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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended MARCH 31, 2001
OR
| | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ___________________
Commission File Number: 001-13889
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
MacDermid, Incorporated Profit Sharing and Employee Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
MacDermid, Incorporated
245 Freight Street
Waterbury, CT 06702-0671
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REQUIRED INFORMATION
In accordance with the rules to Form 11-K, attached as Appendix 1 to this
Form 11-K are the plan financial statements and schedules prepared in accordance
with the financial reporting requirements of ERISA and examined by an
independent accountant on a full scope basis.
EXHIBITS
23.1 Consent of KPMG LLP
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements and Supplemental Schedule
March 31, 2001 and 2000
(With Independent Auditors' Report Thereon)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Plan Benefits 2
Statements of Changes in Net Assets Available for Plan Benefits 3
Notes to Financial Statements 4
SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 10
Note: Schedules of reportable transactions, nonexempt transactions, loans or
fixed income obligations in default or classified as uncollectible,
leases in default or classified as uncollectible and investment assets
both acquired and disposed of within the plan year as required by the
Employee Retirement Income Security Act of 1974 and Department of Labor
Regulations have not been included herein as the information is not
applicable.
INDEPENDENT AUDITORS' REPORT
Plan Administration Committee
MacDermid, Incorporated Profit Sharing and
Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for plan
benefits of MacDermid, Incorporated Profit Sharing and Employee Stock Ownership
Plan as of March 31, 2001 and 2000 and the related statements of changes in net
assets available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of MacDermid,
Incorporated Profit Sharing and Employee Stock Ownership Plan as of March 31,
2001 and 2000 and the changes in net assets available for plan benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ KPMG LLP
Hartford, Connecticut
June 22, 2001
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Plan Benefits
March 31, 2001 and 2000
ASSETS 2001 2000
-------- --------
Investments, at fair value (note 5)
MacDermid Company Stock Fund $ 56,254,944 85,917,558
Other investments 51,700,988 64,902,218
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Total investments 107,955,932 150,819,776
Cash 609,483 --
------------ -----------
Net assets available for plan benefits $108,565,415 150,819,776
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See accompanying notes to financial statements.
2
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended March 31, 2001 and 2000
2001 2000
------- -------
Investment income:
Dividend and interest income on securities $ 3,884,952 2,840,192
Interest on participant loans 266,504 214,273
Net appreciation (depreciation) in fair value of
investments (note 6) (37,351,230) (21,530,742)
------------- -----------
Total investment income (loss) (33,199,774) (18,476,277)
Contributions:
Employer 1,559,915 1,032,186
Employee 5,612,126 3,488,956
Rollover 2,078,844 204,575
------------- -----------
Total net additions (23,948,889) (13,750,560)
------------- -----------
Deductions:
Distributions to participants (18,125,797) (22,331,684)
Administrative expenses (note 9) (11,156) (9,801)
Forfeitures (139,653) (27,358)
Other, net (28,866) --
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Total deductions (18,305,472) (22,368,843)
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Net decrease prior to transfers (42,254,361) (36,119,403)
Transfer from Canning Gumm 401K Plan -- 3,031,472
Transfer from W. Canning Inc. 401K Plan -- 956,762
Transfer from Polyfibron Technologies Inc. Savings and
Investment Plan -- 21,341,110
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Net decrease (42,254,361) (10,790,059)
Net assets available for plan benefits, beginning of year 150,819,776 161,609,835
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Net assets available for plan benefits, end of year $ 108,565,415 150,819,776
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See accompanying notes to financial statements.
3
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2001 and 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements have been prepared on an accrual
basis. Current values of investments are determined using quoted market
prices and current yields. Purchases and sales of securities are
recorded on a trade-date basis. The cost of investments sold is
determined on an average cost basis.
(b) TRUST FUND
Prudential Investments was the Trustee of the Plan through December 31,
2000. Effective January 1, 2001, First Union National Bank is the
Trustee of the Plan. The assets of the Plan were transferred in January
2001. Under the terms of a trust agreement between the Trustee and the
MacDermid, Incorporated Employees Profit Sharing and Employee Stock
Ownership Plan (the Plan), the Trustee manages a trust fund on behalf
of the Plan. The Plan Trustee has discretionary authority concerning
purchases and sales of investments in the trust fund. The investments
and changes therein of this trust fund have been reported to the Plan
by the Trustee as having been determined through the use of current
values for all assets and liabilities.
