. The impact from foreign currency translation was favorable to reported
earnings by approximately $0.02 per share for the three month period.
THE FOLLOWING DISCUSSION COMPARES THE RESULTS OF OPERATIONS FOR THE SIX MONTH
PERIOD WHICH ENDED JUNE 30, 2003 TO THE SAME PERIOD IN 2002.
SALES, COSTS AND EXPENSES
Advanced Surface Finishing: Net sales for the six months ended June 30, 2003
were $168.1 million, an increase of $9.1 million, or 6% from $159.0 million in
the same period last year. This includes a positive foreign currency
translation effect of $13.7 million. Excluding this effect total sales would
have shown a 3% decrease. Proprietary sales, excluding the effects of foreign
currency translation, were 4% lower than the same period last year. Proprietary
sales remain weak largely due to lower consumer spending in the electronics
industries and a cyclical slowdown for industrial applications.
Costs of sales, as a percentage of sales for the six month period were below the
same period last year. Lower costs were influenced by the closure of a
production facility and associated cost reduction efforts. Gross profit
percentage was 51.2% as compared to 50.5% for the same period last year, in a
large part, a result of the cost reductions.
Selling, technical and administrative expenses ("ST&A") were $60.0 million for
the six month period, a 1% increase as compared to $59.4 million for the same
period last year. The increase is from a $4.5 million unfavorable foreign
currency translation effect, otherwise ST&A would have decreased 6%. ST&A as a
percentage of sales for the six month period was 35.7% as compared to 37.3% in
the same period last year. Total amortization expense was $1.3 million for the
six month period, which was $1.5 million less than the same period last year.
As a result of the factors discussed above, advanced surface finishing operating
profit (after amortization) for the six months ended June 30, 2003 increased 37%
to $24.8 million from $18.1 million in the same period last year.
Printing Solutions: Net sales for the six months ended June 30, 2003 were $137.5
million, a decrease of $4.4 million, or 3% from $141.9 million in the same
period last year. This includes a positive foreign currency translation effect
of $6.4 million. Excluding this effect total sales would have shown an 8%
decrease. Sales to the commercial advertising customers have been depressed
while activity in these industries remains soft.
Costs of sales, as a percentage of sales for the six month period were below the
same period last year, largely due to the closure of a production facility.
Gross profit percentage was 43.8% as compared to 42.0% for the same period last
year, influenced by cost reduction efforts.
ST&A expenses were $34.9 million for the six month period, a 2% decrease as
compared to $35.7 million for the same period last year. Excluding a $1.6
million unfavorable foreign currency translation effect, ST&A expenses would
have been 7% lower. ST&A as a percentage of sales for the six month period was
25.4% as compared to 25.2% in the same period last year. Total amortization
expense was $0.3 million for the six month period, which was similar to the same
period last year.
As a result of the factors discussed above, printing solutions operating profit
(after amortization) for the six months ended June 30, 2003 increased 7% to
$25.1 million from $23.5 million in the same period last year.
Electronics Manufacturing: Net sales for the six months ended June 30, 2003 were
$42.6 million, a decrease of $0.2 million, or 1% from $42.8 million in the same
period last year. This includes a positive effect of foreign currency
translation of $7.9 million, otherwise total sales would have shown a 19%
decrease.
Costs of sales, as a percentage of sales increased and as a result gross profit
percentage was 9.0% as compared to 13.1% for the same period last year. The
major factors were higher depreciation coupled with labor and utilities
increases.
ST&A expenses increased $0.3 million, or 8% as compared to the same period last
year, the result of a $0.7 million unfavorable foreign currency translation
effect. ST&A as a percentage of sales for the six month period was 8.4% as
