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MacDermid Shareholder Letter 1997

|Includes:Platform Specialty Products Corp (PAH)


Fellow Shareholder,

Nineteen hundred ninety-seven, our 75th year, marked our sixth consecutive year of record performance. Sales increased to $293.7 million, up 25% from $235.9 million in 1996. Net earnings increased to $22.0 million, up 67% from last year's $13.2 million. Per share earnings, restated for a 3-for-1 stock split, increased to $2.55, up 70% from $1.50.

Free cash flow (before financing activities) was more than $30.0 million. We used $9.0 million to repurchase shares at an average price of $23 per share. We reduced our borrowings by $25.4 million. After the fiscal year end, we exercised our option to retire the more than $30.0 million in preferred shares outstanding, after which our total debt to capital ratio will be 60%. We have more than $150.0 million in additional borrowing available under current bank facilities. In December of 1995, we acquired the Electronics and Printing Division of Hercules, Incorporated. A top priority in 1996 was to make the transfer of this acquisition as seamless as possible for both our customers and our new associates. We achieved greater success in this effort than we expected due to the competence and to the commitment of both our new and old members of the MacDermid clan.

While we celebrate our 75th year, a much bigger company, with greater potential than ever before, our focus remains unchanged - we continue to work every day to improve our products and our services, to remove excess costs, and to grow as rapidly as is prudently possible. We have important growth opportunities within our current business and, as such, are funding investments in printing, printed circuits and industrial products. Of particular note, we will begin construction of a manufacturing plant in China this year, fueling one of our most important growth opportunities. We expect to fund these investments in capital improvement, R&D and marketing, while at the same time continuing to grow our cash flow and per share earnings.

Our acquisition philosophy remains unchanged - to make acquisitions that strengthen the competitive position of our current business in both technology and market share, and to add areas of growth that compliment our core competencies. Most important, we intend to increase the intrinsic value of our company on a per share basis. As you see from our repeated references to per share results, we are acutely conscious that we work for our shareholders and that our stewardship is measured in per share terms over the long run. That is easy for us, your employees, since stock ownership in the company is both widespread and substantial. Your employees own approximately 35% of the outstanding shares.

On behalf of the Board of Directors, congratulations to the entire MacDermid clan. Thank you for a job well done. From the MacDermid clan and the board, thank you, our shareholders, for your continued commitment.

Disclosure: I am long PAH.

Stocks: PAH