(c) PLAN MERGERS AND ROLLOVERS
During the 2001 plan year, the employees of Colorspan, which was
acquired by MacDermid Incorporated in June 2000, elected to rollover
their 401k retirement accounts into the Plan.
During the 2000 plan year, the Company, as a result of acquisitions,
merged the following plans into the Plan: Canning Gumm 401K Plan, W.
Canning 401K Plan, and the Polyfibron Technologies, Inc. Savings and
Investment Plan.
(d) USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management of the Plan to make estimates and assumptions that affect
the reported amounts of assets, liabilities, and changes therein, and
the disclosure of contingent assets and liabilities. Actual results
could differ from those estimates.
(e) PAYMENT OF BENEFITS
Benefits are recorded when paid.
4 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2001 and 2000
(2) PLAN PROVISIONS
The Plan, as amended and restated, is a defined contribution plan sponsored
by MacDermid, Incorporated (the Company).
Effective January 1, 1999, the ESOP provision of the plan was changed to
allow participants to contribute to the Plan using pre-tax dollars to
purchase company stock. This provision is referred to as a KSOP.
Under the terms of the Plan, employees who have completed three months of
service are eligible to contribute under the KSOP, 401(k) and after-tax
options. Participating employees may elect to have up to 8% of pre-tax
wages contributed to the Plan under the 401(k) option, and up to 7% of
pre-tax wages under the KSOP provision. Participating employees may elect
to have up to 3% deducted from their after-tax wages and invested in the
same investment options as the 401(k) arrangement. The Company will match
50% of the employee's KSOP contribution, up to a maximum of 3.5% of the
employee's compensation. Employees may elect to make pre-tax contributions
up to the IRS limit of $11,000 in 2001 and $10,500 in 2000 to the same
investment options as the 401(k) arrangement.
The Company may make profit-sharing contributions to the Plan. This is a
discretionary contribution determined by the Board of Directors. In order
to be eligible for the profit-sharing contributions, employees must be at
least 21 years of age and have completed five months of service. Employees
will be eligible for profit-sharing as of the March 1st subsequent to their
completion of the above requirements. Profit sharing contributions were $0
for the years ended March 31, 2001 and 2000.
Employees vest immediately in their contributions. Full vesting with
respect to the Company's contributions requires five years of credited
service, except that full vesting will apply when an employee attains age
55, dies or becomes totally disabled. Any forfeited amounts related to the
maximum additional 3.5% of compensation allocated to the MacDermid Company
Stock Fund are used to reduce the cash contribution required by the Company
in the following year. Forfeitures available to reduce future employer
contributions amounted to $153,007 and $0 at March 31, 2001 and 2000,
respectively.
Distribution of participants' accounts upon separation shall be paid in (a)
a lump sum, or (b) equal installments over a period not to exceed 15 years.
If the non-forfeitable balance does not, and did not at the time of any
prior distribution, exceed $5,000, the participant's account shall be
distributed in a lump-sum.
The Company expects to continue the Plan indefinitely, but necessarily
reserves the right to amend, modify or terminate the Plan at any time. If
it is necessary to discontinue the Plan, the assets in the Trust Fund will
be used to provide benefits in accordance with the provisions of the Plan
document.
5 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2001 and 2000
(3) FEDERAL INCOME TAXES
The Plan has received a tax determination letter from the Internal Revenue
Service (IRS) dated July 13, 1995 indicating that the Plan qualifies under
the provisions of Section 401(a) of the Internal Revenue Code (IRC) and is
exempt from federal income taxes. The Plan has been amended since receiving
the determination letter, however, the Company believes the Plan is
designed and is currently being operated in compliance with the applicable
sections of the IRC.