compared to 7.7% in the same period last year.
As a result of the factors discussed above, the electronics manufacturing
operating profit (after amortization) for the six months ended June 30, 2003
decreased 90% to $0.2 million from $2.3 million in the same period last year.
Consolidated: Net sales for the six months ended June 30, 2003 of $348.2 million
increased $4.5 million or 1% from $343.7 million in the same period last year.
This includes a $28.1 million positive effect from foreign currency translation
which resulted in higher reported net sales. Excluding this effect, reported
sales would have decreased 7% and proprietary sales, which were roughly 82% of
total net sales in both periods would have decreased 6%.
Gross profits increased 3% for the six month period ended June 30, 2003 as
compared to the same period last year. The closure of production facilities and
other cost reduction efforts offset lower sales volumes. Accordingly, gross
profit as a percentage of sales for the six month period ending June 30, 2003
was 43.1% as compared to 42.3% for the same period last year.
ST&A expenses were flat, or $0.1 million more than the same period last year.
Excluding a $6.8 million unfavorable foreign currency translation effect, ST&A
expenses would have been 7% lower. ST&A as a percentage of sales for the six
month period was 28.3% as compared to 28.6% for the same period last year.
Total amortization expense was $1.6 million for the six month period ended June
30, 2003. This was $1.5 million less than the same period last year.
Operating profit (after amortization) for the six month period ended June 30,
2003 of $50.1 million, an increase of $6.2 million, or approximately 14% more
than $43.9 million for the same period last year.
PROVISION FOR INCOME TAXES
The Corporation's effective income tax rate approximates 32% for both the six
month period ended June 30, 2003 and 2002.
NET EARNINGS
Net interest expense, $15.7 million was approximately 11% less than the same
period last year, attributable to cash management programs resulting in lower
average debt balances. Net earnings available to common shareholders for the
six month period ended June 30, 2003 of $0.74 per share was 42% higher than
$0.52 per share for the same period last year. The impact from foreign currency
translation was favorable to reported earnings by approximately $0.05 per share
for the six month period.
Financial Condition
Operating activities during the six months ending June 30, 2003 provided a net
cash inflow of $45.0 million. This included net earnings of $23.7 million,
non-cash expenses for depreciation, amortization, bad debts and stock
compensation of $17.1 million, and a net decrease in operating assets and
liabilities of $4.2 million. A large portion of the cash generated from
operations during this period was utilized to repurchase treasury shares.
Investing activities for the six months ended June 30, 2003 utilized net cash of
$2.7 million, all of which relates to capital expenditures. This capital
spending compares with total planned expenditures of approximately $13.0 million
for the full year.
Financing activities for the six months ended June 30, 2003 consisted of a net
use of cash of $37.3 million primarily used for treasury shares of $30.5
million, as well as net debt repayment of $5.6 million and dividends to
shareholders ($0.02 per common share in each quarter) of $1.2 million. The
Board of Directors on August 5, 2003, voted to increase the dividend from $0.02
per share to $0.03 per share, effective with the next payment.
The Corporation's financial position remains strong. Working capital at June
30, 2003 was $149.4 million as compared to $139.5 million at December 31, 2002.
The Corporation issued 9 1/8% senior subordinated notes in June 2001, with a
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 $50
million. There has been no balance outstanding, or activity on this revolving
loan facility for the periods presented. The Corporation has other uncommitted
credit facilities which presently total approximately $59 million. These,
together with the Corporation's cash flows from operations are adequate to fund
working capital and expected capital expenditures.

There are no long-term commitments (including the short-term portion) which
would have a significant impact upon results of operations, financial condition
or liquidity of the Corporation, other than the obligations in the following
table:






($millions). . . . . . . . . . . . . . . . . . . . . This Year 2-4 Years 5 or More Years Total
---------- ---------- ---------------- ------
Long-term debt. . . . . . . . . . . . . $ 5.4 $ 8.6 $ 302.2 $316.2
Capital leases. . . . . . . . . . . . . 1.0 1.2 0.2 2.4
Operating leases. . . . . . . . . . . . 9.4 12.9 11.1 33.4
Put and call agreement on common stock. 21.3 - - 21.3
---------- ---------- ---------------- ------
Total contractual cash commitments . . . . . . . . . $ 37.1 $ 22.7 $ 313.5 $373.3
========== ========== ================ ======



The Board of Directors from time-to-time authorizes the purchase of issued and
outstanding shares of the Corporation's common stock. Such additional shares
may be acquired through privately negotiated transactions or on the open market.
Any future repurchases by the Corporation will depend on various factors
including the market price of its shares, its business and financial position
and general economic or market conditions. Additional shares acquired pursuant
to such authorizations 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). At June 30, 2003,
the outstanding authorization to purchase approximately 1.65 million shares
would cost approximately $43.4 million. On May 7, 2003, the Corporation
executed a purchase and sale agreement with Citicorp Venture Capital Ltd
("CVC"), to acquire all of their 2.2 million outstanding common shares on or
before November 3, 2003. The price per share is subject to a minimum of $22.60
and a maximum of $25.00 by this agreement. The Corporation purchased 1.35
million shares, at $22.60 per share, for $30.5 million on May 7, 2003. The
Corporation expects to purchase the remaining 0.85 million shares for not less
than $19.2 million and not more than $21.3 million. As a result, an amount of
$21.3 million has been reclassified as temporary equity with a transfer from
additional paid in capital to put and call agreement on common stock, on the
consolidated condensed balance sheet at June 30, 2003, representing the value of
the shares as of that date, in accordance with Emerging Issues Task Force Issue
No. 00-19, "Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company's Own Stock".
The following table presents owner earnings for the six and three month periods
ended June 30, 2003 and 2002. Owner earnings is defined as cash flow from
operations less net capital spending and is not intended to represent cash flow
from operations as defined by generally accepted accounting principles. This
measure 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. Management
believes that owner earnings portrays a meaningful measure of the impact of free
cash flow, which is an important factor towards the growth of intrinsic
shareholder value over time.








Six Months Ended June 30, Three Months Ended June 30,
2003 2002 2003 2002
------------ ---------------- -------------- ----------------
Cash provided by operations $ 45.0 $ 50.0 $ 25.6 $ 37.1
Less: capital spending, net (2.7) (2.3) (1.7) (1.1)
------------ ---------------- -------------- ----------------
Owner earnings. . . . . . . $ 42.3 $ 47.7 $ 23.9 $ 36.0
============ ================ ============== ================


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 judgment based on its understanding and analysis of the
relevant circumstances to reach these decisions. By their nature, these
judgments 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: The Corporation recognizes revenue, including freight
charged to customers, when products are shipped and the customer takes ownership
and assumes the risk of loss, collection of the relevant receivable is probable,
persuasive evidence that an arrangement exists and the sales price is fixed or
determinable. The Corporation's shipping terms are customarily "FOB shipping
point" and do not include right of inspection or acceptance provisions.
Equipment sales arrangements may include right of inspection or acceptance
provisions in which case revenue is deferred until these provisions have been
satisfied.
Accounts Receivable: 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.
Goodwill 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. The Corporation categorizes and depreciates its
assets over periods ranging from 3-5 years for computers, software, furniture,
fixtures and autos, 5-20 years for machinery and equipment, and 5-30 years for
building and building improvements. Leasehold improvements are amortized over
the lesser of the useful life of the asset or the life of the lease.
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. Patents and various other
intangible assets are amortized on a straight-line basis over their estimated
useful lives as determined by an appropriate valuation. The present periods of
amortization are 15 years for patents and range between 5 and 30 years for other
separately identified intangible assets. The Corporation assesses the carrying
value of goodwill, intangible assets with indefinite lives and other long-lived
assets in accordance with SFAS142 and SFAS144. In many instances, projected
future cash flows are used in these assessments. 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
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".
Employee Benefit Plans: The Corporation sponsors a defined benefit plan and a
retirement medical benefit plan for its domestic employees providing retirement
benefits based upon years of service and compensation levels. The Corporation
also sponsored a defined benefit plan for its United Kingdom based employees
employed at its Canning subsidiary that was frozen as of April 6, 1997, when the
plan was converted from a defined benefit plan to a defined contribution plan.
The projected benefit obligations and pension expenses from both of these plans
is dependent upon various factors such as the discount rate, actual return on
plan assets and the funding of the plan. Management can neither predict the
future interest rate environment, which directly impacts the selection of future
discount rates, nor predict future asset returns that the pension plan will
experience. Changes in these assumptions will effect current year and future
year pension expense and the projected benefit obligation. Management estimates
that a 50 basis point drop in the discount rate for the valuation at December
31, 2003, will increase the plan's projected benefit obligation by approximately
$4,500 and increase the plan's pension expense by approximately $1,000.
However, these increases could be offset by other factors such as favorable
asset experience or additional cash contributions to the plan.