Plan participants are taxed on plan benefits at the time of distribution to
the extent such distribution exceeds a participant's post-tax contribution
to the Plan. Effective January 1, 1993, the Plan withholds the mandatory
20% federal tax from all taxable distributions which are not direct
rollovers. The tax consequences to the participant will depend on the type
of distribution (lump sum, annuity or installments).
(4) INVESTMENT PROGRAMS
Plan participants may elect among 17 separate investment funds in which to
have their contributions and a portion of the Company's contributions
invested. Company contributions in excess of 5% of a participant's annual
salary must be invested in the MacDermid Company Stock Fund. The 17
investment funds as of March 31, 2000 are as follows:
(1) FIRST UNION STABLE INVESTMENT FUND - Seeks maximum current income
consistent with stability of capital and maintenance of liquidity.
(2) FIRST UNION ENHANCED STOCK MARKET FUND - Seeks to exceed the
performance of the S&P 500 index by investing in a select subset of
the stocks in that index.
(3) AMERICAN CENTURY ULTRA FUND - Seeks capital growth by investing
primarily in common stocks that are considered by management to have
better-than-average prospects for appreciation.
(4) DAVIS NY VENTURE FUND A - Seeks long-term capital appreciation and
income through purchasing high-quality, well managed growing
companies at value prices and holding them for the long term.
(5) EVERGREEN SPECIAL EQUITY FUND I - Seeks growth of capital through
investing mainly in both growth and value-oriented stocks that show
potential for growth in earnings and price.
(6) FEDERATED STOCK TRUST FUND - Seeks growth of income and capital by
investing principally in a professionally managed and diversified
portfolio of common stocks of high quality companies.
6 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2001 and 2000
(7) FRANKLIN TEMPLETON SMALL CAP GROWTH FUND A - Seeks long-term capital
growth by investing primarily in small and medium-sized companies
with market cap values of less than $1.5 billion or similar in size
to those with the highest market cap values in the Russell 2000
Index at the time of purchase.
(8) INVESCO DYNAMICS FUND - Seeks capital appreciation.
(9) JANUS GROWTH & INCOME FUND - Seeks long-term growth of capital with
a limited emphasis on income.
(10) JANUS WORLDWIDE FUND - Seeks long-term growth of capital by
investing in a diversified portfolio of common stocks of foreign and
domestic issuers of all sizes.
(11) MFS CAPITAL OPPORTUNITIES FUND A - Seeks capital appreciation by
investing primarily in common stocks.
(12) DREYFUS MID-CAP INDEX FUND - Seeks to provide investment results
that correspond to the price and yield performance of
publicly-traded common stocks of medium-size domestic companies in
the aggregate, as represented by the Standard & Poor's MidCap 400
Index.
(13) PUTNAM INTERNATIONAL GROWTH FUND A - Seeks capital appreciation
through a diversified portfolio of international stocks, targeting
companies with established earnings growth that are selling at below
market prices.
(14) EVERGREEN SELECT CORE BOND FUND - Seeks to maximize total return
through a combination of current income and capital growth by
investing mainly in corporate and mortgage securities.
(15) FIDELITY MORTGAGE SECURITIES FUND - Seeks high current income
consistent with prudent investment risk. The fund may also consider
the potential for capital gain.
(16) AIM FUNDS GROUP BALANCED A - Seeks to provide income and long-term
growth of capital and income by investing in companies of all sizes,
both domestic and foreign, and investment-grade bonds.
(17) MACDERMID COMPANY STOCK FUND - This fund consists primarily of
common stock of MacDermid, Inc.
Participants may elect to transfer amounts from one investment fund to
another, up to once per day, using a voice mail response system.
7 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2001 and 2000
(5) INVESTMENTS
In September 1999, The American Institute of Certified Public Accountants
issued Statement of Position 99-3, ACCOUNTING FOR AND REPORTING OF CERTAIN
DEFINED CONTRIBUTION PLAN INVESTMENTS AND OTHER DISCLOSURE MATTERS (SOP
99-3). SOP 99-3 simplifies the disclosure for certain investments and is
effective for plan years ended after December 15, 1999. The Plan adopted
SOP 99-3 during the Plan year ended March 31, 2000.
The following table represents the fair value of investments. Investments
that represent 5% or more of the Plan's net assets are separately
identified:
MARCH 31,
-------------------------
2001 2000
------ ------
MacDermid Company Stock Fund $ 56,254,944 85,917,558
First Union Stable Investment Fund 19,855,947 --
Davis NY Venture Fund A 9,359,039 --
Prudential Money Mart Assets Fund A -- 20,124,518
Prudential Stock Index Fund Z -- 9,259,846
Prudential Equity Fund A -- 8,677,092
Other investments 22,486,002 26,840,762
------------ ------------
$107,955,932 150,819,776
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(6) NET APPRECIATION (DEPRECIATION)
During the years ended March 31, 2001 and 2000, the Plan's investments
(including investments bought and sold, as well as investments held during
the year) appreciated (depreciated) as follows:
NET APPRECIATION
(DEPRECIATION) IN FAIR VALUE
----------------------------
2001 2000
------ -------
Company Stock Funds $ (29,227,244) (21,562,682)
Other securities (8,123,986) 31,940
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$ (37,351,230) (21,530,742)
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8 (Continued)
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
March 31, 2001 and 2000
(7) PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50% of their vested account
balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Loan Fund. Loan terms range from 1-5 years or
up to 10 years for the purchase of a primary residence. The loans are
secured by the balance in the participant's account and bear interest at a
rate commensurate with local prevailing rates as determined quarterly by
the Plan administrator. Interest rates range from 8.00% to 9.50% at March
31, 2001. Principal and interest is paid ratably through regular payroll
deductions.
(8) SUBSEQUENT EVENT
Effective April 1, 2001, the Board of Directors of the Company elected to
reduce the age of eligibility of employees in the Plan from 21 to 18.
Additionally, employees are eligible to contribute under the KSOP, 401K and
after-tax options as of the first of the month after their date of hire.
In May 2001, the Board of Directors of the Company elected to change the
Plan's fiscal year-end from March 31 to December 31.
(9) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by First Union
and Prudential. First Union and Prudential are the trustees as defined by
the Plan and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan for the investment management services
amounted to $11,156 and $9,801 for the years ended March 31, 2001 and 2000,
respectively.
9
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEES STOCK OWNERSHIP PLAN
Schedule of Assets (Held at End of Year)
March 31, 2001
IDENTITY OF ISSUER, BORROWER, DESCRIPTION CURRENT
LESSOR, OR SIMILAR PARTY OF INVESTMENT VALUE
--------------------------------------------- --------------- ------------
*First Union Stable Investment Fund 736,138 shares $ 19,855,947
*First Union Enhanced Stock Market Fund 1,740 shares 124,162
*MacDermid Company Stock Fund 3,111,446 shares 56,254,944
Hercules Company Stock Fund 9,048 shares 117,534
American Century Ultra Fund 194 shares 5,162
Davis NY Venture Fund A 362,613 shares 9,359,039
Evergreen Special Equity Fund I 206,659 shares 2,171,982
Federated Stock Trust Fund 22 shares 715
Franklin Templeton Small Cap Growth Fund A 155 shares 4,633
Invesco Dynamics Fund 1,945 shares 32,461
Janus Growth & Income Fund 5,910 shares 136,699
Janus Worldwide Fund 82,585 shares 2,581,618
MFS Capital Opportunities Fund A 476,066 shares 7,174,319
Dreyfus S&P Mid-Cap Index Fund 1,087 shares 21,350
Putnam International Growth Fund A 25,497 shares 539,523
Evergreen Select Core Bond Fund 67,415 shares 727,438
Fidelity Mortgage Securities Fund 313,933 shares 3,202,367
AIM Funds Group Balanced A 110,981 shares 3,013,135
*Participant Loans 8.0%-9.5% 2,632,904
------------
Total $107,955,932
============
*Represents a party-in-interest.
10
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
MACDERMID, INCORPORATED PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
Date: October 15, 2001 By: /s/ Frank Montiero
------------------------------------
Frank Montiero
Member, MacDermid Benefit Plans
Administration Committee