NEW ACCOUNTING STANDARDS
In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity (SFAS150) which is effective for interim financial
statement periods beginning after June 15, 2003. SFAS150 addresses financial
accounting and reporting criteria for certain financial instruments with
characteristics of both liabilities and equity. SFAS150 requires that financial
instruments within its scope are classified as liabilities, or assets in some
circumstances. The adoption of SFAS150 will have an effect on the reporting of
the put and call agreement on common stock line item on the Corporation's
consolidated condensed balance sheet at June 30, 2003.
In April 2003, the FASB issued Statement of Financial Accounting Standards No.
149, Ammendment of Statement 133 on Derivative Instruments and Hedging
Activities (SFAS149) which amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities under Statement 133.
This statement is effective for contracts entered into or modified, and hedging
relationships designated after June 30, 2003. The Corporation does not expect
that the adoption of SFAS149 will have a material effect on its financial
statements.
In November 2002, the FASB issued Emerging Issues Task Force Issue No. 00-21
"Revenue Arrangements with Multiple Deliverables" which provides guidance on how
to account for revenue arrangements that involve the delivery or performance of
multiple products, services and/or rights to use assets. The provisions of this
EITF are effective for revenue arrangements entered into beginning with the
Corporation's next interim period. The Corporation does not expect that the
adoption of this EITF will have a material effect on its financial statements.
Statement of Financial Accounting Standards No. 148, Accounting for Stock-based
Compensation - Transition and Disclosure (SFAS148) amends SFAS123 to provide
alternative methods of transition for enterprises that elect to change to the
SFAS123 fair value method of accounting for stock-based employee compensation.
Since the Corporation adopted the fair value method of accounting for
stock-based employee compensation for the reporting year ended December 31,
2001, the alternative methods of transition to that method provided by SFAS148
do not have any effect on its financial statements. SFAS148 also amends the
disclosure requirements of SFAS123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The required interim disclosures are provided in Stock-Based Plans,
Note 4 to these consolidated condensed financial statements.
Statement of Financial Accounting Standards No. 143, Accounting for Asset
Retirement Obligations (SFAS143) addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. SFAS143 requires recognition of asset
retirement obligations as a liability rather than a contra-asset. The adoption
of SFAS143, effective January 1, 2003, did not have an impact on the carrying
amount of the Corporation's long-lived assets or liabilities.
Statement of Financial Accounting Standards No. 145, Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS145) among other things, rescinds SFAS No. 4, which required
all gains and losses from the extinguishment of debt to be classified as an
extraordinary item and amends SFAS No. 13 to require that certain lease
modifications that have economic effects similar to sale-leaseback transactions
be accounted for in the same manner as sale-leaseback transactions. The
adoption of SFAS145, effective January 1, 2003, did not have an impact on the
Corporation's financial statements.
Statement of Financial Accounting Standards No. 146, Accounting for Costs
Associated with Exit or Disposal Activities (SFAS146) requires companies to
recognize costs associated with exit or disposal activities when a liability is
incurred rather than at the date of a commitment to an exit or disposal plan.
The provisions of SFAS146 are effective for exit or disposal activities that are
initiated after December 31, 2002. The adoption of SFAS146, effective January
1, 2003, did not have an impact on the Corporation's financial statements.

Interpretation No. 45 (FIN45) Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others, which
requires that a liability be recorded in the guarantor's balance sheet upon
issuance of a guarantee. In addition, FIN45 requires disclosures about the
guarantees that an entity has issued, including product warranty liabilities.
The Corporation does not maintain any warranty expense or related liabilities
for its core specialty chemicals business. Warranties for certain ancillary
businesses are not material. The Corporation adopted FIN45 at December 31, 2002
and it did not have a material effect on its consolidated financial statements.
In January 2003, the FASB issued FIN No. 46 (FIN46) Consolidation of Variable
Interest Entities and Interpretation of Accounting Research Bulletin No. 51.
FIN46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN46 is
effective for all new variable interest entities created or acquired after
January 31, 2003. The Corporation does not expect that the adoption of FIN46
will have a significant effect on its consolidated financial statements.
ENVIRONMENTAL and LEGAL MATTERS
Environmental Issues: The nature of the Corporation's operations, as
manufacturers and distributors of specialty chemicals and systems, and products,
including raw materials, 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 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.
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 certain sites acquired in the December 1998 acquisition of W. Canning
plc, 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 $1.6 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 has instituted
an arbitration to enforce the obligations of other parties to the acquisition
agreement concerning the remediation of the Kearney, New Jersey and Waukegan,
Illinois sites. The arbitration is in an early phase and as such its resolution
cannot be predicted. 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 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 was required to pay fines and penalties
totaling $2.5 million, without interest, over six quarterly installments. In
addition, the Corporation was required to pay $1.5 million to various local
charitable and environmental organizations and causes. As of June 30, 2003, the
Corporation has paid the full amounts for both of these arrangements. The
Corporation has been placed on probation for two years and will perform certain
environmental audits, as well as other environmentally related actions. The
Corporation had recorded liabilities during the negotiation period and therefore
its results of operations and financial position were not affected by these
arrangements.
Various other legal proceedings are pending against the Corporation. The
Corporation considers all such proceedings to be ordinary litigation incident to
the nature of its business. Certain claims are covered by liability insurance.
The Corporation believes that the resolution of these claims to the extent not
covered by insurance will not, individually or in the aggregate, have a material
adverse effect on its financial position or results of operations.
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 the consolidated condensed financial statements, Market
Risk, Note 10.
ITEM 4:
CONTROLS AND PROCEDURES
The Corporation's principle executive and financial officers have evaluated the
effectiveness of the Corporation's disclosure controls and procedures (as
defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) as of a
date within 90 days of the filing of this report. Based on that evaluation,
they have concluded that the Corporation's disclosure controls and procedures
are adequate and effective. There have been no significant changes in the
Corporation's internal controls or in other factors that could significantly
affect internal controls subsequent to the date they completed their evaluation.
PART II. OTHER INFORMATION
ITEM 1 : Legal Proceedings
Refer to the notes to the consolidated condensed financial statements,
Contingencies and Legal Matters, Note 11.
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
6(a).1 The Corporation filed a Form S-3 Shelf Registration on February 27, 2003.
The Form S-3 is incorporated by reference herein.
6(a).2 On March 27, 2003, the Corporation filed its Form 10-K/A to provide
additional disclosure regarding non-GAAP references contained in the Message to
Shareholders attached as exhibit 13 to its Form 10K. The Form 10K/A is
incorporated by reference herein.
6(a).3 The Corporation signed a new Credit Agreement with Bank of America, N.A.
on April 28, 2003, which was included as Exhibit 4 to the Corporation's Form 10Q
filed on May 15, 2003. The Form 10Q is incorporated by reference herein.
6(a).4 Signature page for certifications under Section 906 of the Sarbanes-Oxley
Act of 2002 is included as Exhibit 99 to this filing.
ITEM 6(b) : Reports on Form 8-K
On May 7, 2003, the Corporation filed its Form 8-K to disclose a purchase and
sale agreement had been signed with Citicorp Venture Capital Ltd ("CVC") for the
Corporation to purchase all of CVC's common shares of MacDermid, Incorporated.
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: August 8, 2003 /s/ Daniel H. Leever
---------------- -----------------------

Daniel H. Leever
Chairman, President and
Chief Executive Officer






Date: August 8, 2003 /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-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, 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");
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by
this report, based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of the annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, of internal control over financial reporting, 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 control
over financial reporting which are reasonably likely to 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
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: August 8, 2003 / 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-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, 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");
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of the annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, of internal control over financial reporting, 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 control
over financial reporting which are reasonably likely to 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
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: August 8, 2003 /s/ Daniel H. Leever
---------------- -----------------------
Name: Daniel H. Leever
Title: Chairman, President and
Chief Executive Officer